LOBBY INVESTIGATION

HEARINGS
f

lIF.Ottv A

SUBCOMMITTEE OF THE
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
SEVENTY-FIRST CONGRDlESS
SECOND SESSION
PURSUANT TO

S. Res. 20.
A RESOLUTION TO INVESTIGATE TUE ACTIVITIES
OF LOBBYING ASSOCIATIONS AND LOBBYISTS
IN AND AROUN4D-WASHINGTON, DIS-

TRIOT OF COLUMBIA

VOLUME 2
INDEX IN VOLUME 4
NOVEMBER 19, 1929 To JANUARY 17, 1930

Printed for the use of the Commltteo on the Judiciary

*
UNITED STATES
GOVERNMENT PRINTING OPPICH

31304

WASINGTON: 193

COMMITTEE

ON THE JUDICIARY

GEORO W. NORRIS, Nebraska, Chafeman

LIM S. OVERMAN, North Carolina.
WILLIAM IL BORAH$ Idaho.
HENRY F. ASHURST, Arizona.
CHARE S. DEON, Illinois.
FREDERICK H. OILLET, Massachusetts. THOMAS J. WALSH, Montana.
ARTHUR R. ROBINSON, Indiana.
THADDEUS I. CARAWAY, Arkansas.

JOHN J. BLAINE, Wisconsin.

WILLIAM H. KING, Utah.

T
11
P

ttte

Se

FREDBRICK STRIWER, Oregon:

HUBERT D. STEPHIUNS. Mississippi.
CHARLES W. WATERMAN, Colorado.
C. C. DILL, Wasbington.
DANIEL 0. HASTINGS, Delaware.
FRLIX HEBERT, Rhode Island.
JOnH P. Rom o,. Ork
WILIAM L. Javm, Afestant Olerk

00rn

SunOMMIrEIm ON SHNAT3 RESOLUTION 2.4)

THADDEUS H. CARAWAY, Arkansas. Olhacnum
THOMAS J. WALSH, Montana.
WILLIAM . BORAH, Idaho.
ARTHUR I. ROBINSON, Indiana.
JOHN J. BLAIN, Wisconsin.

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Per
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Do

Grass
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Sen
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Sen
Doe
Corn
Sen
themI

LOBBY INVESTIGATION
TURSDAY, NOVEMBER 19, 1929

UNM'r

STATES SENATE,

SUBCOMMI31rEE OF THE COI3arrrEE OX TE JUDICIARY

Washington, b.

a.

The subcommittee met, pursuant to adjournment, at 10 o'clock

a. i., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman) and Walsh of Montana;
Senators Borah and Robinson of Indiana appearing later as hereinafter noted.
Also present: John C. Holland, Esq., counsel to the committee.
Senator CARAWAY. Is Doctor Cathcart in the committee room?
Come around, please, Doctor.
T TIMONY OF DR. WILLIAM R. CATHOART, CORN PRODUCTS
REINING 00., 17 BATTERY PLAOE, NEW YORK CITY
fI'he witness was duly sworn by the chairman.)

enator CAAiVAY. Give your name, place of residence, and oecu.

nation, if you please, to the reporter.

Doctor CATIICArr. William R. Catheart. My home addres is 174
Park A'enue, Leonia, N. J. My business address is 17 Battery Place,
New York City. I am employed by the Corn Products Refining Co.
Senator CARAWAY. What waS yoit o7
ti0pror t hs mly
ment, Doctor?li
Doctor CATiJCAIT. Wel,,*,Tr tia,
-,y'de" '0f'"'" ,is of philosophy at the Universit ':
Eeidelbei Zwas
' ep by the
proMl-eveland, 0b After t'M ,J
Grasselli Chemical Co.,
fessor of chemistry A hBcs at the C6 I
of Char
z']Jeston, S. C., which is '
tivstate. Afte;.that. W w. ...
.ia emical manufacturing
6rn,*Mt that time .,o
thdn
S
a rd
Essence Co., of Maywood, N.- ,.
Senator CARAWA. Was that ot fi '*gt pducts_
Doctor CATUCABi.. They made a vailety of products. They ir ade

synthetic vanolin litkdum compquno, an things of that kind,

Senator CARWY'"
go ahed.-Well,
.
'
Doctor CATHAiRI', Afer.&tt I was doing consulting Work k New

Yorc City for a year of two.

Senator CAAVAi. What do you meai b. that?
Doctor CATAnT.%OhbiMal"consulting*&rk. Then I went*to the
J
Corn Products RefiniiOn6c'-0
Senator CARAWAY.
":yer diWhtit'* ' tour- pllyinent with
them
*1'

1241

1242

LOBBY INVESTIGATION

Doctor CATHOART. I went with the Corn Products Refining Co. in

March, 1%1.
Senator CARAWAY. What are your duties with that companyI
Doctor CATHOART. My duties with that company are rather varied.
I have a great deal to do with the technical uses of our products.
For instance, with the textile people and the paper people, and in
some respects in the food industries and things of that kind.
Senator CARAWAY. You are not the president of that associationI

Doctor CATucAir. B no means, Senator.

Senator CARAWAY. You are rather a technician?
Doctor CATHCART. Yes.

A chemists

Senator CARAWAY. You deal with the chemical products?

Doctor CATHOART. Yes.
Senator CARAWAY. You have been very vitally interested in having
your sugar removed from the ban of the pure food law so that you
could call it cane sugar?
Doctor CATOARIT. Not at all.
(At this point appeared Senator Robinson of Indiana.)
Doctor CATitcArI. I would like, if you would allow me, to coireet
that impression, Senator. 1e have no desire for our sugar to be
called or to be sold as anything else but corn sugar. What we have
worked for and are still working for is to grant to corn sugar the
same privilege, for instance, that is granted to oleomargarine.
leo.
inargarine is to be sold in original packages, so labeled, and we
stand squarely on that. We do desire, however, that when anybody
purchases our sugar that they will be allowed to use it as an ingredi.
ent in food products, the same as cane and beet suga., without dis.
crimination.
Senator CRAIWAY. I think I understand that.
Doctor CATJUcAirr. Yes; I did not want you to get the impression
that we had any desire to sell this sugar for something other than
it is.
Senator CARAWAY. Of course, the legislation has been pending here,
and it speaks for itself.
Doctor OtTjimr. Yes.
Senator CARAWAY. You spoke of oleomargarine. You are not will.
ifig for it to pay a tax like oleomargarine is taxed, are you?
Doctor CATIICAIIT. WO should be ver sorry to have that done. I
do not think the corn growers would i e that, either.
Senator CARAWAY. Well, I don't think the other folks like it, but
Vou just said you wanted to be treated like the oleomargarine peoplee.
I wanted to know if that was correct.
Doctor OATMAvIrr. I will use another illustration, if you will allow
me.
Senator CARAWAY. W'ell, that is all right. I don't think that is
material.
Doctor CATiw,.iT. Edible oil is in exactly the site class.
Senator CARAWAY. Whlt is that?
Doctor CATuICART. I say. edible oil is in exactly the same cla.cs.
Setiato'r C.'nAwA'. Anyway, you have maintained a vety large aid
active force that has been propagandizing the couttry in ito inerest
of your product, haven't you?

)octor CATUCAUT. We have not.

T
T
e

of

LOBBY IN VESTIOATION

1243

Senator CARAWAY. None at all?

Doctor CATucAnT. That has principally devolved upon myself. I
think that I am quite frank in saying that I have been called upon
both by Members of Congress and by Senators to give information
in regard to this very important problem rather than having sought
an opportunity to put out any propaganda.
Senator CARAWAY. If ou wil pardon me, have you maintained a
place here in Washington
Doctor CATUcAmr. No;we have not.

Senator CARAWAY. You have no office here?

Doctor OATHC'Asr. No, sir; none at all.
Senator C wARAAY. Do you have tny propaganda that you seek to

get into the newspapers?

Do you issue releases, and so on?

Doctor CATHcART. No; not in regard to corn sugar or anything else,

as far as I know.
Senator CARAW.%Y. How many people are in your New York office?

Doctor CATHOAM"T. Well, now, we occupy, I should say, almost three

floors in the Whitehall Building. I guess there are two or three

hundred people there. I have never been interested to ascertain
exactly how many, but we have a very large staff there.
Senator IVALSH of Montana. Just tell us in brief what have been

Iour activities in promoting this legislation that has been pending

ere before Congress for several years.
Doctor CATIcIART. May I go into that from the beginning?
Senator IVALSii of Montana. Well, go into it as far as necessary
to answer my question,
Doctor CATICAnT. The corn-sugar legislation started-I have forgotten the exact year, it was probably 1-926 or 1927--when a bill was
introduced simultaneously, I believe, in the House by Congressman
Cole and in the Senate by Senator Ctinmins, brought in as an amendment to the pure food law. We knew nothing at all about that
legislation. had no connection with it whatsoever, until after it had
bien introduced, and as a matter of fact. Pad passed the Senate.
Then we were called upon to give information in regard to it. It
was not in any way initiated by uq or sponsored by us. We were, of
Course, interested and very willing to give correct. accurate, and
reliable information in regard to (he problem involved. In that way
I fli.st came into the picture.
As you probablyy know, that bill failed of passage hy tlai' adjurnment of Congress. Then the legislation was reviveiI by tI1e introduction of bills by Congressman Cole and Senalor Capper. All
of this legislation was primarily directed for the benefit of the corn
growers, becauseSenator VATsit of Montana. Ostensibly, at least.
Doctor CATI CAnT. And actually and really, because it is perfectly

well known that if the use of this sugar i.i

increased it will broaden

and increase enormously the market for American grown corn. On

a most conservative estimate it will provide a market for 20,000,000

bushels.

Senator WALSH of 31ontana1. We do not care to go itto the merits

of it.

Doctor CATitAirr. I beg your pardon.

1244

LOBBY INVESTIGA'TION

Senator WALSH of Montana. 1 am simply asking you what your

activities in the matter have been.
Doctor CATIVAiT. These have been my activities, that when I have
been called upon to give this information I have been glad and
willing to do it.
Senator WALSH of Montana. That is all, then, as I understand you
now, the sole part that your corporation or organization has had
in tile mnatter;, is that when it has been called pon for information
about the matter, it has furnished the information?
Doctor CATiWArr. Exactly; but when we have found that mis.
statements and misrepresentations have been made, we of course,
naturally were interested in correcting those.
Senator WAlSH of Montana. Just how did you go about correcting
those misrepresentations?
Doctor CATIWir. Through correspondence.
Senator WALSH of Montana. Correspondence with whom?
Doctor OATiWADRT. Oh, sometimes with members of Congress;
sometimes with Senators.
Senator WALsH of Montana. Did you use the p-ess for the purpose
of correcting it 1l0
Doctor CATCWAmr. Not directly.

In
01
III

I was invited at different times

to make addresses, which I did. I was invited to contribute arti.

cles to journals, which I did. That is about the extent of my
activities.
Senator WALSH of Montana. By whom wvere those invitations
extendedI
Doctor CATHCAT. Of course, not knowing exactly what I was go.
ing to be asked about, I have not refreshed my memory, so I am
speaking largely from memory. I recall that I was asked particularly to deliver an address before the North Jersey section of the
American Chemical Society, which was a rather lengthy paper.To
Senator WALSH of Montana. Let, us have this clear Was that
invitation extended to you for the purpose of setting forth your
views concerning this le/rislation?
Doctor CA'1nvMr. It was a discussion of the entire corn-sugar

problem, involving also the legislative features..

.Senator W %iHof M1fontana. I can very readily understand. Doctor, that youtmight be invited by scientific societies and that kind of
thing to discu-s corn products generally. That does not interest me
at till. I am referring to invitations that were extended to you to
discis this legislation.
Doctor C.%Tulc.i' If you narrow It down to that, I recall an invination thlt was extended to me by the vi(.e president of the American
Form Bureau Federation, who was also clairmion of their resolutions

committee. In response to that invitation I appeared before that

committee at their meeting in Chicago, I think it was last December.
The question of corn-sugar legislation wis very thorbughly gone into
at that time and resulted in t ieAmerican Farm Bureau Federation
passing a resolution which they put on their legislative program as
of interest to agriculture in general and particularly to the corn
growers.
Senator V,%tsH of Montana. Then you had an invitation from the
Farm Bureau Federation to discuss the subject before that body?

ot

thi

Pui
Vol

hi
pi
not
the
sha
hai
Wit
we;
Wi

LOBBY INVESTIGATION

1245

Doctor CATHCARtT. Exactly.

Senator W,1IS of Montana. What other organizations extended
you such invitation?
)octor CA3IC1AIT. I do not recall any others of that type.
Senator WAJJHII of Montana. Now, you wrote articles at the request of some of them. Who requested you to write articles on this

legislation ?

Doctol CATIIcir. After I made that adecs before th North

Jesl.ey, action of the Anterican Chemical Society I was visited by 1)r.
Veal Gordon. editor of the Journal of Cliemial Education. I think
le is also connected with the University of Maryland. He liad re.quested a copy of this address, and after reading it lie .aidl he would
lik for mc to write a series of articles for his journal.
Senator W ,sjI of Montana. Was that with respect to the legisfition?.
Doctor CAritc.%rr. The article was written in three sections. andi
one of those sections treated of the legislation, because it had an e.onoic imn-ortanwe. In that way that wa. bI'ought in, 'l'h,,artiehes
were. pubihsied under the title " The Story of a Ofrain of Corn "in
lheournal (if Chemical Education. I have forgotten the issues. but
I think it was in 1928 that that was done I
Senator W,Atqix of Montana. Then we have now that you made at%
address upon the invitation of various bodies, including farni organizations?
Doctor CATHCART. Yes.
Senator WALLSU of Montan. And you published articles dealing
with this subject, upon the invitation of the editors of technical and
other journals?
Doctor CATHCART. Yes, sir.
Senator Amzsn of Montanan. Very well. Was there anything else
you did to bring this natter before the public er to ciultivate public
wentinent with respect to it?
Doctor CAT'11CAmR. I aim quito frank to say, Senator, that I embraced every opportunity that was offered to'set forth the muo'it:; of
this proposition. It would be rather diffIcult for me right now to
specifyy oilier instances, other thi those that I have uimentioned-not
that I am trying to hold any of them back at all.
Senator WAisi of Montana. Let tie see if I can state briefly the
purport of this legislation. Under the existing pure food haw if
your corn sugar enters into any article of food or preserves or that
kind of thing, the label must indicate that corn sugur is used in the
preservation of the food product?
DoctorCATIWCART. In the preparation of it; yes. sir.
Senator WALsn of Montana. While cane sugar or beet sugar need
not thus be specified?

Doctor

CATICAUT. Yes, sir.

Senator VAistt of Montana. And.you want to have the law

changed so that when corn sugar is thus used as a preservative it
shall not be so designated upon tle label? In other words, it should
have the same immunity as is extended to cane sugar and beet s;ugirI
Doctor CATIMART. Substantially that is the case. I want, if you
will allow me to make this coment-that provision is not in any
way a part of the pure food law. That is purely an arbitrary regulation in the administration of the pure food law.

LOBBY INVE.STIOATION

1246

Senator W. LSUt of Montana. However, you want the law so that

you will not have to (o that?

Doctor CATKiwAiT. And, since all efforts to secure for corn sugar
what we consider proper and fair treatment have been futile; the
object of Mr. Cole and Senator Copper and Senator Cummins in

introducing this bill-Senator CA IAwAY. Will you pardon me just a moment, please. I
do not want to be discourteous but if you go on to deliver a lecture
on every question that is asked, we will not get through.
I)oet(or

,ATCAIrr. It is a very broad subject.

I appreciate your

position. I anti willing to be interrupted at any time.

Senator CAiAWAY. Y'our people will want you back in New York
soie time.
Doctor CATEIC,%IT. I just wanted to get this f undaniental principle
into the record.
Senator WALVxth of Montana. The fundamental principle is this, is
it not, that either by expre.,s provision of the law or by a rule of the
dejtrtnient you are required to label the product?
o0o(0 4riiC.urr. By a trule of the department.

Sentoi' W ALSII of Montana. Thie Inia nu facttrers ising your corn

sugars must label the package as containing corn sugar
Doctor CATIrwCurr. exactly, and that is atcommerciale.neiiator W ,isUs of 'Montina. And the legislation vou want is
legislation that will (10 away with that, so that the abel need not
bea' evidence that corn sugar is used in the pr'.ervat ion?
Doctor C.ATeIo.mrr. So that these regulationsSenator W

S.rIm

of Montana. Well. never mind.

Is that the fact?

r
i

Re
de
I
c
if

Doctor UA.TnomIr. That is the fact; yes.

Senator W.%Lsii of Montana. Ver.y well. .ow, this legislation,
you say, has been pending how lon"Doctor C.VrwUcm Well. it was fll. t started under the Cuininins.

Cole bill, which I think was in 1926.

Senator WALmSH of Montana. Oh, it is away back about 1922,
isn't it ?

Doctor CATIICAuT. You may be correct, Senator. But as I say, I

ant speaking entirely from memory.
. Senator WAtsu of Montana. You' organization is a member of the

Domestic Sugar Producers Association, is it not V

Doctor CATHICART. We are.

Senator IV rsn of Montana. When did it become such?
Doctor CATjncrrr. We became members in 1928; the sumner of
1028.
Senator W, smr of Montana. Is your product-that is, corn sugar-sold on the market in the same general way thtt beet sugar and cane
s1 tfar is sold ?
Doctor

CATIIAUT.

Not in the same genera) way- no. It is sold

almost entirely in hundred pound bags; not ir small quantities.

Senator IV,4.si of Montana. For preservative Iurposes, not for

domestic useI
Doctor CATmowr'. No; not for domestic use, because we tried
that-

Senator VArsn of Montana. Well, never mind about the "be.

cause." It is not thus sold, but is used, generally speaking, for

the
t
this
tha
the"

do
tog

mar

rM
u
give
T

our

LOBBY INVESTIGATION

1247

preserving canned peas, canned bean, tanned tomatoes. anid t1Mt kind

f thingI

:-o
it is not for that. on account of these
Doctor CATIMANT.
regulations.
is the more common
enator' WAI.s1 of Montan. Well, just iwhat
use of it?
Doctor CATIUnAuI iho.food tuses of corn sugar at the present time
are limited to the baking induist ry, because the definition for "bread"
does not say that only cane or beet stugar should be used.
-s of Montana. Let us leave out the "because,"
Senator WV' rit
Doctor, and answer the (jitestion frankly. Wlhat is its more common
use now for food l)1rpol.Ies?
Doctor (,A'rUC'AT. It is also used quite largely in the ice-cream
industry. It is used in confections.
Senator WIALSH of Montana. Just what was yiour object in joining
this Domestic Sugar Producers Association?
Doctor CATC.UIT. Iell, may I establish a background for our

action in the matter, very briefly?

We were very muiich stirprised ant(, I confess, rather pleased and

delighted when we receivers a letter from Congressman Cole stating,
I believe--1 thik I have that letler-.sting -that lie had ben advised by some represeitatives of the Domestic Sugar Prothdcers AssodationSenator WALSH of Motitana. Is that COnIgi{0."llllfi Cole of Ohio?
Doctor CATHCnRT. Cyrentis Cole of Iowa. And wanted to know

if we would be interested in becoming

Sugar PrIodtcers Association.
Senator WAL18L1 of Montana. Have you
Doctor CATIMAET. I have.
Senator W .8LsU of Montana. Will you
Doctor CATIOAUT. Yes. sir [producing
Senator WALSh! of Moiitna. I read:

members of the Domestic

got Mr. Cole's letter there?

let us see it?
letter].

C }NORIMS OF TUE UNITED STATES.

HOUSE OF IIEPRUE*STATIES.
lVWahiglnl, A). .. Mala 25, 1029.
Dr. W. R. CATUOABT,

Corn Products Refinig o.,

New Yor. N. Y.
M1y DEAR Do-Tr CATHOAB: Mr. Jou1n B. Pratt. eXfutive vie president of
the Domestic Sugar Producers Association. together with Mr. Mead, of the
Hawaiian lnlerest-i and a representative of the Lonislana cane, called on me
this morning to confirm what I have told them Ivrevioasiy. that I. that I heleved
that the corn-sugar men would be glad to cooperate with them fitprotecting all
formed ui as.o.
rs iIailist tariff rehluelion ill so on. TI..v iIuIV.'
their ui'trlllt'.
elation for defensive and offensive Purposes. aid, I hi'liev, that we can afford
to go ii

with them. for they are willing for u- to fill out' little place In the

sugar hihlsulry. Their itont Is that if we till tire giveui access to the American
markets there will lie roonn for sill i these markets. and with all that we can
Produlue we will still fall short of cotlwutlon ani slill need more imported
suga.
They tare willing to help us get onui rights for the help that we can
give them Ifwe should ever get our farm organizations back of corn sugar.
They ire goilig to write ymu awl to Mr. Ctuajit tibuit ti lilmatter. mti(I
I hope that you 'irn Mil .some lIasi-s of ti.ail erathil. tI live tdld theni, of
course. tht It h.prhunitirly till to you at111l your a.s,,einHt!on.
'cerelyTU
Col.r.

Have you got a copy of your reply?

Doctor CkATiWamIT. The dtate of t hat letter is May 25, isn't it?

1248

LOBBY1

JNVEST1OATI0N

Sen1ator IVALSU Of MoHNana. Yes.et

Doctor OxriuAirr. Here is8 any repl1y, dated May 28.an
Sezntor WVALSHK of AMontiaA readi:
M1AY 2S, 1928),.
110o). CYHs,.uI COLE,
Howse Offlve ltildi, Wvishluylon, D. 1.
DEAR 3111. COJ.E: Younr letter of Way 23. rt'ft'rrlig to tltt, Visit of 11i. JIohn
B. Pratt, executIve vie president of 'uimicilt Sutgar P'rodutcers' Assmcialion,
Maw ben read w~th great interest.
Sugal, Ind
AWe are very glad to know that the deautslc iroduvera of Cane11
1

beet .4tgar rev41g1l?.ep lbt there i.- no g~rounid for ttltgoflhin uwwe flb~r
Interests and thove of flit- Amaericani earn groWers and fle Amierleaat viris sugar
aini ufact irer,.. We wIll certainly be %v4ryglail to idketis.., Wilit thleml t11' tile
hiterests of liith tmay lie furillereul.
Thix imoritljig I hIvivo r4''1eviA it letter from Alto. Joiumi It 11.Iiati. executive
viet' premn''ut Doieste S4igttr 1'rijiluers', Assue. 1111u0.
WaUSliingou., I). 0.,
havitmig it efnfere'tlc with blimit 111nd oiler ('Ill~erx Olf It II-;
'tlo 11s too luw
('fouieratIinit (,tlt bet e'fiN ted. I nin wilthitg AMie 11rait ast ler lIteinsid. Polly.
M'iniild fhiii'tifeienvets i('fe'r('I toi tuake 11111.' In wa-1ts.-tt'l. 1 11ui111 lirig
amti t
very glad to havoc ytin vrt'i""t If you tare ii Wa.shlington nt thuga Ut1L 11114

ltt
YO
h
let
m

W_

if

ri
far

IlIliiI(d to linflICpaIte Ini tilt" #1i--cusloui.

Have youl got a copy' of tile letter' youl W,140 to 31r. Ipratt?
Doctor CATHCARIT. 11Cre is Mr. Pra'ttt's letter' to me. 011(1 here

is at copy of niy reply' to 31'r. Piaft.sa

Senator W,;isn of Montana rtending] :

Ab-

IS~ %~
o;.%tg 1I(E uivetao' A,ss'er.ATt' 'x
11i.Ot.
NATIONAL I'E.IiK
Negr York Clity.

)omuestie S4uugm rPr.

tiucers' A'xsoclatthm wax~ recently orgilz'd here by the lUnlted-laIoe.- 11eet Sugar
Asuii-atoiu, Amerlemi Sower 'tie Leiig-ure litfit- United Skles4 (hwlj.)
Iiawiallon Su:gar Pliante'rs* A.o lll.
andi A" n.'ielm101) of Sugar 1rIuisof
Poritoi Ul1-). 1[15 In'iJlM'orsl~) hip11(1-ee lirallually till of flit, hu.''I -sivilr-151 lie
gr'uwers- (if file United Slttles mtid thle tu'rrifiorles of IftawalI a11( Porto
TIhae fminnidita Iflh'IIE.W of ft' D)unesle Xm'luor Pritdeer.-a Assuelnthii is to
Stiiiiu1lat( the. output of .homnesil sugar and., i: so doinv. 1to advanetlt' grinvwtfc
oif file Amerk'anti sugar-producing Iidustry.
f
Tiheb basic tndersndims o? tilie Donic%,tle lqugar I'andteur-s' Acz'twidot lili
officers underamand, tire proee(ly Idenfleal Wil tlosi oif the Anue ii~ 'surn
lProdtt 31imufnetmer.4. anl they have' authorized me to Invite yd..r orgoini'/.ifion to join Willi u!4. am i meit'ei orgatiulw4tion)In
iii
~fl'fo0rt.
On our own parit It 1.4 the sentiviid of out'. ivasuellatn thilt we woauh.1 nilIvhy
valute thle force youtr ori't~n!utioni. as anauimh.,, Wouhld gIve ti file weirk ahtud

or us.
If flit, matter %evm,4 prateflcable ft you, I Would bie gind to eall tin you
,with other Elficerns of our it.-soelation. tn go Into more defall. for If vou :orre in 1*$
In Ailngton lit the near future I would be pileasedl to airrionge a enoe'ece
bere.
Thanking you for flit, favor of a uepdy lit Yours earliest Conveinienuce. I lint
Sinacerely,

Your reply:

Isl
des

'Ivehu.euil ))irclo,' Corn Proditebs Th/luiibhi Co.,

31Y I)kl.RF Dmiron CATHCA~RT: As voit ion)3 know ile

zt

JOHN~ B. PYRATT.

MAY 2.3. 192&

Mr. Jon x B. I'RAVI'.

Eeculire i"ce Pre-sldent Donme'~to Saganr Iroditcrs' Astoclatlon,
Mr
PRvr
~~~ ~ mpeae
~ ~ oakoleg
~ ~ ~ ~ eep
~ '1"~nln orfvroD.Ae..

us

eve

You*
o
4

8
wats

o
ofS

S8
a da

D
D

size
t

Ste

31YIam
z~npeasd
n. R.%T:
toacknwlege rcelt ofyou favr o

May 25, ltiliting its to Jiuln with your ammIKlatlo l in Its efforts to stimulate the
output of domestic qugar unt advance tile growth of thle American sugarproducing Industry.

Mr.

1249

LOBBY INVESTIGATION

We are convinced that there Is no ground for antagonisin between tile interests of donestlc cane and beet sugar producers and the AMnerican corn growers
~iitsed to nIccept your Inviand corn-sugar manufacturers. I should be very
Iitloin to insect with you 1nd other officers 4,f your iissechit ion either In Xew
York (or Washington, its iay bt convenient. My present engiigenitnts are such
that I %youi niot be avalhlblo until after June 10.
lease be good enough to
let fie know Wh(en you fire In a posith1 to fix a definite time.

Now, I rect' to the letter of Mr. Cole, in which he says "they,"

meaning the J)omestic Sugar Producers' Association: " They are

willing to help us get our rights for the help that we can give thent
if we should ever fet our farm organizations back of corn sugar."
When he says: They are willing to help us get our rights , I supso
he referred to this pending legislation about which we have
bentalkmi,.
Doctor ACTncIT. Yes. That was my inference.
Senator 11Am.s of Montana. "They itre willing to help ts get our1

rights for the help that we can give them if we should ever get our

farm organizations back of corn sugar."

What effort has been made in this direction?
Doctor (,%T6ucirr. Tllt letter was written before the farm organizations had gone on record us supporting this legislation. I want to
say that the farm organizations have been exceedingly conservative
about this matter on account of representations which were made to
their executives that this would destroy or weaken the pure food
law. They hesitated to go on record because of that contingent.
After having convinced themselves of the fact that that was not the
Case, that the pure f6od'law would not be affected, weakened, or
destroyed in any way, then they took the stand that they did.

Senator WASul of Montana. Well, you diverge from ihe question.

Doctor CATHCARIT. It is not my intention.
Senator WAVLsh of Montana. "le says, "They are willing to help
us get our rights for the help that we can give them if we should
ever get. our farm organizations back of corn sugar," and I asied
you what effort you had made to get the farm organizations back
of corn sugar.
Doctor CATJCAinT. The efforts that I have made? Well, the lprin-

cipal effort which I made wits accepting the invitation to appear

before that committee at their ineeting.
Senator WAL u of Montana. Anything further?

You say that

was the principal effort you made. What were the other efforts?
Doctor CAT ICAT. Wel, I have talked with the representatives
of farm organizations, Senator, whenever opportunity offered.
Senator W,%Lqj of Montana. Could you tell us some of them?
Doctor CA nTnC r. I have talked with Mr.--Senator WAsin of Montana. I am speaking now, of course, as of
a date prior to the (late of this letter, May 2,9 1928, but, let that go.
Doctor CATiCART. I could not place dates.
Senator WALSH of Montana. Very well.
Doctor CATICART. I am quite frd'nk to say, and I want to empha-.
size when I am saying it, that I have spoken to representatives of
other agricultural organizations.
Senator VAtsn of Montana. My question was who were those

representatives?
Doctor CATticART. I have spoken-had several conferences with

Ur. Brenckman of the National Grange.

I have had one or two

1250

LOBBY INVISTIOATION

very short talks with Mr. Taber who is master of tile National

(]range. I have also had one or two conferences with 'Mr.Ilolman.

His organization, I think, is the Farners' Union, or something like
that. In other words, I have been very glad to have these disu ,&Sons
and this wl.ole matter put in the llelight as nuclh as possible.

Senator WArsit of Montana. He says: "They are willing to help

us get ouri rights."

orga nizations, Doctor.

Just what help did you look for frolm these

Doctor CA-rneCAr. Well, we realized in the beginning that if this

corn sugar proposition was brought forward directly as qun industrial
measure, timt there would not be anything to it; it was necessary
to show the agricultural. interests that it was more important to
them! than it was to us, and that when the agricultural interests
realized (lint situation and became interested in it, that we should
fade out of the picture and be absolutely inactive, and that they
would carry it on.
Senator W .sr of Montana. But you were speaking about the
lielp you were to get from them. What help did you expect'to get
from them?
Doctor CATICAnT. The help would consist in having these organi.
nations minake it their issue and their fight, rather than llr.
f did you expect
Senator WAI.sn of Montana. What kind of a light
them to carry o?
Doctor CATximr.lrr. At that time, we had been led to believe that
there was opposition on the part of the cane and beet sugar people
towards this. That would lie one opposition. There was also a
very definite oppo-iftion oin the part of the )epartnient of Agricul.
ture, anl there was also very vociferous and bitter opposition o the
part of the honey producers.
Senator WiM.s of Montana. Apparently you thought that their
argunents would be more effective than your own.
Doctor CvTMw.Ainr. Tile agricultural argunients would be more
effective than out. We were not in any distress.
Senator W.AJsii of Montana. This was to be a give and take
proposition as I understand this letter. "They are willing to help
us to get our rights."
Doctor CATIHCART. That gives that impression.
Senator WALSn of Montana. But of course, it was to be reciprocal,
because he continues "for the help that we can give then." Just
what help (lid you expect to give them, in return I
Doctor CAT1WiAnT. Well, I would like, if you will permit me, to
recur nowF.sm
of Montana. I will be glad to permit you to
Senator W.
answer the question. What help were you counting on giving
them?
Dr. C.VCaUT. W.ell, I do not know that we were in a position to
give then any particular help.
Senator WLSh of Montana. But, Mr. Cole was directly pledgil you.
Docotr CATCA T. Except that the idea was to bring about a com
muniltv of interest, as producers of domestic sugar, as against im.
ported sugar.

tc

th
D
0

PrC

LOBBY INVESTIGATION

1251

al

Senator WALSn. of Montana. Oh, that is perfectly obvious, Doetor, but the question I am addressing to you is what help were you
give thenWill
I, you pardon me? I wish you would please
118 expected
SenatortoCARAWAY.
answer the question. The arguments are falling on deaf ears.
Well I do not know what ilp except perhaps
CAvubcAir.
Doctor
they
realized
and we realized that both industries will benefit by
present duty.c
their maintaining
118Senator'
Wimsii the
of Montana.
M) course everybody realized that.
If you had a lighter tariff you would all have profited by it.
7
J)octor CATH.UnT. The only help we expected to give them was
0
to become members of their asociation and show a united front on
S
all matters pertaininug to sugar, as I understand it.
d
Senator WALsH of Montan a. Well, uny'way, did you understand
Y
that this was a give and take proposition; that you liad entered into
an agreement with them that if they would come forward and sup.
port your propositionn you would support theirs?
Doctor

LATC.%1':.

Iot essentially that, Senator.

Senator W
VrsIK of Montana. Yor attention has doubtless been
called recently to this letter of January 28, 1928, signed by you and
Mr. Chapin as trustees for the Associated Corn Products, and directed to Mr. Lippitt of the Great Western Sugar Co.
Doctor
SenatorCATIICAnT.
WALsI of Yes.
Montana. I call your attention to what is said
there, speaking of the.conference here in Washington:
An invitation was extended to Assoeinted Corn Products Manufacturers on
ehalf of the Domestic Sugar Producers' Association to become a mnnber of
Domestic Sugar I'roducers Assoe'latlon. It was frankly anti freely stilted that
the producers of domestic cane and beet sugar, desired the support and cooper.lion of tho' corn sugar manufacturers ite
securing an Increased duty on inported
sugar and that they in return, through the agency of the Domestic Sugar Producers' Association, would aid and support the efforts of the corn sugar manufacturers to remove by legislation or otherwise the governmental discrimination
now prevailing against corn sugar.
Doctor CATIICAIW. That is quite correct.

Senator W.'rsit of Montana. So, you actually, made a trade with

them that if they would help you get these restrictions removed, you
would help them get at higher duty on sugar?
Doctor CIA'rlctAHT. I can not say that we made a trade. That is
why I wanted to explain.
Senator W. ,sir of Montana. Do you mean to say that is not a correct statement?
Doctor CATHCAR It is a correct statement. but it can be explained
if you will have the time and patience, by letting me state what transpired at this interview which occurred in Now York.

Senator WAr 911 of Montiana. I am not particularly interested in

that. If you want to explain this language I am quite willing you
should do it.
Doctor CATHCAnT. That is what I have in mind to do.
Senator WALSH of Montana. If that does not mean what I stated.
Doctor CATJHCAHT. It means exactly what you state. It means exactly what is in that letter, but the background of it was not on the
basis of a trade. Wlien these gentlemen came to New York we expressed our surprise that they were asking us to join such an associa-

1252

LOBBY INVESTIGATION

tion, because we quite frankly told them that we did not see how we
could coopertate in an association if, as we had been informed, they

were opposed to the proper recognition of corn sugar. Then they die.
claimed the fact that they Were opposed to the proper recognition
of corn sugar and were quite in accord with that position. We like.
wise said qute -frankly and freely that obviously we were in favor of
an increased duty on sugar, and we would have been in favor of it
no matter whether we %ventinto that organition or whether we
stayed out of that organization, because we believed that by a coinbi.
nation of tile corn sugar group p and the cane and beet sugar groups,
the United
States cold be made substantially independent of foreign
sugar
production.
Senator WMtsiI of MIontana. Those are all reasons that led you to

a
r

le

make the agreement?

Doctor CATIReAnIT Those were the reasons which led us to accept

membership in the Domestic Sugar Prloducers Association.
Senator AVALSit of Montana. And that was the obligation which

they undertook to help you-to get the restrictions upon your product
removed? Is that correct?
Doctor CATUICAUT. That is correct.
Senator WALSH of Montana. Do you approve of that method of
getting legislation, Doctor?
Doctor C(ATICA1T. I do not know that I have any feeling of having
been a party to anything wrong in joining that association.
Senator WAIsII of Mantanha. Well, suppose that I, being in favor
of your proposal, your legislation, but being deeply intere-sted in
some legislation of my own. should make a deal with the opponents
of your legislation by which'I would agree to vote against your legislation if they would vote for mine, would it present itself to you in
a little different light
Doctor CATHCemrr. I should say so.
Senator WAL h of Montana. Just what difference do you see
between the agreement that I suggested and the one you entered
into
Doctor CATIWARTT. Because as a matter of fact, as developed at
this conference, we were no longer opponents. They were not
sacrificing anything to us. We were not stmrificing anything to
them. We were members of the same family.
Senator WAL'4h of Montana. Prior to that time they had rendered
no assistance to you, had they?
Doctor CATIECArT. There had been no occasion for it.
Sonator WAsi of Montana. They had no interest whatever, I
mean financial interest, in the removal of the restrictions on your
product, had they?
Doctor CATHCART. No.
Senator VALsix of Montana. Indeed, the removal of the restrictions upon your product would be against their financial interest,
would it not?
Doctor CAT AT. To some extent, perhaps.
Senator WALSH of Montana. To the extent that you would occupy,
to some extent, their market. Now, prior to that time at least they
had been indifferent to your legislation, had they not?
Doctor CATICAXRT. I have not known that there has been any particular change. They are simply not opposing it.

t4

b
I

LOBBY INVESTIGATION

1253

Senator WALUS1 of Montana. But. they did agree to help you get
the legislation, did they not?
Doctor (ATHOART. That was not accepted as an agreement. As
a matter of fact, the resolution that was finally passed by the Doinestic Sugar Producers' Association merely put that association on
record that they would not oppose.
Senator WALsit of Montana. Well, however that may be, this
letter was written, was it not, as a protest against the idea that they
were not to help you, and you were insisting that they had entered
into an agreement to asmist you to get that legislationV Is not that
the purport of this letter?
Doctor CAtTr1oAtT. That letter-

Senator WA.sn of Montana. Is not that the purport of this letter?

Doctor CATUCAnT. Will you state that again, please?

Senator WAIs of Montana. Is not this letter in substance a protest upon your part against such an interpretation of the agreement
as is suggested, namely, that the real agreement was that they were
to help you get legislation, and-were you not protesting against any
other construction of the agreement?
Doctor CATJIAOT. I was protestingSenator WALS of Montana. Let me read the letter to refresh
your recollection:
This position was stated positively, without hesitation or equivocation. On

these grounds, and with this definite understanding, Associated Corn Products

Mnnufatcturers accepted the Invitation to take membership in Domestic Sugar

Producers' Association.

That position was as you stated above:

It was frankly and freely stated that the producers of domestic cane and
beet sugar deslrt the support and cooperation of the corn-sugar manufacturers
in securing an increased duty on imported sugar, and that they in return,
through the agency of Domestic Sugar Producers' Associatlon, would aid and
support the efforts of the corn-sugar manufacturers to remove by legislation
or otherwise the governmental discrimination now prevailing against corn
sugar. Thiis position was stated positively, without hesitancy or equivocation.
On these grounds ald with this definite understanding Associated Corn Produets Manufacturers accepted the Invitation to take membership in Domestic
Sugar Producers' Association. The meeting adjourned with a spirit of mutual
accord and cordiality, after a full explantton of what was Intended by the
pas.-sage of lite Capper-Cole corn sugar bills now ln the Agricullural Committee
of the United States Senate and House of fRepresentatives.

Doctor CATIJUAwr. That is correct.

Senator WALSH1 of Montana. Now, was not this letter brought out
by a letter from Mr. Lippitt in which he took the position that the
United Stafes Beet Sugar Association wits under no obligation what-

ever to help youI

Doctor CATnAT. Not by a letter. That is what I had in my

mind to explain.
Senator VAisn of Montana. Now. let me refresh your recollection
from another paragraph:
During the weeks of January 13 and January 20 there was a general gather.
Ing of the cane, beet, and corn sugar Interests in Washington on account of
the hearings before the Committee on Ways and Means of the louse of Itepre.
sentatives on Schedule No. 5. In the informal dliscusslon the reluctance of the
Kansas City meeting developed into definite opposition.
2
78214-2--zr 3-

1251

LOBBY 1XVESTIGATION

That is where they declined to go on record in favor of your

proposal.
The technical position was taken that the sli0cill Comilttce, had Riot Coln.
sidered the question of corn sugar. Mr. Lipplitt, representing beet -sugar and

clitirinun of the slpclidl coinjlttm, finally consented to call a niee/ting of the

comnittee. Mr. Keniper, proxy for Mr. ilker (etime sugar), aid Mr. Cl.inidn

(corn sugar) desired to report In favor of the corn sugar resolution). Mr.
Llppltt (beet sugar) stated that If this were done a minority report In oppojI.
tion would be ninde. Therefore, the committee very properly agreed to Wlake
no report. Mr. Lippitt stated that he did not consider the Domestle sugar

qa

Producers' Assoeittlona obligated to support (lie corn-sugar program an" waited

to retkerve the right to object.

.Your letter was written as a protest against that view, was it not

ih

Doctor CATHAiinT. Exactly.

Senator WI,%Ls of Montana. In other words V0u were insisting

that they had agreed to support your legislation

Doctor CATHOARIT. Exactly.
Senator WALSu of Montana (reading):

At the present time the representatives of the cr-sugar Iudustry don not

know whether the understnndluig definitely anud clearly arrived at as a edition

of our part fell atllg ig Don

oil,,l, Sugar 1'roduuers Assoiallon is to lie fNliileit
or repudiated. We wish thiu situation hirifled by action of the board as early
as possible.

A
is

There does not seem to be any difficulty about understanding that

letter.
Doctor CAT]WAnT. None at all. I meant it to be that way.
Sienntor W.%tLU of 'Montaua. Namely. that you had entered into
a solemn agreement with them-at least an unequivocal agreement
with the-ht
you werethey
re
to support your legislation
d
Doctor C.M. .UT. 1"xcept that we were on the samte side of the
fence all the time and that sinJ)ly Cstablished that.
Senator VALSH of Montana. but prior to that time they had not
been on your side of the fence, at least, they had been on top of the
..
fence; on the fence?
Doctor CATI=AT. They had not taken any position.
.Senator WALSH of Monitana. And by this agreement they had got
1
down on your side?
Doctor CQ irncAnrr. They had not taken any position although we
were under the impressioh that they had taken a position in opposi.
tion. rhey disavowed that position through their representat ives
when they met with +us in New York.
Senator V.%Lii
'Now, to come back to the instance I
spoke to you about,ofofMontaua.
my own position, would you care to expressed
an opinion then as to whether I would do the honorable thing or noti
Doctor CAT1CAnT. Well, I fail to see anything dishonorable in tiat
arrangement.
Senator IVALsIz of Montana. What would you tlhinnk of the interests of the country if legislation be carried on on that principle?
Doctor C.tTHART. I think all legislation should be carried on dis.

tinctly on its merits, and the impression that I have gotten in my

various contacts is that the Members of Congress and the Members of
the Senate are endeavoring very strongly to do that, and earnestly to
do that. I find then eager and anxitouts to get information about
subjects concerning which they were not suflciently informed, and

lo

thu
0

it,

t4

LOBBY INVESTIGATION

1255

when they have called upon me to contribute to that information I

have done it fairly and squarely and truthfully.
Senator WAL, i of Montana. I think probably all you can say
about it is that you are not any worse than a good many other people.
Doctor OATicAIuT. Thank you, sir.

Senator WALSH of Montana. That is all.

Senator UItAWAY. Senator Robinson, do you wish to ask any
questions.
Senator RoBINso of Indiana. I wanted to ask you, Doctor, what
is the difference between corn sugar and beet and cane sugar that
causes the department to discriminate against it, as you suggest, by
ihat regulation?
Doctor CATHART. The pure food lawSenator 1,TALsH of Montana; Now, you are not answering the question of the Senator. Ile asked you what is the difference between the
two.
Doctor CtTiCART. Do yoU want to know the chemical difference?

Senator Ronixsox of Indiana. Yes; that causes the Department of

Agriculture to discriminate, as you say.
Doctor CATUCAR.

If you just ask me what the chemical difference

is, I can tell you that.

Senator 1toin'sotx of Indiana. Do you know what the reason is?
Doctor CATIUC.AT. I know what the reason is.

Senator Roni sox of Indiana. Then, tell me.

Doctor CATJC.mT. That is what I started to do.

Senator CMIAWAY. Let us just tell it, then, without going into a

longexplanation.
Just tell him directly. There is an answer and
you can make it, you know. He asked you why the department made
this regulation, and you said you could tell him. Now, just tell him.
Doctor CATIWAnT. I don't know-well, I tfiink I will put it this
way: The'definitions and standards under which the pure food law
is administered are said to be based upon custom. 'Ihe definitilons
and standards follow custom, but do not lead custom. Sugar, under
those definitions, is defined in such a way that only sucrose, which
is the hemical name for cane and beet sugar, is sugar. As a mater
of fact, there are hundreds of sugars. Corn sugar or dextrose is a
true sugar, but isn't included in that definition. Therefore, from
the standpoint of these regulations, it is not a sugar. Now. then,
whenever tiny article of food is defined, in which slgar is used. the
word "sucrose " is put in parentheses, after the word "siga'r ," limiting the use of sugar to sucrose. making it necessary for anyone who
cares to use dextrose or corn sugar as an ingi'edient in such product
to put it on the label. So far as the consuming public is concerned,
you might as well put "arsenic" on the label, because the consuming

public has been educated to believe that label mention is intended to

call attention to a deleterio)us. injtriou., inferior ingredient; and corn
sugar is not in that class.
Senator RoBiNsow of Indiana. How extensively is corn sugar manufac:ured in this country.
Doctor CAT1CAInT. When I am talking now about corn sugar. I am
talking about the pure, highly refined dextrose. The production in
this country now will be around 100,000,000 pounds.
Senator 'RoniNsoN of Indiana. Do I understand you to say that
this sugar from corn can he used wherever beet sugar ani cane

1256

LOBBY IN VESTIGATION

sugar can be used, if you can get tile regulation removed? Is that
'ilnt you menu?
Doctor CrW'irr. GJenerally speaking, that is correct; but more

accurately in combination with those sugars. That is why we have

a unitives interest with (Ie cane amld beet sugar. In the first place

corn sugar i.s not quite so sweet as cane and beet sugar, but a combi.
nation of those sugars is highly nutritious and wholesome and desir.
able, because of the phy.iologicl properties of the dextrose. Every
bit of cane or beet sugar you consume has to be changed to dextrose
before your body can ntninzo it, and every bit of the starch ou con.
son In'is to be changed into dextro-o before you can use it. Dextrose
is the only sulgar found in the body. It. is the normal constituent
of your bloodd stream. It is the only sunnar that. can be injected
directly into your eircuatoary system and go' utilized without going
through the digestive system.
Senator ('ARWA.'Y. Doctor, can YOU make it cheaper than i'hat
we know its sugar?
Doctor ('ATIHCAPT. On aCcoCunt of-

Senuator CIIAWAY. No, no. Just yes or no, please.

)octor C4ATUcUTn' Yes.
Well, the are some questions, you know, we
80n1tOr (AR.AWY..
can answer that way.
Doeto0 CATHCARTn'. You will pardon me, but I am so thoroughly
saturated with this corn-sngar proposition it is very difficult for
Senator ('.wAY. I know. Let us get the chemical reaction,
though.
Doctor CTcII-wr. That is right.
Senator CARAWAY. I was interested in your reply to Senator
Walsh's question that. your corn-sugar people and domestic sugar
people met in Kansas,- Cty andi entered into at trade. That is sol
Doctor (',ATHCAUT. Well, I wasn't at that meetingSt,ltol' CARIAWAY. IVell, I Am mot asking you tia. As a matter
of fact, you know that.
Doctor' CATICAIrr. It was so understood Senator.

-Senator CArA wAw. All right. Let us Lave some direct answer.
As you understood it, your association was to support a higher tariff
on sugar. That is sol
Doctor CATucAirr. We were getting at that, anyhow.
Senator CAA1wAY. I didn't ask you that. That was part of the
agreement; you were to support a high tariff on sugar?
Doctor ATIIAIT. I don't like for you to put it that way.
Senator CARAWAY. That is the way you put it in your letter, and
I just wanted to know.
Doctor C, TTIARiT. Well, All right.
Senator CuIARwAY. Let us be candid.
Doctor CATiCAIrr. We are in favor of it, and were in the be.
ginning.
OenIntor CAIAWAY. I didn't ansk you whether you were in favor of
it, or got traded out of your position. That is what you agreed to.

do?

Doctor CAT WART. That is what we agreed to do.

LOBBIIY IN Vt 1*TICATION

15
1257

Senator CARAWA
4 Y. And inl turn, as you mttdernitood it. they agieed
to sliport, tile legi-shittionl that is embodied in the so-cailled "CapperCole billv
IPoCtor CATHRT.~~i YeS.

Senator CAUAWAY. Int other words, volt

gentlemen meeting in Katn-

sis City entered into it trade to affect legislationl.

IDoctr O~rCmmurr. As at matter of factSenator CARA.WA~Y. @11A
ust.elt Or 1no.
J)octor CATHCART. NO:' theyV did not, lbeCatSP., as it ma~ltter of fact,
tit the 1(anislis City Imeetig they refused to adopt tile re0.40111061.
Sinator ('~lAAWY. No. 110. 111'0,1 adopted it. lind YOU .aRid they
%Voelhed oil it. youl knlow. Le t s jlit get it down,1 inito tile hutgutellI11
2
(of fle~. streets., Youl went inito it trade.
Azwtor 'X 1,ri.nr. It, looks that wail. buit thev diduit.
St1ator WVALsnI of M1ofitana11. My unlde..tamdig is til agreement
wias elltered inato before tile KlISlson C~ity tile'rItand tit tiuc Kamsas

City' mneetinlg time four' slya atsiei tit ioil wantelf theml to go through
5.
with their "agaceienit alurthepy refused to (10so
Senator
Y'~Lww
es; I ..,o 1uuader-Stamd thlat. Wilma I 111 getting
to i... do yout think it is in the interest of thle publie that larg, grimpus
should get. together mid1( formi ('4)nlinatioils 111nd trade on legishatioil I
D0001r CA'rnoArr. If thle legislat iOn k in thle inlterest of tile public;

ves; anid this certainly is.

Senator ('umm~w 'T'hat wasn't the tjltedim)t I asked you, tid( Volt
knlow that.S Dactor. Do youl thinki it is ill thle interest of the public
that large blsiiaess ititere'ts should get together mid1( trade on legrislaD)octor CAvI'ncAwr-.

X-0.

810mi1tOr (!An.AWA~Y. IV(11l,

YOU wNre

dlng that whidh yout dili1 not

SJ)1imoveth en?
l)oetorCATMm
Iclr.o:

because t his lisgislation wvas econonmically

SMuiid.
SPnator CARAWAY. I AMi Hot aSkinig V01u thtat. anld V11u kn1ow it.
For tile Lord's sake. flow-yon* very-h~sl(II(vv inl autswerit it, volt
2
khow, caries nt untovfa blhde imprests'5ioll.
IAwtor CATIIU0lII. Well. I W.IliII tO di-SAIjMate thait.1surelyI.
8Senaltor C~uAWAY. WVll. youlta as1
aasw'rl tile qulestions.. Here are
powerful interests 1an1d thev got t(!gether 11nd4 entered inito all agreetalent to affect. legislat1tionl. " I will help1 Vout tit yVOIrls. 111111 Youi lci)
tie(get ndnle." You saly vout do01t apProve of thalt ?
Doctor CA~THCA~RT. 14don1t at))ptO1' Of that ; 110.
Sena1tot' ('.Aimwxy. Aliul if legislation could be' e'trried 4)11 bky that
1)lo)L'C, thpeil thei lpubli(' Weal nImst Suffer, l111151 it not?
IDoetor Cexiw.u-mlr. Not tiocm.satrily. lbeeait.se it Call be goodu Jegislatiota.

Sinator C~~ARWAY. Yes: buit theta if it is gOOd legiSlation,. Wily

thle nueessity of getting together andl trading onl it
Doctor CxvrnAet1rr. Wer 1,01 .;eeC
Sena~tOl' C~tA.H1AY. No. It;, It;). MIA,' Start off with Iantlter. leeture. That is thle fault *of yoil school men. You get so you want
to lecture uts aill, anid we witilt, just nit aliswer. Why is it necessary
to get together idu trade if both of your propositions were good
propositions in thle public interest?

1258

1.0011Y NVESTIOA'TION

Doctor C0' 1 'Anr. There ought not to be.

You don'tSenator CAY.
Doctor CyrItc.orr. It ought not to bis.
Senator CARAA. You know, T)oetor. its a matter of fact, if
legislation shoul be traded on, the rights of the public eventually
must suff1er, must they not !
I)octor CAi'.urr. 'Iam not sufficiently versed in legislation to say

anything about that.

_enator

t,
O I thought you were an ex pert.
BIutt on iinciple,

Doctor CATHC(AiT. Not on legislation: no, sir.

I would say yes.

Senator C.nRw.w. I thought yo were intereste(l. in giving to
Menibers- of Congrems valuable- information.
l)octor Cl ic~n'r. Not on lgislation. I can not qualify in that
respect.
Senator ('AwRAWv. You just qulify in trading on hgiSlttion
affecting sugar. You never put this agreement in the newspapers,
did you ' It would have made a very good news item. but you never
put it in the newspapers.
Dotor CATHCArT. I think there was some reference to it in tile
press.
Senator CARAWAY. Setting out your agreements?
Doctor C.ArrC'rIT. There was no agreement set out, except a verbal
agreement.
Senator CAn.RwAY. You set it out pretty plainly here. I don't
care whether it was verbal or written. I say you never sought any
%8,
publicity for that agreement?

Doctor CArlC.ART. I can't say I did. It. would not have been nm
province.
Senator CARAWAY. it.I didn't ask you whose province it was, but I
say you didn't seek
"J)octor ',wurr. I di(ln't avoid it. I would hauve been glad to let
it be known.
Senator CARAWAY. You could have gotten" a headline on that any
day b. saying, that the sugar interests got together on the Capper.
Cole hill.
Doctor CATHCART. That shows how inexperienced I tun in those
matters.
Senator CARAWAY. No; I think it shows how artful you are in
those things. Let me ask you another question. Did you inform
Congressman Cole you had gotten together and made this agree.

the
whi

Cap
L
tinu

Wlw
to
let

S
it. e
1.
lettl
Si
cow

que
don
S

S
cnt
ago
I

IV

aIe
The

ment f

He brought us together.
OATHT.,
Senator 'ARnAIwAY. Did you tell him what your trade was?
Doctor CATICART. Sure.
Senator CARAWAY. Did you inform Senator Capper about that?
Doctor CATIWART. We were in agreement; yes.
Senator CARAWAY. You told them you had traded on tariff and the
Capper-Cole bill?
Doctor CATHCART. I never told him any such thing. It wasn't a
trade. We found we were both on the same side of the question
.
andi absolutely in accord.
Senator CA'IIAWAY. You said that yourself, Doctor. You impeach
your own letter. You said you hail a fair and square agreement,

I)octor

Poe
my
Col

do

gro
Cat

1259

LOBBY INVESTIGATION

tile result of which was you were going to support their measure,
which was tariff, and they.were to support yours, which was the
Gaipper-Cole bill.
Doctor CATHCART.

It was the understanding that we were to con-

tinue along the course we had mapped out already.

Senator CAnAwAY. That Was not what you said.
Doctor CATHCART. You See, Senator, you have got me in a hole-Senator CARAWAY. I know it.
Doctor CATCART. Because you haven't allowed me to tell you

what led up to this thing, and I don't want to tell you what led' up
to that letter. I am not retracting one word in that letter. 'That
letter is there and I stand on it. "

Senator CItIAWAvY. If you wanted to, you couldn't get away from

it, could you?

D0tor CATiHCAIT. There are circumstances which led up to that

letter.
Senator CARAWAY. I know that, and the publicity it has gotten

since makes it a very undesirable thing.

I know that.

Now, as a

consideration for their withdrawing their opposition to your bill,

how much money (lid your association put upI
Doctor CATICAUIT. 3one as a consideration for that.
Senator CARAWAY. Well, how much did you put up? That is a
question I don't thing the public will have any doubt about.
Doctor ('ATHAnT. That is a matter of record, and something I
don't know anything about.
Senator CARAWAY. Would you be interested to know you put up

$8,400?

Doctor CAIUAUT. What is that?

Senator CARAWAY. Would you be interested to know you put up

$8400?

Doctor CATIcAtwr. I shouldn't have any particular interest in it,

because if that is the figure that is reported, it is correct.
SenatorCRwAY. You may be interested to know you put up 40
cents more than that. You put ti) $8,400.40.

Doctor CAT'rncAT. Let me get that clear.

Senator CARAWAY. NOW, wait a Minute. You winut to lecture
again.
Doctor CATICART. NO; I do not. I want to tell you something.
I want to tell you that the Associated Corn Prodiutets As.-ociation

are the ones that are members of the )onestic Sngar Association.

The Ass-ociated Corn Products Manufacturers cotsist of 11 Coal-

panie-s situated in the ,Middle We-t who did thi.s, so that that
8,400.40 was divided between 11 Companies.
Senator CARAWAY. It didp't all coie out of your pocket?

(l t know anithMiing about i9t. ad I have no

pocket about it at ill. I wish I did.' beeau.se I would like to make
my pocket a little bigger.
Senator CA rAwAY. I suppose if they got their bill through they

Dtor (A1rneCt'r.I

couhl make it bigger, and put one or Ioth sides.

Doctor CATH[ARIIT. Well, they haven't shown any inclination to
do that.
Senator CARAWAY. How was Cole and you going to get the farm
group back of your organization? You say, as Cole's letter indicates, you didn't have itnything to trade on until you could get the

1260

LOBBY INVESTIGATION

farni group back of you, andi whenever you got themai ill youi' Pocket,
,0o ldu at stake in this thing. II4)'wer
W41(0tYO gon lg to gest. thein
Cick of you ? You know that is the sigiivant Iit of it.
Doctor CA'riw~mi~ I don't think tht6 it fair wity to 1)nt it. W
didn't have anytlhing to, trasde onl. We don't have anything to trade
Oil How.
801nator ('AUW A Let
tpt it thle wily 'Mr. Grtundy put it. I
lojok upon01 hinm it-, a radher typIical, man.11 l-ie .-aih thaltopeople Nwho
did( halve Certaitn things did( not have ally Chips ill the gaile. YOU
know what lie metanit?
letolr ('ATueIART. I don't1 know anythiNg about it. WAhat wils it?
Selmlr C.mtivw Iidn'!t halve tily"Chips inl thle gamile.
Doctor ('m1'riuc~~r. 111o saido thalt ;
SPenator1 ('ARAWAY. Mr. Gtrindy. You know what it mneans when
they%% Say you haven't got, ally chip-' ill thle !!iutu'?
IDoct;W CATHiCA~RT. That refers to whatI

Senaitor. (Cmut.m . lDon't volt kiiow *?

D OCtor (.'u1C.ART. 11*ll, 1~ W(IlfliA drawv til inIfeni'e(. Stitor.

Senator (.mwtvr
perfectly well.

That is till. 1)wtor. We uunldersi's

TESTIMONY OF COL. JOHN H. CARROLL

ld eatuh other

var,
188!

Cit6

site

sornl
its
mnak

quit

corn

C
81

ear"
C

.0to~

(ilhe w~ittuess wats duily smorn by Senator Cartiway.)

Senator W1alsh, you wish to question the Ivit.

Smuiat or ('.w.i..

nes~e.?abol

Senator01 WVAJAII Of Mo34tan11. Give your nametl andt res~idence to tlie

reporter.
(!oloucl ('.innoix. My tiattuit' i; .John 1-I. Carroll 1113 k'gril and
rot ing i'esideiiee, LUllioniIlle, I~ii~tiCouitttv M1o. I have 11, offie
htere ill Wa11shinigton ill thle 'V11asjxorhtion Butilding untd hitve( had
Aive~( 191T. atiic 1 11111 -1 pralcticilig haivyeu'1.
Selitntoi' WmAlh of fol~tii. Ifaiu "oitIit'&it iii Washington prior
to that tilt, C'olomel 1

('oloucal ('matmaxij. Never to stay. buitt I hatve been here quite often.C
80111101- AADIE Of ' Moiatz.Wtete dlid you. Practice p~rior to
opehtihig V0our olile' in WlshilgutolI?
('01hine) (1.uuutom. I,TiliOnll~ihk

C
ffte

titatli Couty3, 1No.

Sentor11C1411 of M1onitana. flow la11re a towit is Unionville?

('olomuel ('.AmiOIXr. 'Iwenty-ive huin1drefrI pople, albot; I guess.

Sonuator WALh (if 'Aoj16maiu. YOp01ened it Jim oifce here inll 17

0olonel (UmutIom.1. I came here iii 1917 afterI the wa
oill'l
o
ictied.
801tatol'1AAIS-1 Of Montanaif. D~id you c',tublish a firm hecre?
('olone4-l (.Xmuiomj. A lit-l?
Senator' WALSI11 (If Mon01tana11. Yes.F

Colonel CAIZU4IoJ.t. N,\o; I (Jidl not. I came over here, as a tite~rC

of fact, Senaitor, and you probably know-I have repreisen~ted the
Chicago. Burlington Lt Qultucy( Rauilroad~ for 47 veairs, tile Northern
Pacific for nea'l y 30 years, and the Great. Xoitheri forl 25i years,
and that I gave ulthree years ago, and I C111110 here Ilarigelyf to look
after tile variouts things that the railroads had for mel to dto.
Senator AVALSU1 Of Mfontna. What wats the character of the work
you (lid for those companies prior to your coming to Washington?

ferc
0

S
Buri

sup

81
C
the
var'
afti

Seh

aiso

and
Bur
C
81
the

C011

LOfBY IN VE1TOATION12

1261

Colonel (,%nt'oLt,. Well, I had more or less to do with looking

8 fter-Oh,

before?

of Montana. Yes.
Colonel
CA
ROLL.
I did a large amount of legal work in
tIle early eighties or about 1880, 1887, 1888, and
variou.-ways, and in Well,
1889, along in there. I was sent by the railroad company to Jefferson
City, Mo., to look after their legislative matters.
Senator VALsH of Montana. And during all that time you looked
after their legislative matters at Jefferson City?
Colonel CAtIMOA,. I dlid, more or leIms, awl at other times I tried
sonie cases for them. You will remember the ol Burlington Co. had
its headquarters at Burlington, Iowa, and we were accustomed to
making inspections once a year over all of the properties, which was
quite a considerable task.
Senator WLsu of Montana. Did your work for the railroad
comlanies during that. period ever take you into the Supreme Court?
Colonel CAiItoI.
No, sir.
Senator WALSH of Montana. You tried some cases during the
earlier years of your association with them?
Colonel CARROLL. Yes, but I have not for a long time.
Senator WALSH of Montana. I am speaking now of the time prior
to your coming to Washington.
Colonel CARROLL. Oh, yes.
Senator WALSI of Montana. Your principal business was at Jefferson City during the sessions of the legislature and traveling
about the system in one way or another?
Colonel CARROLL. Yes.
Senator WALSH of Montana. Who was the general counsel for the
Burlington?

Senator

Colonel

WVA!. sI

CARROLL.

Joseph W. Blythe.

Senator WALSH of Montana. Where did he reside?

Colonel CARtOLT,. Burlington. Iowa.
Senator VALsii of Montana. He did most of the trial work, I
SUpI)ose.
Colonel CARROLL. How is that?

Senator WALSH of Montana. He did most of the trial work?

Colonel CuimoL,. No: lie didn't do any of it. I think a man by
the name of Eaton, at Burlington. Iowa. and Judge Spencer, at St.
Joseph, and a fellow by the name of Nelson over there. They had
various ones. Mr. Blythe, as far as I knoiv, rarely went into court.
Senator WA14 of Montana. Is that the Judge Spencer who
afterwards was Senator?
Colonel CAUROLM.
No; afterwards general counsel. That was

Selden Spencer who was-the.Senator.

Senator WALsh of Montana. But you very rarely got into court?
Colonel CARROLL. No, sir; I did not.

Senator WALsM1 of Montana. Coming here, you still retained your

association with the Burlington, and then with the Northern Pacifie
and the Great Northern, by reason of their association with the
Burlington?
Colonel CARROLL. Yes.
Senator WALSh of Montana. And just what was the character of
the duties that you dis.charged here as representing those railroads,
Colonel I

1262

LOBBY INVESTIGATION

Colonel CA~nROL. Well, we had various things. Legislative mat.

tes is the only thing that I recall at all, but we had occasionally to
get a bill to cross a navigable stream, and the Northern Paeific
and the (reat Northern were more or les interested in the develop.
ment of tile (Ilacier National Park, as you must recall yourself. We
were very much interested in the development of the Eager irriga.
tion project, and I think for many years we went over tMose reda.
ilation projects.
Senator WAx~rn of Montana. Were you looking after their in.

terests before the Congress?

Colonel CARROLL. Yes.

Senator WALSU1 of Montana. And I suppose before the depart.
ments?
Colonel CARROLL. Yes.
Senator WALSH of Montana. Have you done any work in court
since you have been here?
Colonel CARROLL. I have not.
Senator WLsH of Montana. You have a partner now, have you
not, Colonel?
Colonel CARROLL. I have not. I have an associate. I have no
partner. I have a young man named Baker who helps me.
Senator VAistzs of Montana. '1hat is not in tile nature of a part.
nership, however?
Colonel CARROLL. No. sir.
Senator WALst of Montana. Mhat particular department have
you appeared before?
Colonel Cumo.r,. W ell, I have been in the Interior Department 4
great deal. I represent the Royal Dutch and Shell Co.'s and all their
subsidiaries in the United States, and they have large busines.- with
reference- to leasing of land and that sort of bitisiess. I think I had
.olie business there in the last 10 years.
Selnatolr WAL.SH of Montana. 'fhie Inte state Coiniteree (Cois.
sion?
Colonel CAt 1OmLL,. Yes. Nearly lilthese railroads have their
special Interstate Commerce counsel, hut they come down to my
olliee and I assist them in briefs and so forth.
Senator WIASn of Montana. Was your work before these departmenots in the nature of submitting briefs, Colonel?
applica.
Colonel CARROLl. Well, if Ineces,.'V. When yol Ililike till
tion for the lease of oil lands, we ld for a long time a controversy,
Senator, and you must bt familial with it-inder the land leasing
act tlere was a prohilbtion of foreigners. getting titles tles they
lived in a.coulntry that gave recilrociv. Te Royal l)utch had an
lt
etoolll CC., had ill appi cation
in i'or a lease of Indian lands
that was thrown out by lall. I don't
supIl)O:e you wanttile to go into the details of it
Senator WATAs1i of Montana. No, no.
Colonel C1utnoLx,. 1111t more recently the larger problem has been
to see that they were qualified under the la f leasing act to lease,
and that has only been settled within a year that olland is.
Senator WAL14lI of Montana. Colonel, colld you refer us to any
briefs that you have prepared in these matters?
.
Colonel CARROLl,. I don t think I preparedd any briefs. I think you
will find some letters down there that I have written to them, and

i
liter
Beer

Bel
so

lie4
to111
well

we
e

been
give
o
in C
Ment
land
in dh
and
wai

abo,

advi
Oub
(ub.
to d
i0d

I wV

title

Vtl
Iwi.
Se
$10s
n46
cc
C

St.
Ci

legs

Hol

i
i h
Wit
a,
an a
spoke

LOBBY INVESTIGATION

1263

I think our arguments were always oral before Secretary Fall, and
later Secretary Work. I haven't had anything to do with the new

Secretary.

Senator WAIsnI of Montana. We had some information here, Colonelt that jon are now employed by the Cuba C).
looneI'CARROLL. Yes. I have been employed by the Cuba Co.,
and by--I don't know whether it is a sugar association or what.
Senator WALqu of Montana. The United StatesColonel CAmRoLL. The Cuban interests, represented by Mr. Lakin.
lie is president of the Cutba Co., and he called on me and wanted me
to assist them in their efforts to get the tariff lowered on Cuban
sugar. I didn't, as a matter of fact, want to (o it. I am not very
well and haven't been, and my wife was in the hospital.
Senator WAIsn of Montana. Your health has been rather infirm
recently, for the last couple of years?
Colonel CARROLL. Oh1, yes. My wife has been very ill, and I have
been half this summer in bed myself, but I am not making any
apology about that. I finally agreed to take this work if they would
give me a retainer of $10,0 0, and then Lakin took up the subject
of what is known as the Barlow and other claims that he has down
in Cuba, generally referred to as claims against the Cuban Government. It is really a dispute as to the title between himself and other
landowners, and lie claiming all the time that he could not get justice
inthe Cuban courts, that they were dominated by President Machado,
and no American of his type could get justice down there, and lie
wanted me to make a thorough investigation of that. I had heard
about it before, because for about 10 yea s I have been the legal
adviser of the Cuban emba sy here, and he thought I knew about
Cuba, and lie wanted me to do that. and I said, "Certainly, I would
do that." " What will you charge?" " W ell, What do you want me
to do?" "This is what I want you to do." I said, 1 I will have to
make two or three or fon trips to Cuba and stay there some time.
I will have to have a Cuban lawyer of experience to look up'those
titles and all that." I said, "Vell, all, right; if you will pay me
v4,500 a month until this work is finished, I will undertake it; and
I will go to Cuba just as quick as I can."
Senator WALSH of Montana. As I understand it, Colonel, the
$10.000 was for service in connection with tariff legislation, and the
$4.500 a month represented your compensation for orvices in connection with this Cuban matter?
Colonel CAHROLL. In connection with the Cuba Co., I was to do
whatever they wanted me to do.
Smnntor WVALSU of Mo tan. Whlat didi you do so far as the tariff
legislation is concerned, Colonel?
Colonel CAmDHOLv,. Well, I told Mr. Lakin and Mr. Shattuck that
I would be very glad to advise with thezi and to help them. The
House had passed a bill recently raising the rates on sugar. and I
said" I think under our Constitution you have the right to peition."
I think that is the very first one of the Bill of Rights. And I said,
iI think we can get--everything should be in the open. You can
write letters, and Mr. Shattuck, being an expert on sugar, is to make
an address to the committee." And, as a matter of fact, I have not
spoken to a single Member of Congress, of either House, about
sugar; not one.

1264

LOBBY INVESTIGATION

Senator WAlSH of Montana. Have you done anything else, Colonel?

('oonel ('t1
At,.L1. No. sir. I iven't. exCopt to advise th.fie hI
It is a matter I hate to'refer to agnin but I have been pretty feeble
all summer and I have not been of much account. But I 'ant to
give you till the information I can.
SeltOr WAL411 of Iontana. Well, so fair at the tariff legislatio
is c incerned. all you di(l was to advise and counsel with Mr. Shat.

tuck and Mr. Lakin?

Colonel CARROLL. Mr. Shattuck and Mr. Lakin and I never talked

with any Senator about it. or solicited1 a vote one waiy o1 the other.
Senator WAL~M of Montana. And with respect to the otlr branch

of your employment. Colonel. in connection with Barlow and the

other mixed Cuban claim, what have yon done in that matter?
Colonel CARROLL. Well. I have not done a great deal about it. In

the fil-t place, I got ready to go to Cuba. Mrs. Carroll got ill, and
I had to stay here. and when I got her up to her country houe. I
fell by the wayside and was laid up in the house for a month with
some fraetured ribs, so I have nnt been able to get away. but I intend
to go. My plans have been made twice. I have got thm made now

to leave here Sunday night for a month's visit to Cuba.

Senator WAlsi of Montana. Just how does Mr. Lakin come to be

interested- on either'one side or the other of the Barlow claini?

Colonel CAnmouai. Well, I think it is not so much the Barlow claim,
but the Cuba Co.1 as I understand, bas an invetinent of soietiing
like $170.000,000 in Cuba. They atre veri greatly interested in the
administration of President Machado.

They. as I understand, think

he is making a good President. I know the' President very well my.

self. I brought him to this country before he was President. Now
I know him very well, and I think he is making a fine President, but,
if the story circulated about him is true, lie is unfit to be President
of Cuba.
Senator WATASh of Montana. What I don't understand quite

clearly, Colonel Carroll, is just exactly what you were to do in the

matter.
Colonel CARROLL. Well, I was to go down there and try to get some

evidence and proof so that if this matter was taken up by tile Senate
Committee on Foreign Relations I would be ready to make an answer.
I must tell you, I must be perfectly frank about it, so that you Cal
understand my relations; sitting in my house one evening, Senator
George Moses called and said lie wanteI to see me. and he came down
and said, 1You atre -ery interested in Cuba." ISaid " Of course, I
am, especially Machado and his administrationn" and he said, "Well,
thoy tire charging, making very serious charges against Machado and
his government."
At this point Senator Borah entered the committee room.)
Colonel CARROL, (contlluing). I asked hi,. "What are they"
Well, they are liable to go be ore the Senate Committee on Foreign

1en.
ish
8
of

..

inj

As
8
the
does
peq

Bar
and
istra
thin
Se

prf
C
thin
fnis
Sr

espe
C
an
had
cont
Se
Cub
So
Or
Sol
day

Sol

o. B.

Co
tere.
Ohio
brief
Sel

briei
Co

Relations in time." "Could I have a copy?" He said lie would give

me a copy. He sent me a copy of those resolutions, the preamble of
qe
which contained one charge after another against the administration
Co
of Machado.
The
Senator W.VLsit of Montana. They were all lublished in the paper
thin
weren't they. Colonel?
empi

LOBBY INVESTIGATION

1265

relf
Colonel CARROLL. Yes; they were all published. I had them pub.
"c"lished myself.
Nble
Senator VALsui of Montana. Now, does that constitute the extent

to

of your work?
colonel CARROLL. Up to this time that is all I have been able to

do, but I want to go down there and investigate for these people the
real claim that Barlow has. I want to go into the question of title.
As I understand it, the question ofcod
Senator WALs Hof Montana. Let me understand how Mr. Lakin, or
er. the Cuba Co.) becomes interested in Darlow's claim. What difference
n hoes it make to them whether Barlow sustains his claim or l-he other
-he people who are protesting it?
Colonel CARROLL. They tell me they are not interested per se in the
In andBarlow
claim,
they aireareinterested
in Machado's
administration,
and Barlow
or but
his friends
making this
charge against
the admin. I
istration. of Machailo, which these people think are not true and they
lith think it is their business?nd
Senator WALSH of Montana. What can you do about it, Colonel?
-oN Suppose Machado is a perfect tyrant, what can you do about it?
Colonel CARROLL. I can't do anything, Senator.
13
Senator WALSH of Montana. On the other hand, suppose he is a
president,
what
can you
do not
about
it?
im,perfectly
Colonelwise
CARROLL.
I don't
know.
I am
claiming
I can do anythi~n, but you are asking me these questions, and you did not let me
hnehn, What we tre trying to get at isSenator WALsH of Montana. What I want to know is what they
elected of you and what you expected to do for them.
ON
Colonel CARROLL. I am telling you, I expected to go down there
ut, and make a personal investigation of this Barlow claim myself. I
had heard more or less about it and the various charges that were
contained in this preamble to the resolution I have just referred to.
lite
Senator WVALS[ of Montana. You said you have represented the
be Cuban Embassy for some ten years.
Colonel CmROLL. Yes.
mne
Senator WALsm of Montana. What salary do you get from them?
ate
Colonel CARROLL. I think they pay me $4,800 a year.
*r.
Senator WALsH of Montana. There was something said the other
!ftday about your representing the B. & 0.

or

wfl

nd

ye
Of
onl

colonel

CARROLL.

Yes; I am the counsel for the Baltimore & Ohio.

Senator WALSH of Montana. That is the Baltimore & Ohio; the

I . B. & Q., and the Northern Pacific?
Colonel CARnoLL. I am special counsel in their consolidation matters. I am also the counsel for the Erie Railroad, the Chesapeake &
Ohio, the Hooking Valley Railroad, to amist in preparing their
briefs and making the arguments for consolidation of railroads.
Senator WVALS, of Montana. Have ypu prepared any of those
briefs?

Colonel CARROLL. We are at them now, working all the time.

Senator WALsH of Montana. They have other counsel here?

(olonel CARROLL. No. not in Washington. not to my knowledge.
They may have. I am Mr. Willard's personal representative. I (d
think that former Interstate Commerce Commissioner Hall has been
employed.

1266

LOBBY INVESTIGATION

Senator WALSH of Montana. He has been employed also?

Colonel OARROLL. Yes, I think so.
Senator WALSH of Montana. That is all.

Senator BORAH. I take it, Colonel, that you were using the Bar.
low claim as a kind of a test as to whether the administration in
Cuba is what it ought to be or notI
Colonel CARROLL. Oh, no. I was not using it at all, Senator. It
just came up. I have known about the Barlow wiaim I think three
or four years ago, and I talked to you about it, along with the Smith
claim, find I have known more or less about it, but at this time, early
in April. Mr. Lakin told ine about these various stories that were
being cir culated.
Senator BoHAM. The reason I ask you that question, it seems that
Lakin himself has no financial interest in the Barlow claim.
Colonel CAnomJ,. Oh, no; none in the world.
Senator BORAH. Then, why should Lakin be employing you to look
into the Barlow claim?
colonel l CARJOL. He said his company was interested in defend.
ing Machado, and that was the. reason he got me.
Senator BOR.i. Therefore the Barlow claim is a kind of a key to
tile success or failure of the Mtlihdo ml(iministration?
Colonel C.uMuOL,. Perhaps. It might be the answer to the whole
question. But you will understand, Senator, that in this preambleI don't know who wrote them. I only know where I got them-and
in justice to Senator Moses I asked whether I might tell the truth
about it to this committee and he said I night. You can get it from
him. I don't know where lie got it. But these charges set out in
detail facts that, if true, would compel another intervention, which
these American property"owners down there don't want.
Senator BORA. Blut Lakin was interested in mnaintaininov tile
n
Government?
Colonel CRROLL. Sustaining the Machado government.

Se
refer
rc

Se
claim
Co
So
CI
Se
Co
an,"l
Se
Co
Se
seloto
down
is the_
an
oft, th

Sen
Col,
Sen
is
Coll
Sen
Sen
Y1g
Sol
eign
Col

Senator Bom.ri. You were interested, therefore, in investigation you w

Sel
the Barlow elaim from the standpoint oe sustaining the Government
Colonel CARROlL. Sustaining .aclhdo; yes. lie and I have been little t
personal friends for a great many years.
o t
Senator BoR.M. Do you know how many peol)le were interested for th(
in tile Barlow claim from that standpoint?
Sena
Colo
not.
I
do
No;
Colonel C,,mWOI.Lr.
Senator BORAH. There seems to have been a good many, You are me $2
legal adviser of
Cuba Eiinbassy
Cnete
Co (
Colonel CARROLL. Yes.
Senator BoR.M. How intimately are you informed as to the action single
of the Cuban Embassy with reference to sugar matters in this April,
country

Colonel CAitoLr,. They have never spoken to me on the subject of

sugar. As a matilter of fact, the ambassador has been away all sum.
mer
and about
only recently
returned. I have never been asked to do
anything
it.
Senator BORAi. Then, your employment with the embassy had
nothing to do with the sugar tariff?
(olonel CARROLL. No, no. That was just such advice as they might
want.

tion of

That %
now.
Sena
other
cons.It
Colo
Iembe
They
here.

LOBBY INVESTIGATION

1267

Senator BoIRAI. It had no relation to any particular activity with

reference to legislation?

Colonel CAROLL. No; none whatever.

Senator BonAU. Are . ou going to Cuba to look into this Barlow

claim?
Colonel GARROLL. Yes.

Senator Bomiul. You are going as it friend of the administration?

Colonel
0CARROLL. I am.
Senator BOJRA. You haven't yet had time to look into it?
Colonel CAitOL,. Well, Mr. Lakin prepared a brief on the claim,
and I haven't had time to go into that at all,
Senator Boimi. Mr. Lakin is a citizen of this country, isn't he?
Colonel CAmOLL. Oh, yes.
Senator 1301An. Just why should Mr. Lakin be employing counsel to help sustain the Government of Cuba?
Colonel CAIJLJI,. Well, allI know is he says they have $170,000,000
down there, and they like the administration of Machado. Think it
is the best they have over had down there, and they want to sustain
it, and they think this Barlow business is an assault on the integrity
of the Machado administration.
Senator BoUAH. And therefore they employed you?
Colonel CAUROLL. Yes.
Senator BoR.ir. To go into that matter from the standpoint that
it is an assault?
Colonel CAMROLL. Yes.
Senator BojiAit. Are you going to make a report to Lakin when
you get through investigating the Barlow claim?
Colonel CAnitoi,,. I am.

S.nator Bon,%n. Will you send a copy of that report to the For.
eign Relations Committee?
Colonel CARROLL. I will be very glad to do so. Senator Walsh,
you were talking to me, and I ought to say this:
Senator WALSH of Montana. You may remain seated.

Colonel CAlUOLT., Pardon my apparent feebleness. I am just a

little tired; that is all. I want. to say this; that I make no apologies
for the big fees they pay me. None at all.
Senator OARAWAY. I should think you would boast about it.

Colonel CQJJtoL,. I am not braggiuig about it, if such people pay

me $2,000Senator WALJts Of Montai-ti. Well, I congratulate you.
Colonel CA11no1.L. I want to tell you, Senator Walsh. the greatest
single day's earnings I ever got in my life was on the 15th day of
April, 1865, selling nowspapeis iving an account of the assassination of Abraham Lincoln. I male $&.0 in little 5-cent paper money.
That was the greatest day I ever had, twice over what I am getting
now.
Senator WALSH of Montana. Colonel, i'1 your employment by these
other railroad companies besides the so-called Hill group on this
consolidation matter alone, or do you represent themColonel CARnOLL. The consolidation only. I should say I am a
member of what is known as the Railway Txecutives' Orgnization.
They have a president and a general counsel, Mr. Thom, who lives
here. They also have a legislative or law committee. I think they

1268

LOBBY INVESTIGATION

call it a law committee. I am a member of that law coinmittee

representing the Northern Pacific Railway. But they haven't asked
me to do any legislative work, and I haven't done any. Tile only
thing I have done in Washington since the war was when the r
roads were taken over I went along with them to the Government
and I assisted John Barton Payne in getting a law passed to regu.
late the railroads while under Federal control. That is all the
legislative experience I have had.
Senator WALSmH of Montana. When was this that you brought
President Machado here f
Colonel OAR OLL. Well, it was in April or May, 1025. He was
elected in 1924, and inaugurated in May. It was between his
election and inauguration.
Senator WALsH of Montana. You were likewise somewhat instru.
mental in bringing Queen Marie here, were you not I
Colonel CARROLL. Yes. I helped carry her around.
Senator CARAWAY. Were you about the only one that was left on
theColonel
train by the time
gotknow
through
tie trip?
0
I was. We brought her
whether
meROLL.
Ithey
don't
back all right.
Senator OARAWAY. I know you d!d. I want to ask you a question
please, Colonel. I judge you are interested in the investigation ol
the so-called Barlow claim as hostile to Barlow. You are not trying
to establish Barlow's contention, but to disprove it?
Colonel CARROLL. Oh, yes. I am trying and intend to try in what.

in the
to the
0 e
inresen
lett
i Sen
before
Colk
Sena
Colo
Sent
anythiColo
Sena
thing t
Coo
employ
erst
uncerst
Sah
Sh
Cln
Sen
working
Cuba (J
Colon

of Mr.
ever way I can to maintain and sustaino Senat
Senator CARAWAY. The Machado government
Colonel CARROLL. The Machado government, as I would if an Shattue
assault was made upon my own country.
Colony
Senator CARAWAY. The reason I ask you this question-I don't
Senat
know whether there was anything said that I ought to have gotten ploymen
the impression, but I got tile impression from Mr. Lakin that he
Ctolonj
was interested in establishing the Barlow claim. I evidently was in ill sumar
error about that. I don't know that he said anything here from
Senate
which I should have drawn that inference, and Isee now that lie for your
has employed you to try to defeat the Barlow claim.
colonl
Colonel CARROLL. Yes.

Senator RoBzsoN of Indiana. Colonel, when did you receive the

$10,000 retainer?
Con01el -CAMoLL. When?
Senator Ronizsox of Indiana. When?
Colonel CAROLT,. Well, I don't know. I think it was in May
or June.
Senator Rbsnsox of Indiana. Of this year?
Colonel CARitoLL. Yes.
Senator Ronixsox of Indiana. That was for work in connection
with the tariff?
Colonel CARnOLL. Yes.
Senator Ronmsox of Indiana. What were you expected to do?
Colonel CARROLL. Well, Mr. Lakin said he only wanted me to
advise and counsel with them about it. As a matter of fact, I was
not able to take any active part, but I advised and sat down with
them, and we agreed that everything that was done should be done

Senat(

Colone
Senate
since th,1

Colone

Senato

insix mol
Colone
taken abc
Senato
regularly
Colonel
Senator
Colonel
Senator
rst mone,
78214.

LOBBY INVESTIGATION

1269

in the open. I thought we had the right to express our grievances

to the Congress, and, as I stated awhile ago, Mr. Shattuck was to
present it to the committee and Lakin, as president of the Cuba
Co., and had this large interest in sugar plantations, was to present it
in letters to the Congress and to the Senate and to the public.
Senator RoBINsO of Indiana. Well, Mr. Shattuck did appear
before the Ways and Means CommitteeV
Colonel CARJORu,. Yes* I think he did.
Senator RoBINSoN of indiana. Or, at any rate, he filed there?
Colonel OAnu0LL. Yes.

Senator RoBi-sso of Indiana. Did you prepare that brief or have

anything to do with its preparati0n?1
Colonel CARRoL. No, sir* I didn't have anything to do with it.
Senator ROBiNSON of Indiana. Did Mr. Shattucklimself have anything to do with your employment?
C61onel CAtRoLL. I don't know whether he did or not. I was
employed by Mr. Lakin. Shattuck, like myself, is a hired man, as I
understand. Is that right?
Senator RomNsoN of Indiana. Let us just have your testimony.
Wi. Shattuck has been on the stand and may be on again.
Colonel COmLo. All right.
Senator RoBINsON of Indiana. For whom did you think you were
working, the United States Sugar Association or Mr. Lakin, the
cubf U06.I
Colonel CAnnou. I thought I was working under the direction
of Mr. Lakin.
Senator RonINsoN of Indiana. But you did counsel with Mr.
Shattuck?
Colonel CAnBo,. Oh, yes; certainly.
Senator RoBINsoN. And throughout the summer of your employmentl
Colonel CAIOLL. Yes. I gave up my vacation and stayed here
ill summer.
Senator RoBINsoN of Indiana. When did you receive the $4,500
for your monthly pay?
Colonel CAnROLl. I think the 1st of June.
Senator RoBiNsoN of Indiana. The 1st of June?
Colonel CARRoL. Yes.
Senator RoINqsox of Indiana. And you received $4,500 a month
since thfm regularly?
Colonel CAnou. Yes; I have.
Senator RomNsoN of Indiana. That is $27,000 you have received
m six months.

Colonel CARRoLL. I will send you up a statement. I may be mistaken about just when I got it.
Senator RoBiNsoN of Indiana. You have received the money

egularly?

Colonel CI oL. Oh, yea.

Senator RomosoN of Indiana. You haven't missed a month?
Colonel CAitnou. Not a month, and I hope I won't.
Senator RomnsoN of Indiana. And so far as you remember the
t money was received in June?
78214--20--PT 3----3

1270

LOBBY INVESTIGATION

Colonel CARROU.. I thiuk. The checks are all issued account of the

Cuba Co.

Senator RoBINsoN of Indiana. If you are correct in your recollect.

tion, then that is $37,000 you have received from Mr. Lakin, or from
the Cuban Co
Colonel CAPmom. Yes; and the $10,000 retainer.
Senator RoBINSON of Indiana. That is counted in?

Colonel CAROLL. Yes.

Senator RoBINsoN of Indiana. How long do you expect to continue

to receive the $4,500 a month?

Colonel

CARRoL.

Well, I hoped it would be over before this tine,

but I have got several trips to make to Cuba.

Senator ROBmISON of Indiana. Several trips?

Colonel CAPnOLi.. Well I promised to make three trips. I can't

give all my time to it, unfortunately. They have made no complaint

and have said nothing to me about it, but I have now arranged to go.
Frankly,
I ought
to tell
you that
figured upto this
cost, ItI
found--well,
I have
to travel
like when
I am we
accustomed
travel.
costs me from $4 000 to $4,00 to go to Cuba. I have to take a
doctor with me. I have to take an attendant with me. I have got
to have some hired lawyers.
Senator RoBiNsoN of Indiana. Colonel, you are the counsel of the

CI
dow,
pub.
is Ie

So

inter
Cc

whe
a Inhow
Se

Spe

Co
ing t
S1

to flil

Cuban Embassy?

Colonel CAP.ouL. I am.

Senator ROBINSON of Indiana. And they are interested therefore

in the Cuban administration?

Colonel CAnRoLL. Yes.
Senator ROBINsoN of Indiana. In fact, you counsel that adminis.
tration?
Colonel CARROLL. Yes.

say
shei
Cc

Sei
Det

Senator RoBINsoN of Indiana. As to things connected with its

welfare?

Colonel CAPROLL. Whatever they ask me about, I give them what

advice I think is best..

Senator ROBINSON of Indiana.. Now, it would be your duty in

any event to uphold that administration in connection with the

regular retainer you receive as salary?
Colonel CARROLL. Certainly, o'r resign.
Senator ROBINS of Indiana. Or resign.

Colonel CARROLL. Yes.

Senator RODINSO. of Indiana. Now, you also receive from the

Cuba Co. $4,500 a month, as I understand, for upholding the Cuban
administration?
Colonel CMuinoLL,. Yes. You can put it that way, if you like.
Senator ROBINSON of Indiana. That is what it amounts to, isn't it?
Colonel CARROLL. Probably so.

Senator ROBINSON of Indiana. You are doing nothing in connection with sugar for that $4,500. That is true, is it not?
Colonel CGAmoLL. That is very true.

Senator RoBINSO of Indiana. Now, if you go to Cuba, these three

trips that you take to CubaColonel CAmoLL. Yes.

Senator RoINFSON Of Indiana. What can you do there to uphold

the Cuban administration?

Co
since
has I
Ser

CO'
They
-forni
Petrc
Sex
Co.
Set
Co
Sezi
Co.
SeCoSei
Wash
Co
Setrols

LOBBY INVESTIGATION

1271

Colonel CAPoLL. Well, I don't know what I can do until I get

down there.

Senator Ron!isoN of Indiana. What do you expect to try to do?

Colonel CARROLL. I expect to try to show, first of all, that the preamble contained in these resolutions is not true. They charge the
public health is not what it ought to be, and the administration itself
is very corrupt and dominates the courts, and so forth.
Senator RoBNsoN of Indiana. Do you expect to clear this up by
interviews with President Machado?
Colonel CARROLL. No, no; I do not. If the committee is Interested

when I get through, I will send them my brief. I can't tell. I am

a lawyer. So are you. You don't go and tell the people in advance
how you are going to try your case.
Senator RoBINsoN of Indiana. I am just wondering, Colonel, what
specific things you are doing for the $4,500 a month.
Colonel

-ARROLL. As a matter of fact, that seems awfully big to

you, but I would like to tell you that out of the money they are paying to me I have got to pay tle Government in increased income taxes
$24.000, plus.
Senator Rom..sox of Indiana. Yes; I know, but what I was trying
to find out is what you expect to do for the Cuba Co.
Colonel CARROLL. Maybe they have -overestimated my capacity.
KSybe so.
Senator Rornxso.N of Indiana. Colonel, I also understood you to
say you are counsel and have been for some time for the Dutch
Shell Co.
Colonel OARROLL. Yes.
Senator RomsoN of Indiana. And appear before the Interior

Department?
Colonel CARROLL. Yes.
Senator Rom.issom of Indiana. For that company
Colonel CARROLL. They have never had any legislative matters

since I have been with them that I know of. At least, none of them
has been called to my attention.
Senator RoBixsoN of Indiana. Colonel, what is the Dutch Shell

Co.I

Colonel CARROLL. Well, it is a Dutch-Holland controlled concern.

They own large property in this country. The Shell Co. of California -nd the Roxanna Corporation of St. Lo uis, the Asiatic
Petroleum Co.-Senator BORAH. That is not a Dutch-controlled company now?
Colonel CARROLL. Oh, not now. That has all been settled.
Senator Bomir. The English control it now?
Colonel CAROLL. The English now?

Senator

OIRAI.

Yes.

Colonel CARROLL. Well, I don't think they do, Senator.

Senator BoR zi. Well, I think you will find that is so.
Colonel CARoLL. I may be mistaken about that.
Senator ROIWNSON of Indiana. Colonel, you represent them here in
Washington, don't you?
Colonel CARoLL. I do.
Senator RoBINsoN of Indiana. And you ought to know who controls it.

1272

IOBJY

NVESOATIO

Colonel CA ROLL. Well, immediately after the coming of the new

Secreta.'y, Wilbur, we had made a lease with a fellw b-y the name

of Ralph, in California. The Shell Co. of California had made this

lease, and the question was upon the assignment of the lease, and upon
that question arose the question of the eligibility of the Dutch com.
pany, and after much controversy it was reported to the State De.
partment and settled that the so-called Shell Co. and Dutch companies
were controlled by Holland, and the lease was approved by Wilbur.
You know about that, I suppose. But if there is anything new since
then, Senator, I don't know.
.menti
Senator BORAH. The company. That was a corporation that
owned the stock?
Colonel OAIM6LL. I don't know.

We have filed a complete list

in the Interior Department. We had to give every stockholder, his

residence and amount. I can't carry that i my head. If you are
interested, I will get you a copy of it.
Senator BORAIT. AVell, I am interested, it I am satisfied I have
the facts.
Senator RonBiqsoN of Indiana. Colonel, what is the capital of the
Dutch Shell Co.?

Colonel CARROLL. I don't, know exactly. I think it is close to a

billion dollars.

Sen
count

Coll
act, eA
Sen
ment
Col
Baker
Sen
Coll
Sen

Coll

Sen
and th
Coll
to ma

Sen
Coh
on Inc
got pe

Sent

Senator RoBzisoN of Indiana. Do you know what their investment

before

Colonel CARROLL. Well, it is in the neighborhood, I think, of

that I

is in this company

$500,000,000. It is very hard to say. The head of the concern is

Gen. Avery Andrews, who is chairman of the board of these Ameri.
can concerns, and we report to him and I suppose he reports to The
Hague.
Senator ROBINSON of Indiana. You have been representing them

here at Washington for the past 10 years, I understood you to say.

Colonel CARROLL Yes* I think so.
Senator RoBiNsoN of ndiana. How much do they pay you, Colo.

nel?

Cok

Sent
have C
Colc
Sena
commit
Colc
to et

An r

Col

Colonel CARROLL. $25,000 a year.

Senator ROBINSON of Indiana. Is that a retainer or a specific

Andre,
Sena

Colonel CARROLL. That is paid every month.

Senator RoBINsoN of Indiana. Have they paid you any money be.

Sena
Shell

salary?

sides the regular $25,0001

Colonel CARRom. Not a penny.
Senator ROBINSON of Indiana. That includes all the services you
render?
Colonel CARROLL. Yes; and I pay my own expenses, too.
Senator ROBIN ON of Indiana. What service in the last five years
have you rendered for them, generally?
Colonel CA oL&. Well, it-has been-there is a great amount of
detail in bringing in expert labor and all that. We have everyda
trips to the State Department, which is done by my assistant. I don t
do that.
Senator RoBiNsoN of Indiana. To the State Department?
Colonel CARROLL. Yes; to get passports to bring in the labor, expert
labor.

Colk

ments

Col(
Sen

the St
Colc
any ot

Sena

You sit

Colh
Sena
merger
Cole
Sena
consohi

LOBBY IN VESTIOATIO2N

1273

Senator RoBiNsoN of Indiana. Do they bring in labor from foreign

Countries?
Colonel CARROLL. Various countries. They bring in under the labor
act, experts.
Senator ROBINSON of Indiana. And you go to the State Department or send some one?
Colonel CARROLL. I don't do it. It goes through my office.

Mr.

Baker does that. I go over occasionally.

Senator RolutsoN of Indiana. Mr. Baker is the associate you
mentioned awhile ago?
Colonel CARROLL. Yes.
Senator Rom, sox of Indiana. He is the only associate you have?
Colonel CARROLL. The only one I have.

Senator RoniNsoN of Indiana. Aside from the State Department,

and these passports-.
Colonel CAmtoLu.. Well, all the leases. They are constantly trying

to make leases.

Senator RoaiNsox of Indiana. Where?

Colonel CARROLL. Well, for instance, they are trying to make leases

on Indian lands from the Indians in Oklahoma, and I think we have

got pending several applications for leases in California.
Senator RorNsoz of Indiana. You represent this foreign company
before the Interior Department for leases of that kind?
Colonel CAUROLL. Oh, I do whatever they send to me to do, Senator,

that I can do.

Senator RoBINsoN of Indiana. Do you know how many leases they

have of Government property or with the Indians?

Colonel CARROLL. No; I do not. You know, we had thisSenator RoBiNsoN

of Indiana. You can furnish that to this

committee

Colonel CARROLL. I don't know whether I can or not. I will try

to get it, if you want it.

glnator Rominso- of Indiana. Suppose you do.

Colonel CARROLL. I will do that.

I will have to ask General

Andrews to furnish it, because I haven't it in my office.

Senator ROBINSON of Indiana. Just so the committee gets it.

Colonel CARROLL. I will be glad to do that.
Senator RonINsoN of Indiana. What else do you do for the -Dutch

Shell Co. in connection with your contact with Government departments or officials?
Colonel CARROLL. Nothing in the world.
Senator RoBnso.N, of Indiana. Just the Interior Department and

the State Department.

Colonel CAnnOLL. I don't think they have ever had any business in
any other department. I don't i'ecall that they had.
Senator loniNsox of Indiana. Colonel, you also represent, I think
you said, a number of railroads?
Colonel CO nOLL. Yes.

Senator RonI.-sox of Indiana. You are preparing a brief now on

mergers or consolidations?
Colonel CARROLL. Yes.
Senator RoBIN;so.

of Indiana. That has nothing to do with the

consolidation program that is in progress?

1274

LOBBY INVESTIoATION

Colonel CAnnOL,. No. The railroads themselves file their applica.

tons before the commission. The controversy whether three shall

be four parties in the East or five parties in the East. I don't know
what will be the outcome.
Senator RomrNsov of Indiana. The brief that you are preparing
now,- to whom do you expect to present that brief
Colonel CARROLL. The Interstate Commerce Commission, when
they have called a hearing. They haven't fixed a hearing on this
yet.
of Indiana.
That has to do with the consolida.
Senator
RoBINsoN
of railroads?
of a number
tion
or merger
Colonel cARROLL. Yes; the Baltimore & Ohio and the so-called
Van Swerigen merger. They seem to be in accord and I represent
both parties.
Senator RoBinsox of Indiana. Whom also do you represent here,
Colonel? You have mentioned the Dutch Shell Co.; you have men.
tioned the Lakin interests, the Cuba Co., and the United States
Sugar.
Colonel CARROLL. The United Fruit Co.
Senator Rornxsox of Indiana. Who is that?
Colonel CAiROLL. The United Fruit.

I have represented them for

about two years.

Senator RoimsoN of Indiana. That is an American corporation?

Colonel CARROLL. Yes.

Senator Ronjxsox of Indiana. What is its capital stock?

Co

brou
Se
a yea
Co
S?
pa
Cc
Burl'
a
is
office
In rc
Se

Co',

Se
C0
Set
Co
the 1
Set
you

Co
Se

Co
Set

Colonel CARHOLL. About $100,000,000.

railrc

Senator RoniNsoN of Indiana. Where is it incorporated?

Colonel CARROLL. I think it is incorporated in Massachusetts.

pas
get
Co,

Senator RonixsoN of Indiana. $100,000,0001

Colonel CARRoLL. About $200,000,000.

Senator ROBINSON of Indiana. Colonel, what fee do you receive

from the United Friit Co.?

Colonel CARROLL. What fees?

Senator RoBiNsoN of Indiana. Yes.

Colonel
month.

CAUROLL.

$1,500 a month-no, $15,000 a year, or $1,250 a

Senator RoniNsoN of Indiana- What is the United Fruit Co.?

Colonel CARROLL. WVell, they are a shipping company.

Senator RoisnrsoN of Indiana. They are what?

Colonel CARROLL. Shipping, largely engaged in shipping, and the
production of bananas in South America.
Senator RoniNsoN of Indiana. South America?
Colonel CARROLL. Yes. Central America, the Honduras.
Senator RoBimsov of Indiana. What do you do for them here in
Washington?
Colonel CnnaorL. I have done very little for then. I think they
anticipated that there was going to be an attempt to levy a tax on
bananas. I imagine that. They talked to me about it.
Senator RoBiNsoN of Indiana. They anticipated that .
Colonel CARROLL. They anticipated something of that kind.
Senator RoBmsoN of Indiana. They employed you to help pre.
vent the Government from levying a tax on bananas?

Co

ley p

Sen
Co
Sen

0e
Co

momo
SeUnite
Co
Se
resen
Co,
I don
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Sen
their
Co
gradi

LOBBY INVESTIGATION

1275

Colonel CARROLL. Yes; and to do such other business as might be

brought up.
Senator RoBIxsoN of Indiana. And for that they pay you $15,000
a year?
Colonel CAmROLL. A year; yes, sir.
Senator RoBINsoN of Indiana. Colonel, how much do the railroads

pa you?

Colonel CARROLL. Well, I have a sort of joint employment by the

Burlington and the Northern Pacific, with an expense account that
is a little bit less than $500. They allow me a little office rent, $75
office rent, and $100 for a stenographer and $125 for an assistant.
In round numbers, they. pay me about $26,000 a year.
Senator BORAnI. How much?
Colonel CARROLL. $20 000
Senator RoBxisoN of Indiana. $20,000 a year?
Colonel CARROLL. Yes; the two companies.

Senator RoBINsoN of Indiana. Which two companies?

Colonel CARROLL. The Burlington and the Northern Pacific, and

the Northwestern Improvement, which is a subsidiary.
Senator ROBINSON of Indiana. Now, I understood you to say that
you are general counsel here also for the B. &0.?
Colonel CARROLL. Yes.
Senator RoBINsoN of Indiana. What do they pay you?
Colonel CAROLL. $10,000.

Senator RoBINsoN of Indiana. I think you mentioned some other

railroad companies.
Colonel CARROLL. Well, I mentioned the Erie Railroad, which

pays me $3,000.

Senator RoBINsoN of Indiana. Yes.

Colonel CARROLL. The Chesapeake & Ohio and the Hocking Val-

ley pay me $12,000.

Senator

ROBINSON of Indiana. $12,000?

Colonel CARROLL. Yes.

Senator Ronisox of Indiana. What other companies?

Colonel CARROLL.

WhatI

enator RoBINsoN of Indiana. What other railroad companies?

Colonel CAROJL. I don't think I represent any others. At the
moment I don't recall any other railroads.
Senator RonINsoN of Indiana. Colonel, you have got down to the
United Fruit Co. now?
Colonel CARROLL. Yes.
Senator ROBINSON of Indiana. What other companies do you represent?
Colonel CAIRROLL. I don't think I represent any other companies.
I don't recall at the moment that I do.
Senator RoBINSO: of Indiana. You mentioned a moment ago,
Colonel, that you would have to see General Andrews to get certain
papers or certain information?
Colonel Carroll. Yes.
Senator RoniNsox of Indiana. Will you identify him a little further?
Colonel CARROLL. Gen. Avery D. Andrews is an American, and a
graduate of West Point, and one of Roosevelt's old boosters. He

1276

LOBBY INVESTIGATION

is the head of the Royal Dutch and its subsidiaries in this country,
known as chairman of their different boards.
Senator RoninsoN of Indiana. Chairman of their different boards?
Colonel CARROLL. Yes.
Senator ROBiNSON of Indiana. How many boards have they,
Colonel?
Colonel CARROLL. Wel, there is the Shell Co. of California, and the

Roxanna Co. of St.. Louis, the Asiatic Petroleum Co., and perhaps

wa
repi
you

one or two other concerns.

C.

Senator RornisoN of Indiana. It would be interesting if you could

furnish to the commitete the names of those various subsidiaries.
Colonel CARROLL. I will.

Senator RoBissoN of Indiana. And the amount of capital each

one has.
Colonel CARROLL. Yes.

Senator ROBiNSON of Indiana. If you can.

Colonel CARROLL. Yes; I will be glad to do that.
Senator RoBInoS of Indiana. Ad, of course, the leases they have
with the Government.
Colonel CARROLL. Yes.
Senator RoBiNsoN of Indiana. And Gen. Avery D. Andrews, then,
as I understand it, is the chairman of each of the boards of these
subsidiary companies?Colonel CARROLL. Yes. He is really the head of the representa.

ties in the United States.

Senator ROBiNsoN of Indiana. What is his address, Colonel?
Colonel CARROLL. Sixt -five Broadway, New York.
Senator ROBINSoiq of Indiana. Colonel did I ask you, or did you
state, how much you received from the Northern Pacific?
Colonel CARRoJJ. I receive from the Northern Pacific-I give it in
figures exactly. I receive from the Northern Pacific $9,04 a year.
Senator ROBINSON of Indiana. $9,0D0
Colonel CARROLL. And from the Burlington $10,500 a year and
then I have this expense account, which is a trifle. That is all tile
expense account I have.
Senator ROBnKSON of Indiana. Colonel, a hurried addition of these
various sums you have just-suggested would indicate that from these
different companies-that is, those you have enumeratedColonel CARROLL. Yes.
Senator RoBINsoN of Indiana. You receive approximately $143,000.
a year.
Colonel CARRoLL. Yes.
Senator RonIsoN of Indiana. Does that seem correct to you I
Colonel CARROLL. Well, I think it is a little bit more, rather than
les.
.
Senator RoBiNsON of Indiana. Do you know how much it ist
Colonel CARIROLL. I would be very glad to send you my income-tax
return. That will. show it. I willsend you a copy of it. I would
be glad to do that.
Senator RoBisSON of Indiana. I think that will be unnecessary,
Colonel.
Senator BORAII. Colonel, just a word. When did you become
attorney for the fruit company

intc
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atto

LOBBY INVESTIGATION

1277

Colonel CARnoLL. A year ago last September.

Senator BORAH. That is when the agitation of the tariff on bananas
was brought up?
Colonel CAROLL. Yes.
Senator BORAH. Do you know the capitalization of that company?
Colonel CARROLL. I don't know, Senator. I have got the last
report down at my office but I think it is around $200,000,000. If
you would like to know, I would be glad to furnish it.
Senator BO9AI. Can you give me, offhand, the profits-the income?
Colonel CARtOLU. No; I can not.
Senator BORAH. Do you know the extentColonel CARROLL. I would be glad to send you the last annual

report, if you would like to have me do it.

Senator BORAH. Do you know the extent of the bananas they ship

into this country?

Colonel CARROLL. Well it is a very enormous amount.

Senator BORAH. And they come in free?
Colonel CARRoL. Yes.
Senator BORAH. You want to keep them free?
Colonel CARROLL. That is what they want to do. I haven't really

done very much about it.

Senator BORAH. They would be opposed to paying even a revenue

tax, I suppose?
Colonel CARROLL. Well, I don't know about that. There are very
few people that volunteer to accept taxation.
Senator BORAH. I wish you would furnish us the amount of bananas which'are shipped into this country by that company, will you?
Colonel CARROLL. Yes; I will. I can't do it for five or six days.
I have to write to "et it..
Senator BORAH. That will be all right.
Colonel CARiOtLL. I will be glad to give any information I can

about this whole subject, because, Senator, my work is in the open.

I am not ashamed of myself or my associates.
Senator WALSH of Montana. You have been entirely frank, Colonel.
Colonel CARROLL. I am very tired, Senator., I am just an old
worn-outman.

Senator BORAH. I will only ask a question or two. I have no desire to prolong it, but I must say I am very much interested in the
Barlow matter.
Colonel CARROLL. I know that, and I have great faith in you myrelf on that subject, too.
Senator BORAH. I really can't understand Colonel, why Mr. Lakin

should employ an attorney take part in an investigation of a

private claim. This is not a claim against the Government and

the Government is not supposed to have anything to do with it.

Colonel CARROLL. Wasn't there an effort made, Senator to have
it settled in the diplomatic channels as they did in the Smith case?
Senator BORAH. They claim it should be settled in the courts, and

the Cubans claim it'is now in the courts and should be settled by the
courts.
Colonel CARROLL. Yes.

Senator

BoRAi!.

Now, why should an American citizen employ an

attorney to appear, as it were, against the claim of another American

1278

LOBBY INVESTIGATION

citizen, which is a private claim, and supposedly being settled ac.

cording to law in the courts of Cuba.
Colonel CARROLL. I think my emplopyient was largely in defense
of these charges made by Barlow and his friends against the adminis.

tration. Personally I don't know Mr. Barlow.

Senator BORAW. Would you feel perfectly free if you should de.
velop a line, on investigation, of facts Which would show the justice
of the Baflow claim, to pursue it with the same lawyerlike eagerness
that you would if it were not
Colonel OARROJL. I certainly would. I don't have any desire to
do an injustice to any human being.
Senator BORMAir Then if the investigation discloses, in your
oplton as a lawyer, tfhat Barlow has a claim Colonel CARROLL. I shall report it to you.

Co
ment
like t
Sol

TiWe
Co

SC

took
ment

Co,

Seamba
cob
Co

Senator BonAr. You don't understand; then, you are there for
the purpose of defeating him I
Colonel CARROLL. Oh, no; no, no, no; just to get the truth.
.
Senator BOIRAH. Tell me why did you bring the president to this
country after he was elected? .
Colonel CARROLL. Well, I liked Machado, who was a good friend
of mine, and hie wanted to come up ad see Mr. Coolidge and start
in on litinew administration in a friendly way, and I took my car
and went down there and brought him up here. took him over to the
White House. He was entertained there, and I took him back home
again and I visited him. I think lie is one of the finest characters I
ever knew.
Senator BORAU. It was largely a matter of personal admiration
and friendship t
Colonel CMIROLL. Sure.
Senator BORAH. There was no suggestion from any interested
parties in this country that you do so?
Colonel CARROLL. No, no; and I must say that neither the president
or the .rcretary of state or any of the officials down there have ever
mentioi, d Barlow's name to me. I have heard it talked about the
embassy here, more or less.
Senator BORAn. When Senator Moses called upon you it was in
regard to the Barlow claimI
Colonel CARROLL. He came arid said lie knew I was very much
interested in Machado. He knows about that, our friendsliip, and
he said they were making those charges, and there was about to
be introduced in the Senate Committee on Foreign Relations a set
of resolutions that if adopted would bring about intervention. Well,
I said I would like to have a copy of that, could I. He said lie
would get me'a copy of it, and I think the next day I got a copy and
later on I thought, "Well, if this is true, I will have it published to
the world.
Senator BORItI. Did you do anything in regard to it after you

Jense
Co
manSc
man
ease?
Co.
Edw
Se:
this
ing f
Co
Se
Col
fellow
1 don
Set

published it. I have a copy of it in my pocket if you would like to

have it.
Senator BORAu. I mean, did you take it up with the Government
of Cuba, in any way t

in it.
Se
lead
0e ,
to fui

got the copy ?

Colonel CAHROLL. Yes; I gave it to the New York Times. They

anvt
Se,
matte
Co
Se
Se

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Se
Salt:
Co
Se
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and
anyt

Co

LOBBY INVESTIGATION

1279

Colonel CAnioLL. Only that I mentioned it. I notified the Govern-

ment of Cuba through tre embassy of what I had done. Would you
like to have a copy I
Senator BoAif. You mean the one that appeared in the New York
Times?
Colonel CAnROLTJ. Yes.
Senator BOIAM. No. I have seen that. As I understand it, you
took no part in presenting it either pro or con to the Cuban Government?
Colonel CAIRnOLL. Oh, no; no, indeed.
Senator BoitAii. Did you make any representation to the Cuban
ambassador here?
Colonel CARROLL. To the chargtz d'aftaires. I told him what was
going on here, and he saw this copy of the paper. What lie (lid, if
anything, about it, I don't know.
Senator BOilAH. That was the extent of your activity in the
matter?
Colonel CABROLL. Yes.
Senator BoRA. I believe that is all.
Senator WALSh of Montana. Colonel, I am sorry to keep you any
longer.
Colonel CAInOLL. That is all right.
Senator WALSH of Montana. DI you leain about an attorney from
Suit Lake who had investigated this Barlow case down in Cuba?
Colonel CAUROLL. No; I did not. If you would mention the name.
Senator IVAwS of Montana. A man by the name of Dennett.
Colonel CARROLL. No; I have been talked to by a man named Peck
and Carlin. They have been to see me about it, but I couldn't do
anything about it.
Senator WALSH of Montana. The Salt Lake lawyer's name was
Jensen.
Colonel CARiOLL. No; I don't think so. I can't recall. He had so

many lawyers that I don't recall all of them.

Senator WALS1 of Montana. But you didn't hear of this Salt Lake
man by the name of Jensen going to Cuba to investigate this Barlow
case?
Colonel CARROLL. No; I don't think so. I think I hea rd of an
Edward Farstell, of St. Louis, going down there.
Senator WALSH of Montana. Have you heard it suggested that
this Barlow case was stimulated and promoted by the interests looking for a duty on sugar?
Colonel CARROLL. No; I have not.
Senator WALSH of Montana. For the purpose of discrediting-Colonel CAniOLL. 0h, I haye heard tat the western beet-sugar

fellows were doing this, that, and the other, but it is just like rumor.
I don't believe it.
Senator WALsh of Montana. You don't take any stock in that?
Colonel CARinOLL. No; I don't. It may be so, but I take no stock
in it.
Senator WALS1 of Montana. You have no information that would
lead you to that conclusion?
Colonel CAnnoL. None in the world. If I get any, I will be glad
to furnish it to you.

1280

LOBBY INVESTIOATION

Senator ROBINSON of Indiana. Colonel, I understood you to say a

moment ago that the United Fruit Co. feared a tariff on bananas at
the time the employed you.

Colonel

CARRoLL. Yes.

Senator ROBINSOx of Indiana. Who employed you for them

Colonel CARROLL. George P. Chittenden, their vice president, ant
M(
their president-"
live?
he
does
Where
Senator RornNsoN of Indiana.
me.
for
sent
Mass. They
Colonel CAROLL. He lives in Boston,
for me.
sent
They
all.
at
job
this
solicit
I did not
mean, sent for you
you
Senator RoniNsoN of Indiana. What do
I went up to Bos.
Boston.
to
go
to
Colonel CARROLL. Asking me
arrangement.
an
to
came
we
ton and saw them and
to mention
Senator ROBINSON of Indiana. I thought you started
someone else's name.
of the name of
Colonel CARRoLL. I tried to think at the moment
very well.
the president of the company, a man I know
he the other man ?
Senator RoBNsoN of Indiana. Wasthe
vice president.
Colonel CARROLL. He was-he and
the only representative
you
Are
InAiana.
of
ROBINSON
Senator
they have here, Mr. Carroll?
Colonel CARROLL. I don't know about that. I have never heard
of any other.
Senator RonnisoN of Indiana. Colonel, one other question, and I
think that is all. I understood you to say in response to a question
of Senator Walsh awhile ago that while you were in Missouri you
spent quite a considerable time in Jefferson City.
Colonel CARROLL. Yes.
Senator ROBINSON of Indiana. Was that while the legislature was
in ses ion?
Colonel CARROLL. It certainly was. There would be no occasion
to be there otherwise. I am really telling you now, if you want to
know, that I am ashamed of ever having gone to Jefferson City on
that business, and 28 years ago I notified the president of the C. B.
& Q. Railroad that I would never go to the damned town again, and
I have never gone there. Pardon me.
Senator CARAWAY. May I ask .question. Why were you ashamed?
Was it the character of the work?
Colonel CARROLL. Vell, it was the character of lobbying around,
buttonholing fellows.
Senator CARAWAY. You don't approve of it?
Colonel CARROLL. I do not. I promised my God then Ihat I was
finished, and. I play my game in the open. "
like
Senator CARAWAY. It is a delight, Colonel, to have a witness
appreciate
yourself that is frank. I just want to say how greatly I
it. You are just such a striking example of that iu contrast with
some other fellows we have had that it has been a torture to get
anything approaching the truth from.
Colonel CARROL.. Senator Robinson, I want to shake hands with
you. I am a Hoosier. I grew up with an old Quaker in Morgan.
town, Ind.
Senator BORAH. Just one other question, Colonel. Did you have
anything to do in connection with a loan matter in connection with
Queen Marie's trip?

1e]

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cat
erc

LOBBY INVESTIGATION

1281

Colonel CAmaoLL. A loan? Not in the world. If she borrowed any

money, she didn't get any that I know of. I think, Senator, it is a
that the Queen's trip has never been understood.
great
If youmisfortune
will let me take five minutes, I will explain it. Do you want
to hear that? We have talked about everything else.
Senator OARAWAY. Yes; go ahead.
Colonel CARRO.L. Sam Hill, the son-in-law of James J., that you
know and Loie Fuller, and some other people organized what they
called the Mary Institute of Fine Arts, located about 100 miles from
Portland, Oreg., on the Columbia River, and they got some stuff
together and invited, through Government channels, the Queen to
come here.
Senator CARAWAY. I beg your pardon. Did you say the Mary Institute of Finance?
Colonel Camioua. No; 'fine arts. This is all very old. They invited the Queen to come and dedicate it, and the Government granted
permission for her to come; so when they arrived here, Senator,
there was no way to take her around. Nobody had any money,
and Hill asked the Northern Pacific Railroad if they would take
her out to Mary Hill which is on a joint road of theirs. We went
to the Baltimore & Ohio to take them out, and the job fell to me.
Senator CARAWAY. You weren't sorry?
Colonel CARROLL. What?
Senator CAUAWAY. You weren't sorry to take that job?
Colonel CARtoL.. Ohi I wasn't particularly sorry, but I want to

tell you what she said to me when I met her. I said, "I am just a
child of nature. I don't know anything about this kind of business,
and I don't know anything about the orderly proceedings of the
courts of Europe, and I want to do just what you would have me do."
She said to me, " You know the slogan, ' When in Rome, do as the
Romans do.'" I said, " Yes." She said, "Well, you just take me
like you take your wife or daughter, and I will do the balance."
When we got tip in Canada-this is all very funny-the New York
World came aboard with some kodak pictures that showed the Mary
Institute of Fine Arts was nothing but a few walls of concrete.
There wasn't a door. There wasn't an)hing. Had we had in our
train a million and a half dollars in paintings and statuary to put
in the Napoleonic room when we got there, with two high coinmissioners of France bringing it along, and we had a half million dollars
of the same thing to put in the Rumanian room, and when we got
there there was no Napoleonic room, and there wasn't any Rumanian
room. It was perfectly ridiculous, and I was never so embarrassed in
my life. I though, "What in the world are we going to do?"
Senator CARAWAY. Let me ask you. Did you put any of them off
the train before you got there.
Colonel CAnuOLL. No; I didnt put anybody off the train. But
when we got there-Senator bor'fh, you will be interested in this, as
showing what a marvelous woman this girl was. [Laughter.] I
don't mean to be funny, gentlemen but she was introduced. We had
a little prayer, a brief one. and lo was introduced to dedicate it.
Looking across at Samuel Hill she said, "I was invited here to dedicate this museum of fine arts, and I was told that this was two great
cross roads, one from the Atlantic to the Pacific, and one from

1282

LOBBY INVESTIGATION

Canada to Mexico, and here was designed to be the future seat of

Hill is a dreamer; ILoie
Looking at Hill she said, " Well, Samuel and
who is going to say
dreamer,
a
am
too,
I,
Fuller is a dreamer.
that dreams won't come true?"
Well, there you are. Pardon me for taking up your time.

empire.l

TESTIMONY OF EDWIN P. SHATTUOK-Recalled

(The witness had previously been sworn by the chairman.)
Senator RoBN soN of Indiana. Mr. Shattuck, since you are back, I
would like to ask one question. I understood you to say when you
were here the other day that you spent an average of t ree days a
week in Washington since last January. What did you do in Wash.
ington during those three days each week?
Mr. SHAT'rUCK. I did a great deal in conferring with experts and
working out a sliding scale.' That was the early part of the work.
Senator' RoBINso of Indiana. What do you mean. experts?
Mr. SHTArrucK. With the experts of the Department of Commerce.
you work
Senator RoBIzsoN; of Indiana. Whom, for instance, did
with?
Mr. SjiKrFUCK. Mr. Perdum, who was the head of the sugar divi.
sion in the Department of Commerce.
Senator RoBzisoN of Indiana. How much time did you spend with
Mr. PerdumI
Mr. SHATTUCK. Not a great deal of time. There were a number
of conferences about the work.
Senator RoBInmON of Indiana. How many conferences did youhave with Mr. Perdum?
Mr. SHATrUCK. I should say four or five, or six or seven.
Senator ROBINSON of Indiana. In the period extending from last
January until when ?
Mr. SHATrucK. No; that was, we will say, beginning in March or
April. I was not here in January.
Senator RoBINSON of Indiana. Wait a minute. You had four or
five conferences with Mr. Perdum ?
Mr. SHATUOK. Yes.
Senator ROBINSON of Indiana. Beginning some time or other in
March?
Mr. SHyATucK. March or April, probably.
Senator RomxsoN of Indiana. But you had been here since Janu.
ary?
Mr. SIA-7'ricx. No; Senator, you are wrong.
Senator RoBINsoN of Indiana. Well, if I am wrong, you are wrong.
I understood you to say you had been here ah average of three days
a week beginning last January.
Mr. SiAtrrucK. No; I think I said beginning March or April.
Senator RoBImSON of Indiana. As I remember it, you said an aver.
age of three days a week since last January. I repeated that question
and got the same answer, I think.
Mr. Sia,&rucK. No. I remember that question, and I told you I
was in Florida.
Senator RoBINsoN of Indiana. All right. You now desire to say
you were here an average of three days a week from'what period?

pros

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e
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M

LOBBY INVESTIGATION

1283

Mr. SIxiTUoK. I should say from the middle of March until the

present time. Sometimes a day a week; sometimes four or five.

Senator RoB.NsoN. of Indiana. All right. Now, you had four or

five conferences with Mr. PerdumI

Senator RoBINsoN of Indiana. How long did each one of these conferences last?
Mr. SHATTUCK. Maybe three or four hours, an hour, a half hour
sometimes.
Senator RoBINS0N of Indiana. All right, four or five such conferences. With whom else did you confer?
Mr. SIIAwrUcK. I worked with Mr. Johnston, the statistician of the
sugar association, practically every day for two or three months,
every day I was there.
Senator Ronx.so.N of Indiana. Mr. Johnston, the statistician of the
sugar association?
M r SuATWCK. Yes.
Senator RoBINsoN of Indiana. That is the United States Sugar
Association?

Mr.

SATPuoic.

That is right.

Senator ROBINSON of Indiana. How often did you work with him?
Mr. SHATrUCK. I think every day that I was here.
Senator RoBiNsox of Indiana. He, you said the other day, is the
man in charge of the sugar bureau here?
Mr. SHATrUOK. That is right.
Senator RoBINsoN of- Indiana. Of course, you would work with
him?
Mr. SHATTUCK. Yes, air.
Senator ROBINSON of Indiana. Because he has this Washington
office of your company?
Mr. SHATTucK. Yes, sir.
Senator ROBINSON of Indiana. But he could just as well go to
New York, busy as you are, and work with you there could he not?
Mr. SHATTUCK. He might have, but he had his maerial here. It
was convenient for me to be here.
Senator ROBINSON of Indiana. Well, with whom else did you work?
Mr. SHATTUCK. With the head of the tariff division in the Depart.
ment of Commerce. I can'Y recall his name for the moment.
Senator ROBINSON of Indiana. How many conferences did you
have with him?
Mr. SHATTUCK. Oh, probably two or three. I don't recall.
Senator RoBINsoN of Indiana. Now with whom else did you work?
Mr. SHATTUCK. I worked with Mr. Lakin a great deal.
Senator RoBIasoN of Indiana. Mr. LakinI
Mr. SrATrucK. Lakin.
I
Senator RomNsoN of Indiana. He was, of course, here in the interest of the sugar proposition
Mr. SHATruCK. Yes, the same thing.
Senator ROBiNSON of Indiana. The tariff?
Mr. SIATIUCK. Yes.
Senator RoINsoN of Indiana. Then, your work was in connection,
so far as he was concerned, and so far as Mr. Johnston was concerned, and so far as the sliding scale was concerned, in connection
with the thrift bill?
Mr. SHAITUCK. Yes, sir.

1284

LOBBY INVESTIGATION

Senator RoBI,.soN of Indiana. Now, with whom else did you

confer?

the

times on the sliding scale.

e
mon

Mr. SHAw'uox. I conferred with Senator Smoot a great many

Senator RoBixsox of Indiana. As a matter of fact, your reason for

staying here three days a week throughout the period of the consid.
eration of this bill i hfie House and Senate was in what we commonly
call lobbying activities for your proposition? Isn't that the fact?
Mr. SHAIUcK. No; that is not the fact. I did not do any.lobby,
ing. I was engaged to assist in trying to get put into operation the
findings of the Triff Commission. That is where this whole thing
started. I appeared and represented the sugar interests before the
Tariff Commission.
Senator RowNsoN of Indiana. How does that differ in the slightest degree from some one on the other side of the tariff situation
working here in the interest of his program 1
Mr. SIHAWVrCK. I do not see that it differs any.
Senator ROBINSON of Indiana. Then, it is practically the same,
isn't it ?
'
Mr. SUATrucK. But, we were seeking toSenator RominsoN of Indiana (interposing). In other words, if
one is lobbying the other is lobbying? Isn't that true? If one is
lobbying the other is lobbying; the character of the work is the same,
isn't it ?
Mr. SHATrUCK. Well, I do not know the character of the work
that other people have done. I know the character of work I have
done.
Senator ROBINSON of Indiana. Their work was to furnish their
program, and that is what you were doing?
Mr. SHATrUCK. Quite so, sir.
Senator RoBiNsoN of Indiana. That is all.
Senator CARAWAY. Mr. Shattuck, do you think it is a part of an
attorney's duty to his client to hire a publicity agent and have all
these matters pass through the lawyer's office? Is that a legal prop.
osition ?
Mr. StATFUOK. No. That was done at the request of Mr. Lakin,
because we talked it over.
Senator CARA W Y. I know. I am. not talking about that.
Mr. SiIATmuo. That was just an incident.
Senator CARAWAY. You wold not call that legal work?
Mr. SHATTUCK. No. That was just an incident.
Senator CARAWAY. Well, what would you call it?
Mr. SHATruCK. That is doing something that a client asks you
aJue
to do.
Senator CAnAwAY. Yes. For what purpose?
Mr. SHAWDUcK. To establish a publicity bureau and get somebody
in charge of it.
Senator CARAWAY. For what purpose?
Mr. SHiToK. To put the information to the public.
~a~
upos Y.For .Sept.
hatp
purpose?
For what
Senator CARAWAY. Senior
Mr. SxxA-rruoK. To try and educate the public and Congressmen
to the facts which should be known in legislating on the subject.
Senator CARAWAY. For what purpose?

Aug'

M
S8
ever
final
it-t
K
S1
All
M
81
M

71T
hous
year
S

M
in.
up.

Dec.

H.

Feb.
Mar.
Apr..
une

July
Aug.
Sept.
Oct.
Nov
ec.
Dec.

Januv
Juno
J

May
July

July
Augui

Janu

July
July

Feb.
My

1285,

LOBBY INVESTIGATION

Mr. SHATUCR. Well, in our case we were trying to either hold

the tariff as it was or to put it where the Tariff Commission said it
ouht to be.
Senator CARAWAY. So that your company would make more
moneyI
Mr. SuAToUCK. SO that they would lose less, probably.
Senator CARAWAY. Well, all right. You have to split hairs on
everything, so we will say -"lose less." It was the purpose, then,
finally-that is What I am getting at; it takes a long time to reach
it-to influence legislation?

Mr. SHATruoK. Yes.

Senator CARAvAY. And, of course, you do not call that lobbying.
All right; thank you. That is all.
Mr. SHATrUCK. May I insert these in the record?
Senator WAisn of Montana. Well, what is that?

Mr. SHATrUoK. Well, may I briefly tell you what they are?
These are the fees that Czarnikow-Rlionda, a sugar brokerage
house in New York,. paid my firm as a retainer, covering about five
years, the entire period of the retention.
Senator RoBINSON. How much is the total?
Mr. SHATruoK. The total is-I will have to figure it up and put it
in. It is sixty-odd thousand or seventy-odd. I have not figured it
up. I will figure it up.
(The list referred to is as follows:)
Tranwrilpt of rccord of fcc8 rcc.lvc4 from Ozarnfwic.Rlonda Oo.
Dec. 2, 1919, retainer, October, November, and December, S. G.
------------------------------------------------H. &
&
Jan. 3, 1020, retilner, 8. 0.
------------------Feb. 1, 1020, retainer, S. 0. H.
------------------ *------------Mar. 1, 1020, retainer, 8. G. IL &
------------------------------Apr. 1, 1920, reta ner, 8. (. 11. &
---------------------------May 1, 1920, retainer, S. 0. H. &
---------------------------June 1, 1020, retainer, S. 0. H. &
---------------------------July 1, 11)20, retainer, S. 0. H. &
-----------------------------Aug. 1, 1020, retultier, 8. 0. & 0
Sept. 1, 1920, retainer, S. G. & O --------------------------------Oct. 1, 1920, retainer, 8. 0. & 0 ----------------------------------------------------------Nov 1, 1920, retainer, S. 0. & 0
-----------------------------Dec. 1, 1920, retainer, S. G. &
----------------------------Dec. 31, 1020, retainer, 8. G. &
January to June, 1921, monthly retainer, 8. G. & 0----------------------June 8, 1021, demurrage claims ---------------------July to December, 1921, monthly retainer, S. G. & 0 ---------------January to April, 1922, monthly retainer, S. 0. & G--------------May 2, 1022, Monthly retainer, 8. 0. & G --------------------------------------------------June 2, 1922, Alton Mercantile Co
----------------------------------------Monthly retainer
--------.
---------------------July 5, 1022, monthly retainer
.
July 20, 1922, Citizens Bank case ------------------------------------------August to Dec. 31, 1022, retainer ----------------------------January to June 30, 1023, retainer ------------July 14, 1023, Sherburne, Wellenstein -------------------------July to November, 1023, retainer, S. 0. & 0 -------------------------------------------------Sept. 19, 1023, Brand.Castano
---------------------------Feb. 18, 1924, 1. Wall Commission
-----------------------------July 20. 1024, Joannes Bros. Co
78214-20-T 3--4

$3,760.
1250
1---------------------------1,250
250
1 2
1 250
i 20
1 250
250
250
I 250
1250
250
1,250
1000
7,50
, 000
1, 250
2,000
1,250
1,250
2, 000
0250
7,j00
1,000
0,20
2,500

,000

3, 000

1286

LOBBY INVESTIGATION

After the dissolution of the firm of Shattuck, Glenn & Ganter

in November, 1923, the new firm of Glenn & Ganter took over and
continued under their name the litigations concerning Czarnikow.
Rionda Co. which were Unfinished at the tine of dissolution. Since
that time Shattuck, Bangs & Winant has received as its proportion
of fees from Glenn & Ganter the sum of $34,000.

Act

Services of S. B. & IV. for December, 1923,

3,M500

Act

Now I also have here a list of over a hundred cases involving

millions of dollars, probably 30 cases, which are litigated cases in
Chicago, in Oklahoma, in New York City, in Brook yn, in which
two or three years were spent on the ease, some of themtowere
put
appeals; a tremendous lot of litigated Work. I would like
that in the record. I would be glad to explain it all in detail as I
have it here.
Senator WALSh4 of Montana. Well, I do not think that is neces.
sary,.
Mr. SHATUOr. It was a very busy season-these four or five
years-in claims on breaches or contract, involving hundreds of
thousands of dollars in a great many cases arising.
Senator WALSH of Montana. You told us about that the other
day.
Mr. SITArrucm. Well, it has nothing to do with the tariff. That

Act

is my point.
(The statements referred to are as follows:)

T
by

MRSMORANDUSM

ind years 1024 and 1925._.

Act
Ac
Aet
Act
102,
"ell{

Of V
bue3

sugs
C
the
by

op LEGAL Mrrrtls YOR CzAiCNIhrOW-RIoNDA Co. Dtvuxo PE.ROD

Op ForlIxOINO P,.AMNNTS

ern

Re contract forms: October, 1919, etc. Drawing forms of charter parties;

contracts for purchase of sugar on f. o. b. basis and c. I. f. basis; drawing
contracts for letters of credit; revising tll forms of contracts It general use
in the sale and shipment of supplies to Cuba and the purchase of sugar for
shipment to the United States aid (treat Britain and other Europeanl ports:
drawing pulverization clauses; clauses for optional delivery at various ports;
drawing Insuraiwe contracts, etc.
Ito coul demurrage claims: October, 1019, to June, 1921. Tis Involved
claims for demurrage rnd dispatch In United States and Cuba Iw steamships
against Czarnikow Co. on about 35 cargoes of coal totaling $154,M91. These
demutrage claims arose during 1010 and 1020 on shipments of coal to Cuba,
arising out of congestion, strikes, etc., and the claims were made by the
following steamship companies:
L. Pewaukee ----------$7, 350.05 Cranenest ------------$2,467.72
Lake Duncan -----------3,758.80 L. lille.um
.-----------10, ,s. V
Calispell ----------------108.12
Do ----------------3, 848. 53
Do -------------------14,451.0 1 L. Crampus-------------- 4. 128. 21
Lake Cayuga -----------8,777.00
Do ----------------1,394.o7
Mariner's llarbor --------- 14,075.48 Is. Pochutm --------------207.07
Lake

Act
St
Act

riar --------------

0. 03. 23

Lake Gorin -------------3,207.17

Lake (ledney -----------4, 380. 04
Craythorne --------------301.04
L. Annette --------------3, 230. 47
I. Daraga ----------- 2.023.91
L. Foxeraft -------------- 14,802. 57
I,. Fluvanna ----------- 0. 1105. 57
I. Franci, --------------594. 03
L. (lormania-----------5,732.14
Coquina ----------------3,020.24
I,. Ormnioc --------------1f.21)
L. FnirlIt---e--------------0, 759. U

orcoriin ---------------

Coreoran---------------Lake Crystal -----------Lake Larga -------------L#%;ke Lesa -------------T,. Fluvanna ------------.. fledney ---------------Tr. Winthrop-------------1,. fentoa ---------------I. Winthrop---------------...
1, So lhago---------------T,. Akkra-----------------

2.035. 30

2, 035. 30
2,835.70
87. 72
1,394.74
07.33
4. 135. 35
104. 83
2I. 7
03
887.75
1. 27. 311

Jul.
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Yo

LOBBY INVESTIGATION

1287

Action No. 1: Alton Mercantile Co. v. Czanlkow-Rionoda Co.; district court, McClain County, Okla
$17, 200
Actlon, No. 2: Ridenour Biker Mea'iadile Co. v. Qzarilkow-lionda,
0).; United Mttites District Court, Southern District of New Y-rk8, 000
Action No. 3: Willamson-IlallselI-Frtusler Co. v. Czarnikow-tibuda;
Southern District of New York ---------------------------4,000
Action No. 4: El Reno Wlible.,ale Grocery Co. 'v. Czarnikow-ltionda;
United states District Court, Southern District ---------------89.712
Action No. 5: I. Wall Commission Co. v. Czarnikow-Rlonda;
Supreme Court, NeW York County, amount of Judgment--------- 50,90.70
Action No, 0: Joannes Bros. Co. v. Czarnikow-ltlonda; Supreme
Court, New York County
6-------------------------------4
78. 00
Action No. 7: Ryley-WIlson Grocer Co. v. Czarnikow-Rionda;
Supreme Court, New York County ----------------------8,400.00
Acllon No. 8: P. M. Ieavitt & Co. v. Czarnikow-Rionda; United
States District Court, Southern District of New York---------- 225,000.00
Czarnikow-Rlonda Co. v. Federal; 8 cases: Consolidated actions Nos. 1 tO 8.
Actions for breach of warranty. Action faiken In Oct l ,r, 1023, and tillhi May.
1028. Judgment entered June 1, 1920, in favor of plaintiff for $450,000. Appeal
landing. This claim against the Federal Sugar Refining Co. arose out of claims
of the above compmnles against Czaroikow for off-grade sugar.
Czarnikow-Rionda Co. v. Federal: Action No. 9. Similar to last action for
breach of contract based on claim of Shepard-Strassheim Co. for off-grade
sugar. Amount $50,000. Awaiting trial.
Czarnikow-Rionda Co. v. Federal: Action No. 10. Similar claim based on
the sale of bff-grade sugar to Lamborn & Co. Consolidated with action brought
by Lamborn v. Czarnikow for breach of warranty. Amount $560,000. Await.
Ing trial.
Brodskl Gross v. Czarnikow, municipal court, Chicago, II1.; $0,600; started
by attachment: Suit for damages for off-grade sugar.
Black Diamond Steamship Co. v. Cuban Trading Co. (Strike situation,
$15,000.)
McVeagh & Co. v. Czarnikow: Action in United States District Court, Southera District of New York; for $22,010; started September, 1921; settled
July, 1024.
Horn v. Minford Lueder Co.: Supreme Court, Kings County; suit for $2,000;
started fall of 1928; Judgment for defendant April, 1927.
Claims of Czarnlkow, Suzuki v,. R . Sherburne. This involved a bankruptcy
In the United States District Court for the District of Massachusetts. The
claim of 0. Czarnikow (Ltd.) was for $18,009.68. The claim of Suzuki in the
same bankruptcy was for $18,781.26. The bankruptcy proceedings were had In
May, 1021.
The Sherburne Co. was affiliated with the Continental Products Co., which was
also liquidated through the Sherburn bankruptcy proceedings; also filed against
Sherburne & Co. claims on behalf of Wallensten Krouse & Co. for $12,010, and
on behalf of italli Bros. $1,953.
Cuban Trading t'. Black Diamond: Supreme Court, Now York County;
started June, 1010,, discontinued September, 1925. $15,000.
Banco Commerclale v. Czarnikow: Supreme Court, New York County; suit
for $8,409; settled in May, 1923, by payment of $8,480.
Czarnikow v. Citizens National Bank of l Iteno: Action oil letter of credit
for $09,000; Unitid States Supreme Court. Western District of Oklahoma;
Judgment for the plaintiff; judgment discharged June 80, 1022.
Czarnlkow a. Kulde: supremee (ourt, New York County; March, 1023, for
$126,000; Pettled for M5,000 in Jilly, 1)25.
Northern Jobbing v. Lunborn: Action in muidelpal court of Chicago for
breach of warranty for $180,000; started August, 1921; judgment paid by
defendant Janmary, 1020. $49,520.80.
Lamon-(ohl v. Czarnikow: United States District Southern District of
New York; amount sued for $29,200; suit started July, 1021; settled January,
1028.
McNeiII & lliggins Co. v. Czartlikow; Superior court Cook County, ill. Contract May, 1020. claim, $71,102.45; second suit. April 23, 1020, $104,023.
Mallott Wholesale Co. v. Czarnikow: $33,245.88; .outhern District of New
York.

1288

LOBBY INVIESTIOATION

Ferrel* i. Minforil Lued-r: Czarnikow & Co. V. Steamshlip (7ity of Eivood..

Claim for damages arising out of defective ship.
Sheppard Strasshelm Co. v,. Czarnikow-t.: Off-grade sugiltC
Czaralkow ro. Chicago Bottlers: Failure to accept sugar delivery.
Czarnikow-glonda Co. i,. Steamship Fauna: August to October, 1921. Claim
for short deliver0-$0.
czai.nikow-ltlonda
a,.Rockwood & Co.: December, 1020. Delayed delivery
to.
of sugar. EXchange of documents.
Czarnikow-Rlionda Co., re National Corporation: February, 1921. Contract
of sale. 10,000 bags refined sugar.
Niagara Supply Co. v. Czarnikow-Rlonda: October, 1920. Cinil for 800 bags
of off-colored Sugar disallowed.
Czarnilkoi-0londa Co. v. Oanfleld Canning Co. and Plymouth Canning Co.. .
March. 1921 to May, 10921. Sale of 1,200 bags of nugar. Arrangements forpayment of dishonored drafts for $10,092.
CzarnikoW-Rlonda Co., re Luce Sugar Can Harvester Co.: November, 1021,
to May, 1025. Bankrupt. Claim for $180,000 based on loans secured by
assignment of patents.
Czarnilkow.Rionda Co. v. George Mogensen: Bankrupt. January, 1021, to
April, 1925. Claim In bankruptcy for $100.
Czarnikow-Rtionda Co., re steamship. Pozian December, 1920. Failure to.
deliver merchandise to value of $5,000, consigned to llalbna.
J. 0. Roach v. Czarnikow-Rionda Co. Action In supreme court, New York
County. June, 1921, to March, 1025, to recover under agreement $345,590, also.
re Mercantile Bnk (of America (Inc.).
Czarnikow-Rionda Co., re steamship 6olhaug: January, 1021, to. December,
1922. Claim for $11,000 for freight duo under charter party.
Czarnlkow.Ilonda Co. i,. Leon Nisslmrn Taranto. Action In city court, City
of Now York. Trial in Mareh, 1924. $98.
Czarnikow-ItIonda Co., re Tulnuou Sugar Co. v. Alton Mercantile Co.: June,
1921, to August, 1921. Claim for $10,000 for goods sold aid delivered. Payment
refused on account of counterclaim.
Czarnikow-RIlonda Co., re steamship Ncw Britain: August, 1021, to February,
1023. Claim for dispatch on unloading at port of discharge. $0,023.
Czarnikow-Riomda Co., re steamship Louis K. Thurlow: July, 1021, to Decem.
ber, 1923. Claim for $6,014, arising out of short delivery of 120 bags of sugar.
Czarnikow-Rionda Co., re Watson Bros. Stores, bankrupt: April, 1922. Claim
for $300.
Czarnikow-Rlionda Co.. re Well.'nstein, Krause & Co.: October, 11121, to April,
1924. Claim In bankruptcy for $4,823.
COzrnikow-1tionda Co., re Borden Co. steamship Rangoon Mara: January and
February, 1022. Claim for demurrage, $300.
Czarnikow-lionda Co., ro steamship Harriet: February-May, 1023. Claim
for short delivery, $430.
Czarplkow-illonda Co. v. Chicago Bottlers Brokerage: August, 1920-November. 1023. Breach of c-ntract for fallur, to take delivery of sugar. Damages,

$3,000.

Cznrnikow.lionda Co., re I. and U. Frenkel: October, 1022. Claim of $1,232.

Off-grade sugar.
Czarnikow-Rlonda Co., re Glass & Praeskill: July, 1021, to August, 1024.
Bankruptcy claim for $210.
C4zarnlkow v. Austin Nichols: June, 1021. Claim for $104.
Czarnikow-llonda Co. i'. Steamship R'ypt Marn: October, 1021. Survey
charges on 10,000.bags of sugar.
Czarnlkowlionda Co. r'. G. H. Flndlay & Co., steamship Singaporc 3laru:
July, 1021. Denturrage charge, $100.
Czarnlkow-Rionda Co. v. Interstate LiIghterage & Transportafon Co.: Soptember, 1022, to April, 1023. Claim for $173 arising out of lightorage.
Czarnlkow-Rlionda Co., re steamship Lake Ravus: July, 1022. Claim for
$5,153. Short delivery of sugar.
Czarnlkow-Rlionda Co. v. Massey Steamship Co.: January-June, 1023. Claim
for $402; dispatch.
('zarnikow.flonda Co., re Roulston Beckert Co.: August-September, 1921.
Claim for $1,011. Shortage of sugar on delivery.
,
Czarnlkow-Ilonda Co., re steamship Lake Ohamptain: Agust, 1021, to May,
1022. Claim for $423; short delivery.

for

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LOBBY IXVESTIOATION

1289

steamship Bole: October, 1922, to -=, 1923. Claim

Czarnikow-Rlonda
sugar.
to re
for $0,007 damage
Czarnikow-Rionda Co., re Garcia Sugars Corporation: July, 1921, to Mrarch,
1923. Claim for $32,209, demurrage charges and advances.
Czarnikow-Rlonda Co., re steamship Lapland: March, 1922, to December, 1023.
Short delivery claim for $1,590.
Czarnlkow-Rionda Co., re 0. J. Johnson & Co.: March, 192.1, to May, 1024.
Vouched in to defend an action for $12,469. Off-grade sugar.
Cz rnlkow-R.onda Co., re steamship Mayaro: August, 1921. Payment under
protest. Case of short delivery.
Czarnlkow-Rionda Co, v. Empire Grocory Co. Correspondence regarding
evidence as to sale of sugar by third parties in Detroit.
Czarnikow.Rlonda Co., re Lewellyn Bean Co,, July 1, 1921, to March 29,
1922. Claim for off-grade sugar, amounting to $10,235.
Czarnlkow-RIlonda Co., re Acadia Sugar Refining Co.: May, 1920, to October,
1921. Cllni for shortage of 736 bags of sugar on a 10,000-ton contract.
Czarnlko'-Rionda Co., re steamship Acropolis: January, 1923. Shortage of
71 bags of sugar.
Czarnikow-Ilonda Co., re steamship Argallis: January, 1922. Relative to
arbitration of freight charges.
Czarnikow.-lionda Co., re British Molasses Co.: January, 192.3. Advice on
breach of contract to take delivery.
Czarnikow-lionda Co., re A. R. O'Neill: May, 1021, to June, 1921. Claim of
$171 for demurrage.
Czarnlkow-Rionda Co. v. Pacific Malt Steam Ship Co.: October-November,
1922. Claim for short delivery, $680.
Also mlscellamnous correspondence and advice to Czarnikow-Rionda Co. from
September, 1019, down to date Involving advice on contracts, advice on insurance matters, advice on claims, miscellaneous business advice, miscellaneous
correspondence with customers of Czarnlkow & Co. involving, amongst others,
correspondence with H. Adkins & Co. re tolling agreement, Savannah Sugar
Refining Co.-Federal Sugar Refining Co., claim of off-grade sugar sold to
Springfield Grocery Co.
General advice on c. 1. f. contracts.
General advice on fire Insurance.
Correspondence relating to: Steamship Fort Garne., R. B. Freeman & Co..
Federal Trade Commission, independent warehouses,. W. F. Schrafft & Son,
steamship Jersey Clity, lighter Bangor, Mosel-Johnson Co., Midland Grocery
Co., New York & Cuba Mall Steam Ship Co., Newark Sugar Refining Co.,
steamship OrIzaba, Santa Clara Sugar Co., steamship Texas Maru, S. B. Thonipson & Co.
Czarnikow-Rionda Co., re steamship Patogniers February. 1923, to May,
1923. Claim for short delivery. Amount $7,777.
Czarnikow-ltionda Co. v. Republic Navigation Co.: June, 1021, to November,
1922. Claim for shortage against steamship Plainfield. $1,159.
Czarulkow-Rionda Co., re Sterling Sugar & Railway Co.: July, 1921. Claim
against Sterling Sugar Co.; 157 bags of sugar.
Czarnlkow-Rlonma Co.. re Tacjao Sugar Co.: March and M1ay, 1023. Advice
on voting trust certificates.
Czarnlkow-RIonda Co.. re steamship Tue: January, 1021, to June, 1023.
Claim for $392, short delivery.
Czarnlkow-Rionda Co., re Brauidensteln v. Castano: November, 1021. Attach.
ment of $80,000 worth of credits In the hands4 of Czarnikow.
American Grocers Society (Inc.) v. Czarnlkow-Rionda Co., commenced Sop.
tember 1, 1020, discontinued October 21, 1020, action to restrain presentation of
draft of $114, $00. Injunction of restraint batted.
Czaralkow-Rionda Co. v. Atlantic Sugar Refinery: Examination of files and
advice re anticipatory breach of contract, November. 1020.
Bradley McIntosh contract.-Steamship Vbliumnla: Examination correspondence and letter of advice September 10, 1920.
American Sugar Refining Co.. libellant, v. steamship ,Yew Britain: CzarnlkowRionda Co. et a]. July 10, 1022, February 26, 1923, $1,404.47.
Czarnikow-Rionda Co., re steamship Lewis K. Thurlow.
Crowell & Thurlow Steamship Co.: July 0. 1921. December 21, 1023,
$0,014.90. Claim for shortage in sugar.

1290

LOBBY INVESTIGATION

Czarnlkow.Rionda Co. (Wellensteln, Krause & Co. v. Wright & Brown):

October 25, 1021, April 29, 1024. Bankruptcy claim for $14.823.01.
Czarnikow-lionili (,. P, lVatsin Bros. Stores: April 26, 1t"22, Mady 22, 1922.
Bankruptcy, claim $1,30.70.
American-German Mixed Claims Commission. Matter of claims against Ger.
many filed with cm~nmisslon by Itionda Co. Petition verified Decentier 29, 1920.
Olaims were for losses sustained by the claimant by payment of premiums on
war.risk insurance aggregating $002,003.77. Claims dismimsed under decision
of MixIed Claims Comnisslon November 6, 1023. Liability on the part of Ger.
many for cost of war-risk Insurance premiums.
K Line v. Czarnikow.Rionda Co., re steamship OhlttL-u Mara: Demurrage
clah for $3.030.91.
United States v. Czarnikow.Rionda Co.: United State. District Court,
Suternt )isti'ict of New York. 8teanisip Lake Geduwy. Demurrage claim
$10.180.48. Action bl'gun July, 1922. Action discintiuimd July 12, 1923.
United States v. Czarnikow.Rionda Co., ro steamship Lako 0ormvinla: Demurrage claim, $2.708.09. Action begun July, 1022. Action discontinued July
12, 1923
Pennsylvania Milk Products Co. claim for $742.00: June, 1021, to May, 1924.
Matter steamship Lake Daragat, $3.001.80: Correspondence, advice, etc., from
April 5, 1023, to July 17, 1924.
Savannah Sugar Refining Co.: Examination and approval of recelpt and toll
agreement, June, 1921.
United Wholesale Grocery Co., $009.89: January, 1021, to May, 1021. Claim
for difference In weight of sugar settled.
San Peco Chocolate Co.: Examination of contracts, memorandum of law and
advice re 5.000 tons of San Peco Java sugar.
Claim of Central Caracas for $51,940: July, 1021, to September, 1921,
Settled.
Re Cuban-American Sugar Co.: Opinion letter of advice re 1,400 tons sugar,
July, 1921.
Continental Candy Co.: Advice in connection with bankruptcy clati of
February, 1921, to January. 11)22.
$106;41,0,
Cullen Brokerage Co.: Advice bankruptcy claim, June to September, 1921,
$555.47.

st
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etc.

JANUARY 15, 1025.

Sul

CZARNIXOW-RIONDA CO.
SUINIARY OF COUNSEL

WORK FO

lg

1024 (PARTIAL)

Claim against Thurlow Steamship Co., examining creditors' agreement anodo

Consideration and opinion ro moneyed capital tax (New York) as related
to your checking accounts of customers, etc.
1.I.t. Sherburne, bankrupt (Boston), re collection of dividends, etc.
Opinion antitrust laws re pooling contracts with other c4mlniates. etc.
(0'nferences with Departnent of Conmerce and Deparlmnt of Agricutlture,
re sugar reports.
Shipping and insurance clauses it sugar contracts. Opinion aund dr'aniIg
new clautses to cover.
assignment (if claim and advice and following up.

Ward Line receivership.

Itklllg .tells willi receiver and their

tltor'neys to

protect yoli under exitsitg shillmpig colnracls, (4c.

Claim of K Line and reporthig toil sae.
l)emurralge nnttter re Chilikit M'uiritI which Zwu.ukt Inhvolved.
Ito ils.solutionk Crescent Sugar Co.
lie Informaion on contracts covering shippilng insurance, etc.
Opinions n'o cost Insurance and freight contracts aid coutt constrtctjon,
these contracts where payment to he made against out-turn weglhts, etc.
Attemidance Mercantile Bank of America's annual meeting.
Advice, etc. re subpwna in outside case directing you to produce sugar
contracts.
Study and making amendment to form of cost insurance and freight con.
tract.
Stady uind advice ro contracts guaranteeing against decline in price. Con.
ference with Federal Trade Commission and attorneys regarding their decisions
and iendling cases and following these tip.

ol
line.
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other

LOBBY INVESTIOATION

1291

study clauses it charter party releasing ship from negligence and opinion.

OpInin on effect of Hiarter Act in marine contracts.

Examining form of chairteir party submitted by Ozarnikow-lionda. for revision

to lprvent shlj06.ner rellevintg himself from liability for negligence.

Questions and advice re charter pa ty.
Consolidated Products Corporation; Its liquidation by trustees and looking
up questions of dlitributloh of assets On stock takelf In settlement old claims.
Investigating Newark Sugar Refinhig Co. orgalilzialon.
lie transacth(ll5 bearing on antitrust act and Clayton Act and advice.
Bill of hiding witll shipper's'stamp clauses sent us by you for study, re bags
shorl, washed, unmtrked sugtir, bags In dispute, etc.
Preparation slamp causes to be ueid i off-setting shipper's stamp clauses
and preparing opinion,
Questions re protest to bill of lading.
Cuba stevedot, strike. Examination and giving opinion re effect of existing
contraels with 'ellners and producers.
Clahm of Warner HugaritRellning Co. for delay in shipment, preparing reply
to their demand for damages, etc.
charterr party with Munsoll Line re strike clauses and advice regarding their
right to dispatch vessel with partial cargo and to port. not named, etc.
Luco Sugar Cane Harvester Co. on bankruptcy matter and advice regarding
your rights against that company and respecting the patents, etc.
Negotiations with you and with altorneys and officers American & Cuban
Steamship Co. regarding dispatch of steainers and revision of bills of lading.
on stump clauses aiid on question raised by Cuban Trading Co. (llubana)
regarding same.
Also matters lost year re Walifront Really Co.
Conducting arbitration on claims of contractors.
Attending to various liens filed against the building.
Opinions re liability Insurance, window cleaners, elevator operators, etc.
Negotiations and Settlement Surety Co. re claims arising from default of
contractor.
ie elains against you for damages to No. 112 Wall Street and adjoining
building on vacating premises; negotiations with attorneys, settlement of claims,
etc.
SUMMARY STATEMENT OF SERVICES OV SUATTUCK, BANOS & WINANT FOR 1025

Study of bills of lading used In the Cuban sugar trade for the purpose of tryIng to eliminate disputes between carrier and shipper, consideration of authorlti:., etc. Conference with attorneys for shipping lines.
Consideration of new stamp clauses and advice.
Consideration of new charter party submitted by attorneys for steamship
line. Conferences, advice, etc.
Consideration of protests of captains of vessels regarding stamp clauses, conferences, opinions and advice, etc.
Roach v. Czarnikow-lionda Co.: Study of facts, preparation for trial, conferences, negotiations with attorney for Roach re settlement, preparing stipulations and terminating action.
Sherburne & Co.: Going over files and records in connection with status of
elamis of Czarnikow-ltionda Co. by reason of Judgment obtained by trustees of
Sherburne & Co. against Corn lIxlonge National lBatnk of Philadelphia, conferences and correspondence with attorneys, advice, etc. ,
Opinion on questions ra sed by your labana correspondents regarding count,
torn bags, disputes, etc.
Be Wallfront Realty Co. matters: Lien asserted by Cane, application of receivership funds on account of this lien and protecting situation under bonds
of surety company. Questions on party walls, etc.
Investigating and considering trend of decisions of Federal Trade Commission on question of guaranteeing prices against decline. Following contemporary proceedings in cases before the Federal Trade Commission on this subject,
examination of testimony, especially Corn Products Co. case, conferences, correspondence and advice, etc.
Lake Gediley and Lake Gormiania, re cancellation of bonds.
Investigation re contemplated merger of Federal Sugar Refining Co. with
other refining companies, considering effect of various forms of merger upon

1292

LOBBY INVESTIGATION

claims against Federal, conferences, opinions and advice, preparing forms of

loss
protest, etc.
etc.,
On bankruptcy proceedings of Luce Harvester Co., examination of officials,
In
reports and advice, etc.
rece
On Investigation of claim against Newell and opinion thereon.
ihe,
losing mortgage securing loan of $140,000 by Central Union Trust Company
,'Fe
to Walfront Realty Co.
and
At the request of the committee I give the retainers and fees received fro4
pany
United States Sugar Equalization Board, by the law firm of Shattuck, Glenn,
Ty
Huse, and Ganter and Its successor firms. None of these fees have any relation
B0111
to tariff matters.
tiOn
$00
trac
Apr. 1, 1018, retaner, S. 0. H. & 0 ------------- ---------------Apr. 20, 1018, retainer, 9. 0. HI. & 0
------------------------------ C0
at
June 3, 1018, retainer, S. 0. H. & 0
----------------------------596
ilx,
furt
96
June 27, 1918, retainer, 8. 0. H. & 0 --------------------------------Bo
Aug. 1, 1918, retainer, . V.
& ---- -----------------------------600
poun
Sept. 1, 1018, retainer, 8. 0. H. & 0 ----------------------------Boat
Oct. 1, 1018, retainer, S. 0. H. & 0 -------- ---------------------------5
with
------------------Nov. 1, 1018, retainer, S. 0. H. & 0 ---------Nov. 29, 1018, retainer, 8. 0. H. & - ---------------------------- 60
entit
T
00
---------------------Jan. 2, 1019, retainer, 8. 0. H. & -----Feb. 1, 1919, retainer, 8. 0. H. & 0
----------------------------00
a
Mar. 1, 1919, retainer, R. 0. H. & m---------------------0Cubm
Apr. 1, 1019, retainer, S. 0. H. &
---------------- ------------00
tionr
May 1, 1019, retainer, S. 0. H. & 0 ---------------------------------600
pri(
May 31, 1019, retainer, S. 0. H. & 0
---------------------------00
the
300
price
June 10, 1919, retainer, S. 0. H. & 0 ----------------------------June 30, 1919, retainer, 8. 0. H. & ----------- ---------------fre
July 10, 1919, retainer, 8. 0. H. & 0
----------------------------300
Co.
Aug. 1. 1910, retainer, S. 0. H. & 0- ---------------------------600
is soi
----------------600
TSept. 1, 1019, retainer, S. 0. H. & -----------1.
-----------------------------600
Oct. 1, 1919, retainer, S. O. H. & 0
Nov. 1, 1919, retainer, 5. 0. H. & 0
-----------------------------C0
Com
Dec. 1, 1919. retainer, S. 0. H. & 0
6t------------------halt
Jan. 1, 1020, retainer, 8. 0. H. & 0 ----------------------------,0o
the
Feb. 1. 1020, retainer, S. 0. H. & 0 -----------------------------;00
2.
Mar. 1, 1020, retlain-r, S. 0. H. & 0 --------------------------------00
other
Apr 1, 1020, retainer, 8. 0. IL & 0 -----------------------------------3.
io
---------------------May 1, 1020. retainer. S. 0. It. &
100
tlon
June 1, 1020, retiner, .. 0. IL & 0 ----------------------------and
3.600
July.December; 1020, rtainer, S. 0. & 0 ................
4.
3.
--------------------------------January-.une, 1021, rtainer
July. August. September, 1921, retainer
------------------------1,
Co.
0
tll
October 1-31, 1921, retainer --------------------------------------In
--------------------------1.200
No'eaber-Decentber, 1021, retainer
T
2.400
------------------------January-April, 1022, retainer, 8. 0. &O
and
300
--------------------------------May 2, 1022, retainer, S. 0. &
May 17, 1022. retainer, 8. 0. & 0
-------------------------------- 300
tine
0
T
----------------------------June 1, 1022. retainer. S. 0. & 0
June 1, 1022, retainer, S. 0. &
------------------------------300
settle
June 30, 1022, retaitner, . a. & 0
------------------------------300
Ti
July 16, 1022, retainer, S. 0. & 0
------------------------------300
Bour
July 31, 1022. retainer, U. G. &
------------------------------:00
FeIe
August 8. 1022. retainer. S. 0. &
---------------------300
EquF
August 1r, 1022. retainer. S. 0. & 0
----------------------------00
izatil
September 9, 1922, irtainer, 8. 0. & 0
---------------------------300
T7
September 19, 1922. retainer, S. fl. & ---------------300
0
September 30 122 retainer, 8..0. & --------------------00
ppe
October 17, 1622, retainer, A. 0. & G---------------------------00
October 81, 1022, retainer, S. 0. & o --------------------.00
MEM
The above retainer covered consultation and advice preparation of contracts.
regulations, and' documents in regard to the purchase, sale, and distribution of
sugar, and during its period of active business which ended toward the end of
1010, and In regard to the liquilatlon of Its business and contracts with the
T
Cuban Government, American refiners, the Royal Commission who purchased
total
diffe

LOBBY INVESTIGATION

1293

a portion of the 1019 Cuban sugar crop, with insurance companies on damages,
loss claims and with shipping companies oniclaims for demurrage and dispatch,
etc., and in general we acted as the legal department of the sugar board.
In addition to the retainer above, the firm of Shattuck, Glenn & Ganter
received, on April 22, 1922, a fee of $25,000 for services in the two cases in
thi, United States District Court, Southern District of New York, entitled
,sFederal Bugair Refining Company v. U. S. Sugar Equalization Board (Inc.)"
anl "U. S. Sugar Equalization Board (Inc.) v. Federal Sugar Refining Company."
The suit of the Federal Sugar R.fining Co. against the Sugar Equalization
Board Was instituted in September, 1019, to recover $20,744 from the Equalization Board. The Federal charged that lu August, 1917, it entered into it contract to export to the Norwegian Government 4,500 tonis of refined sugar
at a price of $0.00 per hundred pounds. '1'hat bivaust, (if the regulations
imilxsed by the food administration it was unable to ship that sugar. It
further alleges that In AUgUst or September, 1918, the Sugar Equallzatioi
Board sold to thle Norwegian Oovernment, 4,500 tos of suaar at $11 per hundred
pounds. The Federal claimed that this later sale by the Sugar Equalization
Board was in fact thp carrying out of the contract made by the Federal Co.
with the Norwegian Government the previous yeart, and claimed that it was
entitled to the profit made by the P.quallzation Board, anmouning to $210,744.
The suit instituted by the Sugar Equalization Board against the Federal
Sugar Refining Co. in September, 1020, was to recover the balance due for
Cuban sugar sold to the Federal during the period of the sugar board's opera.
tios. ''he net amount of this claim was $590,058.70 and consisted of two
principal Items, $404,330.05 being the unpaid differential of 3/,&cents between
the cost of the Cubatn sugar to the Sugar Equalization Board and the sale
price to -the reflners the remaining uniount of $120,002.05 being additional
freight of 2 cents per hundred pounds charged to the Federal Sugar Refilling
Co.for moving tho sugar from New York to Yonkers, where the Federal factory
is situated.
'The Federal Co.'s defenses to the differentials were as follows:
1. That the old agreement of October 1, 1917, with the International Sugar
Committee was still in force during the operations in question and that under
that agreement no differential could be exacted, as the Federal was to obtain
the Cuban sugar at cost.
2. That the agreement of October 25, 1018, between the refiners and the
Sugar Equalization Board was signed by the Federa.l Co. under duress, as
otherwise It would not have been able to receive Its allotment of Cuban sugars.
3. That the agreement of October 25, 1918, was void as the Sugar Equalization Board had no authority from Congress to enter into such an agreement,
and further that it was contrary to the Sherman antitrust law.
4. That the differential of 373j, cents sought to be exacted from the Federal
Co. was in effect tin import tariff duty, and as Congress had not imposed such
a tariff no other department of the Government could do so.
In the spring of 1022 these cases were settled in the following way:
The Federal Co.paid in full the item of differentials amounting to $404,330.06,
and the Federal Co. was released from the payyment of $120,22.05, the additional freight item from New York to Yonkers.
The claim of the Federal Co. for $219,144, on the Norwegian matter, was
settled by the Sugar Equalization Board paying to the Federal Co. $165,000.
The net result being that the Federal Co. paid the Sugar Equalization
Board in full for the differeiitil and the sugar board released its claim on the
Federal for additional freight from New York to Yonkers, and that the Sugar
Equalization Board paid a portion of the profits realized by the Sugar Equalization Board on tle sale to the Norwegian Government.
The foregoing are the salient facts in regard to the litigation in question.
On July 14, 1923, tie firm received a fee of $15,000 for the services which
appear in the following memorandum:
MEMORANDUM Or MATTERS THAT HAVE BE.rN DISPOSED op DvItnNO THE PRESENT
YEAR BY TUC UNITED STATES

SUOAR EQUALIZATION BOARD (INC.)

81I1PPING DOARD DEMIRI.I(IE

CLAIMS

The Shipping Board has asserted claims against thb Sugar Board in the
total sum of $322,000.7. for deniurragem arising under charter parties on 41
different vessels at United States ports during the Sugar Board's operations..

1294

.4L-

LOBBY INVESTIGATION

All these demurrage claims were carefully examined, after obtaining informa.
tion from all available sources, and full consideration was given to the legal
questions Involved, and briefs on the facts and law were pr0pared. Many con.
ferences were had with the Shipplng Board managers, and tlhir attorneys aud
the operators of the Shipping Board vessels, at which tll questions were
thoroughly debated with the result that those denurrage claims were filly
settled on our agreement to 'pay the Shipping BoardI a total of $77,344.88, and
release agreements between the parties were drawn and executed.
HJrees Inasurance promlitns on wroodcn tcs8cli.-Durhug ile Sugar Board's
operitios some wooden vessels were iqllotted to the Sugar Board for bringing
Cuban sugars to the United States, which eai'rled un excess Iiisuirane charge.
The Sugar Board claimed that these excess Insurance premiums should be
reimbursed to the Sugar Board by the Shipping Board. We examined all the
files bearing on this question antd interviewed many of the reiflers who re.
celved cargo on these Vessels, examined lNtO their tccounts aid took the matter
up with the Shipping Board tuid had numerous conferences with them, their
Insurance department and counsel on this subject, and after obtailng neces.
sary allidavitO and supplying the Shipping Board with our accounts and other
data in support of our contention, we were able to secure the full reiburse.
ment of these excess insurance premiums amounting to $15,700.47.
Claims for damaged sugar in ocean tratait on sicamshlip ('orrates and steam.
sip Lake Louise.-Tho American Sugar Iteflning Co. bud for some two years
been trying to adjust antd collect the water damage to the sugar cargo on these
two vessels on behalf of the Sugar Board, and beig unable to adjust the
matter sent all tihe papers to us. We took the matter up with the Insurance
companies mid their counsel, but without success. Wo then made claim
against the Shipping Board and after various conferences with them, and
submitting data and legal arguments were able to collect the full amount of
our damage claims auouliting lit the case of the steamship Corr.tles to $2,.
715.30 and in the case of the steamship Lake Louilo to
Claim of Mtonson Line for dcmnurrwole on stcamnsiIp Paloa.-The Munson
Steamship Line had made a claim for demurrage accruing In 1011) on this
vessel in the sum of $12,797.10 und we succeeded li having this demurrage
claim entirely canceled.
Settlement writh American sugar Rcflnhinl Co.-The American Sugar Refiting
Co. was withholding from the sugar boards at large sum on account of various
claut which had Ieen made against time American Hugar iellitng t!o. which
were chargeable to the Uniled Stutes Sugar I:quiiizattti
Btoard. Most (if
the claims assertcel were denturr~ages, bit some other items were involved.
After prolonged niegotiationts with the America Sugar Iteflling Vo. we td.
justedtill claims and open tcecounts and succeeded lit collct-ting from them
the balance duo on the adjustment of 4112,593.41 lit ihial and comipieto settleument of all matters between the Anorkacttu Sugar Itelnlling Co. and the sugor
bourd, and release agreements were drawn and exeetcted.
scltlcmcnt with Arblwkol
ros.-Likewlse Arbuckle Bris, were withhohing
a considerable sint to l)rotect them agitatst ehims which had btic Imliade ugaillst
then, but which they asserted were properly chargeable to the sugar board,
among which were vulotts dvnlurrage items amid certain other chtllis against
the sugar board Itself.
We entered into egotlatioms with Arbuckle Pros. foir an alJustiment and
settlement of all" these matters and succeeded in collecting from them tile
amount shown to lie due on this adjustment of $25,6110.20, and release agreenients were drawn and executed flally disposing of tilI elains of eliher party
agallst the other.
Chtima of Aanerelif PidfiliUl ('o. find 1. 1. horirll Ronf Co.,
et iuiider Renalo
Joint R~e)orullona o. 12.4-(oslderfitlon and opnilon on tMe Interpretation of
this resolution and scol of the claim. Gomertl advice throupthout the nego.
tiutioms for settlement respectig various questions arlshig from time to time,
and onl preparation of Ililhdigs and report of the hoird to the President. in
which the hoard reduced the ehthnis from 2,024,109.04 as of ,'ebruary 28,
1023, to $2,482,470.33 as of May 24, 1923; maid on drawing Ixecittive order
directing the board to adjust auid settle the ehtm on the basis of its findings
and report and drawing papers nd agreements on settlement.
Clalm of P. Do RoudO 4 Ct o. under Senato Joint Rcolittlon N'o. 7.-This claim
was for some $2,000,000 alleged losses sustained lit the purchase antd importation of Argentine sugar during the year 1020, and under the legislation mentioned the President was given authority to cause the board to liquidate and

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P
I

LOBBY INVESTIGATION

1295

adjust and pay this claim. The President Instructed the sugar board to advdse
him as to the worthiness of the claim. We gave long and careful examination
and eonsIderation to the history of the claim and all data bearing on the subject, Including the testimony taken before the flouse and Senate and the congresslonalk debates thereon, and gave opinions and advice i respect to various
pliases of the matter and on drawing report of the subcommittee to the board
and the report of the board to the President.
acuMral.-In addition to the foregoing various other matters were referred to
us front Iine to tlite, which reqlulred our aetion and advice.
On May 18, 1924, the firm of Shattuck, Batiks & Winant received a payment
on account fromn the Sugar Equalizatilon Board of $10,000 for acting as attorneys fand counsellors in the suit of P. De Rondo & Co. t. U. S. Sugar Vqutlization Board. The suit was based on a resolution of the United Slates on.
gre.s in order to recover losses alleged to have beei -Usthained by the plaintiff
In IitwclisIsilg in the Argentlie

telitic ai c.rtiin amoUin-t of sugdr, bringing

it Into the United Stittes, and selling It here at the request and direction of the
Delrtmient of Justlce. The amount involved, with interest, amounted to
-ver $2.0)0.000. This ense wits tried and Irgued and briefs submitted in the
United States District Court of the District of Delaware, with the result of
the finding of it decree In favor of the plaintiff.
'lito action was then appealed to the United States Circuit Court of Appeals
In Philadelihpln, where briefs were prepared and submitted and the case argued.
The decree below was sustained by at divided court, a very vigorous dissenting
option losing rendered. We then apPlied and prepared and submitted briefs
for a writ of certlorarl in the United States Suprene Court. This writ was
granted and we prepared the brief on behalf of the sugar board for subnisdon
to the United States Supreme Court on the whole question. Before the case
was reached for argument In the United States Supreme Court, negotiations
for settlement was taken up with the plaintiff by the then Attorney General
Stirgent, uind at compromise and settlement was reached.
B this settlement Ilaintiff was paid the sum of 1$500,000, instead of his
elain for the losses which he sustained in an amount with Interest tit excess of
$2,20.OtJ and as a result the sugar board saved about $1,700,000 from the
amount found to be due by the district court. For these services in the United
States Circuit Court of Appeals and In the United Shates $uprene Court we
received from th

phaintlft $20,000.

After

lit Executive order approvilig the

settlement had been made by President Coolidge, general releases were obtained
and the United States Muhirem Court action was discontinued.
A further fee of *T,500 was received by Shattuck. Bangs & Winant i February, 1920, for professioal services for the two years ending Jttnuulry 1.1920,
in respect to various matters connected with the liquidation of the boav and
matters arising from time to time out of the war and postwar operatlolis of
the board, the resolutions of Congress relating to the taking over of Argentine
sugar transactions, and their Investigations fit addition to these specifically
mentioned above, the litigation of Howell & Co. on defaulted Argeltine sugar
contracts In which the board had a contingent interest, litigation between the
Federal itlgar Itefliing Co. and the Norwegian Clovernnwit on export transuctions of the board, litigation between third pairlies tit whIh reguhlAtIons and
activiles of board Involved, Investigation. reports. Inquiries. etc., which have
been referred to its front time to time, and e'Sltitons. opinions. advice, etc.,
over the period.
None of the above fees, of course, has any relhation what-soever to tariff
matters.

Senator Ilom-xsox of Indiana. How much money did you receive

for your tariff activities, Mr. Shattuck

SU1AWVCK. Senator, I have never received anything except, as

I stated the other day, about $25,000.-I think it wao $26,000--for
preparing and presenting the case on sugar before the Tariff Commission. That is all.
Senator Ron.xsox of Indiana. How much more do vou expect?
Mr. SHATTUCK. I have told you I expected to receive ,5,000 or
more. I do not know. I have not received to-day one cent.
Senator RoBIsoN of Indiana. Have you decided since you were
here the other day whether it would be more or not?
Mtr.

1296

LOBBY IN1VESTIOATION

Mr. SHAl'ucK. I have not decided, sir.

Senator ROBiNSON of Indiana. Then, you have received or expect

to receive at least $50,000 for your tariff activities?

Mr. SnATrVcK. Yes, sir.
Senator ROBiNSON of Indiana. All right, sir. That is all.
Senator CARAwAY. That is all, sir. Thank you.
Is the commissioner of agriculture of the State of Mississippi
present? Come around, please.
TESTIMONY OF 1. 0. HOLTON, STATE COMMISSIONER OF AGRI.
CULTURE, ACKSON, MISS.
(The witness was dul' sworn b) the chairman.)
Senator CARAWAY. Will you give the stenographer your ame,
residence, and occupation?
Mr. HOLTON. J. C. Holton. State commissioner of agriculture,
Jackson, Miss.
Senator CARAWAY. You are a native of Mississippi?
Ar. HoLroN. Yes, sir.
Senator CARAWAY. How long have you been commissioner of agriculture ?
Mr. HOLwN. Since January 10, 1928.

ou

asl
it

wi

Senator CARAWAY. What was your occupation prior to becoming

he

Senator CARAWAY. Do you know J. A. Arnold?

ex

commissioner of ngriculture of the State of Mississippi,

Mr. HoL'ro. For four years I was connected with the United
States Department of Agriculture, Bureau of Plant Industry . in the
State of Florida. Later, secretary of the Chamber of Commerce,
Tupelo, Miss., and then superintendent of high schools from 1921
until I was elected in 1927.
Mr. HoLTox. Yes. sir.
Senator CARAWAY. How long have you known him?
Mr. HOLTON. I have known him about a year; possibly since Jan-

uar ,. 1929.

Senator CARAWAY. Where did you get acquainted with him?

Or

Senator CARAWAY. What was the occasion of his coming?

Lo

Mr. Horov. He came to my office in Jackson.

Mr. Hovrox. He was passing through Jackson and came to meet

me. with no particular reason for hiisit.
Senator CARAWAY. He just wanted to get in contact with yot?
Mr. HOLTON. Well, he called; he wanted to come by and meet me.
He was on his way to some town. I don't remember.
Senator CARAWAY. What was the subject you discussed with him

when lie was there?

Mr. HovoN. Well, nothing in particular at that time.
Senator CAUAWAY. You did not talk about anything? Is that
what you say?
Mr. HovroxL
. Well, he came by. and he told me who he was connected with.
Senator CARAWAY. Who did lie say he was connected with?
Mr. HovioN. The Southern Tariff Association.
Senator CARAWAY. Did he tell you what the Southern Tariff Association was? Yes.
Mr. HoivroN.

wh
co
Me

Th
re

LOBBY IN'ESTIGATION

1
1297

CAHAWAY. What did he say it was?

Mr. Homorx. He said it was a nonpartisan organization,
Senator CARIAWAY. How came he to tell you it was nonpartisan?
Mr. HoLrox. Well, I don't know. That is in the principles set
out in the pubica'ions.

Senator

Senator CARAWAY. Well, I did not ask you what was set out. I

asked you how came lhe to tell you it was nonpartisan.

Mr. 11oroN. Well, I 'as asking what the association was, what
it meant, what it was for.

Senator CARAWAY. What did he say it was trying to d0

Mr. Ho,roN. It was interested in getting a tariff schedule on

agricultural products.
Senator CARAw,%Y. Agricultural products?
Mr. Hoz oN. Yes, sir.

Senator CARAWAY. Did he name the products?

Mr. Homo.

Senator

Well, not except in a general way.

Did he ask you to become connected with it?

CARAWAY.

Mr. Horm. No, sir.

Senator CARAWAY. When did he take that question up with you?

Mr. HOLTOX,%. He never has asked me directly to become connected

with it.

Senator

Well, either directly or indirectly; when did

CARAWAY.

he take up this question of your unitingyour activities with his?

Mr. HouiroN. 'he first meeting I attended was in New Orleans.

Senator

CARAWAY.

Senator

CARAWAY.

Who paid your expenses ?

Mr. Hour0N. The State of Mississippi.

The State of Mississippi paid your expenses?

Mr. HouroN. Yes, sir.

* Senator

Did Arnold contribute anything to your

CARAWAY.

expenses on that trip?

Mr. HoOrN. No, sire not a dime.
Senator CARAW A. Not a dime?
Mr. H1ozO. No, sir.

Senator

CARAWA-.

What was the purpose of that meeting in New

Orleans?
Mr. HoLT o . It was a meeting called by Commissioner Wilson, of
Louisiana.
Senator CARAWAY. I did not ask you who called it. I asked you
what was the purpose of the meeting.
Mr. Hourow. To discuss tariff rates -on agricultural products-cotton, rice, sugar, vegetables, and the different vegetable oils.

Senator

CAnAWAY.

Who made the principal speech in that

meeting?
Mr. HIromN. Mr. Kirby, of Houston, Tex., made the principal
address. I have a program here in my brief case.
Senator CARAWAY. You may file that with the committee later.
Then, when did you next see Mr. Arnold?
Mr. Hotzox. Mr. Arnold came to Jackson. If I remember correctly, it was about March 28 or 29.

Senator

CARAWAY.

Mr. Ho ow. Yes.

Senator
that time?

CARAWAY.

Of this year?
What was the reason of his coming there at

1298

LOBBY INVESTIGATION

Mr. HoLToz-. The matter came up at the meeting in New Orleans.

Senator CARAWAY. That is not what I asked you.

Mr. Houvrox. It was a similar meeting in Jackson.

Senator CARAWAY. In Jackson?
Mr. Ho ArN. Jackson, Miss.

in

Mr. Houxror.

Senator CARAWAY. You were going to hold a meeting in Jackson?

Yes, sir.

Senator

CARAWAY.

Senator

CARIAWAY.

What was the purpose of holding the meeting

in Jackson I
Mr. HoLTox. For the same purpose.
Mr. Howo.

For what purpose?

For discussing the rates on agricultural products.

Senator CARAWAY. What was the occasion for discussing rates
in Jackson when they were writing the rates in Washington?
Mr. HoLToN. Well, the purpose was to find out what the general
sentiment over the State was in reference to the rates. We were
interested in seeing---

Senator

CARAWAY.

fr

ca

What effort was made to find out what the

general sentiment wasI

Mr. HoLTno. By calling this meeting.

Senator

CARAWAY.

Well, who attended the meeting?

Mr. HOLTON. Fifty-nine business men and lawyers.

Senator CARAWAY. Fifty-nine business men and lawyers?

Mr. HohlroN. Yes, sir; and farmers, truck growers, mostly heads
of different commodity organizations, like the State Dairymen's
Association, Vegetable Growers Association three or four bank.
ers; all of the different agricultural organizations in the State were
represented.

Senator

CARAWAY.

What were the lawyers doing?

Mr. HoioN. They came in for the meeting.

._

Senator CARAWAY. Who paid the expenses of that meeting?

Mr. HOLTOx. The people of Mississippi.

that meeting by resolution.

It was provided for at

Senator CARAWAY. Where did the checks come from?

Mr. HoLTO. They came from J. A. Arnold, of the Southern

Tariff Association.

Senator

CARAWAY.

Do you mean to say now that the people

down there put up the money in J. A. Arnold's hands, and he sent

it back and paid them?
. Mr. HoLTrig.
No. The money was raised as a result of the resolu.
tion adopted at that meeting.

Senator

CARAWAY.

Well, who contributed the money

Mr. HoroN. Well I do not know how many contributed, except

I have a statement irom Mr. Kramer, of Macomb, Miss., who was
chairman of the finance committee.

Senator CAHAWAY. How much did lie say he received?

Mr. HOLTON. $800. I can tell you exactly.
Senator CARAWAY. We will get to that after a while. How much

did the whole meeting cost

Mr. HovroN. That whole meeting there

Senator CARAWAY. Yes.

Mr. HOroN. $122.

Senator

CARAWAY.

The wh61e meeting cost $122t

pr
de

LOBBY INVESTIGATION

1299

Mr. HoLToN. Yes.

Senator CAaUwAY. Who was it that got $175 or $150 for his interest
in that meeting?
Mr. HoroN. I don't know.
Senator CARAWA. Yes. Some of you gave Mr. Arnold a statenent touchin$ his expense account. Senator Walsh is more familiar
with it. I will not go into it. Anyway_ some enthusiastic protectionist got one hundred and sone odd dollars to attend as a delegate
from Jackson, and lived In Jackson.
Mfr. Houwro. Will you permit me to correct that statement from
$122 to $128.17?
Senator CARAWAY. Who got the 17 cents?
Mr. HowN . Well, that was not-that was the cost of the meeting
and other expenses incurred after the meeting, such as telephone
calls and telegrams.

Senator

CARAwAY.

Senator

CARAWAY.

Senator

CARAWAY.

You were trying to get somebody to come in I

Mr. Howom. Yes. We invited all the members of the Senate and
Congress, and different people over the State.

I guess that is where the 17 cents came in.

Mr. HouTro,. Possibly so.

What was the occasion for Arnold paying the

people?
Mr. HoLToN. He did not pay the people.
Senator CAHAWA . He paid the debts, did he nott
Mr. HouroN. He paid the Western Union messengers and the
Printing and postage and stationery and such things as that, incidntal to the meeting.

Senator CARAWAY. Did he pay any individuals?

Mr. HomoN. Not that I know of.

Senator

CARAWAY.

Then you have not read his testimony. Did he

pay you anything?

Mr. Hourox. He turned $250 over to me to take care of the expense
of the meeting.

Senator CAnAWAY. What did you need $250 for when it only cost

$128?

Mr. HoKroN. We estimated that would be the cost of the meeting.

At this meetingSenator CARAWAY. Well, just a minute. What did you do with
the difference between the $128.17 and $250?
Mr. Hovrow. It is at the disposal of the Southern Tariff Association. It has been reported to them.

Senator CARAWAY. You have still got it?

Mr. HoLT oN-. Yes, sir. I still have it.

Senator C

ARWAY.

Why did you keep it? Why did you not turn

it over?
Mr. HoirON. Well, I made-I have an itemized statement--

Senator

CARAWAY.

I don't care what you have got about a state-

ment. I say, why did you not turn it in to the association?

Mr. Horom. 'to the association?

Senator

CARAWAY.

Senator

CARAWAY.

Yes.

Mr. Hoorox. Well, I have not had any occasion to turn it in.

Well, it isn't your money?

Mr. HoLTox. I know it, and it has been reported that it is not my
money.

LOBBY INVESTIGATION

1300

Senator CARAWAY. I know. How long have you had it?

Mr. Horo.'. The last expenditure was on July 2.
Senator CARAWAY. You have had it since July 2; and you have
kept it. Now let me ask you how much altogether have you got out
of the association?
Mr. HoLToN. $069.73 plus $250.
~mAWAY. $009.78 plus $250?

Senator

Mr. Hourox. Yes.

S
A
S
S
you

Senator ORAWAY. So, you have got $t1.78?

Mr. HoumrN. No, sir. I did not have it.

Senator CARAWAIY. I say you have got that much I

Mr. Hourox. I have received that much; yes, sir.

Senator CARAWAY. IVOl, that is what we are talking about. What
was the occasion for you getting the other $0609.78?
Mr. HoE/roN. At ti s meeting in Jackson they authorized a com.
mittee to be appointed to select some one to represent the farmers and
other interested parties in Mississippi at any meeting that might be
called later, and at the Memphis meeting-there was a meetings later
at Memphis-a resolution was adopted authorizing the meeting to
appoint a committee of five, in fact, all the commissioners of the
South-a committee of three or five to come to Washington, at the
call of the commissioner of agriculture in Louisiana, who is president
of the Southern Commissioners Association.
Senator CARAWAY. I know all about that, but that has nothing to
do with it.
Mr. HoL/ro. I had no money to travel on and this resolution at
Jackson provided for the money to be raised in Mississippi to take
care of our expense,
Senator CAuAwAY. But who were you to get it from? You never
got it from Arnold I
Mr. Hovroy. I got it through Mr. Arnold. Mr. Kramer turned it
over to Mr. Arnold.
Senator CARAWAY. Well, what was the occasion for you to get
What did that pay you for?Ii.V
$609
Mr. HoLr.o. To pay our expenses, the five of us, to come to
Washington. Here is an itemized statement of the expenditures.

Senator

CARAWAY.

Well wait a minute. Why were you being paid

to come to Washington? What were you to do at Washington I

Mr. HoLro. To attend this meeting as called by Commissioner
Wilson.
Senator CARAWAY. What were you to dot
Mr. HOLTOx. To get the groups that had met in these States all
together in Washington.

Senator

CAbAwAY.

Mr. HoITr

For what purpose?

CARAWAY.

Senator

CARAWAY.

Just come here to discuss rates?.

Mr. Hovrow. Yes, sir.

With whom were you to discuss itt

Mr. Hom.-;. I beg our pardonl

en
1
to s,
the
then
We
get
Cnec

to

fire
W,
Sc

other
S
1

S
vote
M

So

SE

askeo

ofM

-.

Senator OARAwiY. With whom were you to discuss it?

Mr. itouro.

-Se

. To discuss rates.

Senator

$4

Why, there were different ones on the program.

Senator CARAWAY. But, were they just brought here to hear
speeches? Was that ItM

Sk
aske

M,

LOBBY INVESTIOATION

1301

Mr. HezroN. All the representatives from all the Southern States

in one meeting.
Senator CAAWAY. To hear speeches?
Mr. Hourox. Well, that-Senator CARAWAY. What did you do while you were here?
Mr. Hourow. I was appointed by the groupSenator CARAWAY. No. Don't say you were appointed. I asked
you what you were t6 do.
Mr. Hovwro. I submitted a brief to the subcommittee of the finance

committee on long staI)le cotton.

Senator CARwAAY. Did you do anything else?

Mr. HoNroN. No, sir.
Senator CARAWAY.

Did you call on the Members of the House or

Senate?
Mr. HoroN. Not officially.
Senator CARAWAY. Now, I did not say "officially."1

to see thmni?

Did you go

Mr. Hov-oN. Yes. I always do when I come here.

Senator CARAWAY. What did you talk about when you came here,
the tariff?
Mr. HoLTOx. Well, the tariff came up.

Senator CARAWAY. Was that the object of your going to see

them?
Mr. Horox. No, sir; it certainly was not.
Senator CARA'wAY. Then, the pu pose-that is what I am trying to
get at-all the purpose of you coning here was to hold a con ference? It was not to go to see Members of Congress or have anything
to do with legislationt
Mr. Htxiro.x. No. sir. That was not in the call at all.
Senator CARAWAY. They. just brought you here for that other
purpose? You were sencing about this nona'partisa organization.
You knew it was raising money to try, as they call it to build a
fire under Senator Harrison to make him change his position?
Mr. Hoz oN. Now, let me tell you, that never did come up in
I i s iss-01)1)1*

Senator CARAWAY. I say, you knew that?

Mr. HoiO . No; I di/not know it until it came out here the
other day in the paper. I did not know it.
Senator CAAwAY. That was your first intimation?
Mr. Homrow. Absolutely.
Senator CARAWAY. Nobody had asked you to try to change the
votes of either one of the Senators from that State?
Mr. Hourox. Well, I possibly had been askedSenator CARAWAY. WIell, who asked you?
Mr. Hoi roV. I don't recall' whether I was asked or not.
Senator CARAWAY. Well, why did you say you were probably
asked?
Mr. Hoxrox. I said I was possibly asked if I knew the opinion
of Senator Harrison.
Senator CARAWAY. No, no. I did not ask you about opinion. I
asked you about changing the vote. Did you have anybody request you to do that?

Mr. Hoxr.

No, air.

78214-20--?r3-5-

1302

LOBBY INVESTIGATION

Senator OARAWAY, So, one of the purposes of your meeting was

to try to give the inpressioii that Mississipi was for protection so

that you could inilluene tile vote of the Members of the Senate
and AbOse from that State?
mS
Mr. HoL o'. Why, we are interested in protection.
Senator CAuAWAY. NOW, that Is not what I asked you. I ask
you if the purpose of your meeting was to try to convince them that
there was a public sentiment down there for protection, so that they
would vote for the bill?
Mir. Ho= -x. Not necessarily.
Senator CARAWAY. Was it one of the purposes?

thil

bef

Mr. Hourox. No, sir. That was not the purpose. The purpose

her
sub

Senator CARAWAY. It wis not then for the purpose of trying to

influence legislation at all?
Mr. Homrmo. As far as I know, no.

spe

was to discuss these rates.

Senator CAUAWAY. Just. nerely anl academic discussion of rates.

All right. You may ask him, Senator.

Senator WLsuH of Montana. What did Mr. Arnold have to do
with this meeting at Now Orleans?
Mr. HoLTo,. At Now Orleans?
Senator VALii of Montana. Yes.
Mr. HoLTo.. Senator I do not know that he took any part what.
soever. He did not make any talk.
Senator Ar~v
s of Montana. What is that?
Mr. HOLroN. He did not make any talk. He was present at the
meeting.
Senator WALSH of Montana. He was present?
.
Mr. HOLTOx. He was present at the meeting; yes, sir; and so was
Mr. Kirby, the president. Mr. Kirby delivered the main address,
which was over the radio.
Senator WALSH of Montana. But you do not know that either of
them was concerned in promoting the meeting?
Mr. HoLO'ro. Well, Mr. Kirby s name was signed to the call, to.
gether with Commissioner Wilson and possibly some others.
Senator W.,r su of Montana. How did you learn that a meeting
wis to be held?
Mr. HoLox. Mr. Wilson in ited me.
Senator IVLsit of Montana. Mr. Wilson?
Mr. Hor:rox. Yes.
Senator WALSH of Montana. Who is he?
Mr. Hoin-ox. Commissioner of agriculture of Louisiana.
Senator lWtms of Montana. By letter?
Mr. Ho-rbx. Yes.
Senator WA1LS, of Montana. That is the first you heard of it?
Mr. Hot-So. Yes, sir.
Senator WALSH of Montana. Was that prior to the time Arnold
called at your office, or later?
Mir. H1oJTOx. I beg your pardon?
Senator WVAJAH of M!ontana. Did you get this notice from Mr.A
Wilson pror to the time that ArnohI called at your office, or had
Arnold 1...woen at your office prior to that time?
Mr. HoLrox. He had been at my office prior to that time but it
he mentioned this meeting I don't recall it. It was just incidental.

is

do.
(r
it

wit

YO

lea
lea
jec

Sp

fro

cilt
Jae

gol

LOBBY INVESTIGATION

1303

Senator WALSH of Montana. What time did you get the notice of
this meeting at New Orleans?
Mr. HoLroN.. Two or three days before the meeting.
Senator WALsH of Montana. When was the meeting held?
Mr. Howoo. I can not tell you very definitely.
Senator WALso of Montana. Well, about when?
Mr. HOLTO0x. It was possibly some time in March. A short while
before the one was called in Mlssissippi.
Senator WALsil of Montana. We will not waste time on it.
Mr. 11=rN. Senator, let me make a very frank statement. I am

hero to tell you anything in the world that has any bearing on this
subject that I know. Everything I have done has been what I think
is for the interest of agriculture in Mississippi.
Senator W,Lsi of Montana. We will assume that.
Mr. HoIuroN. I will just lay the cards on the table, Senator, so to
speak.
Senator WALSn of Montana. That is what I am trying to have you
do. I wanted to get from you some information about this New
Orleans meeting. As far is you know, you had no information about
it tit all until you got the invitation from Mr. Wilson to attend?
Mr. ItomLoh. I do not recall having any information. PossiblySenator WALSh of Montana. Mr. Arnold had never communicated
with you about the matter by letter?
Mr. HOLTON. I am not sure about. that. He might have. I have
hundreds of letters froin him and lots of them I do not read.
Senator WALSh of Montana. Hundreds of letters from Mr. Arnold?
Mr. HoLTox. Yes, sir. Lots of them I do not read.
Senator VAL81s

of Montana. Over wliat period, Mr. Holton, did

you have these hundreds of letters from Mr. Arnold?

Mr. HoL'rox. Oh, since I first met him.
Senator WiLSit of Montana. Have you got the file there?
Mr. HoLaox. Yes, sir. I have every letter that I have ever had
from him; a complete file.
Senator WALSH of Montana. I will ask you to sort those out and
leave them with us.
Mr. Hoa ;O.I will be very glad to do so.
Senator WALSh of Montana. Then, on a search of the files we will
learn whether you did or did not get a letter of this particular sub.
ject.
Mr. HoLoT . I do not recall whether I did or not.

Senator WALSH of Montana. But as to that meeting, your ex-

penses in attending the meeting were paid by the State of MissisSil)Pi?

Mr. HOLT0o . Yes, sir.
Senator WIA11 of Montana. Out of what fund?
Mr. HoIvA.
Out of iny regular traveling fund.
Senator IVtAsit of Montana. Were tliere any other representatives

from your State at that meeting?

Mr. 1loL/o.. Yes, sir. Mr. Kramer-E. M. Kramner, of the agri.
cultural service department, another agricultural department in
Jackson-accompaned me to the meeting. I did not know he was
going until I saw him on the train.

1804

LOBBY INVESTIGATION

Senator W.l.sir of Montana. I suppose his expenses were paid in

the same way I
I spoke to my
Mr. HoL'.oN. I suppose so. If I recall correctly,
governor about attending the meeting and about being out of the

State, and he gave his sanction.

Senator WALsn of Montana. Now the next meeting was in Jackson?

Mr. Hovtbrt. I believe so; yes, air.
Senator WALsh of Montana. What was the date of that meeting?
Mr. Hovrw. April 3.
Senator VAisit of Montana. Now, who called that meeting?
Mr. Houro. There were about 12 or 15 different people that signed
the call.
Senator WAmsu of Montana. At whose instance?
Mr. Hoizrov. Well I don't know.
to sign,
Senator WALsH o? Montana. They did not just happen
you kiow.
Mr. Hol/roN. No, sit.
Senator WALSH of Montana. Somebody must have started the
thing-initiated it.
Mr. Hor.rox. Possibly I assumed responsibility myself for calling
the meeting.
Senator WALSh! of Montana. Well, don't do it unless it is a fact.
Who did do it? Who took the lead in the matter?
Mr. Hoyrox. Well, Mr. Arnold suggested that we have a similar
meeting, in New Orleans.
Senator WUsi of Montana. When and where was that suggestion
made by Mr. Arnold?
Mir. HoL'oN. At the meeting in New Orleans.
Senator WIAL811 of Montana. At the meeting in New Orleans he
suggested that you have a meeting in Jackson?
Mr. HoLurox'. March 25 was the date of that meeting in New
Orleans.
Senator WALst of Montana. How many people were in attendance
at that meeting?
Mr. Horom). At the New Orleans meeting?
Senator WALSH of Montana. Yes.
Mr. HoLrTow. About a hundred. I do not have a complete list.
Senator WALSH of Montana. Xo; I mean the Jackson meeting.
Mr. Hoh/rox. Fifty-nine people.
Senator WAsH of Montana. -How did they come to come together?
Uton what solicitation by anyone?
Mr. Hovrox. They were invited when this call was sent out for thi
meeting.
Senator WALsh of Montana. You sent out the call?
Mr. HoLrox. I sent out the call; yes, sir.
Senator WArs!! of Montana. Was that signed by y0oi'self I
Mr. HoLTOX. By myself and the heads of the several different
organizations in the State.
tile call
Senator W.ALSU of Montana. Did you get them to sign
with you ?
Mr. Hozro. Some signed it and some I just called them over the
telephone and asked their permission-if they would sign the call,
Senator WALsLi of Montana. You were the moving agency in
calling tie meeting?

C.

y
hit

so

this

Mr.
ran
me(
IN
F
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1
MIS
MY
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pril

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of
coin

LOBBY INVESTIGATION

1305

Mr. Hoqdrox. Yes. sir.

Senator WALSh of Montana. And getting the signatures to the
callI
Mr. HoLtft. Yes, sir.
Senator WALSH of Montana. How many of those invitations did

you send out?

Mr. Hoi'ro.N. Oh, Senator, we must have sent out four or five
hutindred.

Stk-flt6r WV ALI of Montana. By mail?

Mi. HoJJT0o. Mostly. Some by telephone.
Senator W .i[ of Montana. And 69 responded?
Mr. Ho vx. We had 59 people respond; yes, sir.
Senator

son?

WVALsir

of Montana. How niany of those resided in Jack.

Mir. Hourox.. How many of those resided in Jackson?

Senator WALUi of Montana. Yes.

Mr. Horrox. I wouhl have to count them, Senator. I have 10 on

this list. This is a complete list.

Senator WoALsHt of Montana. Of the 59, 10 resided in Jackson?

Mr. Horzrox. Yes. sir.
Senator W',uLsr of Montana. At the time you had the talk with
Mr. Arnold in New Orleans about calling this meeting, what arrangement, if any, was made concerning the expenses of the Jackson
nme(ting?
Mr. HoL-ox. None whatsoever.
Senator WA LSH of Montana. Was it talked about?
Mr. Hortox. No, sir. Not as that meeting.
Senator W,
1Js
of Montana. He did, as a matter of fact, put up
$2,0 toward the expenses of that meeting?
Mr. Homno.. He did; yes. sir: but he put it up after the meet ing
ws held. because I told hini in the beginning, I said, "Mr. Arnold,
my approfriations-I have three or four different appropriationsI do not eel that it would he legal for me to u. e then for this purpose. In other words, I am not going out of my regular routine of
work. and I will not stand any expenditure i:hatevr." lie said,
4o You won't. have to.
ie said. "1We will take care of the expense
of the meeting. It won't cost yxou a cent." So. lie did take care of
every telephone call and every telegram, even' the stationery was
printed.
Senator WALSh of 1ointana. But he did give you $2501
Mr. Hloi.
. Yes, sir: at a later date.
Senator WALSIK of Montana. On the 6th day of April.
Mr. 1oL'rox. I received it on the 9th day of April.
Senator WA SH of Montana. But you had incurred the obligations
prior to that timh, however?
Mr. Hoirox. I es. sir. The expenses had been incurred.
Senator WAJISI of AMontana. The total expense amounted to only

$128?

Mr. Hox,'rox. $128.17.

Senator WATLs of Montana. Hlow did he cone to give you $250?
Mr. H0'rox. We were authorized at this meeting bY resolution,
of which I have a copy here, to send resolutions to all chambers oi
commerce and Rotary clubs and Kiwanis clubs and other eivie

1306

LOBBY INVESTIGATION

clubs of the State-authorized both by my department and the agi-.

cultural service, which is a similar department in Mississippi. After
the meeting I was d(10ussing the mattor with him, and I said, " That

is going to take quite a little time of my office force. I can not

afford to do it." He said, " We will take care of the expenses of tin
additional stenographer for 2 weeks or 30 days or whatever is
necessary." The young Idy that I expected to e11py and that I
tried to employ was not avAilable. Consequently I diA not employ

any extra Ielp, and that is the reason it was $.50.

Senator CARAWAY. We will be obliged to stop here. You will be

back here to-morrow morning at 10 o clock.
(Whereupon, at 1 o'clock 1). In., the committee adjourned until
to-morrow, November 20, 1929, at 10 o'clock a. ni.)
a.

Car
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LOBBY INVESTIGATION
WEDNESDAY, NOVEMBER 20, 1029
UNITED) STATES SENATE,
SUBCO3MITIER OF TilE Co.Min'rrEE ON THE JUi)ICIARY,

f1Jasldngton, D. 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock
a. m., in roomn 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Robinson of Indiana,
Blaine, and Walsh of Montana.
Present also: John G. Holland, Esq., counsel to the committee.
Senator CARAWAY. Is Mr. Holton in the room?
Mr. HouroN. Yes.
Senator CARAWAY. Mr. Holton, Senator Walsh was asking you
some questions when we had to adjourn.
Mr. HovroN. Yes, sir.
FURTHER TESTIMONY OF J. 0. HOLTON, STATE COMMISSIONER OP
AGRICULTURE, AOKSON, MISS.
Senator WALSH of Montana. Mr. Holton, of the $250 that you got
on April 6th or 91h, something like $125 was spent in connection
with the meeting in Jackson?
Mr. Hom,-x. Yes, sir.

Senator WArsu of Montana. The remainder you held to meet

expenses of delegates to Memphist

Mr. HoroN. No, Senator. Of that $250 my expenses to the Mem.
phis meeting and the other meeting at Montgomery was paid out of
the other $669.
Senator ,VALas of Montana. Have you an itemized statement of
the expenses incurred at the Jackson meeting
Mr. Hoiiroz. Yes, sir.
Senator VAKsn of Montana. When did you prepare this state.
mentI
Mr. HouroN. Just before I left.
Senator WALIr of Montana. Just before you left MississippiI
Mr. IHourN. Yes.
Senator WAISit of Montana. From what source did you get thb

figures?

Mr. Hormo. From office records.

Senator IVALSau of Montana. Have you got those records here?
Mr. Hourom. Yes, sir.
1307

1308

LOBBY INVESTIGATION

Senator WALSH of Montana. Inasmuch as this payment was not

made until after the Jackson meeting, why wasn't the amount just
exactly the expenses incurredI
Mr. How-io. Because I was figuring on having to put on an
extra stenographer to take care of that work.
Senator WASH of Montana. To take care of what work
Mr. HoLTOK. This work in connection with-Senator WALsH of Montana. Mailing?

Mr. Hovo. Mailing out the resolutions and things like that that
were adopted. The resolutiomfhat was adopted at Jackson authorized
me to mail, as I said yesterday, the resolutions to the different civic
organizations of the State, but instead of doing so, I used my own
stenographie force overtime without paying them anything extra,
and this that is left over is itt the disposalSenator WAALs of Montana. Youheld the money, however?
Mr. HOLTO. Oh, yes; I have the money.
Senator WALSH of Montana. And you got, then, $500 the 15th of
June, did you?
Mr. Hoiiro.x. Yes, sir. After I returned to Jackson I lacked $169,
as that letter will show you.
Senator WALSH of Montana. Subsequently you got $169.781
Mr. HOLTOw. That was the balance it took to cover the traveling
expenses.
Senator WALSt of Montana. And this is a statement of your
disbursements?

Se

in

ar

W
ce
A

Mr. HoLToN.. Yes, sir; receipts and disbursements.

Senator WVALSH of Montana (reading) :

J. C. HoIton. exenses Incurred tending a meeting at M ntgomery, AIa.,

an

June 2-3, $37.52.

Your office is in Jackson?

Mr. HOLTOx. Yes, sir.
Senator WALSH of Montana. How far is it from Montgomery?
fr. HoLTo.-. Montgomery, Aln.?
Senator WALSH of Montana. Yes.
Mr. HoLTo . I don't know the exact mileage, Senator. It is
around a hundred miles or more.
Senator WALsH of Montana (reading):

su

J. C. lolton, expenses Incurred attending a meeting at Meemphis, Tenn.,

June 4-5, $20.00.

adi

Mr. HoTON. Yes, sir.

Senator WAI.sn of Montana (reading):
.X C. Holton, ex enses Incurred attending a meetinyt at Austin, Tex., June
"
0-9. $02.09.
AMr. HoLiro. Yes, sir.
Senator VALsH of Montana (reading):
Expenses incurred by J. 0. Holto,, P. II. Sanders, and Edgar S. Wilson Rt
Washington, D. C., June 16-22, $344.6;9.

Who are these other men?

Mr. Sanders is my assistant in the office at Jackson,
Mr. Ho vro..
and Mr. Edgar S. Wilson is a journalist at Jackson.
They came up here to attend the
Senator WALsh of Montana. agriculture
I
of
meeting of the commissioners

in
bu

LOBBY INVESTIGATION

1309

Mr. HouroN. Yes, sir.

Senator WALSn of Montana (reading):

Expenses Incurred by II. 8. Stansel, attending meeting at Washington, D. 0.,

June 15-20, $109.02.

Who is Mr. Stansel?

Mr. JIo.rox. Mr. S(ansel is a member of the legislature from Ruelville, Miss., representing- the long-staple cotton growers of that
section.
Senator WP:.sit of Montana (reading):
Exln'ses

ineUrred by J. 31. Aldrich, attending meeting at Washington, D. 0.,

June 15-21, $7.81.

Who is Mr. Aldrich?

Mr. Ho/rox. Mr. Aldrich is a faster, one of the biggest farmers

in north Mississippi.
Senator WALuS of Montanta. You feel quite justified in taking
money from an organization of this kind to travel around while you
are connissioner of agriculture of Alabama?
Mr. HOL1Ox,. Why, Senator. I feel perfectly right in doing so
when the money was raised in Mississippi for that purpose.
Senator WVALSH of Montana. What had been your attitude con.
cerning the tariff prior to the time you came in contact with Mr.
ArnoldI
Mr. HouroN. What had been my attitude?
Senator WALSH of MAontana. Yes.
Mr. HouroN. I knew nothing about it.
Senator VALsn of Montana. Had you prior to that time taken
any part in the discussion of the tariff?
Mr. HOLTON. Yes, sir; I had discussed the tariff, and studied the
tariff on agricultural products to some extent.. I knew something
about the importation of cottonSonator WALSir of Montana. Did you write anything on it?
Mr. HoLToN. Beg pardon?
Senator WALsix of Mlontana. Did you write anything on the
subject?
Mr. HoLroN. No, sir.
Senator WALSH of Montana. Did you make any addresses on the

subject?

r. 11oroN. No, sir. Never.

address on it.

In face, I have inever made an

Senator WVALSJt of Montana. What is that?

Mr. HoLTox. I have never made an address on it.

Senator WVALSiH of Montana. lVell, that is what I inquired about.

You have spoken, however, addressed public meetings?
Mr. HoL ox. Oh, yes.
Senator WALs

of Montana. Upon farm problems?

Mfr. Houroz;. Yes, sir.

Senator .81sir of Montana. But never on the subject of tariff?
Mr. Hoijro.. Never on the subject of tariff, except at these meet.
ings. Of couise, I always made a short address at these meetings, and incidentally mentioned it once or twice in other meetings
that I would attend, in speaking of general agricultural problems,
buG never a general address on tariff.

1810

LOBBY INVESTIGATION

Senator CARAWAY. Mr. Hlolton, I want to ask you a question. You

started to answer Senator Walsh by saying that one of these gentle.
men that came UpIl here was a newspaper man, and then you changed
it to journalist. What is the distinction?
Mr. HoLrToX. He does both.
Senator CARAWAY. I am curious to know what is the difference in

Mississipi between i newspaper man and(] a journalist.

Mr. Houl~lv. Well, li calls himself a journalist, Senator. I don't
know the distinction. le writes for about a hundred papers in the
State, sends out contributions to these different papers and was, incl.
dentally, Senator Lamar's secretary while lie was Senator from
Mississippi.
Senator CARAWAY. ie writes political news from the capital out

to tile country newspaper's?

Mr. HOJixTX. Well, on different subjects.
Senator CARAWAY. On different subjects?
Mr. Hom:rox. Yes.
Senator CARAWAY. Whatever he can get them to take?

Mr. HOJITO.. Well, they are glad to take anything he writes.

Senator CARAWAY. Well, he must be a very busy man if he can
write on any subject and tile newspapers over the State are glad to
get it.
Mr. Hou'To.'. le selects his subjects, and writes things he knows
the nawspapers want.
Senator CARAWAY. I was rather disappointed, but then that is
your viewpoint, as an answer you made to Senator Walsh. Here is
a tarilf association that you said you were glad to take their money
and travel around over this country, that had raised their money
from every source and from anybody who would contribute to it,
from trying to put niggers in politics in Mississippi to advocating
free trade so that they would have something to trade with Senator
Edge in New JerseyMr. Hox.rox. Senator, I didn't exactlySenator CARAWAY. Wait a minute. An association that before it
changed-you know it is the same man. The mal is the association,
and. nobody else-raised money to fight prohibition and to support
prohibition at the same time; raise noney to oppose women suff.
rage; raised money to oppose preachers in politics; raised money
to fight the eight-hour law, raised money from the brewers during
the war to carry on propaganda, and now is raising money from
anybody, getting it front anyone, getting it from Instill on the one
side-of course, he is a great agriculturist in Chicago-and he
financed you to travel around over the country, and you say you are
glad to take that money.
Mr. HoLrox. When that money was raised in Mississippi for that
purpose.
Senator CARAWAY. If it was raised in Mississippi why didn't they
.
they turn it over to a lobbyist here
turn it over to youth Why didn't
Washington
in
Mr. lOLO. I had nothing to do with that.
Senator CARAWAY. I know, but to be perfectly candid, the money
was raised for that purpose. It was raised in Mississippi' if it was
raised at all, like anywhere else, to put the money into the pocket of

LOBBY INVESTIGATION

1311

Mir. Arnold and you are bound to know, if you know anything about
it at all, that that is so. You want to stand by your answer that you
are glad to take money from him and travel over the country?
Mr. HOiTo. I am glad to travel at the expense of the people of
my State, my constituents, when they authorize me t0 go.
Senator OAnAWAY. You know it didn't come from the people of

your State. It came by check from Washington, D. C.

Mr. Ho,,r0l. I know it did, but here is a statement from Mr.
Kninmer of Mississippi showing the amomuts gotten by him.
Senator CARAWAY. When did you get that's
Mr. How-oN. On September 24.
Senator CARAWAY. Already raised before you made any of these
trIS? oOX. Before I made the Montgomery trip.
Senator CARAWAY. What date did lie make tie statement to you?
Mr. HOLTON. This is just a copy of the letter of transmittal to

Mr. Artold, giving a list of the contributors.

Senator CARAWAY. And what does he say in the letter?
Mr. HOLTOX. There is a list of 47 banks that contributed.
Senator CARAw.AY. Banks.

Yes, sir.

The comptroller has it

rigrt now. It says:

I inclose herewillh n list of the contributors-I will idvise you If there are

any m11ore.

There isn't a word in there, is there, that this is to pay your

expenses or anybody else expenses? It came like any other money
that caine from Mr. Arnold.
Mr. HOLTOX. The resolution provided for me to go.
Senator CARAWAY. Who passed the resolution?
Mr. Hourox. Adopted at Jackson by 59 citizens of that State.
Senator CARAWAY. Did they authorize yoti to travel at their
expense. or at the expense of Mr. Arnold I
Mr. HoLroN. Not Mr. Arnold. It appointed Mr. Kramer chairman of a comma tee to raise the finances.
Senator CARAWAY. How much did Mr. Kramer get for raising
them?
MAr. HoLTox. I don't know.
Seator CARAWAY. ThIeC was a contract lhove that sCenmed to indiCate, although they tried to repudiate it, that certain people were

getting 50 per cent. All right. I just wanted to know your view-

point on that.
Senator WALSH of Montana. How much money was raised in
Mississippi?
T x. Mr. Kramer reports 4$04.60. I got kind of susMr. HOLW
picious nbou. this thing along about July, and I asked Mr. Arnold
for a statement of the finances and lie gave it to me. and showed
the amount of money that wias raised in Mississippi. The total

amount here is shown.

Here is what he says:

Confirming our conversation, I am Inclosing a financial statement by months,

of States In the Hoitheri Tairiff Associutlto, since 8citeniler I. the time our
accounts were udlited. Wt- ae nls, Inclosiiig alsupplet itiltary statement
showig tle.source of receipts from Fliorida, Louionnn, 111d Texas, wiilchare
innijr (lile In the ('lamSift'atiol of other States. $2,765. 'These contributions
have been inade by concerns with their headquarters or main offices In other
States, but operitting in these ,tsttes.

1312

LOBBY INVESTIGATION

For Mitsssipll. niontl of April, $855; May. $55; June, $015, a total of $1,525.
A total of all the Souther States, $48,010.30.

Senator WLss of Montana. What made you suspicious about the

matter?

ir. LIoLTov. Well, I got suspicious, and I ant suspicious yet.

Senator WALsii of Montana. Suspicious about what?
Mr. Hoiro. Well. I wanted to know where the finances were
coming from, Senatoi.
Senator W ,Isn of Montana. Where what finances were coining
front?

Mr. HoroN TIe Southern Tariff Association.

El

Senator AVALSII of Montana. How did that interest excite your

suspicions?
Mr. MThm)o:. I didn't care to be associated or connected with any
thing that is questionable.
Senator
01-WAS of Montana. What was there about it that stig.

gested to you at that time that it was a questionable affair?

Mr. HoL'ro.. The letter that Senator Pat Harrison wrote to the
Chamber of Commerce of Greenwood.
Senator WAL1,SH of Montana. Have you got a copy of that.?
Mr. HoLroN. I think I have.
Senator WM 1 su of Montana. Let us see it.
Mr. Hofrox. Well, I don't think-I will see, Senator. I may have
a copy. Senator, I don't believe I have a copy of it.
Senator WALsH of Montana. Well, we will get it from Senator
Harrison.
Mr. HOLTO'. Except the Commercial Appeal report of it.
Senator VALS1 of Montana. What. is that?
Mr. HoL'rox. Tihe Commercial Appeal report.
Senator WLsit of MIontana. Vill you read that?
Senator BLt ri.:. Does that coutaltit Copy of the letterP1
Tit- Hotmox. This is rather long. I don't have a coly of Senator
Harrison's letter.
Io
Senator WA,,tS of Montana. Very well. Wro will get that; but

at
to
T

I wish you would explain to us, Ar. Holton, how it came about that

the people of Mississippi being imp'ortuncd to raise t fund to pay

your expenses and the expenses of other Mississippi people to attend
certain meetings, they did not put that nioneyiIn yor hlii(s or in
the hands of some MAississilpi .man or bamik for that purpose, and
why it was necessary to sen( It lip to Washington here to Mr. Arnold
and then send it baZck to you?
Mr. Ilor:rox. I can't soy, Seiator, because I did not know what
disposition Mr. Kraminer was going to maike of it. In other words,
I did not kn6w whether lie was' going to retain it himself or seud it
on to Mr. Arnold.
Senator Wmj.iL
of Montana. Who is Mr. Kramer?
Mr. Horirox. Mr. Kranter is it citizen of M3,.omb, Mi.ss. He is a
financier, owns lots of property there, quite t wealthy man.
Senator 1Vlrsr of M[olntana. )o ivot know what tell)resel tittllms
lie imade when lie was soliciting thi: money?
Mr. Hbktrom. I have a Copy of the letter that lie sent out.
Senator WtVrsn of Montana. Will you let us see it?
Mr. HoTox. Yes.

to
,

C
0

LOBBY INVESTIGATION

1313

Senator WALSm of Montana. This style of print is quite familiar

to us. Do you recognize this as a part of the literature or stationery
of tile Southern Tariff Association?
Mr. HozroN. I hadn't noticed it that closely.
Senator WASH of Montana. This is under date of April 0, but
Mr. Arnold's check to you is of the same date, April 0, so this was
not sent out until the smno day you got the check?
Mr. HIoryzo. That was*for the $250, the date of his check to me.
Senator WAlSH of Montana. It reads:
We attach copy of resolution passed by the Mississippi division of the
Southern Tariff Association at Jackson April 3, 1020.

Did you attend that meeting?

Mr. Homb)e. April 3,that was the meeting at Jackson; yes, sir.

Senator WALSH of Montana. So tils money was really raised after

the meeting in Jackson ?
Mr. HouroN. After the meeting at Jackson.
Senator WALSH of Montana. But before the meeting at Montgoinery?
Mr. HoLTox. Yes.
Seator WALSh of Montana (reading):
A tariff measure anJ farm relief legislation Is now pending before Congress
which can give protections undl relief to cottonseeda, vegetIlh,., livestock. dairy,
and all other products of the farm, mine, and factory of Mississppi and tie
South.
Tile Southern Tariff A.soclatlon is engaged itn
arousing public sentiment and
in assemldl ng nil soutlherii Ilndstries and commodities Into one unit favorable
to. and demundlng protection and relief.
TJo function properly 11d effectively It is desirable that till intluences,
agencies. aml activities work through the Mllissiple division of the Southern
TMriff Assiation.
We are confronted with an emergency. A crlqis faces agriculture. We think
the activities of tlhe Southern Tariff Association are beneficial, and we have
pledged financial support to this movement.

Was that correct? Had the Mississippi division pledged support

to the Southern Tariff Association ?
Mr. Horow. No, sir; it had not. I hlave a copy of tile resolution
adopted at the Mississippi meeting.
Senator WArL~h of Montana. Uril you read it, please?
Mr. Hoirow. Read the entire resolution?
Senator WArsi of Montana. Only that part that refers to financial support or other support of the Southern Tariff Association.
Mr. Horrx (reading):
Southern Tariff Congress-

That is one heading of the resolution.

We recomnendi the appoltment by the conimi.,shiner of agriculture of the
State of Misslhlsipja of a connittee of live authorized to select representation
to ally meting called in Wiashllgton by tihe Southern Tariff Asmciation alnd
that said committee lie given full athorlt" to act ill tariff matters In conasultation with a similar committee from other groups.
We recotnittl a copy of these resolutions be submitted to tile tariff congresses held throughout the South; that copies lie helt to our Memnbers of
Congress, to agricultural organizationst, and to tie press; and sulnnitted to
chambers of commerce, rotary clubs, boards of supervisors, and other civic
organllzatlons.
We riuest that the State commissioner of agriculture, J.0. Holton; director
of agriculttlral service department, liurn llllbun, and president of the frm

1314

LOBBY INVESTIGATION

bureau, 0. N. Nel. and all organizations concerned in the public welfare, be

requested through their publicity agencies to carry to the liyinell and flit-ilers
of Mi.31ssIlppl the importance and necessity of conveying to our Representatives
in Congress our conception of this subject.

Senator WALsH of Montana.

You don't see anything in there

pledging financial support to the Southern Tariff Association, do

youl
y ?r. HoLTOz;. No, Mlr.

ti
at

a!

uT

Senator IVALsH of Montana. Did you call the attention of the

people of Mississippi to this misrepresentation in this letter?
Mr. HouroN. I didn't notice it, Senator. I am not sure that I ever
read it. I am sure I didn't.
Senator VALaii of Montana. You realize now it is not in accord.
ance with the fActs1
Mr. HoLTox. Oh, yes it is in accordance with this resolution.
Senator WArasu of Montana. I continue:
The committee has not the time to make a personal solicitation for funds but
Is making draft on you through the Fiirst National Bank of Macomb for a
nominal amount and we trust that you will lend your full cooperation and
contribute this amount or raise it among other interested citizens of ypur
community.
Yours very truly,
X,\vI-:R A. KRAM2.R.
chairman JfsiAppi Division,
Southern&Tariff Assocatlion.

That is the way money was raised, then, by making draft on

banks. Is that your understanding about the matter?
Mr. HoLTo.. Yes, ir, that is my understanding.
Senator W.umsH of Montana. Your understanding further is that

AT

ta

it was raised by representation that it was to be used to pay the

expenses of yourself and others in attending these meetings?

hr. HOLTo-x. That is what the resolution provides for.
Senator WALS11 of Montana. The resolution provides that you
were to go*1
Mr. HoLTox. Yes sir.
Senator WmLS o Montana. But there is nothing there about how
your expenses were to be paid, is there?
Mr. HoLToxo. Nothing in the resolution, no.
Senator WA.S1n of Montana. Well, how did you get the idea that
this money was raised in Mississippi upon the representation that it
was to be used for the purpose of your expenses?
3%fr. HoL'rox. In the resolution there lis something I overlooked.
We recommend the appointment of a finance committee to
means to carry out the rccommendations herein outlined.

i)rovide ways a,1

Senator WVALsh of Montana. And what finance committee was

appointed?
Mr. Hotro-s'. Mr. Icrater was made chairman of the finance con.t
mittee. C. M. Huber, Crystal Springs; Rabun Jones, Greenville;
J. B. Peri, Gremada; J. H. Petty, Greenwood: G. W. Covington,
Hazlehuist: L. A. Kemp, Hazlehurst; Hugh Critz, Jackson; H. C.
Forrester, Meridian: J. M. Hartfleld Jackson; J. Blake Lowe,
Jackson: S. N. Sutton, Vicksburg; W. A. Johnson, McComb; W. 14.
Beeket, Brookliaven, J. '. Thomas, Grenada.
Senator WMsi- of Montana. You recognize, Mr. Holton, do yon
not, that this is a )lain draft for payment of so much money to

y
a

LOBBY INVESTIGATION

1315

the Southern Tariff Association without any conditions at all

attached to it? Isn't that correct?
Mr. HOI.TOX. Apparently.
Senator WALsiL of Montana. Apparently no misrepresentation at
all. A draft was made upon these various people by the Southern
Tariff Association of Washington, D. C., and it went into the treas-

ury of the Southern Tariff Association. Nothing like that was

authorized by this resolution?
Mr. Hoivro,'i. It said "We recommend the appointment of a contmittee to provide ways and means."
Senator IVAui of Montana. But that did not recommend that
the Southern Tariff Association get that money, did it?
Mr. Hov.ro-N. Senator, I had nothing to do with the raising of
that money, aumd I know nothing about it except what is before you.
Senator Wmu.su of Montana. I understand perfectly well, but you
were concerned in the initial steps through wtich it was raised?
Mr. HoLTo,.N. Yes, sir; I was acting chairman at the time.
Senator WSirI of 3ontana. That is all.
Senator CARAWAY. You took funds out of the appropriation and
went to New Orleans to attend the meeting?
Mr. HoyTox. Yes, sir; niy State funds.
Senator CARAWAY. You knew what kind of a meeting you were
going to attend?
Mr. Hoj:ro '. I knew it was a tariff meeting. I did not know
what was coming up.
Senator CARAWAY. WAs there an appropriation made by the
Legislature of 3ississippi to furnish you expenses to attend the
tariff meeting?
Mr. Hojrox. Most any kind of a meeting I want to attend.
Senator CuAAWt.y. Then, why was it you came to a lobbyist in
Washington to-get money to go to Moutgoneiy, Ala., and Memphis,
Tenn.I
Mr. H1om.ox. I didn't go to them.
Senator CARAWAY. Oh, of course you did. I say what nmde you
take the funds to go to New Orleans so you could get in contact with
these people, and then afterwards get your money froin them?
Mr. Horox. My traveling exl)enses are limited.
Senator CARAWA Y. How much?
Mr. Hoiurox. That particular fund I was traveling on-

Senator

CARAWAY.

Did you exhaust it?

Mr. Hovrox. No, sir; I haven't exhausted it yet.

Senator CARAWAY. That wasn't tie reason, then. What was the
reason you required money to go to Mlemphis, Tenn., which is a very
near-by city, from this lobbyist down here instead of using it out of
your own fundsI
Mr. Hovros. Well, my expenses were offered me to go, according
to this resolution.
Senator CARAWAY. The resolution* just provides that you shall
attend.
Mr. Homrxo. Yes, sir.
Senator CARAWAY. Tlint doesn't answer the question, Mr. Holton.
Of course, the amount is so insignificant that it isn't worth a minute's
inquiry, except that the dignity of a State is involved, where one of

1316

LOBBY INVESTIGATION

its officials should take money and travel around that way, and I
want your explanation of it, the motive that prompted ou as a
representative of the great. Conimonwealth of Mississippi to take

he

money from these people.

Mr. HoLTO. All right, Senator. I did just exactly what the com.
missioners of agriculture of Arkansas, Alabama, Georgia, South Caro.
lina, Tennesseo, and Texas did; exactly.
Senator CARAWAY. Yes?

Mr. HorrN. We all got our expenses when we came to Wash.

ington.

Senator CARAWAY. Yes; all of you did get it from the same source.

Mr. Hourox. And the commissioner of agriculture of Arkansas

attended all of these meetings, and I did.
Senator CARAWAY. Yes, sir. He denies it, though.
Mr. HoLTo. Well, I don't deny it.
Senator CARAWAY. Becauiso lie (lid it, do you think it is any justification that you should do it?
Mr. Horok. None in the world; no, sir.

Senator CARAWAY. Do you think the dignity of the Commonwealth

ought to bo dragged around that way, Mr. H1olton? Do-you com.
mend that? There is something back of all that, that a State that
had a George, and a Lamar, now should have a representative tray.
eling around on the money of a cheap lobbyist. Do you commend
that?
Mr. 1ov'ro.s-. When the money is coming from my constituents down
there, going into this fund, and then coming back to me, it does not
offend iny dignity one particle.

is

an
Vo
y
y
coy

Senator QUIAwAY. All right. I just wanted to know that. So

long as your people put up for a bunco game, you are perfectly will.
ing to take the money., so long as somebody gets it out of their hands
that way. That is all.
Senator
Mr. Holton, you appointed this committee of
Ai,,lJE.
five to attend (ho meeting at Washington?
Mr. HoL'rox. Yes, sir.
Senator BLAINe. Did they all attend?

Mr. Houiwx. Senator, as you know, in any committee-this matter

was brought up at Memphis, and they authorized me to appoint five
men representing the long-staple cotton section.
Senator BLAINE. That was the same subject?
Mir. IIoivrox. Yes; he same section. I appointed those men from
the Delta section, and some of thoso mien could not attend and I had
to appoint others.
Senator Bh,Ax.%:. Have you 'riven the committee the names of those
who att lnded jit Washington f

of

est
sci
the

Mr. IloiroY. s, sir.

Senator B
Hri..
lave you given the committee the information as
to their business occupation?
Mr. HolhroN. Yes. sir.
Senator Ilr,.. t:. How ninny of them were farners?
Mi'. lilor:rov. Two.
Senator BJLAI.U:. Living on their farins?
Mr. oLT ox. Yes , sir.
Senator BLAMEi . And tilling the amin?

den
to
i

LOBBY INVESTIGATION

1317

Mr. HoLTovN. Yes, sir. One man is a big farmer. The other man
has farming interests. I don't know how extensive.
Senator BLAtNn. The big farmer operates a large farm?
Mr. How w. Yes sir.
Senator BLAIN.E. Lives on the farm. Did he contribute?
Mr. HowroN. To the tariff association?
Senator BLAINP.. Yes.
Mr. HoLroN. Not that I know of.
Senator BILAiNz. He attended the meeting in Washington?
Mr. HoUroN. Yes, sir; and at Memphis.
Senator BLAINE. Thre names are *allin?
Mr,Ho'owN. Yes, sir.
Senator

is all.

BLAINE.

Well, I don't care to go into the details. That

TESTIMONY OF GORDON S. RENTSOHLER

(The witness was duly sworn by Senator Caraway.)

Senator CARAWAY. Give the stenographer your name, residence,

and occupation.
Mr. RENTsCiLER. My name is Gordon S. Rentschler; my legal and

voting residence is Hamilton, Ohio. My business residence-is New

York City. I am president of tihe National City Bank of New
York.
Senator CARAW.'. What was your occupation before you became
connected with this bank?
Mr. RE:NTsoIILER. Manufacturer.
Senator CARAWAY. Of what?

Mr. RETUTCJLER. Of heavy machinery.

Senator CARAwAY. Where was your plant?

Mr.

RNTscIIITJItn.

Ha milton, Ohio.

Senator CARAWAY. When did you become connected with the

National City Bank?

Mr. RMTSCULE. Originally on special work in 1921, at the start
of their situation in Cuba.

Senator CARAWAY. You came to the bank?

Mr. RENTSCHULEU. Yes.
Senator CARAwAy. Have you had any relations with Cuban inter-

ests of any kind?

RE.
1tUrScHIi.En. Yes; my company, the Hooven, Owens, Rentschler Co.) of Hamilton, Ohio, had been manufacturers of sugarmill machinery and we had had long contact with the sugar industry.
Senator CARAWAY. And you yourself personally had contact with
the business intere..ts of Cuba?
Mr. RENTSCHLm. Yes.
Senator CAUIAWAY. YOU la'd becen to C11ba
Mr. RH1ETSUuLEu. Oh, yes.
Senator CARAWAY.

lave you ever resided there?

I never resided there. I was there a groat

Mr. RhNTSlILEl1. No;

deal. I was there in 1021, but not before except on occasional trips
to Cuba.
Senator CArAWAY. But you had business connections with Cuban
industry and sugar growers particularly?
Air. lRNscnin.
78214-20-- 3-0

es, indeed.

1318

LOBBY INVESTIOATIO'N

Senator CARAVAY, You have charge nIow or are familiar with the
investments of the National City Baink?
Mr. RHNTSOULER. Yes; that has all been in my hands since 1921.
Senator CARAW,4Y, Senator Robinson wished to ask you some ques.
tions, Mr. Rentschler.
Senator Roui.NsoN of Indiana. Mr. Rentschler, what was the name

to

M,

of your Ohio company?

Mr. RRNTTSCU1LEI. 1o1on Owens, Rentschlor Co..

Senator RoniNsox of Indiana. Was it a corporationM
Mr. RENTSCIILM. Yes.
Senator RoBINsoN of Indiana. Where was the home office of that
company I
'Nr. lEN8Owiim. Hamilton, Ohio.
.
Senator RoINsoN of Indiana. Where is it incorporated I
Mr. RIrSoILER. In the State of Ohio.
Senator RonixsoN of Indiana. What was the capital stock?
Mr. RF.'sCULEu.

dollars of preferred.

A million dollars of common and a million

of

Senator RonisoN of Indiana. What was your relation to the

company?

Mi RmTsClILM.

I was president of the company at that time.

Senator RoBINsoN of Indiana. When did you become president of

that company?
Mr. RENTSCHILER. I was president from about 1922. I think 1922
I was made president.
Senator RoINSON of Indiana. When was the company organized?
MI'. RENTSCIILER. The original partnership dates back to 1848.

Tiho company was incorporated, I think, about 1882 or 1883.

Senator ROBINsoN of Indiana. Anyhow, you became the president

of the company in 1022?

Mr. REN'scILERt. I think about 1022, yes.
Senator RoBIxsoN of Indiana. Was your home in Ohio at that
time?

pa

Mr. RENTSCI ER. Yes.

Senator? Roauxsox of Indiana. What was the business of this
comnpal
Mr. RENTSCILER. We made heavy machinery, sugar nahnMiery,

Corlis.s engines, plate-glass mndehinery, rolling mill equipment-a

general line of heavy machinery equipment.

Senator RoBINsoN of Indiana. Where was your market chiefly for

the product you made?

Mr. RErrhclLVm.. Of course, steel equipment or rolling mill equip.
ment-

Senator Ronixsox of Indiana. So far as sugar machinery is con.

cerned?
Mr. RENTScIIU.mt. Sugar machinery, principally.in Cuba; some in

Porto Rico, some in thie Philippines, and some in' the South, but
principally Cuba and Porto Rico.
Senator RoINtsoN of Indiana. Are you still president of that
companyI
Mr. RENTCHLUR. No.

Senator Romuusom of Indiana. When did you leave the presidency

Mr. RENTSOIL.Rn. In 1925, when I came to New York to become
vice president and assistant to the president of the National City
Bank.

LOBBY INVESTIGATION

1319

Senator ROBINSON of Indiana. Did you come to New York or go

to Now York first in 1925 permanently?
ll'. RENseM,1FR. I started in this sugar business for the bank in
1921, and from that time on spent quite a lot of time away from
my own business.
Senator Ronipssox of Indiana. What was your business prior to
1022 when you became president of this company?
Mr. RNiTSo.ILER. Frojit the time I left college I had been in the
machinery and foundry business in Hamilton, Ohio. I left college
in 1907.
Senator Roniso. of Indiana. As I understand it, you went to
New York and identified yourself with the sugar business iR connection with the National City Bank in 1921?

Mr.

RENTSCHLER.

That is right.

Senator RonINsoN of Indiana. But you did not become president

of the corporation in Hamilton until 1922?
Mr. RENS H 1En. Before that I was vice president and general
manager. You were asking when I became president. That was
in 1922. As a matter of fact, my father, who was quite an elderly
man, was the noinmal president and I was in active control of that
company beginning about 1915.
Senator RornXsoN of Indiana. How did you happen to go to New
York in 1021?
Mr. RENrsCtiLR. Wre had those very close contacts .with Cuba and
a lot of business there.
Senator RoB.0Nso of Indiana. What contacts do you have in
Cubat
Mr. RP.xTscimF.t. We sold to a great many Cuban sugar conpanics.
Senator Roni-sON of Indiana. Were they -companies owned by
Cubans?
Mr. REN-TIscMIr. Yes; both by Cubans and by Americans.
Senator Romnisox of Indiana. I am curious to know jus4 how
you happened to go to the National City Baunk in 1921.
Mr. RIDNTSOIII.Mt. We had been delositors and our concern had
earned an account in the National City Bank1for inny years, and
we were on a very intimate basis with the offl.'ers of the National
City Bank.
Senator Ronxsox of Indiana. Were you invited in 1021 to become
vice president of that bank?
Mr. RE:NTSCIIotput. No; I started in 1921. The bank first asked ie
to look into their sugar situation in Cuba and become an advisor
to them in regard to their sugar interests.
Senator RoBnpsox of Indiana. Were they already interested in
Cuban sugar when you went with them ?
Mr. RNmTouLrn. Yes.
Senator RoBINsoN of Indiana. You had nothing to do with the
be winning of their interest in the Cuban sugar?
%l. Ruxsomi. They were interested in this way. I think I
can mako it clear very easily by giving you a little history of it. In
1915 or 1916 the bank opened a branch in Habana.

1320

LOBBY INVESTIGATION

Senator RoBINsoN of Indiana. When was that?

Mr. RENTScILEnt. In 1915 or 1916.

Senator RonINSON of Indiana. Do you know when? 1915 or 1016,

which?
Mr. RE."INTSCITLEn, One or the other. I would have to look up that
exact date for you, Senator, but I think it was about 191.
Senator ROBINSON of Indiana. It was during the World War?
Mr. RE 'rSoHLVR. That is right. At that time the City Bank was
establishing its banks around the world. Cuba was just a part of
that plan.
Senator RoBiNsON of Indiana. What kind of a branch was estab.
lished in Habana?
Mr. RENT8OILER. Just a regular branch of the bank.
Senator ROBINSON Of Indiana. A subsidiary or the bank itself
Mr. RENTSCHLER. An actual branch of the bank itself, as author.
ized by the banking act of 1913 or 1914.
Senator ROmiNSoN of Indiana. But it was a branch incorporated
in Cuba, I assume?
Mr. RENTSCHLEn. Oh, no; operating as the Nati6nal City Bank of
New York.
Senator RomNsoN of Indiana. The National City Bank of New
York?
Mr. RE.xTSCiILV.R. Oh, yes.by
Senator Roan-soN of Indiana. That you think was about 1915 or

19

lo

lo
go!
l0
W
of
a(

1916e

Mr. RENTSCJILERH. I think about 1015 or 1916.

Senator 1IomiisoN of Indiana. Then, from that point: Do you

know when the bank entered the sugar business in Cuba?
Mr. RK.%rNcIILH'. Up until 1021 the bank's interest in the sugar
business was solely as a lender to the sugar planters.
Senator oBINSON of Indiana. When dd it start lending money to
the sugar planters?
Mr. Rins-TSmrcgui. Immediately. That was the main business of
Cuba, and that was the important business of the bank.
Senator RomIXsoN of Indiana. Wasn't that the reason the bank
went to Cuba?
Mr. RENTSCHlLER. Surely.
Senator Ronixsos of Indiana. To get into the sugar business dtin'.
ing the World War?
Mr'. R xTsdnLEn. To do a general banking business, of which
sugar was an important part.
Senator RolmNsov of Indiana. When did the bank first have any
considerable investment in Cuban sugar, if you know?
You mean by investment, the matter of lendMr. RENT s11.R.
O
ing money to these planters, or actual Investments?
Senator ROBINSON of Indiana. Put it that way, if you please.
ir. RENTSOHLERI. These loans were made at the beginning of that
period, and, of course, during the war period there was a very
deflnito pressure, as you know, to increase sugar production in
Cqba as well as el.sewhere, and at that time th' bank made con.
sidorablo loans in Cuba, and as a result of the deflation of 1021t
Cuba suffered like every other country in the world.

ye
C

th

ter
on

1821

LOBBY LNVKSTIOATION2

Senator RoniNsol" of Indiana. Before you get to that.

About

1915 or 1916, when the branch was stated, it started, I assume, as

a regular discount and deposit bank?
Mr. RENITSoLER. Absolutely.

Senator RoBiNsoN of Indiana. And accepted deposits from

Cubans?
Mr. R NscU

,Lxn.That is right, accepted deposits and made

loans.
Senator Rom.xsox of Indiana. And made loans there as any
commercial bank would do?
Mr. RENTScIILR. Exactly.

Senator ROBINSON of Indiana. Now, I assume also that it made

loans on deposits that were made in this country, in the New York
general office?
Mr. RPNT8C,1LER. Yes, sir.
Senator RoBiNsoN of Indiama. And money of depositors here was

loaned in Cuba?
Mr. RB,.rSCniL.. Yes. There is an ebb and flow in the sugar
business just like any other agricultural crop. At certain times
of the year they have a credit balance up here and at certain times
a debit.
Senator RoBINsoN of Indiana. When was the first big loan made
by the bank to Cuba or Cuban sugar interests?
Mr. RE:N'M0n1L.. I don't know what you mean by "big loan."
Senator ROBINSON of Indiana. Well, when was the first loan
made, and what was the amount?
Mr. RENTSO11. H. They were made right concurrently along, beginningfact, even before the bank had a branch in Cuba. We
lave always had considerable banking business in Cuba.
Senator RoniNsoN of Indiana. TRhat is interesting.

Before the

bank had a branch in Cuba it loaned to the sugar interests?

Mr. RENTSCHILER. Certainly.
Senator Ronixso-. of Indiana. When?

Mr. Re.TscirL.n. Well, I should say it went back a good many

years. We have always had a business in the sugar busine. ; in
Cuba, as well as we have had with the sugar business of everybody
that ships sugar into the United States.
Senator RoBiNsoN of Tindiana. I wish you would proceed and tell
us just how the bank finally got into sugar, into the busim.e, itself.
Mr. REx'isciILRn. All right. As a result of the deflation of
1920Senator Romnisox of Indiana. Now, wait, I would like to find out
if I can how much money the bank had loaned to the Cuban in.
terests, say up to 1920, or that had not been repaid. How much was
on the books't
11r. R pNTscIILER. Those amounts. Sentlor, would be high at one
season of the year and low at aiollt;r.
Senator lom-sox of Indiana. Let me ask you this qutestion:

Were the loans all promptly paid between the priod of 191.5 and
1920?
Air. RENTSIJLER. Yes.
Senator R BoNsoN of Indiana. As they were miade?
Mr. RENTS0ILEU. Yes. Those were all current.

1322

LOBBY INVESTIGATION

Senator RommsoN of Indiana. Then, those were all short-term

loans, 90 days, mot to exceed 90 days?

Mr.

RENTSCULER.

That is .right.

Senator Rom.xsovw of Indiana. And they were commercial loans?

Mr. RENTSC'ILRU. Precisely, and they were all paid and renewed,

and paid and renewed, in the ordinary banking practice.

Senator RoBINsoN' of Indiana. Now, when did the bank first have
a loan that could not be met by the Cuban sugar interests?
Mr. RmN'TscnLER. In 1921, at the end of that deflationary period.
Senator RornsoN of Indiana. What was the end of that period?
Mr. RENTSCLER. Well, 1921.
Senator Ronicsox of Indiana.
What time in 1921 was it?
Mr. RiRNTsCItLsn. I should say
sugar crop, when some of these
meet their obligations.
Senator ROBINsZoN of Indiana.

ei

I know, but 1921 has 12 months.

g,

in May.or June, at the end of the

companies were not in position to

er

How much did the bank have out.

standing at that time?

Mr. RENTSCHILERn. The bank had, at that time, in slow and doubtful

th

loans-put it during 1921. It. developed from, say, the beginning

of May, 1921. and was ascertainable between then and the end of
the year. There were slow and doubtful accounts in Cuba amounting between $30,000,000 and $35,000,000.
and
Senator RoBINsoN of Indiana. Between $30,000,000

sit

$35,000,000

Mr. RENrTSOLER. Yes, sir.

Senator RoBINsoN of Indiana. In May. how much did the bank
have outstanding? T mean due and unpaid.

Mr. 1IE.TScHL:R. Well, that would--

Senator Ronixso-x of Indiana. May. 1921. At the end of May.

Make it that way, the 31st of May.
Senator. if von want' the exact figure on that. I
Mli'. RPI',wI.
would rather get it for you and'give it. to you.
Senator Roinisox of Indiana. Yes, I am curious to know why you
didn't bring those ligures. What we do want to know is all 'about
the yugan business of the National City Bank, which is a bank of
and deposit.
discount
Mr'. RFN.t'IcmEI. Preei.-Ph'.
Senator Rom.swx of Indin,. And we are anxious to know, the
Committee woai;ts to know, just what interest the National City
Bank has in sugar.
Mr. REN'r(SC(LER. I think we canSenator Roni.xsox of Indiana. And in the sugar tariff.
Mr. RImxs-tiiz.-mt. I think we can make that all clear to you.
Senator Rouixsox of Indiana. The only way I kniow how to get
at tiat is to find how you got into the sugar busine.s. and when "
Mr. R:xEN .'tCi..m. W1e got into it by making these loans which,
say, beginning in May. 1921, we found could not be paid.
Senator Roim.mso'x of Indiana. ']']lose were short term loans.?
Mr. 1xTsCIILEB. Yes, .ir.
Senator RomsoN of Indiana. How much wag the first amount,
if von know. that was discovered could not be met?
Mhr. lh :.,'se
n. It might have been any one of these loans, a
half million to a million dollars, but at the end the aggregate was

J
W
oi
sif

ba
9

de
R
U
in

ml

LOBBY INVESTIGATION

1323

between thirty and thirty-five million that we pu!t into that group
of loans that were not liqmiI, and could not be paid in that year.
Senator RoBNsoN of Indiana. I think that is sufficiently clear.
You say between thirty and thirty-five million you had outstanding

at the end of 1921?-

ll'. RENTSCHiLER. That is right. In other words, we ended ip thle

crop with that much unpaid which should have been paid before the

en(l of the year.

Senator Ronxsox of Indiana. Where did these thirty or thirty-

five million dolla. s come from?

Mr. RIETSCIILERn. That was Cuban deposits and American deposits,

general banking deposits.

Senator RoBINSoN of Indiana. Did the depositors of the bank generlily know this moncy had been loaned at that time and that there
wits Inueh outstanding unpaid?
Mr. REN TSCHLERt. 1 don't think there isany question about it.
Senator RoBimsox of Indiana. What actionV did the bank take at
that time?
Mr. RET8ClIILER. That is when I come into the situation, to investigate just what the standing of these various properties was.
Senator ROBINSON of Indiana. When did you come into the
situation?
in July, 1021.
Mr. R1,92xTscnLEn. I cane into it.
Senator RoBINSOX of Indiana. Really, at the point of going over
what you said a moment agoMr. RE, 'IslIE . Yes, sir.
Senator RoBiNsoN of Indiana. How did you happen to get into it?
Just what started it?
Mr. Ri.xTsciumt. As I told you, our contact had been very close
with Cuba. as well as very close with the National City Bank.
Seto ROBixSOsx of Indiana. Yes.
Mir. R.,rsoiLEtu. And when they were looking around for some
one to give them an independent point of view on their Cuban
situation, they asked me whetherSenator RomzsoN of Indiana. By letter?
Mr. RENTSCHLER. No. by conversation. I happened to be in the
bank one day, and they asked me whether I would be interested in
going down to look this situation over, and report to them. I told
themn I wAoithl be very glad to do it.
Senator Rowzqsox of Indiana. You were at that tihw vice president of your company in Hamilton?
Mr. RENTSOHLE. Yes. Vice president and general manager.
Senator RoBINsoN of Indiana. What was your salary then, Mr.
Rentschler? We have beeq asking everybody the same question.
We are trying, to find out what the salaries paid by these various
institutions are. so that there is nothing unusual about that. We will
probably ask you more embarrassing questions than that.
Mir. ItE TSCiLEiI. Well, I do not recall what my salary was at
that time.
Senator RoBIzso of Indiana. Well. I do not know that the committee is so inuch interested about your salary back in Ohio. What
was it when you went with the National City Bank?
Mr. ]hI'TSCUiEl. Do you mean my salary from the bank?

1324
LOBBY INVEST[OATION
Senator RoINsoi of Indiana. Yes. I understood you to say you
start(ld with the batik as vice )I'esidwet. Is that true?
Mr. JENTS(,jIIn.J. NO. I did not- go in 0la0 bank Is vice president
until 1925. Whein I went down-

Senator RolImso, of Indiana. What was your work with the bank

when you did start?

Mr. Ra'rsviii.E. In 1021 they aske-d tile to go down and lives.
figato their situation in Cuba, alnd to rSport to thent-give them
an inlepen(lent report of what I thought the situation was and what
out. I agreed to go down for them. You
could b0 (folio to work it.
asked iabollt lily -salary i1 that connllectionl. I weit down oil the
basis that I woul look it over without iiny consideration,and when
we got through we would decide what was fair to take, if anything.
$niatorl RoInlxsox of ladiana. Well, lhey paid your expenses, of
cour se??
Mt.. 1NTrSc llyIIa.
Yes. I think ill part. Probably oil lily own, in

part.

Senator lRoim-sox of Indiana. When did yol

make conlection

with tile bank

? so that yo were actually working for the bank or
wih thelm
Mr. RI:NTsciur.R. I wade this investigation, made these reports,
outlined to theii what we thought ought to be done, and then in

Februaryl, 1022, it
group of the directors of tile baik went down to go
over tie 'opertiesI with tio, and then we decided pon a plan that
we would follow. At that tne the responsibility was put tip to
11104
and)w(
we organized
a company
known
as tile General Sugars Co.,
which
asanel1
responsibility
for the
Ilanagoent
of these properties.
Senator RloiNsox of Indiana. When did you organize the General
Sug.u's Co.?

Mr. REN'TsCILEr. That was son, time following February, 1922.

Bet we) ihat tie (and
the early spring of 1922.
Sollt1or lIollxiNO, of Indiana. Vhetn (elle ral Suitars' waS organ.
ize..(l wihait was .youlr capacity with that conpauy?
61\r. 11N'EI'.U.
ll. 1 hivecilnli vIl'eielt
of General Sugars,

and took 01vorge

ou5.on, a man that I had worked willh a great

n1Iav year., ilowni as )Ipesident, and installed him to in that jo).

Selitlo' Roumsox of IndianaI.. Where was general Sulgars organ-

ized and incorporated'?

M1r. ltiX1'SCIIJ..
I Ihaiak it was originally a C01an company.
Originally generall Sulga. wits it('niban olwllng cOl)any. Now
we have 11noller corporation, t h (lenerai Sugar Co., which is oruanizedi eilhtr iniler tho laws of )eli wa re oNMan'lan.l,an Amaerican
ioldiiag COtflf1ny.
Senator ]hIuIxSox of Indiana. What is its capital stoikc? What is
tie amonit of it?
Mr. 1rEn'rs(.n.L . The General Sugar Co. now has.$25,000,000 of
commmifl stovc.
Senator ]IonivIsox of In|liana. And how muinh preferred?
Mr. lI:N'slic:ium. No Irelerred.
Senator Roni.sox of Indlaaiia. It was organized in tile .sriing of
1022?
ill the spring of 1922 originally, and it has
Yes:,01LE.z.
Ies.
Mr.
g'owln froll that.

LOBB~lY IN VE'STIOATION

1325

Senator RoBTixsox of bIdiaina. About that~ samne time you became

pivesident- of the company out in Ohio? Is that, trite?
.Mir. RE~NTSCHL~ER. Yes. Upolnv father's death. Father died in
19231 andl I became pre'sidlent of the companflfy in Ohtio in 1023.
Seiiator Ronixsox of Indiana. Prior to that you had become vice
presoiet of the (41pneral. Sugars?
* Mr. IIExSCILUR. That is right.
* Senlator Biuxsox of Ifl(ino~t. T1'lat was in the spring of 192,21
Mr.

IIIvT&iuntuit.

That is right.

Senattor RomiII-xSO of Indittia. Anid at that time, 11s I understand

youI or earllier thanl 0t.t in 1021" I-oil Say the National City Bank of
"IYw, Yor'k hdottnig
in (Jibmm deIits3, ifl)ati,approxiniately
thity r thirty-1lvo million dollars?
111r. Rmirciit. 'That is right.
Semii(oi' Romlxsox of Indhinn. Nowv up to the spring of 1022 how
S ntieli hai that ()1itid~iy dl'it iIIii('ttsed, that wits slowv?
3M1 .- viE's(!I Iki.R. 1'ract icilly notlhig. That account, renitmnc'd
*PracticalIly staltionlary (ling
1922.
SNa.11to,' 1Iomimox of Ind(iaiam. You mleati that it remained upproXiMiltely thirty oi' tilY-live million dlollars~ throughout the latter part
of 1112 timid. 1022?
Mrt. Rf.-vrsvElr.vit. Into 1922, because wve thenil cattl ito the crop,
oind there wits no way to get the jpaymnts back ummuil. after we Salw
Wlt hmajppelledl diiim thilt crlop.
&'litor Hllmixsox oif In1diaima. Theii in thie spring of 1922 Gleneral
*Suigars (hInc.) wts organized?
Mir. Ituxr jii,,~ . 'That is right.
Senator Romiso'x of Indiana. With i capital stock of $26,O0O OOO?
3M-9 11Pxviscina
1 EIt. Th'lere was pot thatt amiot. of capital stock to
begrill with. At that time, I think, it. startedl out with a tnmild capi.
tafit ion of a few humu1dred thoulsanld dollars, and .cince then it'lhas
been ireased from tunte to time until tt the present timeSenator 11(1111 m (iN
f Inditna. How was that coitpaiiv orgali'/cdl
By itidividulas? Did the bank hatve anythig to dto with it, anld if
go. witt ?

~Ii.
F:'I~m~.El.It was orgaiized, Iujid aill of thie stock is held by
the iNatiotll (v C'o., whiel ii18 a cor'poratiolm itlilhiated with the
Niliotia City Btiik. of Now York, till of the stock of which is owned
by rustvees fill, time beitefit of thle Stoekldold('Is of the Sattiomini City

Semiator Roinxisox oif Indittna. The coinpiAtl then. when o1'giied,

did whatt to begins with, with xreroice to Ihee outta111 iig balaimeies?
Mr.
.111,F11L~m.
'1'htmt comuipaity wals origantized( to take over these,
Properties which we 101111(1 itneceisiity to conltinuie to operate.
Seitor R4 nimscx of Imditiaa. Now, let i; see just it second(. These
companies thalt. yout speakk of its ha1vinig found necet'sii'3 to operalte
WCvOr
debtlors or the Nattional City'Btt
Sellitor. Ilso-(x of 'In1dianai.
nlot pay ouit

T1o stich an extent timt they could

SMr. IIE'r~sciiLtit. Ys. sir. Stipli9se I clarify it. for youl bv Savin"i
into thriee'tIise 8onic whk'h'lldid Jmy'l
out ol 1 1l'ii' (IwiI aeoilit : -solve Ili-Ad We
ef110
Ioliat IM u11ind thalt we

this, tha1t tht'a',tilsfl

1326

.onnY INVESTIOATION'

eventually wrote olf completely; apid some where the properties were
thoroughly good if they were given an opportunity to work their
way out, atn(d it was those properties that wore sound that had to be
rehalilitated, had to lhive equipment, added, that ,had to have ill some

instances lands added to round out tie properties. In sonie instances

where wplturchnased adjoining estates to rotind out the i)roporty, so
that it would btconme it soun(d sugar-producing propety, thtt was
done. Those really soumd properties were the ones llat fodllll their
Witv Illto he (eiOneal SIII'gar Co.
Atmator Romx'sox of Indiana. In other words, the National City
Bank went into the slgar business?
Mr. RT:. xm...
Yes. Tho National City Bank at that point did
go into the sugar' businses, through the (Jeiwral Sugars and its
subsidiary, the National City Co.
Senator Ronimsom of Indiana. How mtany properties did they take
over at this timeI
Mr. lh:.wTscu.E. They took over-of the properties that were
indebted to us tat that tini(b. four. There wore four major properties.

S1

h
t

Senator Romnx qo of Indiana. Will you enumerate them 1 Give

their nanes to the reporter?
Mr. ReU.rTsmimmg. (Centrale Astraya; Centrale Pilar; Centrale San

Cristobal; Santa Clara Sugar Co.

Senator Rom-sox of Indiana. In taking over these four co.t!
pani es, were they corporations?
Mr. R F:TsclLR.R. lie Santa Clara Sugar Co. was a corporation.
The other threat, were just whit ar, known in Cuba ts estates.
Senator 1oiujisox of Indiana. Do I understand that inl taking
over this corporation, for instance, you took over a majority of (lie
stock?
Mr. Rt:N'nscI'I.rnm. No. In the case of the Santa, Clara Co., yes,
we took all the stock of the company. In the case of the other prop.
orties it was a case of taking over the actual properties, the actual
sugar estates. .o inich hlnd mid the mill, and so much railroad and
whatever went with it.
Snabot' ]m.mixsox of Inliana. Now, what otlher cotpalluties did you
take?
Mr. ]I;.N.TScIL.H:. TIten. We aded to thlt, by l)tlrchase, Centrale
Canmawax antd C ntrleah
nrtient6s.
Senator RoIsmON of Indianta. That is six l)rOl)Crties
Mi'. 1U-.x's-'ILI(t. YX's.
ht'st' wtre ahld KyI)pIrch.'t.
Senator lojiIsox of Indiana. Have you aiddi, any m1on'0 since
then ?
In'.Rt:x'rst. No, sit'.
Senator t,'Am. t:. How many acres did thioa six-,.eiatets enhrale?
Mr. IIHN'rerum.mln. 'l'lTe entire property now. with ill tie additioiis
that have luetbn added to it, Senator, represents albout 1lo eabr'eas;
that is 3.000 or 330)00 acres.
Senator W.mnsn of Motlanil. What is tle
pIoiluet ion I
pniuoal
iIr. RINT.CIIEI.o List year's productionn wits 200.000 bags of
sulga1 r.
Senator VAl.sln of Montana. That is raw sugar?
Mr. IhT5UiI.I..'liut, is IlW
aw
gtP yes; ;s2j Ioitilids to the bag.
Sentor ]lin smox of Intdizna. At theo, tote t Nailonal City Banl
went into the sugar' bnsiIte,ss in (' 11m, what was tine priice of sngat'r,
(o you know?

t
r

ft

LOBBY INVrSTIGATION

1327

Mr. RIENHrSVIF.n. At the time we took these properties over, the

range of price during 1022 1 think was as low as 2 cents. It ran lip
to 3.:y cents at tile end of tlie year. I ant talking about f. o. b. Cuba.
Y)1i woulhi atvO to add the tariff and the freight.
Senator Rontxsox of Indiana. It has been alleged, 'Mr. Rentschler,

tlimt at the time the bank loaned extensively to the Cuban sugar
interests they were able-not tiec .marily the bank, but the Cutian
sugar interests were able to force the price of sugar ul) Io231/j cents,
ndt(l that the bank itself was influet('c(l considerably by this high
price of sUgnir, 11n1d loaned upwards of $100000,000 to these sugar
InteI'C sts. Is that true?
Mr. RFsn'iSCIILVi. I think that is ver, much exaggerated.
Senator Roi.xsox of Indiana. You still think the figure was be.

twcen $30,000,000 and $3 ,000,000?

31r. RENTSi-it.un
That Is what we had left. Now, as far as tile
lo-ins are concerned, let us remember that. we I)uy a great many
bills on sugars that aro shipl1. As the sugars leave Cuba, destined
to either an American warehouse or to a British warehouse, sugars
that are sold, we buy bills against it, and in moving a great crop
like the crop of 1920, at high prices, your ebb and flow of loans
might run very high. But those would be loans against sugars in
transit. Your figtre of $100,000,000, as far as investment in proper.
ties is concerned, is away exaggerated.
Senator RoinINmso- of fndiani. But your position is I assume, that
the bank did go into tho sugar business to protect itself?
Mr. RENTSCIu...R. Well, we did not go into it. We were forced

into the sugar business.

Senator Ronuxsox of Indiana. And took over the properties?

Mr. RENTscIIm.R, Surely.
Senator RoBINxsoN of Indiana. And organized this other company?
Mr. R.x'rscnmj
1 Ei. Yes. We found ourselves with slow loans, and
we found ourselves in the necessity of working our way out of it.
Senator ]tonnNsOx of Indiana. Aliait has been tile Oxperience of
General Sugars (Ilne.), since it went into the sUtgar busint.ssI
Mr. RENTTsJiLuR. Well, it has rounded out these properties until
they are now sound sugar.producing units, as I told Senator Walsh,
making last year 2,100,000 bgs of sugar. Under the Cuban crop +
restrictions, that dropped down to 1,600,000. So that it has been up
to 2,200,000 at the peak. These properties are .ong the best on
tile island as they stand to-day, and their prosl)eri y, of cowse, dopends entirely upon the prosperity of tile world's sugar busin em.
S'nat1'or lBn.xsox of Inditnna. Mr. lent,'chler, iave you tilten
nnv interest in this tariff legislation?
Mr. RENTSciSCUIX. Interest? Yes. Front tiMe standpoint of our
great interest in world trad., I have been lery much interested in it.
Senator RotIIIsoN of Indiana. Woll, it it chiefly interest in Cublan
sugar, is it not?
.Mlr. RNxnscinn.,i No. 'Ilhe banIk, us you lnolbly Iknow. las iniore

thliln i 1)r ll(1 h1

Very

Lit'ei in eve y cohi1hitl.V i'n te Wo

luei(h interested ill ei'eyhilig thlit hItis to dIo) with

flow olf wold trileL

poiilts.

II weeil

tlile

illd,
we 111.0

IOw hl) and

niittiill it's
. 1ill tllse ollitsile

1328

LOBBYfl

INVFNi*TIGATU)N

Senator'Tu~xo of ITudin. LTA usH come back for a moment to

your, coliniectioll with i the bonk. You thien camet back mid organ.
*lZe~l tile fleneral Sugars (Co. ill 10221
MrIX~CIL~.-Yes, sir.
Senator Ritx.4o of I inin. T1o take ove~r th".e suir propier'ties
inl (te interest, of tile bank?
Mr'. It X:Ni.%'(ixi lt. T1ht is right.
Senaiitor ltojiit-ox of bidimn. You became vice president of the
l(J('erI Siugas. Cusk

9
m
ge,

pl'

Seiutor. 1oi(.lsox of Indiana. What was your' relation then with

tile. hanlk?
"Mr'I~~iL.
At thle time wve finlishied getting thle Genleral
tii
Sugar C'O. set lf), thlt I Stiul-t('( haeck to illy owl) bilms5., ait whichA
tint.', Otobpr, 1112:1. 1 wac; ('Ie'tcd it(hirctoiP of the bankc. And1 then
mly relation Was thalt as a1director of the bank. antd all of thien' sugar
or
iInt('ie.ts wet. Ilfloe orIless concenitriated unier ile, and( I kept ink eon.
tt witli the progreSIS of the general sugar situation liere in tile
Otb
mak11ing of sugar. 'I'Iien inl 1925 1 found tha~t I was spending moreEl
And( mlore time ink thle buank and lesand les onl m1N ownl bulsiness
Slit
wihel lmy younlger lbrotiffr was runn1ing veriy selectively, itnd whlen
I Was5 iltvl('dI to becomeI vice president~ of the bank I wenlt inl as vice
Ivhl
presi denit oh' the( banlk, amid oif' (ie Not
Wiona
Ciy
I* o., inl Janutary, 1925.
i
Spnitom' RomnNsox of bidiana. Atid whndid you become presi.
file
dent?
iA[r. Rm',ls'IIJ.h Ini A wuil of this year.
Smitatom' JIoImlY()N of I uiii. TIlK beginning of your relations
with tile Iiiik. however. WAlS' ('I0i1u('et(' withi die sligal. industry? Is
ni
that. true?
MrIi.
Ye:'sf.EI
~ts. 1%v actiive work with them.
Sem1Iltol. Roitixsoix of Ind1ital. Mr'. R( ,litscIhi('i, Whit i ctivity hais
tj
VOh~iI eOnMPntiyv
sil( ill conniectioni within this tariff legis'latlii1, ats
it relate.' to (1uball Stigiir?
(hpt
Mlr.
1)0 o0l ln(aill the( 'ouipally itself, the (kiertil
Doxrsul.~t
Sugairs Co., or tile boink?
it
8. itait(or llomiixsox of Idiana. Well, 0a subsidiary.
Mr.I
~'rcui.;,.We mde a.Colit.il'i)till of $1,l060l to this coli.t1
ilt
posCiui)(5ed
or Mr. zabiwiskie. Mi'. Latkiii, and~ Mir. ShuttttICk, wholg
were'( eCili-ged4 wi1th tile respoiility of gettgtogether tile Statis.
tiil 111id other illfI'4l'llftioll, ill1
ore to11make 1i jplop)Cl presentation
of' tile 01111111 Sugar sitinationl14 (lo
tecomimitteps of C ongress.
leg4
Stuito
RouI~(.Nof Inditil. Th'Iat Commitittee' wit.%Cotmposed of
o
7
Mr. S4haut tuck 11111d Mr. ~Ahiiiskip?
Alit. IIEN NIV.1. Mr11. Slant tuc. Mr . Lak11il. alid M.zabriicie.pc
I t hilnk 1w( wi the third I uuinu)(' of' it.
Yeal
Sm'ilitor. Itoiit-s'ox of In1dianam. A tad 'Mr. Lak11in ?
i
311. IEt 8(oug
.11. Mir. Tmli
Ic ill 1i.1
r. 81i itft tic: y'P.
S('Iiltoi 11(311 -*5(i of 11aiitia. 'i'liey were iii(p'i'stvd ill keeping
till
tihe tillill'I oil ('taan sugtir don
A
Mr' ~:~ritii.
Yes: I hink so.
Is
Se('iiaor ittusiti
'of
(itIuiiu
. Wel voul kniow It(
vr, 1di
Ii~t
y30i 1

V1)dd'

fill

j.()jjjjy jN%9l:,8T1flAT1O,%4

Senlator

Jt()iiis5I)

1329

of Indiania. You eontrdhutctld to theni $.101000

311% 1I,:x'( rsc R-nWe cElittiilte(1 $10,000 ill order31 that they could
get together iforeitation and make thie pro~per kind of a brief to
p)i'selit to those1 Comm~fittee's of Conlgress.

Senator ltoiux.sox of Indiana. But that $10,000 is contributed

frm (lie National (City Banik?
Mr. R1.-*q'SCILE~t. No. From, tile (enertl Sugars Co.
Seiiator Itoixsox of 1Ihitia. ]tilt it is a utsi'liai company,
Operated ill tile interests of thle National City Co.?I
Mr'. 1IFmN'sciIJp-R. That is right.
Senattor 1tiii.-sox of Itdiniiu. What other sums did you con.
1%h'UtP'i5OiLEi. Nothing tit all.
senator U iiixso.N of Indiana. Have you been down. here yourself,
or anty representative of tile banlk?
Mfr. Ri:NTSMnLL'u. No. sir. I have not come down myself and no
other representative of I ie bank or'the sugar company hias conme down.
Senator RoEiInxsox of Ind~ian~a. You dlepend~edl entirely oil Mr.
Shattueck and Mr. La1kin ?
1Mr. ht~S~1 EI1. itirely on Alr. Shattivi and "Mr.Lakin, in
whiont we have cofidc tCO
(t
they p resented-wo saw their brief
that, they filedl, 1111(1 were well. satisfied Withi it, and we made lio f uifliter efforIt ourselves.
14(~to loisx
of Ind~ianat. Did you)1 see the brief they lI d ?
Mr. Ri-mN'r-Scir.1. yes.
Seimat4) Itoivsox of Indiana. Before the Ways andl Means Corn.m1i(tee?
hIIIIN5I
of Indiana~t. lVais that submitted io youl for
Nil.
n~i-cim.M.No. I sIIw it-I kitew ill at general wily What
(]I(.%. Were, woriig fiil 1111td sa-w it uahoiit Ille tie81,i11dor 11011ix5(,N 01f Iiiialii. Wetll, hlow d1(
olcknow
iid
ill gelierill
whatl they Were Workinig oil'?
11.INiSCIIrIAT. 1INttiiise I 1ha(] tiliked Willi tteil about it.
81binato' It4)lSON of
4)1 ilili.
'Ltalki'I Witli (he11 llabout this tarlif
legislation?
Mr. IIENTpsCiJ 1 Ent. Yes.
Senator hlopimsoN of Indiana. Talked with themn about this tariff
legislation? D)id you agree Willi thle 1)1111 thalt they had1(, coming
S~t-mi'

down here to influence legislation

Mr11. 1?VN'rsCul.tt. No. 'We left Perytlung to then from thlit
poiliat oil. 1 have hind (.olitaits Willii Mi'. I .1tiii for a1great man11y
yt'Ilars, anid ha1ve eniplete 4'ohililEe ill Mr. L11ktl doing~ only thiose4
things. wbhl were fim'l 111t4 tight to (11.
8eitator lttflhlNsoN of Iniaita. hfauve .you published anly li(eratulro
til this subject?
iAh'. RKi"NUOIKLEDR. Yes. T1hte National. City Bank, inl its bulletin,
haZs reea
Ltely( 13pIublished otir viw inl regard1
to thle tariff lind sugar.
1 thiink each of you gentlenuiel htave copies of -it, because you Were
fill (lie-it 11111y have bietil Selit to you regularly.
80enatOr' CAu.Aw lv. AVO were0 o110n
the ailingd list?

1330

LOBBY INVESTIGATION

Mr. RtENT8sILE-a. Yes, sir.

Senator IoJiNso of Itdiana. You published this sheet period.
cally, which is entitled " Economi t Conditions; Governmental m.

mance; United States Securities"?

Mr. lemilrsiximl. Yes, sir%

Senator RouiNsox of Indiana. Is that the name of it?
ih1i. Jti-TsoiEit.
That is the name of it.
Senator RoBINsox of Indiana. You publish this monthly?
Mr. ltL',TSCHILER. That is published monthly; yes, sir.
many of
Senator ROmINSON of Indiana. During this year a good
situa.
sugar
the
to
given
been
have
publication
this
t~io columns of
tion, have they not?
i[i'. RENT''SCULEl. Yes-, sir. We have discussed the sugar situation
very freely.
Senator RomINsoN of Indiana. To whom did you send this
publication?
Mr. RrNT'rsnImt. To our depositors who asked for it; to our bank
correspondents; to at very broad list of people who asked to be put
on the mailing list.
Seinator Romxsox of Indiana. About how many would you
say?
Mr. RmNrsCHLER. I should say that our mailing lists now are as
high as 30000.
Senator Roiuxsox of Indiana. They all receive this publicationi
Mlr. RI NTSv0iLEm. There all receive that publication; yes, sir.
Senator tomimsox of ndiana. And this publication is put out by
the National City Bank?
MI. INF:Nmimit,.

Yes, sir;by tie National City Bank.

edt
for

Cu
the
we

Of
d.
t

o
con
i
Na
an
tal

Semttor l{iiIIS(i of Ini mit. Not. by the General Sugars Co.?

NonTsclm.Et.
No, indeed. It is put out by the National City
Mr.
Bank of Now York.
Senator RojmNso of Indiana. Its cost is charged to the bank?
'Mr.llc.'svi.sent,:tm. To the National City Bank; yes.
Mentor ltommsoX of Indiana. Do you know what the cost of this
publication is?
Mr. l 'SCIILU. I suppose that that represents an outlay net to
us:-our bank correspondents of coutse participate to a certain ex.
tent--but I should say aicouple'of hundred thousand dollars a year-

the
to
(o
at
do
IV

lliiIiillllll cost to get it ont.

Senator RonNsoX of Indiana. I quote from the issue of June, 1929:

We are not accustomed to comment upon tariff policies for the tariff usually

lins it 'loise relation to IlartY Ioltlics, Inwhich a banking institution does not
wish to be Involved. Furthermore, we are aware that In discussug the sugar
situation, and pardlcufarly as related to Cubat, we may expect to have it said

We
k
cis(
to

twit or' Views are iuiat'e'ed Iy Interests which the b.iank has In Cuba.

Mr. RENTSIILEtt. That is right sir.

Seltor lo 1soN o'f Indianiat (continuing reading) :bul
ItIsof eouim, not a secrett that the bank lms Interests In Cubat, as lave Iho1.

sand. of American business corp'orallons and Individuals, and It may be fairly

(ltIloned Mhatl ln Itimate knlowle'dge of' (lie elatloiS existing Itween, Cubit nudl1
diualillhfion for dklw.i'vsllg Ilient. Moreover, It Is
IN. 1'ilted stntes iisnot a1II
ilint interests wich will to adversely affectedd lay lIN'
liordil oimi to dlilitt
Irllisell -sugalt ft" lItII's11)ell ulllh,'led
to a h'ailig Its itteresls wihhli will
hie beiellq. lardk'triay if Ihe foriter. Inmnumber of lit-r.ol.s und aggregate of
li latter. Unitlowll.
vtlie. affi'te'ld, tire slhowi to [i mntuhi iwite iorlt tIh n ih

to

LOBBY INVESTIGATION

1331

edtly the controversy should be settled, after a full hearing, with proper regard

for the Interests of all people concerned, including the mosses who consume
sugar it tile United States.
it may be said further that this bank has business interests not only in
Cuba, but In Porto Itico and the Philippines, countries which are expected to
benefit by the proposed Increase, and that Its chief Interest, Incomparably, Is
in the prosperity of tie United States. It is concerned for the many Industries
cf this country whose prosperity is largely dependent upon foreign trade, as
the automobile industry, the electrical equipment Industry, the farm impleMent, mechanic tool, sowing machine, and other branches of the machinery
Industry, the steel, textile and] flour milling industries, and numerous branches
of agriculture and till the other Industries which In the aggregate are selling
abroad over K,)0000,000 worth per year of this country's products. The
branches of the bank in every part of the world are charged with a study
cf trade relations, and we feel that we know by direct ant trustworthy inforwation what this country stands to gain in foreign trade by fair and conciliatory trade policies and what It stands to lose by policies which provoke
antagonism and resentment. The proposed increase of the sugar duty is so
unfair to Cuba and would deal such a deadly blow to a people whont fate
has placed In close relations to this country tlat we can not forbear further
comment upon the situation.

Air. REXTs8rnLIR. Yes, air.

Senator Roni,-N-ox of Indiana. That is published by the National
City Bank?

Mtr. RIeNTsmIlI, . Yes, sir.

Senator Roixsox of Indiana. In doing that, of course the

National City Bank is trying to influence Congress(
Mr. R:N'TscHLER. We tire stating what we consider our position
and(1 we are doing it openly.
Senator' Ronisox of Indiana. But, answer that question. Isn't
that trtle, Mr. Rentschler, that in this propaganda you are undertaking to influence Congress?

Not tafll. We are undertaking to present all

H'r$CJLt.
Mr. Itn.
the facts to the colnmittees of Congress, that -we understand want
(o hear both sides of the story.
Senator Roi3xsox of Indiana. Yes, of course, but you are trying
to influence Congress, are 3'O1I not with this J)l'opagandal Otherwise, why would you publish it? 'You say it is not the province of
a bank--" it is not the province of at banking institution "_--vet you
do it. You proceed irnnediately to do just. wlat you said was not

within the province of a bank. Now, is that done to influence

Congress or not?
Mr. R i:N-scnln. I feel it. is within our rights, sir', to state what
we consider our views to be in regard to any
Senator CARAWAY. Will you paidon meSenator Roi.ixsox of Indiana. Now, Air.
cisely what people are (Joing that are down
to ilnitience CongrleS.4, all the tine-)resentil

economic problem.

Witness, that is pre.

hero personally trying

g their views, and that

were doing?
you
whatRt:,
is 111r.
We were presenting our views. not peM-sonally
r-,cimn.
but openly.

Senator tom.-sox of Indiana. Why of course.

Ml. InXI'(,IILIII. So that tile whole world could see.
.ox of Inliania. '11hnt. is lwoap: ipandai, isn't it?
SKllnt1or l
1t. Aollu ('all give it lllV (lhliitioll yoll want.
Mr. lI.N.'rS0c'
Sellatol CAlAWAY. Will yot prdo0h n6 jl'ust a non0ent? I wanted
to asi--I 1r1 frank to say that 1 (1o not find the slightest objection

1332

LOBnY INVESTIOArON

the country if he does it openly, an(l I

to
see anyone
tlt youpropagandizing
announced your interest?
Mr. RIENTSCiiLEt1. Yes, sir.

Senator CARAWAY. I think that any interest has got a right to

appeal either to Congress or to the country, provided it does it with.

out any subterfuge. I have never found any criticism in 1y own

mind about the open appeal. It is a citizen's privilege, and I think
he has a perfect right to exercise it. Tito thing I had in mind was

that there was a high-pressure publicity bureau established by people

in whom you say you hve such great confidence, in which they
sought to iach otpublic by having the stories that were son ght to
deceive the public originate as if they (lid not coine fromt people
who had an interest. You do not approve of that?
Mr T.xTSCLF.R
R.
I do not know anything about that. Senator, but
frankly I do not think that kind of publcity does any good.
Senator COAAWAY. That is not what I asked you. I say, you do
not app)rove of that method?
Mr. RENTSCHLER. NO.
Senator CARAWAY. I notice Mr. Lakin was in agreement with you.

He ai(1 ho detested the jot) that lie had engaged in. le was very
frank, and said he would not have done it for his own interests, but
he was driven to do it in the interests of other people associated
with him.
Mr. RENSTsciLaR. Frankly, I know nothing about any publicity
that has not heen open andaboveboard.
Senator CnAWAY. You gave full indoisement of the use of the

funds that had been) contributed to this Cuban Sugar Association?

Nr. RExN'sCILUR. Yes.

Senator (X,.wAY. I was Curious to know how far you knew what

use they had made of it and Iow far you did in fact even approve
of that use?
Mr. RXtrsCIILEu. Of Course, I know the briefs have beeti
submitted.
Senator CAHAWAY I am not talking about that. I am talking

about the propaganda.

.ol
II. IENTISCiiHi, . I know nothing about the rest of it.
Senator CA .AWAY. The method which your bank Iwursied, whether
you should take your depositor.: iioney and speni it that way, of
course I im not asking you, that, but you made tin ol)ce ap))eall
said you hadl in interest. The )rop)iganida that went oult lowi lere
(lid
notapprove
disclosethe
thatlatter
fact.method?
I a1 trying
if you
-- to differentiate and task you
cAn.
sE NTSCHILE. Well, in the oway
doite
I think you
till of
out-it,
ilnlretst.
can sco Wilaif our atttide is. W e,
lneloscd
. we have
|liTt is the reason I interru)ted you just. a
Senator (t.Y.
moment ago, because I do not think any reasonable person can h|ave
any objection to anybody who lias got an interest ajlpealing either
directly to Congress or to the country, provided they (liselose their
interest.
Mr. HIETASCUmm. Yes, sir.
Senator CAIIAWAY. I never do question the right to do lhnt. I
think it is helpful instead of hlrtful, but wien they disguise their
interest, by propaganda, the inspiration or source of which is
Conealed-

not

con
the
all
pro

I qi
o1e
A

e
log

ao
aga

pro

MR
sheo

abe

rca
A
0Un

it

Incr

of si
wa.
wou

'
the

LOBBY INVESTIGATION

1833

Mr. RzNTSOHL=. I beg your pardon.

Senator ROBINsON of Indiana. Weli, I understand you to say that
you had the fullest confidence In Messrs. Shattuck and Lakin.
Mr. RBNTSOHLER. Yes ;1 have.
Senator ROBINsoN of indiana. And all they did, and the propaganda that they were responsible for, you were in favor of that?
Mr. RBETSOHLER. I do not know anything about that. We have
not had the reports on anything beyond what I have told you.
Senator ROBINSON of Indiana.

Except that you contributed

$10 000 for that particular line of work?

Ar. RENTSOHLER. That is right; yes sir.
Senator ROBiSso of Indiana. I thin you said you had the fullest
confidence in them and approved them, and they did submit to you
the brief they filed before the Ways and Means Committee?
Mr. RmySoJILBR. That is all I lnow about it.
ROiBiNsoN
Indiana.
Andtoyou
were in were
a position
to learn
allSenator
they wer
doing of
with
reference
publicity,
you not,
and
propaganda? Your money was assisting in doing it?
Mr. RRMT8'rscIILV. Yes.
Senator RoniNsoN of Indiana. In this same issue of Juno, 1029,

I quote further, under the caption "lThe

Threat to Cuba." I quote

one paragraph:
A tnriff which would make heet-sugar production generally profitable in this
country. In comparison with other agriculturpl products, would be a stand.
Ing HWRIceo to Cuba as long is It was In force.

Your argument there is against beet.sugar manufacturers and

against the tariff for them, that would permit them to live, is it not,
and in favor of free trade or atlow tariff for Cuba, in order to
promote the National City Bank or allow it to gain?
r.ir RENTSCHLFJR. Our attitude is that the investigation that was

made by the Department of Commerce some three or four years ago

showed Vor clearly
Senator

omiNsoN of Indiana. No. Wait a minute. I don't care

about what your plan is except as it is stated hero. I am questioning

you now on your own statement in youi own propaganda.

Let me

read this again and see if this meets with your approval:
A tariff which would make beet-sugar production generally profitable III this
country, in comparison with other agricultural products, would ht a staldIng memuce to Cuba as long as it was In force.

Mr. ]RENTSCHLER. If you will read the full meaning of that word
generally,"1Ou can get exactly what we mean.
Senator hODINSON of Indiana. I will go further:
It would enforce a gradual proe.

of -stramgulation. as domestic production

Increased, but the inmedlate blow to the ubanlIdustry would be fatal to

perhaps most of iho producers. for the credit of the Industry 4nd the salability
of sugar properties would be affected at once. As more of the Cuban product

was forced itOj| other markets., the natural recovery from the present crisis
would bo prevented ad the crisis In the world Industry prolonged.

That is the Cuban producers you are speaking for there, isn't it?
Mr. RENTSCIL.R. Right..
Senator lomNsoNt of Iindiana. That means, of course, speaking for
the National City Bank?
Mr. 1.NTSCxTsn:r. ExMctly.
7.14--2

-r3- - a

13834

LOBBY INVESTIGATION

Senator RoNsoN of Indiana. As against the American producers,

a tariff that will permit the
and that is for a low tariff against
American producers to live. Isn't that what you meant to conveyt
Mr. RENTSoIILEt. No. We are saying that we believe-Senator RoBiNsoN of Indiana. Oh, I know what you ar saying,
The language is plain. But you still stand on that language, do you
not?
Mr. RzNTSOIILR. Yes, sir; absolutely.
Senator CARAWAY. You wanted to make a statement and were
interrupted. Was it a part of an answer to the question?
Mr. R1porscimImi. I said that the word "generally," I think, is
important in that sentence. If you were going to develop the beet.
sugar interests in this country to the point where you would exclude
completely cane sugar, that would of course be a very serious blow
to Cuba.
Senator CARAWAY. All I wanted to say, of cours, you vote the
Republican ticket, but you are dangerously near advocating some
Democratic doctrines, and you may be read out of the party, and
of course lose yotr job.
Senator RownNsGA of Indiana. Mr. Rentschler, are you acquainted
with Profs. B. II. Hibbard, John R. Commons, and Selig Perlman,
of the University of Wisconsin I
Mr. RENTSCUII. No; not personally; no, sir.
Senator RoaizsoN of Indiana. Who is the editor of this publica.
tion?

or
be,
th

pr
spI
an.
sto
out
do

Mr. RprxTscm.rat. Mr. George E. Roberts.

Senittor Ronixsox of Indiana. George E. Roberts?

co

Senator RoBnhsoN of Indiana. What is his address?

Mr. IN,-TsoiLmEIt. Itis business address is 55 Wall Street. He is

wi

Mr. RExTBSCULUH. R-o-b-e-r-t-s.

vice president of the National City Bank in New York and has bemn
our economist for a great many years.
Senator RoInisoN of Indiana. You stand back of everything he

Al'. RENT'CsLER. Yes, si.

Senator RoumnsoN of Indiana. I note, quoting froin this saine June

dir

writes in this publication, at any rate?

sult

nitunber, which seems to have been given quite largely to Cuban

sugar, the following:

Ai

Profs. libbard, John R. Commons, und Selig Perlman, of tho Universi.v of

Wisconsi, have pbliied an estinate flint the proposed hierease wilt cost
coIS1une0t1 $151,00,000 IN tigalhst it gin of 120,000,000 to less than 3 jer cent
of ilit Aintrlein fariners-

And so forth, atd a number of otlter figures quoted.

. Yes, sir.
Mr. RINTsCI
Senator 1Iont.Nsox of Indiana. Do you know where this infornia.
tion ca ie front that these three prntsfs.ors had )ublished this state.
n1('lit, andIlow it happenIed to get into the posse-s-sin of you' editor
of the National City Bank?
M. JIE rsciiI.u. X calt not answy.r that as a majitter of fact, but I
would altiw, dirt'v-ly fr'oi t:iee gentlemen to Mr. Roberts, beeflaUs, he is Itt quIte con.tant vorrespondenco with economists all
over tie coiliTit.
sellator 11tIINxS* of

etllly wais not telea.ed

uidlialla. 'Tha1t statement,

however,

apa .

util 31u1y 26. I have a copy of it here

Fit

in
to

cat.

tile
Ba

bef
It
huh
tim

LOBBY INVESTJGATIO1

1335

marked "For release Friday, July 20, 1029. Tariff on sugar, approved by B. ii. Hibbard, John R. Communons and Selig Pernan,
of lite Uiiversity of Wisconsin." Now, this is in your ,June nubiher.
Mr. REPxT'SrCILEt. Yes.
Senator Rontxsox of Indiana. A full month and a half or ninire
before the release.
NT80iLER. Yes.
Mr. RE,

Senator Ronxsox of Indiana. Evidenth' the National City Bank

was working right with the authors of this propaganda. Isn't
that truet?
Mr. REN'rsOJILFR. No. "W're were not working directly with them,
but there Is no question-Senator Rojnxsox of Indiana. How did you get notice of this
proptiganda a month and a hilf before it was issued?
-Mt'.IRE TSCULEn. As I sav, Mr. Roberts it in continuous correspondence with economists Aol over the country, and if they camei to
any such conclusion as tiat, unquestionably they would send the
store' to hi.).
Senator RoiiNsox' of Indinna. Is it not true that the National City
Bank is working writhi theoetiee l)rofes.or. and with Mr. Rawleigh

out in Illinois, of the Rawleigh Tariff LeagueI

Mr. Rlt:xjcii.jt. No, I do not know himat all.
Senator CARAWAY. May I ask you a question? Do you contribute,
do you help to finance this movement to get out papers of that kind?
I[r. RE.-TsCntmm. Not it cent.
Senator CARAWA Y. Vell, that is what I thought. You did not,
contribute anything to pay for this opinion?
Mr. . ENTSCIILERl. No, sir.
Senator Ronixso. of Indiana. This publication-I read from
what purports to be a copy of it, marked - For release Friday, July
26, 1029, at 9 a. m.":
The following Is one of a series of statements approved by B. H. Hibbard,

oin n. Cominos, and Selig Perlman, of the University of W1scon ln, resultll'g from an Imnartial investigation of the tariff conducted under their
direction with funds generously supplied by W# T, Rawleigh, of Iireeport, U.
Mr. RENrsiILmn. Ldo-not know him at all..Senator.
The thing I am interested in more
Senator RounNsow O6tndlais.

than anything else is to find out how, if you are not cooperating

with these manufacturers of propaganda of this kind you were

in possession of this article a month and .a half before it was given
to the public, and it appeared in the June number of your publi-

cation ?

R.NTsc1..R. There is only, one way to account for It, and

that is that in thi' mass of correspondence that comes to Mr. -Roberts
they probably sent'it through to him.
Senator -toiPItSO of indiana, Hut evldelit!y the National City
Bank had a copy of this sheet and approved it a month and a half
before it was released and evidently ittas approve by the National
City Bank before it was released. Isn't that true?
Mr. Ru-xriouILFm. No I don't think so; not that we approved it.
but Mr. Roberts was impressed with it and .published it i l
bulletin.
Senator 1Roittxsox of Indiana. Can yo-4 give us any reason why
the National City Bank should hwve It before the authors released it,
Mr.

1336

LOBnY INVESTIGATION

unless they understood perfectly, unless there was a meeting of

minds?
Mr. RBNWSOJILER. I do not know anything about this release. I
know that that information must have been in Mr. Roberts' hands
prior to the publication of our bulletin in the end of June or it
would not have been published.

Senator RoniNsoxtof Indiana. I think it is interesting in this con.

nection to note, Mr. Rentschler, that apparently your publication

would indicator that this statement is made somehow or other by the
University of Wisconsin, because you state broadly here, much more
broadly than is stated by the authors themselves, that these are
profebsors of the University of Wisconsin.
MI[. RENTSCHLEIt. Yes.
Senator RoBi.soN of Indiana. As a matter of fact you know. do
you not, that the University of Wisconsin had nothing to do with
that publication? Isn't that true?
Mr. RENTSCHLER. NO. I do not know. I know that Mr. Roberts
there quotes the professors of the University of Wisconsin.
Senator RoBnrso- of Indiana. I read from ittelegram dated
Madison, Wis., addressed to Stephen H. Love, United -States Beet
Sugar A-sociation, 1180 National Press Building, Washington, D. 0.:

and
Tfhe study of the tariff published by Professors Hibbard, Commons,
Perlina. anoi their associates was nut prepared on university time, was sot
Iid for by tho State, and was not isued as a publication of the University
of Wisconsin. It wits an Independent study made by Profemors Hibbard, Com.
mons, Perligan. and their associates and finanwod by W. P. Rawlelgh, of Free.
port, IN.
11.
university was not sponsor either of Its preparation or (lssemi.
nation. Tite University of Wisconsin consistently accords to its staff the utmost
freedom of opinion and expression, and in conformity to that policy does not
assume responsibility either as sponsor or censor of the views of its scholars
GzziN F Axc.

Senator B.A.INE. He is president of the university.

Senator RoBIN.soN. of Indiana. Yes. I meant to suggest that.

Glenn Frank is president of the University of Wisconsin.

Mr. RENTScHLER. Yes. I know.

Senator RoBimsov of Indiana. Now, in the July issue of your pub.

hication under the heading of "The Sugar Tariff," you were con.

de
ml

re-

in
0I

RP

siaerably interested in the tariff, and I quote:

Our monthly letter of Juno contained an article on the proposed Increase of

the customs tariff on sugar, as carried by the new tariff bill which has pasesd
the House of Representatives and Is now pending In the Senate. In that article
reference was made to a calculation by members of the faculty of the Univer.
sity of Wisconsln showing that as a measure intended to improve the position

of aogriculturo the proposal was Ill-advised, because only 2.3 per cent of the
farmers of this country grow sugar beets, while all are consumers of sugar.

There again you refer to the faculty of the university as being the
University of Wisconsin.
.
Mr. RENTSCHLUI. I do not think there is any misunderstanding.
I think that says very clearly., That says this was made by members
of the faculty of theUniversity of Wisconsin. I think his statement
is clear.
Senator ROBINSON of Indiana. But there is no statement in there
that they were hired, outside of their work in the university, as
pro agandists for free trade.
Mr. RENTSCHrat. I know nothing about that at all.

tr

on

Jun

LOBBY INVESTIOATION

1337

Senator ROBINSON of Indiana. There is not a word on that sub-

ject, is there-, and you know they were paid by Rawleight

Mr. RENTSCBLER. I did not know until you told me right now that

they were.
Senator ROBINSOn. of Indiana. Well, you know it now.

Mr. Rr.TSCIILM. I know it by your statement. That is all. That

is all I know about it.

Senator RoBINSON of Indiana. Then the statement here and evidently your institution, knowing a month and a half before it was
released for publication, being in touch with the Rawleigh League,
must have known it, did they not I
Mr. RE.NTSCHLR. I hawr said to you that we knew nothing about
the Rawleigh League.

If we had the statement that came from three

responsible professors of the University of Wisconsin, we would use

the statement.
Senator RoBIKsoN of Indiana. Let me quote further:

Within the past month we have had opporltyuit of seeing a topy (of iift. forth.
coming monograph oni sugar, und find other Interesting cIntents worlby of gen-

eral circulation.

But the first thing in that publication is the statement that it is

financed by Mr. Rawleigh, of the Rawleigh Tariff League. Not a
word about that in this publication. The inference here in your
publication which cost you $200,000. I believe you stated-the only
indication of any connection here is with the University of Wisconsin,
and apparently means to suggest that view. Now, Mr. Rentschler, I
understand that your connection with the National City Bank was
coincident with the bank's going into the sugar business.
Mr. REp, scimnz. That is correct.
Senator RoiNSoN, of Indiana. And you went with the bank to

some degree as a sugar expert, and you have beach with the bank now
eight years..
approximately
U-_i!~
AMr Rmwi-s.ilLI.n. 0ight years; thati
taken by the
h ve l
Senator Ror.nxsoN of Indian,-:Wat
tibuar in that
National City Bank tolijdtthe
<in i, elated
su41
aety
if
time,
of
period
ton.
eGenera igals
except those interest
orati th&Gdtkbral Sui
Senator Ronixso
1ess,
I~iot,a enbral bankt
tion-now wait a mitnUte. Tha "
is it?
'
"
":: :''
'
'
'
Mr. REN'rSCHLuM. Nxlt'at all.
Senator RoiInboN'1f Indianat fAid, it, U. bein" hbled b-1i and
for the National Cit0'.2ankI
Mr. RE.'rsOiw.4 tlis'ight.
Senator ]RonixON of Indiana. Aiid it is prospering.i! Isn't that
true?

y
k.",
Mr. RNrsciIEn.. Well! it is a good around suk
Senator Roinasox of.fl"diana. I understood yoic,'y they were
on their feet.
Mr. RwNSCERn. It is a sound p.'comnPy1 andtit will prosper
Pop s.
just in proportion as the s A d
Senator RoBINso of Indiana, Tt istf'tiru and did you not
companies you had
make the statement that it was reththo.
taken over, those properties, are now on a paying basis?

1338

LODY INVESTIGATION

Mr. RENTUsCLER. Yes. They pay some years. In low-cost sugar

years they have their difficulties like any other industry.
Senator Rognsox of Indiana. But the General sugars Corpora.
tion now has--you might, if you can, furnish the committee with a

financial statement of the General Sugars (Inc.). You can do that,

canyon not-the last financial statement?
Mr. RENTScnLER. If that is pertinent to this inquiry in regard to
lobbyingSenator Ronzxsox of Indiana. It is pertinent to this inquiry. In
the first place, you will agree, will you not, that the sugar business
is not a legitimate part of the business of a bank of discount amid
deposit?
Mr. RNiNTROHL, R. It is a legitimate part of the busines.4 of' te1

National City Co. You must understand that we atre no in iny

of these businesses as a pernanent holder of these )ioprtiu. but
we carry them until such time as they can be marketed advanta.
geously.
Senator RoBINsoN of Indiana. That is just the loint. What steps
have you taken to liquidate your sugar interests in Cuba?
Mr. RENTSojCLR. Under the uncertainties that have surrounded
the sugar business in the last two years, since these properties were
finally put in shape, it would be impossible to liquidate at a fair
value.

Senator ROBINSON of Indiana. Well, have you made any effort to

liquidate? Is it not a fact that since 1921 you have increased your
holdings in sugar?
Mr. RENTSCHLE.

We rounded out our holdings, putting them in

shale, based upon the sugar tariff existing at that time of $1.36.
Senator RoniNsoN of Indiana. Answer the question, please. Have
you not increased your holdings in sugar since 1921?
Mr. RENTSVHLEI. Surely we increased them up until 1925.
Senator RomiNsox of Indiana. And you have taken no steps what.
ever to liquidate your interests in sugar in Cuba I
Mr. RENTSCHLER. Because since 1925-

Senator RoBiNso. of Indiana. Well, isn't it true?

coi
on

liq
ta
&
his

the
Bfl

tr.

W
le
bui

bu!
in

th4

to

Mr. RENTScHLER. No; it is not true. The City Co. would be per.

fectly willing to-day, on a fair market, to liquidate these properties.

Senator Ronixsox of Indiana. Well, what effort has been made?
Mr. R]rNTCHLER. But we are not content to liquidate it until such
tinte as we can get their fair worth, and as long as uncertainty conthites in the sugar industry that can not be done.

th

Senator RoBINSON of Indiana. What do you consider their fair

worth?

Mr. RI1ITCIILF.R. Considerably in excess of the $25,000,000 that is

invested in them now.
Senator Ronxsox of Indiana. Well, that is not an-answer. What
do you consider their fair worth to be to-day?
Mr. RE.wnscuLEi. It would be fair to say that you could not ap.
praise these properties with any kind of a yardstick unless you
could tell me what the price of sugar was going to be, and whether
the cycle in the sugar industry had come around like it does in every
other agricultural commodity.
Senator Rornixsox of Indiana. Then you never can liquidate any
business on that theory. You never know what the price of any

on

LOBBY INVESTIGATION

1889

commodity is going to be next year or next month. Now that is not

an answer.
Mr. RENTS0HLE. You would not liquidate wheat land in Montana
on the basis of 50 cents per bushel wheat.
Senator ROBINSON of Indiana. Isn't this the situation, that you
do not intend to liquidate it at allI
Mr. RENT0H1LER. No. That is not correct. We do intend to
liquidate.
Senator RoBimSoN of Indiana. Then in the eight years you have
taken no steps thus far to liquidate. That is true, isn't itt
Mr. RB.NTsOnLm. It has been impossible in that period to properly
deal with the sugar situation, because if you will go over the
history-Senator RomNsox of Indiana. Whether it is impossible or not
the fact remains you have not attempted to liquidate it in that period,
and instead of that you have increased your holdings. That is a
true statement, isn't itt
Mr. R. TouLzR. No. I stated to you that we increased up until
1925 and since that time these properties that were rounded out, we
would have been willing to liquidate if the sugar situation would
have permitted liquidation on a fair value.
Senator CARAWAY. Has there been great depression in the sugar
business?
Mr. RENTSoHLER. There has been great depression in the sugar
business since 1925.
Senator CAnAWAY. That depends upon world trade and not tariffs?

MAr. Rr.xTSOJiio. It depends to a great extent on world trade and

in the Cuban situation the tariff is of course linked up with it.
Senator CARAWAY. Do you mean the Cuban political situation?

Mr. RENTSoHLzR. No. The big market for Cuban sugar has been
the United States.
Senator CAnAWAY. There has not been any tariff legislation since
19221

Mr. R mTSeHuLE. Yes; but the tariff has been raised from $1.80
to $1.76 by the Tariff Commission in that period.
Senator CARAWAY. Well, not by the commission.
Mr. RBNTs01MR. Well, by executive action or whatever it is.
Senator VALsH of Montana. Oh, no. You are wrong about
that. The act of 1922 fixed it at $1.70.
MAr. RENTSCHLER. Was that the act of 10221
Senator VALSH of Montana. It has not been changed.
Mr. RuNTSCIILER. I beg your pardon. Then it was in 1021, I recall

distinctly it was $1.30.

Senator WALsni of Montana. An effort was made to reduce it,
but that failed.
Mr. Rt-,NTsiL En. I know it was raised in that period.
Senator WALSn of Montana. No. It was not raised in that
period.
Mr. RrxNsoItszR. Well, in 1021, Senator, I think the rate was
$1.80, was it not?
Senator WA11s of Montana. In 1921, by the act of 1021 it was
raised to the present level. Prior to 1021 it was 1 cent a pound net
on Cuban sugar, by the act of 1918.

1340

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. You will furnish that statement, the

last financial statement of the General Sugars Corporation; is that

.
it-General Sugars (Inc.) ?
Mr. RINxTsCuLEm. If that is pertinent to this inquiry.

is
There,
Senator RonxNsoN of Indiana. Oi, that is pertinent.
state.
have the
no doubt about that. The committee would like to
mont. You will furnish that, will you?
no objection to it.
Mr. RgE-NTSCH6tE. Well, I personally would have
Slator RomNsoN of Indiana. Well, the committee is requesting it.
Air. RENTSCILE. But I do not know whether it is germane.
Senator ROBINsON of Indiana. That is not for you to decide. That
is for the committee to decide. It is not only that but we may want
some of your correspondence. This is letting you down easy. We
may want some of the correspondence you had with these interests
in Cuba, to see just what the National CityMr. RE.NTsCurm . You are perfectly welcome to every bit of it, sir.
Senator RoBiNsoN of Indiana. Well, then, let us have this financial
statement. When can you have it here

ever

per.
mit
qeI
qut

M
mit
M
exp
thai
whe
5
pro
nat

Mr. RENTS0HLER. The matter of the financial statement, I wish you

would let me advise about that.

Senator RoBiNsox of Indiana. There is no advising about it. We
are just asking you when you can have it here.
Senator WALsii of Montana. If he says hie hasn't it ready to fur.
nish, and wishes to take advice of counselSenator Rox.vsox of Indiana. Well, he can either agree or not
agree, but we want to know when he will have it here.
Mr. RE.NTouLnR. I would like to follow Senator Walsh's sugges.
tion, and I would like to get the advice of counsel.
Senator R oBNsoN of rndiana. There is no question that Senator
Walsh's position is any different from any other member of the com.
mittee, is there?
Mr. RI NTScLER. Frankly, I do not see where it is pertinent.
Senator CARAWAY. May I ask you a question ? Do you not issue for
publication a statement of your own company? Does it appear in
your bank statements?
Mr. RENTSOILER. No. That capital stock is all held by the Na
tional City Co. and the statement is only rendered to the National

Cit CO.A
8ienator OARAWAY. When it lists its financial statement does it not

show the value of its propertiesI

Mr. RENTSCHLER. YeS. Personally I see no objection to it.
Senator CARAWAY. Of course, if you want to talk to other people
associated with youMr. RENwmoEn. I would like to talk to our counsel about it.
Senator OARIAAY. I am sure your counsel will advise you to do it,
beepuse i do not see any objection to it. There is nothing to it that
you want to conceal, is there?
Mr. RKNTOHLEM. Oh not a thing.
Senator CARAWAY. WAn, I am frank to say I have been very much
impressed with your frankness, except that. You leave me in doubt,
that there is some transactionMr. R.NTssLE :. If there is any impression in your mind that
there is something in those accounts that might in any way whatso.

Nat
b
A
wer
got
wit
yo
Moe
for
stoc
ont

anc
in
ow

wet

Wh
Pr
giv

Vel

LOBBY INVESTIGATION

1341

ever throw light on what you gentlemen are after you would be
perfectly welcome to it. There is certainly.nothing; there at all.
Senator CARAWAY. Well, I hope you will furnish it to the committee.
Senator RoBnisow of Indiana. Yes. I wanted to ask you another
question. I am assuming that the statement will be forthcoming.
Mr. RiENTSOHLmt. After I consult with counsel, if you please.
Senator RoBnzsox of Indiana. Of course, the request of the com.
mittee is that you furnish the statement.
Mr. RzNTscHL=. Yes; I understand the request.
Senator RoBiNsoN of Indiana. I would like to know when you
expect to furnish it. I am assuming that your company will agree
that the statement ought to be furnished forthwith. If that is true,
when can you have it here?
Mr. RENTsCHLEit. As soon as I can get it hero from New York.
Senator RoBn-sox of Indiana. When you took over these sugar
properties you took over some native properties that were owned by
native CubansMr. RE ;TsCHIr.Ri. Yes; that is right.
Senator RoBiNsoN of Indiana. Did they get any stock in the
National City Co.?
Mr. ReNTSCImiLE. No, sir.
Senator ROBINSO8 of Indiana. What did they get?
Mr. R.NiaSci Rn. Their properties were taken over-the ones that

were taken over were taken over on negotiated settlements. They

got whatever the negotiations called for.
Senator RoniNso of Indiana. Well, what did it call for?
Mr. RENTSCOLjIR. In some instances cash; in some instances those
properties were adjudicated to us, of course under foreclosures,
without anySenator RoBixsoN of Indiana. Exactly. A part of them came to
you without any payment whatever? You did not give any of the
stock of the National City Co. to them?
Mr. RENTSCULEB. No; because they were taken over under regular
foreclosure proceedings.
Senator ROBiNSON of Indiana. Not a single one of them got any
stock from the National City Co.?
Mr. RENTSCnLZR. Except in the case of companies we purchased.
Senator RoBinsoN of Indiana. I understood you to say there was
only one.
Mr. RP.NTscnLEvR. That is .where those men in the Camaway Co.
and the Vertienties Co., in which instance there was preferred stock-.
in those two subsidiary companies, which were given to the original
owners, from whom we purchased. The other cases were cases W'vere
the properties came to us by reason of foreclosure proceedings and
were awarded to us by the Cuban courts.
Senator ROBINSON of Indiana. I understood you to say that they
got some preferred stock.
Mr. RENTSCHLER. In the Vertienties Co. and the Camaway Co.,

which were the two purchasing companies-in those instances the

preferred stock in the Vertienties Co. and the Camaway Co. were
given to the original holders.
Senator RoBmso, of Indiana. That was the preferred stock in the
Vertienties Co I

1342

LOBBY INVESTIGATION

Mr. RENTSOMAL. Yes, sir.

Senator ROBINsON of Indiana. There is no preferred stock in the
National City Co.?

wh

Mr. RENTSCHLR. Not at all, and not in the General Sugars Co.;
not the National City Co.
Senator RoBINSON of Indiana. I meant the General Sugars Co.

Sig
tar

Senator ROBINSON of Indiana. That is all.

Senator WALSH of Montana. Have you taken any interest in any
other feature of the tariff legislation than that relating to the duty
on sugar
No.

abo

Mr. RNTSo0

Mr. IrMN

m. Yes.

OLER.

Senator WALsH of Montana. Your attitude with respect to that

particular feature of the legislation is quite clearly disclosed in your
iterature here?
Mr. RIENTS HLM . Quite clearly and very fully.
Senator WALSHX of Montana. Have you as frankly stated your
attitude with respect to the legislation generally?
Mr. RENTSC1HLR. Well, I think we had no other comment on the
legislation in general, except as it relates to this situation
which was
covered in the bulletin. I am Just trying to think. You have all
of the copies of the bulletin there. Would have to run through
them to see whether there are any other phases that we have com.
mented upon.
Senator WALSH of Montana. At the present time you do not
recall?
Mr. RNTaCL. At the present time I do not recall;any
no,attitude
sir.
Senator WALSH of Montana. Nor have you expressed
with respect to the legislation generally?
Mr. REBNTSOUz. NO, sir.
Senator
WALsi of Montana. Has your bank any attitude with
resp
ect to itt
Mr. RpNTsonLn. No.
Senator WALSH of Montana. You spoke about these many branches
you have scattered all over the world. How deeply interested are

of

ha
tio

you in the interchange of commerce between this country and other

countries?

Mr. R ,NrSOiI .. Tremendously interested in that, yes.

Senator WALSH of Montana. Does that affect your attitude with

respect to the matter in any way?

Mr. RENTS011ALE. Oh, it would. Of course, our chief interest
in these branches abroad-of course, our profits come from havng
a full flow of trade between the United States and other countries.
We are very much interested in anything that has to do with the
exportation of motor cars, for instance, vhich is one of our most
important commodities.
Senator WALsxH of Montana. Have you felt that an effort in
Congress to reduce some of 'the rates is inimical to the public
interest?
Mr. RpNTSOh.Xh. No; I have not.
Senator WALs of Montana. Do you agree with Mr. Kent of
your city who is called here as a witness to-day, that that is responsible for the panic in Wall Street a week or two ago?

cit

11lt

LOBBY INVESTIGATIOX

1343

Mr. RENTSCaER. Frankly I have not thought of it out to the point

where I could express an opinion up)on it, Senator.

Senator WAu inof Montana. You would not undertake to as-

sign responsibility for that crash as between an effort to reduce

tariff rates and the fever of stock speculation that has been going
on in Wall Street?
Mr. Rr,TSILv. It is all too near for me to have ant opinion
about it without study.
Senator WVAJsit of Montana. That is all.
Senator BATxNE. Mr. Rentschler, you have very wide financial
interests througltout the world ?
Mr. RExn'remu:. Yes.
Senator B11,Ntxa. For instance, you have a branch bank at Panama ?
Mr. RE. TSCLEn. Yes.
Senator B1,MAixP. When was that established?
Mr. RrnwTSncmLn. That was established originally as a branch
of the International Banking Corporation.
Senator BAINX-. Oh, about when V
Mr. Rr.PJTRCHLV.I. I should say about 1903 or 1904 or 1905; right
after the period of the Canal construction.
Senator BI,AF.. Have you a branch bank in Port. a Prince?
Mr. RE-'rscuv.n. Yes; Ave have the Bank of Haiti, which is
located there.
Senator B.\JNE. And in Porto Rico?
AMr. RE.'rscnL, g. Porto Rico, yes. That is a branch of the
National City Bank of New York. We have two branches there.
Senator lL,,XF.u.
Have you a branch in 1o.-t of the Central Amer-

ican States?
Mr. RIENTSOuLJtn. Yes. We have a branch bank in Venezuela. We.
have six or seven in Santo Domingo; one in Colombia. with additional ones now being put into -Colmbia. We have one in, Mexico
City; just opened one in Guatemala.
Have vou any in Nicaragua?
enaitor BAI-i.
Mr. RPxTscnvEt. Ko. We are not there.
Senator BAI Ex.Do you expect to establish a batik there?

Mr. RINTsoCLEI. We have not determined that.

Senator B,AIN-P. Have you banks throughout South Ameica?
Mr. RE TSCHLEn. Yes.' We have branches in the most imporiant
trade centers in South America; four in Brazil; one in Urngitav.
Senator B,AI E. Is the main business of those banks to extend
credit?
Mr. Rp'sur
sen.'. No. We accept deposits. make loans-act just
bank would act in its own home
exactly
as
any
other commercial
city
,
they extend credit?
CStnator BLAIxE. But "of course.
Mr. Rn' i'nLmi. Oh. yes.
Senator BLAIN-I:. And they receive money from the Nation-l City
Batik of New York for the purpose of extending that credit?
'Mr. RxTsomLV.

Well, those credits are extended front funds that

come from two sources. 'Thnt is. funds that come front loeal dt,posits, as well as funds that come from New York City.
Senator BLAME. Take for instance Panama, using that as an
illustration, you loaned to the Republic of Panama $15,000,00o last
February or March.

1344
Mr.

LOBBY INVESTIGATION

--

RP.NTSOILER. Yes.

Senator Br.:'E. The Panama Republic issued bonds of the

Republic?
Mr. RENTSOIIL.R. Yes.
Senator BLAINE. Was it your branch bank in Panama that ex.
tended that loan or was it the National City Bank ?
Mr. RENTWOHLPR. That was the National City Co. of New York
that negotiated that loan, which in turn took a formi of bonds of
the Republic of Panama, which are sold to the public. That is dis.
tinet from a commercial banking business.
Senator BLAINE. This organization in New York City negotiated
the loan?
Mr. RINNTsOHLU. Yes.
le.
Senator BLAINE. I assume that accounts for the fatct that (ie
only
of
advancement
an
received
loan
that
on
Panama
of
public
$12,000,000? That is $3,000,000 was deducted as commissions?
Mr. RRMNTSCHLEr. 8h, no. No. I can not give you those tigu s
from memory.
Senator BLAINE. Is it not a fact that the Relublic of Panamathat at least only $12,000,000 reached its treasury out of that loan
Mir. RP.NTSOrILER. Well, I can not give you the details of that.
Senator BLAIXE. There were largo de Iltctions made for conimis,
sions. You don't know ahout that?
Mr. RENTTscILIEu. I don't know about that, no, sir.
Senator 3LAINE. Well, the loan was negotiated outside of the
National City Bank or any of its branches?
Mr. RExSOULER. Yes. That is the National City Co.
Senator BLAI -E. The National City Bank however furnished the
money I
Mr. RExTsCIJLER. No, no. That is handled through the National
City Co., and that just passes through-Senator BLAIN-M. The National City Bank then was simply the
banking agency that handled the money?
Mr. RENTSCILF.R. That is all.
Senator BL.%i.NE. This National City Co., however, is..
RiXTscUiFLi. They are investment bankers.
Senator BLAITN:. Practically. the same thing as the National City
Bank, only different in its corporate organization.
MIr. R
INIrSCILEM. And it is a different kind of business.
But the e.sence of the thing is just exactly the
Senator BLAIN,.
sanio as the National City Bank, only it has a different corporate
existence?
Mr. Rv'.N

HrILE.R

Yes.

SQ
a fa
Phi
Nat
IfMP
thro
S,
this
S
this

8
bi
8

of t
M

itse
A
it r
S
Nat
A
S
wer
tion
by
holt
b

Wo
dist
offic

One is a commercial bank and the other

is an inve.'tment bank.
Senator BLAN . It has its common frame but within the frame
the sane thing as in the National City Bank, for the same purpose?
MAI. RIXTSiILER. Yes. It runs as one of the arms of the insti.

me

tiltion.

Senutor BL.INE. Is it this organization that negotiates loans for

the various advancements that are made throughout the length and
breadth of the world?
Mr. RENHsoULEr. The National City Co., as investment bankers,
are dealing with time obligations rather than current obligations.

an

LOBBY INVESTIGATION

1845

Senator BAixE. For instance, an American industry establishes

a factory in France, or in Gernany, or in China or Japan, or the
Philippine Islands, and that industry becomes the debtor of the
National City Bank or of this National City Co.Mr. RB.TSCnLEr. It all depends upon the character of business.
If it is just the ebb and flow of commercial business, that goes
through the National City Bank. If it is a long-time obligationSenator BLAINE. If it Is a long-time obligation it goes through
this organization

ir. RN'rSCIILEII. That is right.

Senator BLAINE. And the National City Bank virtually supports
this organization, as far as the cash is concerned?
Mr. REN'TSCULER. NO.
Senator BLAiNo. It seems that there is a steady flow of cash?
Mr. RExTsconxy. No. The National City Co.
Senator BLAINE. Somebody must sell those bonds.
Mr. R'NTSCiLRn. Yes.
Senator BLuN E. Who sells the bonds that are issued as evidence
of thes cash advancements?
Mr. RENTs0IiIEU. The National City Co.
Senator BLAINj. It soils the bonds. The National City Bank
itself of course is not in the brokerage business&?
Mr. RENIS'CHLEII. The National City Co. has its own capital and
it runs its own business.
Senator BLAITNE. But it operates as a financial institution to this
National City Bank?*
Mr. RENmio1ittiv. No more thanSenator BLA NE. In other words, suppose the National City Bank
were closed and liquidated to-day, what would happen to the National City Co.?
le. REmscIILv. Well. it has its own separate entity and is owned
by trustees, who, in-turn, hold this stock for the benefit of the stockholders of the City Bank.
Senator BLAxNPE. What would be left of it?
Oh, the City Co., as far as its corporate structure
Mr. REpcxiLIm.
is concerned is entirely separate and distinct from the bank.
Senator BLAINE. I know, that is the legal structure, but what
would be the substance of it?
Mr. RExiTScmriL . The substance would be entirely separate and
distinct just as the legal structure indicates.
Senator BLAI.NE. What would it be? Stocks and bonds or just

officers?

Mr. REyN'10soL1n. Oh, it has its own capital like any other investment banker.

Senator

BAINL.

What is'that capital?

Mr. RENTSCIILit. Do you mean in amount?

Senator

BLAU%-.

No; the character of it.

Senator

BLAINE.

And to anyone who desires to buy?

Mr. RENTSCHLER. Ohq, that would be all kinds of securities; cash.

and the usual portfolio of an investment banker.
Senator BIJAINP. Those securities, of course, are sold to the public?
Mr. RENTSCHLER. Surely.
Senator BLAINE. Sold to bankers and estates and to trustees?
Mr. RewrscnL..n. Surely.

1346

LOBY INVESTIOAT1ON

Mr. RE 'T.cIit.R. Anyone who wishes to bity. That is right..

Senator BLAIN.:. Now, because of this widespread financial con.
tact which the National City Bank has in connection with the Na.
tional City Co., naturally that brings those two organizations to.
gather, and naturally they are vitally interested in world trade and
world commerce Ibet,
Mr. RENTSHLER. Precisely.
Senator BLAmINE. World trade and world commerce depends upon
tariffs, does it not?
Mr. RENT'sCUL.u. Well, that is one of the factors, of course.
Senator BLAIME. That is the flow of trade-tariffs are an obstrue.
tion to trade, or the lack of tariffs removes certain obstructions to
trade.
Mr.
N"rscm.mi. Yes.
Senator BJSAINE. Then, your two organizations, depending upon
the ebb and flow of trade and commerce must be vitally interested
in national legislation in America affecting that which many obst:uet,retard, or promote commerce. Isn't that true?
M[r. RKNTSCIILEI. Quite right. .
Senator BLAIN.. You would be likewise interested respecting the
Government of France or of Great Britain or of Germany or China,
respecting their internal legislation?
AMP. RENSOHLF.R. Quite so.
Senator BLAM E. That might affect adversely or advantageously
the ebb and flow of commerce?
Mr. RENTSCHIL.R. That is right.
Senator BLAMNE. So that your two organizations naturally are
deeply interested and vitally interested in national legislation of the
various countries of the world?
Mr. REn%'scti.Er. Quite so.
Senator B.AINE. Now, what did you do-what does your inst itu.
tion do to promote your interests respecting the enactment of laws
or objection to the enactment of laws that may affect those two
institutions.
Mr. REiSqCJsLa. I think I can explain our policy on that in a
nutshell by saying that we consider ourselves as guests in the house
of the other man, when we are dealing in some foreign country,
and we must conduct ourselves 'as he wishes us to do, and therefore
we have nothing whatsoever to do or say in regard to their internal
laws or regulations. If we can not adjust ourselves to meet their
situations, then we have no other alternative than not doing business
in that particular country.
Senator Bi.%ie.v. Now, let us go to Cuba. I think you said you had
about 800,06 0 acres of sugar lands.

Mr.

RENmTshOiLER.

gov

yV
our
Ste
tie
des
o

the

coy
til
Pi

tl(

me

ra

th

Yes.

Senator BLAINE. Assuming that there is considerable disturbance

in Cuba industrially, dissatisfaction among the wbrkingmen, and
assuming that the Machado Government is held responsible for that,
locally, that is, that as far as labor can speak it so speaks, or as far
as a group of people in Cuba may speak, they might so speak, and
that threatens the stability of the Machado Government, you are
interested in that, are you not.
Mr. RrEbrTsoH 1I. Oh, yes, indeed; we are interested.

w
.

o
o
c
P

ul

LOBBY INVESTIGATION

1347

Senator BLAINIC. Your property depends upon the stability of the

government.
Ar. RENTs(8HLER. Exactly.
Senator BIAiNE. Then, is that a reason why representatives are
sent to Cuba to be observers respecting the possibility of difficulty
between the groups in Cuba and the Government?
Mr. RENTSCHLe. Oh, we keep in close contact.
Senator BLAINE. You keep in very close contact with them and
you keep very close track of that. Now, under the Platt amendment
our Cuban reciprocity arrangement, the Government of the United
States may intervene. You would be in favor of the intervention
then in case there was such a disturbance as might threaten the
destruction of your interests in this 300,000-acre production?
Mir. RENTSCHLER. I think that is a very hypothetical case, because
the Government in Cuba at the present time is a stable, sound Government.
Senator BLAINE. But there have been rumblings of trouble, have
there notI
Air. RENTSO11Ltvt. Not to the point where it would in any way
affect our interests.
Senator BLAINE. Well, brushing aside-there has been testimony
hero coming from the sugar interests that they do keep very close
contact witih the situation there, and that there were certain disturbing elements, but, aside from that, I recall about a year ago
President Machado, not officially, but publicly, gave out a feeler to
the effect that Cuba would like to be released from the Platt amend.
ment. Do you know the provisions of the Platt amendment?
Mr. RzNisou Ent. Yes, I do.
Senator BLAINE. You are familiar with that?
Mr. RENTSCHmLE.

Yes.

Senator BLAINE. Now, you would be interested in avoiding a sepa.

ration of that arrangement between Cuba and the United States?
Mr. RENTSOn'IE. That would be a political situation in which we
as a bank would not become embroiled one way or the other.
Senator BLAINE. But, would your holding companies that hold
these properties?
Mr. RENTOJOLEI. I think not, sir.
Senator BLAINE. Not at all?
Mr. REN SoHLEB. I think not, sir. I think that that is a political

problem which would have to be settled in its own way.

Senator BLANE. You would make no' effort through Congress to
prevent a separation of the relationship existing between the United
States and Cuba under the Platt amendment?
Mr. RENUSCULER. That is something we would have to decide
when we came to it, but our attitude is that that is a political situ.
ation in which we should keep our hands out.
Senator BLAINE. But, if you decided that your 300,000 acres and
other investments in Cuba might be threatened with loss to your
organizations, then you would feel that you would have a right to
come to the American Government and seek the influence of the
American Government or the action of the American Government
under the treaty and the Platt amendment?
Mr. R'rXcMI.Rn. I would rather take care of that when we get

to it and not try to plan ahead of time, because fundamentally, we

1848

LOBBY INVESTIGATION

keep
tries. our fingers out of political situations in all of those coun.

Senator BLAIN1. That is all.

Senator IVAJsig of Montana. Mr. Rentschler, you did not know

anything about Mr. Lakin's National Sugar Association, as I think
you told us, getting our material that was to go into newspapers and
journals generally, without disclosing the source from which those
articles originated
that.
Mr. RBNTSW0IL.. No, sir. I did not know anything about
Senator WALSH of Montana. He likewise told us that he employed
Colonel Carroll at an expense of $10,900 to look after.tariff legisla.
tion here. Did you know anything about that?
Mr. RENT80H1iO
. No, I didnot.
Senator WALSH of Montana. He told us likewise that he had em.
ployed Colonel Carroll at a salary of $4,500 per month, in anticipa.
tion of American intervention in Cuba, and to forestall action of
that character. Did you know about the expenditure of that money?
Mr. RENTiCILEi. Not at all.
Senator WASlh of Montana. Do you keep any check at all upon
the methods by which your contribution and other contributions to
that organization are expended?
Mr. RP.NTSCHLF1h. Oh, yes. Unquestionably we will get a complete
accounting at the end of the year and we will know then. We do
not know now. As I told you before, we simply rely upon Mr.
Lakin to see to it that those expenditures are made in the proper
fashion.
Senator WALse of Montana. Had you any information of the
prospective intervention by the United States in Cuba being so
imminent as to be necessary to employ an observer at a cest of
$4 500 a month to forestall that situation?
Mr. RENTSCHLE.. No; I did not. re
Senator WATsH of Montana. Have you an information about
the probable intervention of the United States?
Mr. ItENTSCHLR. Of course there have been a lot of rumors, but
I have not been deeply concerned.
Senator WALSH of Montana. That is all.
Senator CARAWAY. That is the very point that we are coming to,
Mr. Rentschler. Large aggregations of capital contributing to some
kind of a propaganda breau and turning them loose without
inquiring into their activities, and you find yourself in the financing,
your proportional part of it, of propaganda that sort, in the first
place, to make public sentiment appear to exist, to influence legis.
Nation. The man who is spending it said he was doing it, trying
to have it reflected into law, and to get money into his pocket in
return. You are paying your part toward the financing of the
movement to oppose the so-called Barlow claims in Cuba. Do you
know that?
Mr. RPNTsoHLER. I do not know that that is so.
Senator CARAWAY. Well, you raised so much money, and a part of
it is being used for that purpose.
Mi RI i TsonmLm. Mr. Lakin would have to explain that, because
I do not know.
Senator CARAWAY. But here is what I am coming to. Does it
strike you as the wise thing for people to raise a fun( that way and

pr

an

the

Yo
jai
got

ass
bel

ab
mo

am
Ag

ha
fr

It
Pa

111

to
ma
of
oe

t
tr

ti;
Sel

ar

LOBBY INVESTIGATION

1849

ut it in the hands of people and never try to supervise it, and

.
Mr. RBENSomU:L. From our point of view, I think I can best
answer that by saying that the $10,000 contribution for the purpose
of gathering together data and information necessary to make a
proper presentation before those two committees of Congress was a
reasonable sum.
Senator CARAWAY. I should not object to that, but you do not

et them use it as they see fit

see whether your money went to that.

Our feeling was and is now that Mr. Lakin
Mr. RENTSOHL.

and Mr. Shattuck who have expended these funds are both very

responsible And very high grade gentlemen and that we believe

they would use those moneys in the proper way.
senator CARAWAY. I am not asking about your faith, because
you seem to have a great deal of that. Your moneys actually
paid for these very things. A man told us here yesterday that he
got a $10,000 retainer fee and is getting $4.500 a month out of this
association, to which you contribute.
Mr. RR-NTOHLER. I do not know that that is a fact.
Senator CARAWA.Y. Well, he swore to it, and I am inclined to
believe him.

Mr. RENTSCHLER. I don't know anything about it.

Senator CARAWAY. Well you certainly ought to know something

about it and that is what i am coming to. You can not finance a
movement and then say you are not responsible for it, can you?
Mr. RENTScOLER. oh, no.
Senator CARAWAY. Sir?
Mr. RENTSCOIL.R1. I think you are quite right about that. We
could not.
Senator CARAWAY. I am not criticising you. I want you to be
relieved of any belief of that kind. I am not trying to do thut. I
am just asking you about the policy. You are helping to set up an
agency that was financed quite iberally, and I want to say that I
had a very high regard for Mr. Lakin. He seemed to be perfectly
frank. The other gentleman you mentioned did everything he coula,
I think to conceal the truth. If he told it at all, he did it with great
pain. I .was just trying to get your reaction to the financing of a
movement and then paying no attention to it. It did not appear
to me to be quite in keeping with the other statement that you have
made of your utter impartiality with reference to the governments
of the countries in which you do business. I think your policy of
regarding yourself as a guest is to be entirely commended but on the
otier hand, I do not know that I quite agree that you should set up a
vast fund,. and then turn them loose to make expenditures as they
see fit. I just wanted to know whether you approved of that.
Mr. RPn.TsonliPR. From our point of view, again I come right back
to say that our confidence in Mr. Lakin was such that we felt that
these funds in his hands would be properly used.
Senator CAnAWVY. 'That is not what I am asking you. I was
t.ryin to et-perhaps it was unhappy the way I framed the ques.
tion, but I was trying to get your reaction to the general pohcy of
setting up agencies to influence legislation and then just saying "We
are not responsible. You do whatever you think is right.'
78214-20-- T--8

1850

LOBBY INVESTIGATION

Mr. RENTSCLE.

Oh, I hope I made myself clear that our atti.

Mr.

Yes.

tude in regard to this whole matter is to have everything that we

do right out in the open where you can see it just as you did the
bulletin. If you look at it, it does not make much difference, as we
have declared our position,
Senator OARAWAY. If you can declare a policy and then not pursue
it-Oh, well. Evidently it is embarrassing. That is all.
Senator ROBNSON of Indiana. Regarded of anything else, you
do not know that your contribution was going to prevent an increase
in the tariff on sugar?
RENTSCHLER.

SenatOr ROBINSON of Indiana. You knew that was the general

purpose of it and that Mr. Lakin and Mr. Shattuck would- use it
that day, did you not?
Mr. R*xNTSOHL=. Yes. Our understanding wasSenator RoBiNsoN of Indiana. That is where your interest was?
Mr. RENTSCHLER. That this sum would be so used to present the
case, to as far as possible prevent an increase in the tariff.
Senator RoBINsoN of Indiana. You depended on those gentlemen
to use it any way which they saw fit?
Mr. RENTSCHLER. Yes, feeling positive that they would use it in
the proper way.
Senator ROBINSON of Indiana. But anyway they saw fit to bring
about that result. That is all.
Senator CARAWAY. What was your answer to that?
Mr. RENTSoHILE. Can I say, SenatorSenator CARAWAY. Now please don't. Did you ever hear a nigger
testify? You know, whenever his Adams apple runs up and down
his neck and he says, "Not as I knows of," then you know he is not
telling the truth. Just say (yes" or "no." You do or you do not.
I- Mr. RENTSCULER. I think I have explained my position. First,
Senator CARAWAY. No. You have explained and then qualified it.
I hope you won't get away with that. Were you perfectly willing
to let them use that contribution any way they saw fit?
Mr. RNTSCHLER. Yes, because of our confidence in those men.
Senator CARAWAY. Now, your " because" is where you are trying
to dodge the consequence. You were or you were not. You were
perfectly willing that they should so use it? Yes or no.
Mr. RE.NTscHLn. No. I think that qualification has to be in, in
order to make my position entirely clear.
Senator COARAWAY. Well, then you certainly took no pains to see
whether they did use itMr. RENTSCILE. I think we will when they are through and they
make their report. We will see clearly what they have done, and
I have confidence that they will have done what is.
right and fair.
Senator CARAWAY. You can not avoid responsibility by saying,
"After a man has made his report I will know what he did." You
don't do business that way, do you? You do not turn your financial
agents loose with the money and say, "I don't care what you do with
it, but I will hold you responsible Yor it when you account?"
Mr. RmnoiscnLr. The whole basis of our business is to pick men
that we have confidence in And then follow them. It has to be done
that way.

LOBBY INVESTIGATION

1351

Senator CAHAWAY. Well now, you know if you read Mr. Lakin's
testimony what he is doing with that fund. You read it?
Mr. RINTSCIILER. No; I have not read it.
Senator CARAWAY. You have not talked with him?

Mr. RENT8OHLUm. No sir. I have not talked with Mr. Lakin.

Senator CARAWAY. Vou have no idea then what he is doing, do

you?
Mr. RiENTS(HLR. No; I do not know beyond the brief and the
presentation of this matter before the committees.
Senator CARAWAY. Do you want to let that answer stand, that you
do not know.anything about Mr. Lakin and Mr. Shattuck's activities
except what is disclosed in the brief?
Mr. RENTSCHLR. The rest of it that I have, Senator Caraway, is
frankly, hearsay.
Senator CARAWAY. That is not what I asked you. I said you have
no notion and therefore you are not curious about anything they did,
except what wias disclosed in the brief You know that was not onetenth of their activity, don't you?
Mr. RENTSCILE. No I don't know that.
Senator CARAWAY. Oh. well, then, you never will know when they
account to you for it. That is all.
Senator ROBNsoN of Indiana. That is all.
Senator CARAWAY. Is Mr. Fletcher in the committee room?

(No response.)

Senator CARAWAY. Is Mr. Chandler in the committee room?

(No response.)

Senator COARAWAY. Well, we had a few minutes time and I thought

that we might take their statements, but if they are gone, we will
suspend until tomorrow.

Senator WALSU of Montana. I was desirous of examining Mr.

Kent this morning, but evidently we are not going to have an oppor.
tunity to do so, so that we will have to ask that he come here to.
morrow morning.

Senator CARAWAY. Yes. Mr. Kent will appear to-morrow at 10

o'clock.
We will adjourn then, until to-morrow, at 10 o'clock.
Whereupon, at 12.80 o'clock p. m. the committee adjourned to meet
to-morrow, Thursday, November 21, 1929, at 10 o'clock a. m.)

LOBBY INVESTIGATION
THURSDAY, NOVEMBER 21, 1929

UNITED STATES SENATE,

, b. 7.

SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY

Wa8Aingto

The subcommittee met, pursuant to adjournment, at 10 o'clock

a. i., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway .(chairman) and Walsh of Montana;
Senator Robinson of Indiana appeared later, as hereinafter noted.

Present also: John 0. Holland, Esq., counsel to the committee.

Senator CARAWAY. Mr. Fletcher, just come around, please.

TESTIMONY OF G. S. FLETOHER, PRESIDENT FLORIDA EAST

COAST GROWERS' ASSOCIATION, MIAMI, FLA.
SThe witness was duly sworn by the chairman.)
senator CARAWAY. Mr. Fletcher, will you give the reporter your
name, residence, and occupation?
Mr. FLzrEmm. G. S. Fletcher; farmer; president Florida East
Coast Growers' Association, Miami, Fla.
Senator CARAWAY. Your real business is manufacturing fertilizer,
isn't itt
Mr. FLEncHER. No, sir. I am a dirt farmer.
Senator CARAWAY. Are you not connected with the fertilizer industry?
Mr. Flmun. No, sir; except I buy a lot of it.
Senator CARAWAY. Then I was mistaken.
3Mr. FLTcnR. No, sir. I am just a real dirt farmer.
Senator CARAWAY. An honest dirt fatinerl

Mr. FLr=OIIER. An honest dirt farmer all my life; sir.

Senator CARAWAY. That is interesting, to get an honest man. How
long have you been a citizen of FloridaI
Mr. FLrCoiiEn. All my life.
Senator CARAWAY. Born- there?
Mr. FLETCHER. Yes sir.
Senator CARAWAY. ilow long have you been a farmer?
Mr. FLETCHER. Since I was about-i started to plow about 12Senator CARAWAY. Have you had any other occupation than
farminAf
Mr. JFLEToHE
. sir.
Senator CARAWAY. Are you a fruit and vegetable grower?
Mr. FLETCmm. Just vegetables, Senator.

138-

1354

LOBBY INVESTIGATION

Senator CARAWAY. You are president of the East Florida--

Mr. Fxwronw. No, sir. The Florida East Coast Growers' Associa.
tion, an organization that was organized by the Government 12 years
ago.
Senator CARAWAY. What for?
Mr.

FLTchER.

It was a nonprofit organization, for handling

farmers' products.
Senator CARAWAY. We had quite a number of your letters. You

engaged in building a fire under Senator Fletcher. You said you

we're going to control his vote.
Mr. FLETCHER. No, sir. I said that "we." That was the State of
Florida-to let Senator Fletcher know the attitude of Florida.
Senator CAIIAWAY. Well, we have your letters here.
Mr. FU ECR. Yes sir.
Senator CARAWAY. ou said you knew you could deliver his vote
because you were building such a fire under him that lie could not
get away.
Mr. MlkCHER. Senator, I said "we."
Senator CARAWAY. Who were "we"?
Mr. FLEwCHER. The people of Florida.
Senator CARAWAY. Who was building the fire?
Mr. FuLeim'.n. The people of Florida.
*Senator CARAWAY. And they commissioned you to do that?
stateMr. FLtroHER. Senator, will you just let me
the questions, beaus
answer
just
You
no.
Senator CARAWAY. No,
will take all day,
that
you will wander off here and tell us a story
to hear
don't wantNo,
weFLETCHER.
andMr.
sir. it.
Senator CARAWA Y. Who commissioned you to state that you could
deliver the vote of Senator Fletcher?
Mr. FLErTnhE. Senator, no ono commissioned me to do that, except
I was appointed by the growers of Florida to go over Florida and

make talks relative to protection for our fruits.

Senator CAIRAWAY. Who appointed you?

Mr. FLm-TERn. The growers of southeast Florida.

Senator CARAWAY. How (lid they do it?
Mr: FLMETCER. In a mass meeting.

Senator CARAWAY. Have you got a resolution to that effe, t

31r. FLETCHER. No, sir.

Senator CARAWAY. Was there anybody present but you when that
apppointnent was made?
.Mr. FLEITCHER. Wlhy, Senator, I suppose there was retpresented

there-the heads of the different organizations I suppose repre.

sented posibly.5,000 people.
Senator

CARAWAY.

You were commissioned to be spokesman to go

over Florida for what purpose?

Mr. FI.TCnsn. Senator, to create-in other wordl-an educational campaign. That was in 1027. It started in 1927.

Senator C.RAWAY. Mr. Arnold has been telling us that he was

running an educational institution and you were one of the

professors,
Mr. F-m mR. No sir. I want to say that we were against Mr.
Arnold and his machine all the while. Personally I was, all the
while.

Sen
spon(
Mr

starte
ctme

Flori

of ou

Sen
u wh
Mr
we re:
it is
Mr.1
inder
Sen
line?
Mr
All o
ests i

we ha

in ma
Sen
Tar
Mr.

farme

Sen
handed

Mr

that

Sen
Mr.
Sen

did n,
Mr
Sen

that'

Mr,
try t(
Sen
of tht
and t

Comm
they
Mr.

Sen

Mr.
Sen
Mr.

with -

Sen
presk
Mr.
Sen

LOBBY INVESTIGATION

1355

Senator CARAWAY. How came you in such close, intimate correspondence with him.
Mr. FzcHER. If you will let me explain, Senator, when we
started this campaign in 1927, Mr. Arnold took advantage of this to
come down and raise money over the State, because the people of
Florida realized that unless something was done we would lose all
of our farming industry.
Senator CARAWAY. You know that is not interesting. Just tell
us what you did, if you please.
Mr. FE CER. Well, Senator, Mr. Arnold came down there and
we refused to pay in to Mr. Arnold the money that he wanted, and
it is a known fact in Florida that I taken a stand personally against
Mr. Arnold collecting any money in the State, andwe triedto work
independent of that organization, and did it practically a year.
Senator CARAWAY. Well, you finally were seduced and got in
line?
Mr. FtCHnER. No. We did not get in line. I beg your pardon.
All of the State of Florida-the various fruit and vegetable interests was working through that organization, and I was advised that
we had better work along with the men of Florida not with him, but
in making our appearance here before the Tariff ommissionSenator CARAWAY. Now, then, did you belong to the Skipper
Tariff League; was that it?
Mr. FwirTonx. No, sir. We tried to work just as horny-handed
farmers, to save our farms. That is the way we was working.
Senator CARAWAY. I will bet you have not done a lick of hornyhanded farming in a generation.
Mr. FTHER. Senator, I can prove that by half a million people,
that I have. I planted a seed bed the day before I came up here.
Senator CARAWAY. On a bed about two by four.
Mr. FLWCHER. No, sir.
Senator CARAWAY. Anyway, that is not material. You say you
did not act with Skipper?
Mr. F~raCHEiR. No, sir.
Senator CAR.vY. You know, we came in possession of the fact
that ho has a tariff league down there; Do you know about that?
Mr. FLetCHER. Yes, sir. They organized a tariff league there, to
try to keep away from the Arnold organization.
Senator CARAWAY. No. We happen to have come into possession

of that. literature. He was to raise money under the tariff league

and turn it over to the Republican National Committee. I have the

commission of one of his men who got drunk out in Alabama, and
they took it off of him.
Mr. FmirtrcnE. Yes, sir.
Senator CARAWAY. Were you cooperating with that association?
Mr. FLETCHER. Senator, when that was organized I was not present.
Senator CARAWAY.- I did not ask you that.
Mr. FLETCHER. I was elected vice president, but never did work
with it.
Senator CARAWAY. You never worked with it. Are you still vice
president of it?
Mr. FLETCHER. No, sir.
Senator COUAWAY. When did you quit?

1356

LOBBY INVESTIGATION

Mr. FLvrCHER. It has been something like it year and a half ago.
Senator CARAWAY. They have not been functioning much in a year

and a half.

Mr. FLTCHER. They have not been functioning for about two

years.

Senator CARAWAY. Oh, yes. I have got the commission.

I will

send up and get it if you want to see it. They were functioning in
1928. That was last year.
Mr. FLETCHER. Well, it was not doing anything.
Senator CARAWAY. Well, they were getting money.
Mr. FLEI'cHER. Well, I don't know about that, Senator.
Senator CARAWAY. You know, as I said one of their collectors got
drunk down in Alabama and they arrested him, and among the assets
he had was this commission from Mr. Skipper to get money for that
tariff league and turn it over to the Re6publican National Committee.
Senator Walsh will go over the correspondence with you.
Senator WAIsu of Montana. Did your organization raise some
money that was not turned over to Arnold f
Mr. FLETrcHER. Yes, sir.
Senator WALSit of Montana. How much did you raise?
Mr. FLETCHER.

Senator, the people of Florida-

Senator WALSH of Montana. How much did you raise?

Mr. FLTC-hER. It was one-half cent per crate that we shipped. I
think it was around $800, but we did not pay that to Mr. Arnold.
Senator WALSH of Montana. I am talking about the money that
you raised-that you did not turn over to Arnold.
Mr. FLEronF. . I think it was around $758.

Senator WALSit of Montana. That is the Florida East Coast

Growers' Association?
Mr. FLrrciEu. Yes, sir.
Senator WALSit of Montana. You are president of that organic.
zation I
Mr. FLETCHER. Yes sir.
Senator WALSH of Montana. Who is the treasurer?

Sen
any ff
your
Mr.
Sen
ciatiol

Mr.
in to
things
Sen
Mr.
selves
like
Sen
Mr.
woulc
over t
Sen
Mr.
we ga
'

Sen

infor

Mr

name.
was b
Sen
of the

Mr.

Sen

to son
Mr.
name

tion,

Sen

Mr. FLTCnER. Mrs. M. F. Wilson.

Senator WALsH of Montana; Has that money been spent?
Mr.FLTcn.. Yes, sir. It was used by myself to come-we made
a trip to Washington three times before the Tariff Commission hear.
ings, the Ways and Means Committee, and the Senate Finance
Committee.
Senator WALSHz of Montana. And your expenses were paid out of
this fund raised by the Florida East Coast Growers' Association?
Mr. FLTCHER. Ves, sir.
Senator WAIsII of Montana. Some $700?
Mr. FLETCHER. Yes, sir.
Senator WALMI of Montana. How many came up here on that
occasion ?

Mr.
Sen
Mr
South'
Se
this i!
Mr
Sem
been
Mr

representing my concern. There were several came along, but I

came representing the Florida East Coast Growers' Association.
Senator W,%9n of Montana. Then this $700 went to pay the ex.
penses of your three trips?
Mr. FLicnkn. Yes, sir.

Se
tion?
Mr
So.

Mr. FL.TcIIER. Why, Senator, I could not remember. I came alone

Ser

tends
Mr

Mr. I

excite

LOBBY INVESTIOATION1

1857

Senator WALSH of Montana. The other gentlemen, if they got

any money from any source, it was not out of this fund raised by
your association ?
Mr. FLrciiE. No sir.
Senator WALSH o? Montana. All the money raised by your association went to pay your expenses up here?
Mr. Fwvimk. With the exception of around $200, that we paid
in to the Southern Tarifr Association, before we found out some
things that we found out.
Senator WALSH of Montana. What was that?
Mr. FLTCHER. We realized it was not best for us to affiliate ourselves with them, because we understood they were taking something
like 40 per cent commission out of this money.

Senator WALSH of Montana. Forty per cent?

Mr. FLTCHxER. That is what we understood, and we thought it

would be better to pay our own expenses, and not turn the money
over to the Southern Tariff Association.
Senator WALSH of Montana. Where did you get that information?
. That was just a general impression down there that
Mr. FLTCHErc
we gained, that there was being a heavy commission taken ow" of it.
Senator WALiSt of Montana. You can not give this committee any
information about where you got that impression?
Mr. FTCHMER. Well, Senator, I could not really call anyone by
name. I wish that I could, but the impression was that that money
was being trimmed for commission.
Senator WALSH of Moitana. Well of course, if there was a rumor
of that kind around it must have had some origin.
Mr. FL.-cHiER. Yes, sir.
Senator WALSH of Montana. Somebody must have conveyed it
to somebody else.
Mr. FLvTCHEn. As I recall, there was a man from Tampa by the
name of Murphy that used to work for the Southern Tariff Association, and I believe that he is the man that gave out the information.
Senator WALSH of Montana. Where is he now?

Mr. FLvrCHER. I don't know, Senator, whore he is now.

Senator WALSH of Montana. But at that time he was at Tampa?

Mr. FLw-oHER. He was at Tampa at that time, working for the
Southern Tariff Association, or had been.
Senator WALSH of Montana. And about what time was it that
this information came to your knowledge?

Mr.

FLLVCHEt.

Why that was about the first of 1928.

Senator WALSI of Montana. Has the Southern Tariff Association

been operating in Florida since that time?
Mr. FLtwHER. Yes, sir.
Senator WALsit of Montana. Do they have something that pretends to be a local organization?
Mr. FL voHER. They have what they call a state-wido organization.
Mr. Lorenzo A. Wilson of Jacksonville is'chairman of it.
Senator WALSH of Montana. Are you a member of that organization?
Mr. FLETCIER NO, si'.
Senator WALsu of Montana. Well, was there anything else that
excited your suspicions about the Southern Tariff Association besides

1358

LOBBY INVESTIGATION

the fact, as you understood it, that they were getting a commission
out of the thing?
Mr. FLrwonE.

Yes, sir.

Senator WAIsii of Montana. What else was there?

Mr. FLMEHER. That was this, that we thought as farmers it was
not best to work through them to get relief for the farmers-a tariff
for the farmers. We thought it was best to work just as real farmers,
clean way, and then we
upright
honest, of
and present our case in andecision
the authorities.
would be satisfied with the
at least
Senator WAIas of Montana. Well, they were professing
to secure a tariff for the farmers?
Mr. FLETCHER. Yes, sir; but, Senator, we began to realize that it
was not best to work through them or with them.
Senator WALSH of Montana. That is what I want to know.

Just

why was it?

Mr. FLuTiOlM. Because they were not farmers. We could not see
why they would be interested in the farmers' welfare,
Senator WALsn of Montana. Well, what did you understand they
were?
Mr. FLEum R. Well, Senator, just to be plain about it, we just did
not know. You see we are just farmers. We are not posted on those
things, but we realized the fact that it was best for us, as I said
just to work as farmers, and present oe' case just as it was, and
not to have itcome second-hand. Somebody was collecting money
just to be paid to stay up here in Washington.
Senator WALSH of Montana. You understand that you did appear
to be upon very agreeable terms with Mr. Arnold and Mr. Wilsont
Mr.F1 rnX=n.What I had reference to was contributing money
to Mr. Arnold. When we made our appearance before these various
committees we went and filed our own petitions just as farmers, hay.
ing no connection with them.
Senator CARAWAY. Did not Arnold go with you to the committee
room I
.
Mr. FLECHEn. No sir.
appear
to
here
up
came
you
Senator WALsH o? Montana. When
Arnoldo
Mr.
see
you
did
Committee,
before the Ways and Means
Mr.* FLuTcER. Only on the streets. We did not work through
him.
Senator WALsi of Montana. Did you go to his office?
Mr. FLETOHER. No sir.
Montana. When you say "We (lid not work
WALSH ol
Senatorhim,"
did some other representative'of your organization
through
go to see him ?
people
Mr. Fm.ticnlig. No, sir. When I say "we,"

I mean the

from Florida.
of Monitana. And about going to his office, you
Senator WA4rs office?
his
to
go
did not
Mr. F.t.rcoiE:. No, sir; I did not. Not on that occasion. Of
course, I went to his office various times, but not on that occasion.
We stayed away from the office, because we wanted to present our
case just as farmers.
Senator WALSH of Montana. Were you at his office at any time
when you came here to appear before the Finance Committee
Mr. FL . IJER. One time; yes, sir.

Sena
there t
Mr.
from b

Sna

Bade
bye
[r.
pear
a
Arnoh
every i

and o
and ot
induce
what *
taken
Mr.
M
Mr.
bill if
Sells
manuf
Mr.
Sen
Mr.

Sen
wanted
Mr.
did nc
Alw
1t t
we no
Sent
not is
rS
SM
wi
wise?
Mr.
Sent
Sen

about
letter

I 14
can to

The

I ha,

may k
aly w_

LOBBY INVESTIGATION

18359

Senator WALSH of Montana. What was the occasion of your being

there then?
Mr. FLixneiat. I went up there with Mr. Wilson and a delegation
from Florida.
Senator WALsH of Montana. Was the presentation of your case
made by Mr. Wilson for the Southern Tariff Association as well as

by YoUrielf ?
Mr. F xroHEn. No, sir. Senator, Mr. L. L. Chandler and myself

appeared for tomatoes. We did it independent of all these peo.

pie-just as farmers.
Senator WALSH of Montana. I have here a letter to you from Mr.
Arnold of date July 13, in which he says:
It Is (.e-tuhli to require the vote of I.enotor Fletcher to pass the bill and
every poswlible Illuence ought to l)e brought to bear to that end.

and other letters indicating the purpose of Mr. Arnold at least to

induce Senator Fletcher to agree to vote for the bill, regardless of
what it might have contained, so long as Florida products were
taken ene of. Do you recall his effort in that direction?
Mr. FLFronit Yessir.
Senator VALSh of !ontana. Did you join in that?
Mr. Fm-rciiEr. We asked Senator Fletcher to support the general
bill if it included Florida products; yes, sir.
Senator WA.Lc-h of Montana. Whatever might be the rates on
manufactured products?
Mr. FIrOHF.R. No, sir.- We did not know about that.
Senator WALstn of Montana. You paid no attention to that?
Mr. FU.-rOH II. I say we are not posted on that.
Senator WALSH of Montana. No matter what there was there, you
wanted him to vote for the bill?
Mr. F'eTChER. No, sir; no, sir. I beg your pardon there. We
did not want anything to be done to be destructive to our country.
All we were trying to do was to keep something to eat and sleep,
just to maintain our farms. We did not want anything radical.
We never asked for that.
Senator ,YALsi of Montana. Whether that would be radical or
not is a matter of difference of opinion, but the point is you wanted
Senator Fletcher to vote for the bill?
Mr. FLPnronw. Yes, sir.
Senator WALSH of Montana. Good, bad or indifferent, or otherwise?
Mr. FLTCHER. I would not say that. We did not want anything
that was bad.
Senator CARAWAY. That is, for your organization?
Senator WALS91 of Montana, In view of what you have said now
about your relations with Mr. Arnold, I call your attention to your
letter in answer to this one, of date July 17, 1929, in which you say:
I appre.late the Interest you are takhig li this tariff matter more than I
ca, tell you, iti(1 it means life or death to Florida.

Then you say:

I have shown this letter of yours to our leading growers In order that they
may know what good work you are doing for us. Please keep iue posted in
any way that you can along these lines.

1360

LOBBY INVESTIGATION

Mr. FL TCHMR. Well, Senator, we were hoping, if he could do any

good, to bring about something to save the farmer. You must
remember that in this thing we were to a certain extent victims of
circumstances.
Senator WALSH of Montana. I want to call your attention to an.
other paragraph of this letter:
I also note what you have to say relative to Senator Fletchel, and I agree
with you, and we are bringing all the pressure to bear on Senator Fletcher,
showing that he must vote for the general tariff
0 bill.
~don't
Does that express your idea about it?
Mr. FLEMTCER. If the general tariff bill-if it is best for the country
that that be done.
Senator WALSH of Montana. But you do not say that.
Mr. F THER. Well; that is, if it was best for the country and
including Florida's products.
Senator WALSH of Montana. But you do not say "If it was best
for the country and including Florida's products."
Mr. FL=CER. No, sir.
Senator WALSH of Montana. You wanted Senator Fletcher to vote
for the bill I
Mr. FLTCHER. Well; we knew that Senator Fletcher knew if it
was not best to vote for the bill that he would not do it.
Senator WALsH of Montana. You say alsoWe are bringing ali pressure to bear on Senator Fletere to vote for thi bill.
Senator to show him that 98 per cent of the people
FLETRCHR.
of Mr.
Florida
realized that there must be something done to save Flor.Se
ida's agriculture, and they wanted him to do what he could to help
save it.
Senator WALsH of Montana. Well, this indicates that Senator
Fletcher was either rather opposed to the bill, or at least not very
desirous of supporting it, does it not I
Yes, sir.
Mr. FtrnER.
Senator WALSH of Montana. And you were going to bring pres.
sure upon him to support the bill f
Mr. FLtmCHER. T6 save us, Senator.
Serflator WALSHm of Montana. Your purpose may have been all
right but what I am trying to get at is what you were trying to do.
You knew when you wrote this letter in July, did you not, that there

was very decided opposition to that bill as it came from the House?

You knew that, did you not?

Mr. FLmCHE. Senator, just in the way a farmer would know it.
I can't say I knew that; no, sir.
Senator WArSH of Montana. You read the newspapers?
Mr. FLTCHER. Yes sir.
Senator WALsn of Montana. Don't you know that the newspapers
generally were condemning the bill as it came from the'House
Mr. inrcHn. SenatorSenator WALSH of Montana. And don't you know that there was
an effort made. notwithstanding that general condemnation, to get
southern Senators to vote for the bill in return for duties upon their
products?
Mr. FLETCHER. Senator, we are in such shape down there-

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LOBBY INVESTIGATION

1361

Senator WALSH of Montana. I understand your situation. It is

bad enough. So it is in my State. The farmers in my State are
suffering the same as the farmers in your State. But that is aside
from the question I am asking you. I am asking you if you do not
know that there was a very decided opposition to that bill?
Mr. FECHER. Yes, sir, I know that there was some opposition.
Senator WALSH of Montana. And you were afraid that Senator

Fletcher would be with that opposition, were you not?

Mr. FLJmrCIER. You have sort of got me in deep water now. I
don't know hardly how to answer that.
Senator WALSH of Montana. Well, I do not know of anybody that
would know better than you, Mr. Fletcher.
Mr. FLErChER. What we were trying to do was to let Senator
Fletcher know our condition and that the people of his State
wanted him to do all he could to save the agricultural interests of
Florida.
Senator WALSh of Montana. And one way to save it would be

to have him vote for the general bill?

Mr. Fa-FOHL. As it was presented i yes, air.
Senator W.ALsit of Montana. That is what you were trying to
do. Have Senator Fletcher shut his eyes to any objections he might
find to the industrial rates in the bill or other general provisions
of the bill, but to vote for the bill? That is what you wanted, was
it not?
Mr. FFciitER. Senator, I would not have our Senator vote for
anything that was against the country.
Senator W.LSII of Montana. Senator Fletcher has served you
a good many years, has he not?
Mr. FLEWHER. Very efficiently.
Senator WALSH of Montana. And lie is a very intelligent man?
Mr. FL -THER. Yes, sir. One of our finest men.
Senator W.%LSH of 'Moatana. He knows conditions in your State
fairly well, does he not?
Mr. FLt,TCHER. I don't think lie knows the condition of the
farmers just as they are, and that is what we were trying to show
him. He knows how it is around town.
Senator WALSH of Montana. You were trying to show him by
getting him to vote for the general bill in order that you might get
some protection upon your products?
Mr. FL-ETCHER. Yes, sir.
Senator WALSh of Montana. In other words, to make a trade?
Mr. FESTOHER. No, sir. No, sir.
Senator WALSHU of Montana. Another letter from you to Mr.
Arnold of date July 20th says-I am not sure whether this is your
letter or Mr. Chandlers letter. Perhaps you can help us out in
the matter.
Mr. FL tCHER. That is on our stationery.
Senator WALSH of Montana. Oh, yes.
Mr. FLwTHER. That is on our stationery.
Senator WALSH of Montana. I see it says "President "; so that is
yours.
Mr. FLEToHR. Yes.

1362

LOBBY 1XVESTIGATI N

WALSH of Montana. Now this letter says:

We are taking your advice and going after Senator Fletcher strong, be.
ileve me. We tire going to lave a meeting In Blani this week mUd get up
a long telegrant to hihn asking bim If ie i going to vote for the general
signers. We tre going
bill on our tariff or not, und get not less than 100
sign It and then publish
to get leading men from Key West to Jacksonville to
what ho has to say. In other words, we are going after him with a pick
handle, I menu the old hickory kind.

Senator

.
Senator Fletcher?
Did you get those telegrams sent to him
what
do
to
himr
urging
Mr. FLVreIIR. Yes. Some went to
he could to take care of Florida's products, Senator.
WALSH of Montana. Oh wait a minute. To take care of

Senator
Florida products That is not what you were going to do at all,
Those telegrams were not to take care of Florida products. You
had not the slightest doubt about his going to do that, but these
were going to get were to ask him it he was
telegrams thatforyou
the general bl and then you were going to publish
9Din~g to vote
is answer.
Mr. FLETCHER. Well, Senator, we realized that we could not get
what we wanted unless the general bill passed.
Senator VALSH of Montana. Yes.
Mr. FI.ronm. Now, Senator, let me say right here, Florida is
98 per cent for this. It was not me alone. It is everybody down
there. I did not send the telegrams. They were sent--I expect
Senator Fletcher got 500 telegrams about that very thing, because
we realized that unless the general bill passed we would not be
helped.
Senator WArsIn of Montana. Yes; so you wanted the general bill
passed, whatever iniquities might be in it.
Mr. FLrCHEn. No, sir; we did not want any iniquities included.
We did not want to do anything to hurt this country.
Senator.WALs$ of Montana. But you do know that a great many
people insist there are such in the bill, do you not?
Mr. FLvwTHER. Yes, si .
Senator WALen of Montana. You do not say anything at all about
that. You did not say "We want you to vote for the bill if there
are no objections to it, or if you find no objections to it." You said,
"We want you to vote for that general bill whether you like it or
whether you don't like it."
Mr. FLI;ETCHER. Senator, as I say, if we had wired him or asked him
to vote for our local needs, we knew it would not do any good.
Senator WAUsH of Montana. Exactly, and so you wanted him to
vote for the bill, no matter what there was in it, in order to take
care of your local needs?
Mr. F-LErTCER. Senator, we realized-.
Senator WALsi of Montana. Do you regard that as a part of the
duty of a Senator from your State?
Mr. FrV-.IV.u. Why, Senator. we regard it. the dut.r of the Sena.
tar from our State, of which w4e consider 'Senator F etcher one of
the very best of the Nation, to work up here to create a bill that will
be favorable for the country, including our products.

Se
enoup
MW
Ser
Of Ju

I W
road

know

and p-

An

IW

to exp
Yol
Mr
SURpc
bei
Ion
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touch
Mr
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Mr
Se
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Mr
So
that
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So
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So:
the 1
You
undo
Mr

askec
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Senal
Mr
So
Mr
So,
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Mr
Se
neces

Senator WALs of Montana. You did not say to Senator Fletcher,

Mr

Mr. FLMtCHER. Well, we knew that he was a good enough man to

asIdn

"Do what you can to make the bill a good bill and include ours."
do that anyway.

Se

LOBBY INVESTIGATION

1868

Senator W asii of Montana. But you knew that he was a good

enough man to take care of Florida interests, too did you not?
Mr. FLEVCH.R. Senator, it has not been done heretofore.
Senator WAswu of Montana. Mr. Arnold comes back under date
of July 23:
I wish to thank you for your favor of July 20th. You are on the right

road in undertaking to Influence Senator Fletcher, and it is for those who

know how to do things to assemble Influences In the order of their importance
and persuasion and present to Senator Fletcher.

And again:
I want to congratulate you upon the good work of getting Senator Trammell
to express his views on voting for the bill as u whole.

Yougot Senator Trammell to make that expression, did you?

Mr. FIrWCrcHEn. I wrote Senator Trammell asking him if he woald
support the general bill if it included Florida's products.
Senator WALSi. of Montana. Yes, and Senator Trammell quite a
long while ago said lie was going to vote for the bill.
Mr. FLWE'CH . Yes.
Senator WAiLs of Montana. And that was before the Senate had
touched it at all, was it not?

Mr. FLEcTHER. No, sir.

Senator WALSiI of Montana. WellMr. FLETCER. Yes; I beg your pardon.

Senator WAY.Sii of Montana. So the general bill, as you understood it at that time, was the bill just as it came from the House?
Mr. FLE-'rCn'n. Yes, sij; but, SenatorSenator WALSH of Miontana. Senator Trammell had agreed to do
that had lie not?
. FLWTCnER. Yes, sir; if it would save but remember, the farmer
does not know what is in this general bili that is destructive to the
country. That is not our business.
Senator WAisi of Montana. Yes, but you expect your Senators to
know what is in the bill, don't you?
M'. FLETCHEIt. Yes

Senator WAsir of Montana. And you did not ask them to examine
the bill carefully and support it if they could conscientiously?
You wanted them to agree to vote for the bill, and Senator Trammell,
under your pressure agreed to do so, did he not?
Mr. FLETCIJEI. 0h, I did not put any pressure on him.

We just

asked him.
Senator WALSH of Montana. You did seek to put pressure on
Senator Fletcher, did you not?
Mr. FLETCHER. Wer, just as people, asked him to support it; yes, sir.
Senator WAILSH of Montana. But I am using your own language.
Mr. FiXFrrCIet. Yes.
Senator WALSH of Montana. You did seek to put pressure on
Senator Fletcher?
Mr. FLrcIER. Yes sir.
Senator WVALSit o? Montana.

But you found it needless, not

necessary, to put pressure on Senator Trammell I
Mr. FLEm'IJEI. No sir.

Senator WALSh o Montana. But you did, however, wire him,

asking him to support the general bill?

1364

LOBBY INVESTIGATION

Mr. FLtIoHER. Yes.

Senator VALSH of Montana. And he agreed to do so before it was

touched by the Senate I

Mr. FLrTOHER. Yes.

Senator WAlsi of Montana. So he was obligated to vote for the

bill, not matter what was in it? He had promised to do so, had he
not?
Mr. FLXrTCHER. That was his wire; yes, sir.
Senator WALsi of Montana. In the long course of corresr'ondence
note in
between you and Mr. Arnold, that seems to be the leadingthe
same
the matter, to get Senator Fletcher to vote for the bill just
as Senator Trammell had agreed to vote for the bill. I call your
attention now to your letter of September 8:
I am In receipt of your good letters of August 28, 80, and 31, for which
I wish to thank you. I am glad to see that Senator Watson is working so well
with you and your committee relative to Gulf coast vegetable rates. There is

Mr

sion
That
Ser

As
9vo
Mr
Mr
For"
Se c
you
Ser
Mir
Sex

inth
i h

no doubt In my mind about Senator Watson and the other leading Republicans
being our friends.

Gro'
Mr

Who else did you include in that classification of "other leading

Republicans "
Mr. FL no iz. Senator, all we knew about that was that as a
rule, we thought the Republican Party was standing for the protect.
tion of the American farmer. That was just a general statement.
Senator WALsH of Montana. Senator Moses?

that'
IM
Mr

Mr. FmwFoIR. No, sir.

Senator WALsH of Montana. How is that?

Mr. FLmmHnE.

There is no special one.

Senator WALSh of Montana. No; but Senator Moses is a leading

Republican, is he not, as you understand it?
Mr. FLETcr. Well r don't know Senator Moses.
Senator WAlSH of M1ontana. And you did not know whether he
was for the farmers' interests or against the farmers' interests?
Mr. FLmHER. I do not recall. I can not say just now.
Senator WALsH of Montana. Senator Bin ham of Connecticut
is another leading Republican. Did you understand that he was
heartily In favor of your proposals?
Mr. FLET ER. No, sir. I did not understand that.
Senator WALsu of Montana. Nor Senator Reed of Pennsylvania?
Mr. FwommR. No, sir. I did not understand that.
Senator WiaH of Montana. Nor Senator Edge,-of New Jersey?
Mr.FL rin. No,sr. It was just a general impression of the
people of Florida.
Senator WALSH of Montana. You think those gentlemen are all
your friends.
Mr. FLEnTER. No, sir. I don't say that.
Senator WALsh! of Montana. You say so in your letter. You say,
"There is no doubt in my mind about Senator Watson, and the other
leading Republicans being our friends."
Mr. FILLrroER. We ha[ that as a general impression. We found
out we were wrong about some of them.
Senator WALsix of Montana. You think those gentlemen from the
backward States, referred to by Mr. Grundy, are not your friends.
Mr. FLtCrow. Well, I can not Aay about that now, Senator.
Senator WAL41 of Montana. Well, you lut us in -the other class.

same
Se
For

Flor"

year-

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man
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M
frien

LOBBY INVESTIGATION

1866

Mr. FL.roHE. No, sir. You are wrong about that. The impres.
Sion was that the Republican Party stood for a tariff for the farmer.
That is just a general impression over the country down there.
Senator WALSH of Montana. You continue now:

As to Senator Fletcher, I believe I am safe in saying that we will deliver

his vote without any question.

Mr. FLrroHER. By showing him that a majority of the people of

Florida wished him to do that.

Senator WALatn of Montana. You wrote up to Mr. Arnold that

you could deliver Senator Fletcher.

Yir. FLrCHER. I said "we." That was the State of Florida.

Senator WALSH of Montana. Yes. "We."

Mr. FLTCHE. Yes.
Senator WALSH of Montana. Well, there are a good many people

in the State of Florida who do not belong to the Florida East Coast
Growers' Association, are there not?
Mr. FLETMHER. Yes, sir; but the agitation is all over the State the
same way.
Senator WALSH of-Montana (reading):
For there never was a man in Washington holding the place he now holds
that had a larger and hotter fire built under him than Senator Fletcher.

I wish you would tell us what that language means.

Mr. IETCHER. Senator, I will explain that to you in this way:

Florida has never asked Washington for anything before in '5

years. We have stayed down there, lengthening the hours and hardships, and we have never asked Senator Fletcher nor an other
man in Washington to do anything for the farmers in Florida.
The time is going to come when we will have to move to Cuba or
Mexico, and we will perish to death before we will go to Mexico.
The time has come when we have to do something or else go into
bankruptcy. We feel that we are justified in anything that is clean,
to try to save the children and the women and the farmers in that
country.
Senator CARAWAY. Will you let me interrupt just a minute? You
were just saying that you knew the Republican Party was the friend
of the farmers. The Republican Party has been in office for some
time, and yet you admit the farmers are going into bankruptcy under
that administration.
Mr. FLETCHER. No, sir. I said we had never asked for help
before.
Senator CAIIAWAY. I did not say anything about your asking for
help. I was talking about what was going to happen to you.
Mr. F imim. No. I just said the general inpression was, which
it is, all over the country, that the Republican IParty stands for a
protective tariff, and the Democrats for a tariff for revenue only.
Senator OAIIAWAY. And your commission stood along that line,
too, did you not? But, you were just saying you were in the hands
of your friends, and you were going into bankruptcy. That was the
only curious thing about it.
Mr. FLETCHER. No, sir. I do not say we were in the hands of
friends.
78214-2-ir 8-9

1866

LOBBY INVESTIGATION

Senator CARAVAY. Oh, yes. You were in the hands of the Repub.
lican Party. Florida, with your help, went for Mr. Hoover.,
Mr. FLYicHER. Yes, sir; but we had never asked for anything be.
fore. We were just now asking for a tariff. Florida never made
any request for any protection before, because we could get along7-.

chain
do"
S
Fle
1

now,

to

Senator WALsH of Montana. Now just a minute. Some of us here

were here in 1922 and recall very distinctly that your Senators were
asking for protection on Florida products at that time, and got
some.
Mr. F1LTCHER. But Florida then was not in the need that they are
Senator WALSH of Montana. I was calling your attention to your
statement that Florida had never asked for anything from Congress
before. But let me pass. Do you remember, have you any informal.
tion about te Congress listening to the appeals of the farmers
from any other section of the country?
Mr. LYETHER. You mean in past years?

Senator WAtsis of Montana. Yes.

Mr. FiLaHER. Yes sir.
Senator WALSH of fontana. What?
Mr. FLoHER. Well, I could not say the special thing, but I know

the farmers have been asking for relief on wheat and various things,
but Florida never has before.
Senator WALSH of Montana. And do you remember that they got
it? You close this matter by saying:

esta
S
A
of c

Sta
A
Sent
S
81
98 p

you
M

81

get

8
tect'
A.

laration on the tariff bill, and we" are still plugging away at Senator Fletcher.

We are still thanking Senator Trammell for his definite stand and opien decAs stated before, we will deliver his vote.

Stoo

Now, upon what sort of justification do you hold up Senator

Fletcher in that light, to the world, that you can deliver his vote
on anything?
Mr. FTCHER. Senator, now that is just a cracker expression there.
We mean b that that we would show to Senator Fletcher that 98
per cent ofYthe people of Florida desired him to do that, as the

S
yoeU
IN
S
mell
M

Senator W1.ALSH of Montana. We will come back to this deelara.

tidn that you were going to build a hotter fire under Senator
Fletcher. Now, let me tel1 you'what impression that conveys to me.
That conveys the- impression to me, that Senator Fletcher does not
want to vote for the bill, but he has some political ambitions and
you are going to fix it so that when he comes to consider his political
ambitions he will change his mind about it and vote for the bill in
view of the stir that you have raised in the State of Florida. That
is what it nicans, is it not?
MfP. FLETCIIER. No, sir. Wie would not say that, no, sir.
Senator VALsH of Montana. Now, you did say it, and that is
what everybody understands by what you did say.
Mr. FLeTrcHER. Senator, please remember this: We want to give
you every explanation we can that is satisfactory.
Senator COAIAIAY. I think that is so.

Flet
I
S
thin
A"
S

people from your State would show you what was best for them.

M r. FLE.TciIEI.

But Florida, just as a bunch of 'crackers down

there, were working away, just trying to do everything in an

awkward way, as farmers. We did not know how to follow those

1'

1
S
sayi
In

Chu
8

1%
S

1367

LOBBY INVESTIGATION

channels up right. If we done anything wrong, we did not intend to

do it.
Senator WALsH of Montana. Do you feel you have done Senator
Fletcher any injustice?
Mr. FL.rc-IElt.
,established
there. Not with the people of Florida.

Senator WALsIIE

He is too well

of Montana. But with the people of the country.

Mr. FE'vronn. No, sir. Not when this just came from a bunch

of crackers untrained, I would not think it would do much harm.

Senator WALSH of Montana. If the country paid any attention
to what you say, it would. I should hate to have anybody in my
State say that they could deliver my vote on any question.

Mr. Fix mrreiE. We would not do anything in the world to hurt

Senator Fletcher with the country. He is too good a man.
Senator WALSH of Montana. That is all.
Senator RoBixsoN of Indiana. I gather from what you said that

98 per cent of the people of Florida are for protection.

you meant?
Mr. FLECIEn. Yes, sir.

Is that what

Senator RoBinsox of Indiana. What you were trying to do was to

get protection for Florida products. Is that it?

Mr. FLETCHER. Yes, sir.

Senator RomNsoN of Indiana. And you understood this was a pro.

tective tariff bill. Is that the idea?

Mr. FLETCHER. Yes, sir.

Senator ROBINSON of lindiana. You believed the Republican Party

stood for protection of American products and American labor?

Mr. FLErcnn, Yes, Sir.

Senator RoBiNsoN of Indiana. And because of that fact you asked

your Senators to vote for the protective-tariff bill?
Mr. FLETCHnR. Yes, sir.

Senator RoBiNsoN of Indiana. And you understood Senator Tram.

mell would vote for a bill of that kind?

Mr. FLECHER. Yes, sir.

Senator ROBINsONof Indiana. The question was whether Senator

Fletcher would vote?
Mr. FETCHER. Yes, sir.
Senator RoBINsoN of Indiana. Under the circumstances, do you

think that you are going to get protection for Florida?

Mr. FLxECiEn. I wish I could answer -that.
Senator RoBimso- of Indiana. That is all.
Senator CARAWAY. What year did you quit preaching?
Mr. FLETCU .. I never was a preacher, sir.
Senator CARAWAY. You never were?

.Mr. FLETCHER.

NO, sir.

Senator CARAAY. I have a statement that came up from Florida

saying that.

Mr. FuETcHEn. That is my brother in California; W. G. Fletcher.

I never was a preacher. I am a stanch member of the Methodist
Church, but I never was a preacher.
Senator CARAWAY. This said you were a Baptist preacher.
Mr. FLETCHER. No, sir.

Senator

CARAWAY.

You repudiate that idea?

1368

LOBBY INVESTIGATION

Mr. FLLnr,-nER. Yes, sir.

Senator CARAWAY. You are a member of the Methodist Chur.h?

Mr, Fi'rcm1En. Yes, sit'. If I would ever start preaching I woulj

certainly have kept at it.
Senu1tor CARAWAY. if yol could have got a congregation
Mr. FI.9rClRER. I coUl have held a congregation.
Senator CARAWAY. WVell, look at this [handing witness Exhibit No.
169j. You were vice president of that organization?
Mr. F.LTCJimmi. Seiator, let me exp)lai--1fr)ner

Senator

CARAWAY.

No. no. Just "yes" or "no.

Mr. FLVXoif-R. Yes, sir.

Senator CARAWAY. l1ell, that is What I sity.
Mr. FLmrCHER. Put on wilen I was not there.
Sen ator (',RAWAY. Wait a minute. This reads:

Sen
of at
Be-er
raitro

Sel
Taen
rin

find

Be

LE.
Ait'
Se

RepublIhcan Stitti, ('entrid Committee of Florida. Miami, Fla., April 7, 1928.

G. B. Skppr, vice chairman. otc.
tlee ao1iress suite 27, 1 SW. First Street,

Chnn
Mr
dro

Mr. FLiwrcuEmt. That is right.

Senator CARAWAY. YoU know where the offices areI

So-it no

Miami. ilt.

Mr. FLTCHER. I know

the town.

Senator CARAWAY (reading):

Mr. A. 0. (4tmVA,

.Iaif.

We hant you herewith Tariff Association credentials (corrected) to No. 24,

anid I wish to sty that the Republican Party are raising no funds through any
other s',rcs for campaign funds; therefore It will be greatly appreciated It you
will leml (si.) your good awsl.stance fi that work.
Very truly yours,

G. D. SmeIP.
He was the State chairman of the National Republican Party?
Mr. FLETCHE.R. Yes, sir.
Senator ('A. AWAY. And national committeeman, too, was he not?
Mr. FLX-1CHER. He is now; yes, sir.
Sellator CARAWAY. And this was your organization and you were
ice
president of it. Now, as I said awhile ago, of course, this agent
of yours that you commissioned got drunk down in Alabama and they
arrested him and took this off of him, and that was about the only
thing of value lie had on him. I want to put that in the record,
It may tend to show some of yourt activities.
(The document above set out was received in evidence and marked
Exhibit No. 109," and filed with the committee.)
Senator WJsStt of Montana. Are we to understand from your
testimony that you paid your own expenses here, that is, the Florida
East Coast Growers' Association?
Mr. FLIENOiER. Yes, sir.
Senator VAsh of Montana. Well, you did get some money from
Mr. Arnold, did y1u not?
Mr. FErrHnER. We paid in, as I said a while ago, we paid in
something like $200, and we went there and tried to get that money
out of there, and we turned in an expense account of $185 on that
trip and drew this money out on that trip, in order to get our money
out of there, and never gave any more.
Senator Wits of Montana. $200 is all that you gave?
I think $250 was the total.
Mr. FJimEwrcu.

mitte

Mr
Sell

to it

til's

Air
Se

11,1
Air

drewsopaid

Air
e
Mr
paid
to Pa.
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Mr
never

LOBBY INVESTIOATION1

1369

Senator WALssh of Montana. And you made an expense account

of about the same amount?
Mi FLL-roxiR. No. sir. $130 is what I made my expenses.
Senator WALSH of Montana. And that is all you got T
Mr. FLiwCHEU. Yes, sir. $130. We can spend here a week and
railroad fare and all for about $130.
Senator WALSH of Montana. Well, the books of the Southern
Tariff Association show that you got $300 on one occasion. Do you
remember about that?
Mir. FLrOJiER No str. Not me. $130 is all I drew.

You will

find that you possibly overlooked it. It is $180.

Senator WALSh1 of Moiitana. "Paid 0. S. Fletcher, Miami, and
L. E. Chandler, Goulds, $300, May, 1929."
Mr. FLv.'ro:Ipat. Well, I drew $130.
Senator IVAij.Hi of Montana. So you deny that you and Mr.
Chandler got $300 from the Soutlhern Tariff Association?
Mr. FIJArCHER. Mr. Chandler will speak for himself. He is here.
I drew $130. That is all.
Senator WALSH of Montana. And that was on January 11th, was
it not, when you caine up here before the Ways and Means Committee?
MAr FLiTj-CHER. I can not recall just the date. Senator.
Senator WAiSH of Montana.

V6lI, it was when you came up here

to appear before the Ways and Means Committee that you got
this money?
Mr. FLt'cJIHR. No, sir; I don't think it was that trip.
Senator WALSh of Montana. Well do you deny that on January
11, 1029, you got $130 from the Soutiern 'Tariff Association?
Mr. FLUTOWT1EIt. I don't remember the date. but that is all I ever
drcw-$130, a part of the. money that we paid in.
Senator WALus of Montana.
So that you wold not deny it was
11 ?
paid to you January
MAr. Fimircat. No, sir. I don't remember just the date, Senator.
Senator IVASIi of Montana. The $300 is quite separate and apart
from that?
Mr. Fmiw'rcJm. Yes, sir. I never drew but $130, Senator. We
paid in something over $200. and then we retained the other in order
to pay any expenses on these other trips.
Senator VALs of Montana. Were you not later paid $175 by the
Southern TnriffAissociation?
Mf[r. FJ JW'HER. No. sir. That was paid to ine at the office-the
money that they claimed we ought to have paid then. It was hIld at
our office in Miami, and that was paid to me there.
Senator WALSH of Montana. What was paid to you there?
Mr. FLE'rCIIF.. $175.

Senator WLLSK of Montana. You got $180 here?

Mr. FLu/'aEn. Yes sit. That is all I ever drew.
Senator W S.Ir of [ontana. And you -got $175 in Jacksonville?
Mr. FLErcnEit. In Miami. but it was at a different time.
Senator WALsit of Montana. Oh. yes; whenever it was. Now, you
told us you got $17A in Miami from them I
Mr. PFLrcHEIR. No. no. Of our own money; not from them. We
never did draw but $130 from the Southern Tariff Association.

1370

LOBBY INVESTIGATION

Senator WAlSH of Montana. Well, just explain about the $171

that you got in Miami.
Mr. FETCHER. Well, the people of Florida decided to pay the
Southern Tariff Association one half cent a crate on all tomatoes
shipped, and when we had paid in around $200, as I say, they found
out it was not best for us to do that. Then this money was held
in our office to pay my expenses back and forth to Washington.
Senator WALSH o- Montana. That is in the office of the Florida
East Coast Growers' Association?
Mr. FLETCHER. Yes, sir.
Senator W.%LSH of Montana. So that the $175 was paid you by
the Florida East Coast Growers' Association and not by hio 'Sih.
ern Tariff Association?
Mr. FLMIhER. Yes, sir.
Senator WAIs1 of Montana. And your association retained $691.26
in additlo t
Mr. FLwrommE. Yes, sir.
Senator W,.411 of Montana. That had been raised to go to the
Southern Tariff Association?
Mr. I'I'nEIt. Yes.
Senator WVAmis of Montana. But you had intercepted it t
Mr. Fm-nxcriit. Yes.
Senator WAu1sn of Montana Iii addition to that it appears from
the records of the Southern Tariff Association that you got $171.04.
Will you explain about that?
Trhat
hII. is what I am telling you. I have explained
Mr. FLTTO
don't understand.
justMontana.
You
you.
to
that
Oh, yes. I understand perfectly.
Senator IALSn of
You told us about the $175.

Sena
of the
East C
Mr.
Sena
Mr.

owned this money in our office.

Sentor WAISu of Montana. And your office turned it over to
you?
Mr. FrArc-iER. No, sir. They held it and would issue cheeks as
I made trips here, and Mr. Biird, outr general manager, advised
them, the Southern Tariff Association, that lhe was issuing me
checks for $175, and they were not going to give any more money
to then up here. That is the "money they claimed belonged to
there.
them down
Now, explain about the $171.94.
torWMoWtana.

Senmi

Mr. FLET'cuE. $130 I drew here; $175 they still claimed they

Mr. FLt.rcu... That is what I am speaking of there.

Senator WALSit of Montana. Oh, no. You were speaking about

$175.
Mr. Fm-.'rc-fEn. That was another trip that was made that wim
paid out of that mnley.

Senator WATLSlI of Montana. Your trip?

Mr. FIX.-'rcii:. I can not remember which trip, bit it wits one
of the trips we made to Washington.
Senator WALS1 of Montana. Theo $175 paid for that trip?
Mr. Flwruc1na. Yes.
Senator WALSH of Montana. And $171.94 paid for another trip
Mr. Fxrei ,n. Yes.

(The

Sena
and oc
Mr.
grower
Sena
Mr.

Sena

Mr.
Sena

campa'

Mr.
Sena
ington
tr
of tar'
hew
howm

Sena
Mr.

Mr.

one iV
speakii
course.

Seno
before
Mr.
Sei
Alr.
Sen,

Mr.
Sen
Mr.
and C
Sent
aeua,
Mi.
were

S01
Mr.

LOBBY INVESTIGATION

1371

Senator WALSH of Montana. The original trip you made, or one

of the tripsyou made was paid out of the moneys of your Florida
East Coast (rowers' Association?Mr. FLLrCOyEi. Yes.
Senator WALSH of Montana. That is all.
Mr. F-MEOvER. I want to thank you.

TESTIMONY OF L. L. CHANDLER
(The witness was dul ,sworn bi Senator Caraway.)
Senator CARAWAY. Give the stenographer your name, residence,
and occupation.
Mr. CHANDLFR. L. L. Chandler, Goulds, Fla. I am a tomato

grower, a citrus fruit grower.

Senator CARAWAY. How long have you lived in Florida?
Mr. CHANDLE R. Thirty-three years, all my life.
Senator CARAWAY. Born there?

Mr. CHIANDLER. Yes sir.

Senator CARAWAY. You were associated with Mr. Fletcher in the

campaign to get Senator Fletcher to vote for the tariff bill?

Mr. CUANDIX.R. Yes, sir.
Senator CARAWAY. HOW many trips did you make to Washington?
Mr. C1JANDLqlt. This is my eleventh trip up here in the interest
of tariff for Florida.
Senator CARAWAY. Oh, I didn't ask you what for. I asked you
how many times you came up here. You came up hero eleven times
Mr. CITANDLER1. Yes, sir.
Senator CAIAWAY. In what length of time?
Mr. CHANDLFR. In two years.
Senator CARAWAY. The tariff bill has not been pending that long.
31r.

CITANDiER. No, sair.

In counting these trips, I was counting

one trip I made as a witness before the Tariff Commission, and in

speaking of our work there we include the whole program, of
course.
Senator CARAWAY. You include once you came up here to appear

before the Tariff Commission?

Mr. CHANDLEAt. Yes, sir.

Senator CARAWAY. And you have been here ten tines this year?
Mrr. CHANMLER. Not this year. It is this year and last year.
Senator CARAWAY. What time did you start coming up last year?
Mr. Cu &NDR.I came up the first time, I think, in June.
Senator CAHAWVAY. What for?
Mr. CHANDLER. To become acquainted with the various Senators

and Congressmen, and learn what steps we should take.

Senator CARAWAY. What did you do in your effort to become

acquainted?

Mr. CANIDLER. Well, Senator Trammoll and Senator Fletcher

were Florida SenatorsSenator CARAWAY. You knew both of them?V
Mr. CIrAIDLF, 1. Not

personally.

LOBBY INVESTIGATION

1372

Senator CARAWAY. You came all the way up here from Florida
to get acquainted with your own Senators?
Mr. CHANDLER. Yes, sir; and our Congressmen also.
Senator CARAWAY. You didn't know any of them?
Mr. CHANDL R. Not personally, and we did not understand what
steps were to be taken and were necessary in this work.the year?
Senator CARAWAY. Weren't they in Florida during
Mr. CHANDLER. Yes, sir; but, Senator Caraway, we are farmers
and do not get to see them every time th6y come down there.
Senator CARAVWAY. But you could see them cheaper and quicker

there than coming to Washington?

M r. CII NDFRn. Possibly so .
Senator CARAWAY. Who paid your expenses when you came up

here merely to get acqainted with your own Senators and Congress.
men?
Mr. CjuNDLwi. I paid them myself.

Senator CARAwAY. Nobody paid them?

Mr. CIANDLER. No,

sir.

Senator CARAWAY. That is, they were not charged to any expense

account?
Mr. CHANDLER. No, sir.
Senator CARAWAY. That makes two trips. Then, you made nine
trips this year?
Mr. CEA JMJER. I made nine trips this year and last year. These
tri s were all forSenator CAHAWAY. Wait a minute. Did you make another trip
after June of last year ?
Mr. CHANDLER. I don't remember the exact dates.
a
Senator CARAWVAY. That was one trip you came up here to be
Commission--witness before the Tariff
Mr. CHANDLER. Yes, sir.
Senator CARAWAY. Another trip to get acquainted with your Con.
gressmen and Senators?
I
Mr. CHANDLER. Yes, sir.
Senator CRAVwAY. That leaves nine trips. Were any of those

nine trips made last year?

Mr. CIIAND DI.R. I think one of them was.
Senator CARAWAY. What timoewas it?
Mr. CHANDLER.

November, if I remember right.

Senator CARAWAY. -What was the purpose

of that I

Mr. ChAND L . The samne general work, to acquaint ourselves and

to complete our organization and get data and information from

the Department of Agriculture and from the Bureau of Economies

in regard to this tariff work.

Whom did you call on that time?

Mr. C1IANDJJM. I don't remember specifleally who I called on the
Senator CARAWAY.

various times I have been up here, butSenator CARAWAY. Wait a minute. Just don't go to the various

times until we get through with this one time. When you came up

here to get information, as I understand it--you came up once to be

a witness?
Mr. CHANDLER. Yes, sir.

Sena
you ca

aidyo
tr.
the de.

Sela

mr.
fi
and

here

Sena
pr.

inform
gettin.
genfl

tona
it from

the naM
Sena
Mr.
SAipti

sena

your I

gotten

Mr.

Mr.
a ni
pqlt

Sea]

Fruit

Fr
or.
Fe
of Sena

Mr.
from
Sena
Ar.

Sen

Sena
na

mr.

mango
0rlan(
Mr.

Ser.

Sea

way o
Air.

loan

handle

LOBBY INVESTIGATION

1878

Senator CARAWAY. You came up the next time socially and then
you came up to got information from the departments. howj who
did you seel
Mr. CHANLER. I can't remember the names of the men I saw in
the departments.

Senator CARAWAY. What information did you get?

,fr. C11AN'DLER. I took back about a suitcase full of various charts

and figures and data that I obtained from the various departments
here in Washington.
Senator CARAWAY. What did you do with it?
Mr. CHANDLER, Took it home and compiled a brief statement to
be presented before the Ways and Means Committee. That was
information we thought was authentic and that was our reason for
getting it.
Senator CARAWAY. And you don't know what department you got
it from?
Mr. CHANDLER. The Bureau of Agricultural Economics, I think is
the name.
Senator CARAWAY. Well, that was bulletins you got?

Mr. CirANDLva. Yes, sir; bulletins and charts of various de.

scriptions.
Senator CARAWAY. And you were conscious of the fact, a man of

your intelligence, that you could have sent a letter up here and
gotten it.
Mr. CHANDLER.

Possibly so.

Senator CARAWAY. Did you pay your expenses on that occasion?

Mr. CHANDLER. No; I think my expenses on that occasion were
paid by the American Fruit Growers, a company I am associated
with and connected with.
Senator CARAWAY. What connection have you with the American
Fruit Growers Association?
.Mi1(IAINDLER. I am local representative in the southern part
of Florida.
Senator CARAWAY. What is the American Fruit Growers?

Mr. CHANDLER. Sales agents and brokers for fruit and vegetables
from all over the United States, with head office in Pittsburgh.
Senator CARAWAY. Are they importers of bananas?
Mr. CHAINDLER. No, sir that is the United Fruit Co.
Senator CARAWAY. And the American Fruit Co. is another thing?
Ml. CHANDLER. The American Fruit Orowers (Inc.)is another
corporation; yes, sir.
Senator GARAWVAY. You are their manager in Florida?
Mir. CHANDLER. Local representative. No sir; I am not their
manager. They have a division manager who has a head office in
Orlando.
Senator COARAWAY. You keep an office, do you?

Mr. CHANDLR. Yes, sir.

Senator CARAWAY. What do you do in connection with it?
Air. CHANDLER.

Manage and operate and represent them in a local

way on the east coast of lFlorida in citrus fruit and tomatoes.

enator CAHRAWAY. You boy Mr. CHANDLER. No, sir; I don't buy. I solicit business for them,
loan money to growers for them, and arrange contracts, and we

handle and sell fhe products for the growers, as well as pack them.

1374

LOBBY INVESTIGATION

Senator CARAWAY. You then induce people to ship fruit to them

Yes, sir; that is my business.

Senator CARAvAY. That is your business?
Mr.

CHANDLER.

Mr. CHANDLER.

Part of it, as well as being a grower myself.

Senator CARAWAY. How extensive a grower are you?IA

Mr. CHANDLER. One to three hundred acres of tomatoes each year,

and about four hundred acres of citrus growth.

Senator OARAWAY. Do you manage your own farmI
Mr. CHANDLER. I have a foreman under me who looks water the
details. Naturally, I can't look after all those details myself.
Senator CARAWAY. What do you include in details, Mr. Chandler
Mr. CHANDLvER. Countless and numerous things as to working out
the allocation of lands and how much fertilizer a, grower might
want, how much advance he would want this week, how much 16
labor pay rolls are.
Senator CARAWAY. I was talking about your own farm.
Mr. CHANDLER. My own farm ?
Senator CARAWAY. Yes.
Mr.

CHANDLER.

I have three different foremen in my citrus growth

and two in the tomato field to report to me daily what they are doing
and take advice and instruction from me.
Senator

CARAWAY.

Well, you are the kind of farmer I am. We

are "shade-tree" farmers.

Mr.

CUANDLER.

Well, I won't pretend I go out and do

But it is my money, though, and my direction.

Senator CARAWAY.
Mr. CHANDLER. No,

it personally

Did you inherit the farms?

sir; I bought them and paid for them.

Senator CARAWAY. From your own earnings?

Mr. CHANDLER. Yes sir.
Senator CARAWAY.

Mr.

ou are then engaged in loaning money?

My company is, the company I represent. Not

CHANDLER.

myself personally.
Senator CARAWAY. And you make contracts that they are com.
pelled to furnish so many shipments of fruit?
Mr.

CHANDLER.

We make a crop lend, and under that crop lend

they are supposed, after we have loaned the money, to deliver to

us these products, and they are sold and we recover our money from
the sale.
Senator

CARAWAY.

I am entirely familiar with that process. I

have gone through it myself. I have borrowed money from cotton

merchants the same way, and anybody who does it, sooner or later
will land up where M. Frazer says he is going to land.
You came.up here nine times this year ?
Mr. CHANDJER. No; I would say eight times this year.

Senator CARAWAY. Well, 3 out of 11. That is right, eight. Eight

times. What months were those trips made in?

Mr. CHANDLER. This year?
Senator CARAWAY. Yes.

u,

Meal
grol

S1

Sl
M
was
gro'
Way

Se
M
don"

Se
M
and

SI
tr
M
had

qua

divi

Se

have

M
time

So

Sr

Se

M
Gre
Se
;I

Se
then
M
S

M
Si

8'
N

What were you doing coming here once a

I ta
S

came to a meeting of various growers and growers organizations from all over the South to discuss the tariff meas-

Teni
S,
enl3

Mr. CHANDLER. I think each month except the month of July.

Senator
month?fX

CARAWAY.

Mr. CHANDLER.

1375

LOBBY INVESTIGATION

ure, and what we could do. Then I appeared before the Ways and
Means Committee as a witness, as a tomato grower and representing
growers from the State of Florida. I had been elected to do that.
Senator CARAWAY. Well, wait. I wasn't asking you that.
Mr. CHANDLER. All right, sir.
Senator CARAWAY. That took you one trip?

Mr. CHANDLER. Two trips. I came once in January, a trip which

was solely and principally a meeting of representatives from the
growers organizations.
Senator CARAWAY. And one trip to come before the Committee on

Ways and Means?

3fr. CHANDLER.

Yes, sir.

Senator CAIIAW AY. And one til before the Finance Committee?
Mr. CHAND MR. Another trip before the Finance Committee. I

don't remember that date.

Senator CARAWAY. You don't remember that?
Mr. CHANDLEU. I don't remember the date.

I remember coming

and appearing before them.

Senator CARAWAY. That leaves five trips. What were the other
trips?
Mr. CIIANDLER. Prom time to tne simply to cheek u) on what
had been accomplished and what was being done, and further acquaint myself with the work that was being done.
SPnator CARAWAY. Whom dil you see on tho.tu trips?
Mr. CHAN LEI. Various Congressmen, Senators, and var;ius individuals.
Senator CARAIWAY. Well, name them. They have got names,
haven't they?
Mr. CHANDLER. Senators Fletcher and Tramimell each and every
tim|e.

Senator CARAWAY. Well, we start out with them. Who else?

Mr. CHANDLER. Congresswoman Ruth Bryan Owen.
Senator CARAWAY. Who?
Mr. CHAINDLER. Congreswoman Ruth Bryan Owen, from Florida.
Senator CARAWAY. All right.
Mr. C,ANDLER. Congressman Drain, Tom Yon, Congressman

Green. I think there are four from Florida.

Senator CARAWAY. Whom else did you see

Mr.. CHANDLER. I have talked to I don't know how nannytieehig

Senator CARAWAY. Oh, you can't talk zto them witlhtmt

them?

Mr. ChANDLER. NO, sir.

Senator CAwAY. Who did you talk to?

Mr. CIANDLER. Senator George from Georgia.

Senator CARAWAY. Who else?

Mr. CHANDIER. Senator Connally from Texas.

Senator CAIIAWAY. Who

else?

Mr. CI.ANDLER. Scamtor. I have to stop and think of their names.

I talked to Congressman Garner of Texas.
Senator CARAWAY. Who else?
Mr. CHAND)LER. I talked to Senator M\cKeller, I think it is, from
Tennessee, and I have talked toSenator CARAWAY. You were talking to all these about the tariff

only?

1376

.OBBY INVESTIGATION

Mr. CIANDLEJ. Yes sir; and how they felt about the tariff as it

affected Florida. I didn't pretend to know anything else about it.

Senator OAUAWAY. Have you talked to Senator Watson?
Mr. CIIANDLR. I talked to Senator Watson; yes, sir.
Senator CARAw.AY. Why were you so long in reaching that one ?
Mr. CiANLER. I just hadn't thought of it. I am not well ae.
quainted with all these gentlemen.
Senator CARAWAY. But you know your associate and side partnerr
said ie knew Watson and his friends were for you. Did you see
Senator Smoot?
Mr. CHANDLER, Yes, sir; I saw Senator Smioot. I saw Senator
Shortridge from California, and I saw Senator Pat Harrision from
Misissppi, and I think one other Senator in particular but I don't
remember his name. I would tell you if I remembered it.
Senator CARAWAY. Well, h1e is nnforttuInate in being forgotten by

you, but then we will let it go. Who paid your expenses?
Mr. CHANDLER. On these last trips I was paid by money collected
from the growers of Florida, turned over to the Soutliern Tariff
Association, and collected back from the Southern Tariff A&sociation
by me.
Senator CARAWAY. What makes you make that exliaIInation? You
got your money from the Soutiernt Tariff Association?
Mr. CIAN-LER. Yes. sir.
Senator CARAwAY. Why didn't you say that?
Mr. CHIANDLER. All right, sir; I got my money front the Southern

Tariff Association.

Senator CARAWAY. How much altogether did you get from that

association?

Mr. CHANDLER. Somewhere between seven hundred and a thou.

sand dollars; I don't remember which. I didn't keep track of the

exact amount.
Senator CAAWAY. The books will shtow that?
Mr. CANDLEiR. Yes. sir.
Senator CAiAWAY. Senator Wlalsh has your correspondence her ,
and lie will asi you about it.
Senator WAL-SIf of Montana. I want to inquire first of you about
this $700 that you got.
Mr.

Ci,nlxw.E.

The $700, Senator Walsh. was solely for the lur.

pose of defl'ayijng traveling expenses from Florida hero and back

to Florida. and hotel expenses, ineaI., telegrams, and incidentals of
that nature. No per.sonal remuneration whatsoever.
Senator W11miu of Montana. How much money did you get from
the American" Tax payels' League?
.'one whatever that I know anything about.
Mr. (:n.i
Senator W.%psiu of Montana. Did yoiu ever contribute anything to
that organization?
No. sir; not knowingly.
Mr. ('hiriFii.v
Senator WAIlsH Of Montania. The American Taxpayers' League

books s how on June 20 last you got $175 from them.

Mr. Ciimli1:i. They iay have entered it as being, palid to me
by that organization, but I never uidkrstood it was paid to me by
that organization.
Senator WAAI.si of Montana. Wis the money you go paid to you
in cash or by checks?

LOBBY INVESTIGATION

1377

Mr. CHANoLER. By checks.

Senator WALMK of Montana. Vill you undertake to say you did
not get i check from the TakpAybr's 1,ague for $1751
2W. CnADLt.R. If I (lid, I don't know it. The checks I received

'a

in

is

18

y
IU

were sent by Mr. Arnold. I never paid any attention to the exact
details of the checks, except the amount.
Senator WALSH of Montana. On July 8 you got another check
from the American Taxpayers' League for $50.42, didn'tt you f
Mr. CHANDLER. If I did, I don't know it. I remember receiving
checks from them.
Senator WALSh of Montana. Checks for those amounts?
Mr. CHANDLER. Yes, sir; but, Senator Walsh, if you will let me
explain how those checks came to me: They came to my office; tle
stenographer in my office reports to me the checks, or whatever has
come into my oflce puts a dposit stamp on the back of the check
and some of these checks I never saw. It is just the fact that I did
receive a check and that that account was balanced.
Senator WIlsit of Montana. Did you submit to the Southern
Tariff Association a statement of your expenses?
Mr. CHANDLER. Yes, sir.
Senator WALSH of Montana. Have you got a copy.of it?
Mr. CHANDLER. For every 5-cent piece I ever received from them.
Senator WALSH of Montana. Have you got a copy of it?
Mr. CHANDLER. I have in my office. I haven't here.
Senator WALSH of Montana. Apparently on February 8 last you
got a check from the Southern Tariff Association for $452.85. What
was that for?
Mr. CHANDLER. That was for the two or three different trips it
may have covered up to that time. I don't remember the dates of
then, but it was entirely for those trips.
Senator WAz1su of Montana. And on Septmber 11 you got a
check for $187.62.
Mr. CHANDLER. Yes, sir, probably so. I don't remember the
dates of those either.
Senator WALSH of Montana. That is correct, is it?
Mr. CHANDU.. Yes sir.
Senator WAis of Montana. And in the month of May last got
a check for $1O2.712.
Mr. CHAN-DwX.R. I think so; yes, sir.
Senator IVAsH of Montana. Making a total of $1,058.51 that
f you got from thie Soutliern Taiiff Association.
Mr. CHANDLER. I would say that is approximately right.
Senator WALSH of Montana. And that was for expenses of trips
up here?
Mr. CHAI LER. Yes, sir.
Senator WALSH Of Montana. How did you come to go to the
Southern Tariff Association to reimburse you for expense money for
coming up here ?
Mr. ChANDLER. Because when this fight first started we growers
and growers' organizations and various ones interested either directly
or indirectly all did collect money.

Senator

WALsh1

of Montana.

Collected money for whom?

Mr. CUMLER. For our tariff fight, and it was to be handled and
disbursed by the Southern Tariff Association. That was my under

1378

LOBBY INVESTIGATION

standing. So naturally I submitted my expenses account to then

for payment.
rsen
Senator W.itquI of Montana. The Florida people paid this money
into the Southern Tariff Association?
Mr. CIIANDL'Xn. Yes, sir.
Senator WAULRK Of Mfontana. And accordingly your expenses
wore paid frofii that sourceI
Mr. ('i.txmnL . Yes, sir. My own company put in approximately,
as I remember, $1,800.
Iit of Montana. To the Southern Tariff Associationt
Senator
.
Mr. CuA..v,.u. Yes, sir,
Senator WALJsi of Montana. How did your company go about
contributing to the Southern Tariff Association t
Mr. (0l .FaAN 11. I (idtln't get the question, Senator.
Senator WALSH of Montana. How did your company come to
contribute to the Southern Tariff Associatton?
Mr. ('r.1AuMPn. Because we felt the apparent need of a tar'lrt. and
thought it was good business,
Senator WA-si of Montana. Was this perfectly voluntary upon
your ptart, and upon your own initiative, that you sent a check for
this amount up here to the Southern Tariff Association'?
Mr. CHANDLER. Partly, and partly by solicitation.
Senator WALsH of M6ntana. Who solicited you?
Mr. CHANDLER. Mr. Vance Muse of the Southern Tariff Asso.
ciation.
Senator WAJ-sn of Montana. What representations did he make
to your company to induce them to put up $1,800 to this
organization?
"r. CHAN-D..E. Wel, in the tariff fight the growers needed a
business organization of the nature that. it had been represented to
us was here in Washington to look after our interests, to compile data
and information for us, and steer and guide us in our efforts to
obtain a tariff.
Senator WALSH of Montana. It represented that it would be able

to do that?

wini

tion
a 9,
us an
tinct
did
Se
sent

your

Al
the
the
tion,
in th
that
and
81
rose
M
Se

Se

aq
ticial
M
Just
S1
btati
M
S
iar

1
S

Mr. CHANDLER. Yes, sir.

Sefiator WALSH of Montana. Did it make any further repre.

sentations?
Mlr. CHANDLER. Not that I know of.
Senator VALSh of Montana. What I would like to know of you,
Mr. Chandler, is why you did not handle the money yourself, with
your organization, and pay your own way up here out of your own
funds2 instead of sending this money up here to the Southern Tariff
Association.
Mr. CHA MR. We all make business mistakes and errors. I think
that was one we made. A group of leading growers of Florida and
of growers' organizations we had meeting after meeting to dis.
cuss what steps we should take or should not take in an effort to
further our tariff fight.
Senator WALSH of Montana. As a result of this, anyway, you
concluded to send your money up hero?
Mr. CHAND R. After not being able to decide on any one of our
own organizations to head the group, we decided here was an or-

we
S
X
S
few
dat

T^

T
T
it
tion.
vote

A
alre
it
tlon
that

LOBBY INVESTIGATION

1879

ganization, supposedly a nonpartisan organization who would represent us for practically a nominal sum or fee. There was no mention of what it would cost. We understood Mr. Arnold would draw
a salary from the organization and he would personally represent
us and be on the ground here all the time and be hired for that dis.
tinct single purpose and nothing else, with his organization. That
appealed to us, as we were, as Mr. Fletcher told you, farmers and
did not know any better.
Senator WALSH of Montana.. What organization did he repreent he had that would be able to present this matter any better than
yourselves?
Mr. CHANDLE. That he was connected with attorneys and knew
the various departments and department heads and clerks, and knew
the ropes to follow and the sources from which to derive information, and he would be at all times posted as to what was happening
in this committee and that committee, and so forth. In other words,
that lie knew where to get this information, and where to look for it,
and we didn't.
Senator AVALsu of Montana. That is, Mr. Muse made those representations?
Mr. CHANDLER. Mr. Muse and Mr. Arnold, both.
Senator WALSH of Montana. When did Mr. Arnold visit youI

ir. CHANDLER. I don't remember the date.

Senator WALSH of Montana. Did they represent to you they had
any expert in their employ who was able to assemble-any statistician in their employ?
Mr. CHANDLER. Oh, yes; that was part of the organization, too.
Just who he was, though-

Senator WALSH of Montana. Did they tell you who was the

statisticianI
Mr. CHANDLER. No, sir, they did not. There was a groupSenator WALSh of Montana. They just told you they were familiar with the departments and knew the ,derks and so on?
Mr. ChAN6LR. Yes, sir.
Senator WALsh of Montana. And you were taken in by that?

Mr. CHANpLEit. That they could handle the proposition better than
we could. We know nothing about it, and figured they could.
Senator WALSH of Montana. You know more about it now?
Mr. CHANDLER. Yea, sir.
Senator WArsh of Montana. I want to interrogate you about a
few of these letters. The first letter from Mr. Arnold to you, of
date July 13, 1929, is as follows:
There Is going to be considerable trouble in this tariff measure.

That seems to have been a correct prediction.

It Is the most uncertain and chaotic condition that has existed in this generattion. As you know the Borah resolution was defeated In the Senate by one
vote.
What was your attitude about the Borah resolution?
Mr. CUANDLEX. We didn't know anything about it until it was
already voted on and had failed.
Senator WVALSUt of Montana (reading):
it .evm that the Insurgen1M fnd the Deinoerats are holding their combina.
tlon intact. and threaten to fight it over again on every minufaeturing schedule

that cones up.

1380

LOBBY INVESTIGATION

w_

Did you approve that?

Mr. OHANDLER. We didn't know anything about these things. Our

fight was dowil there, and we were not versed enough or did not
know enough about it to pas judgment on these other things, Sena.
tor Walsh. We didn't pretend to.
Senator WALSH of Montana. It was a matter that was immaterial
to you, whetherMr. CHANDLER. I wouldn't say it was immaterial.

We just didn't

w
hal
Sal

know.

Senator WAzsn of Montana. Whether the coalition would fight

the manufacturing rates or not?

Mr. CHGxUM

. We didn't know about all those things.

Senator VAsu of Montana. He continues:

If we keep prodding the manufacturers, the Senators from those sections
will turn against us and there will be no bill.

How did you take that suggestion from Mr. Arnoldf

Mr. CHANI)MR. Of course any suggestion that there would not be
a bill in which we could obtain relief, we viewed with alarm. It
didn't sound good to us.
.
.
Senator WLtn of Montana. You did not view that as a suggestion
from Mr. Arnold, that you should try and come in and help the
manufacturers to get what they were working for?
Mr. CHAN)LR. No no. That was too deep for us. That was
getting over our heads.
Senator W.,irS of Montana. How long have you been in business,
Mr. Chandler?
Mr. CHAXLER. Since I came out of the war in 1919.

tu

Senator WALsin of Montana. And this extensive business you have

down in Florida now you have built upf

Mr. CHANDLIE. Yes, sir.
Senator VALSU of Montana. Out of your own earnings and that
kind of thing?
Mr. CHANDULE. Yes, sir.
Senator WALsh! of Montana. Notwithstanding the business ex.

perience which you have had, and you leave the impression upon
us that you handle a large business down there, as you doubtless do,
you-didn't know what this meant?
Mr. CHANDLER. Not all of it, no, sir. We couldn't know.
Senator WAL8sh of Montana. Under date of July 15, he writes
you:
You are correct in your conclusion that n campaign should be put on in
the State to induce Senator Fletcher to support the general bill.

That was the general bill that came from the House, was it not?
Mr. CHIAN-D1;r. Yes, sir.
Senator WALSH of Montana. And you wanted Senator Fktcher

to support that bill?

Mr. CHANDIER. I would say yes.

Senator WALS1 of Montana. Just as it came from the House?
Mr. CIZANDLERn. Yes. sir.

Senator WALSH of Montana. In return for getting what you

wanted on your Florida products?
Mr. C ANDLi. I wouldn't call it a trade or anything of that sort.
We figured Florida would derive more good from the bill than she

it

LOBBY INVESTIGATION

1381

would derive harm, and that the general situation over the country

would justify the passage of the bill as it came from the House. That
was our more opinion.
Senator WALsHa of Montana. Did you estimate or calculate what
harm Florida would get from the rest of the bill?
Mr. CHANDLER. Yes, sir. We attempted to do that, and I have een
other men attempt to do that, and no two men ever arrived at the
same figures and Wo just had to leave those subjects alone. It would
go over our heads if we started figuring those things.
Senator WASH -of Montana. What estimate did you see of the
harm it would do to Florida?
Mr. CHANDLER. We figuredSenator WALSH of Montana. No; not we figured. You said you had
seen several estimates.
Mr. CHANDLER. Yes. sir.
Senator WALSH of Montana. Some of them showing the manufac.
turning rates would harm Florida and some others that would not.
Mr. CHANDLER. Yes, sir.
of Montana. I want to know from you who made
Senator WaitA
those estimates you thus saw.
Mr. CHANDLER. Men who lived down in our section who probably
didn't niow but very little about it.
Senator CARAWnvAY. Don't you think it is time to quit saying you
don't know anything about it?
Mr. CHANDLER. I will try to answer any questions you like, Senator Caraway.
Senator CARAWAY. You are always saying it is over your head.
That is too cheap. Why don't you answer the questions?
Senator WALswH of Montana. Did you see any estimates at all?
Mr. CAN'D-LER. Yes sir.
Senator W.sH of Mfontana. Who prepared them?
Mr. CHANDLEn. A man named E. W. Lind in the American Fruit
Growers office is the only one I positively remember.
Senator VALuH of Montana. Did he set up any harm that would
come to the farmers by reason of a raise in the manufacturing
rates?
Mr. CHANDLER. Yes, sir. He estimated that the fertilizer and
farm tools that we used would sustain an increase of 20 to 25 per
cent over what we aro now paying.
Senator WALstr of Montana. So he figured how much additional
you would have to ay for tools I
Mr. CIANDLER. ;sure.

Senator WALS! of Montana. is that all he figured?

Mr. CHANDLER. That is all that would affect us.

Senator WAL411 of Montana. Did you figure how much additional
you would have to pay for crockery or glassware?
Mr. CHANDLER. No, ir.
Senator WVArAI of Montana. Or iron-or steel?
Mr. CHANDLER. No, sir.

Senator WALsH of Montana. Or for clothes?

Mr. CHANDL R. No, sir.

Senator WALSH of Montana. And you don't know now whether
it balanced up your advantages or not, do you?
78214--20-

8--10

1382

LOBBY INVESTIGATION

Mr. CHANDLER. I couldn't say on those figures; no, sir.

Senator WALSH of Montana. And yet you wanted Senator Fletcher

to vote for it?
Mr. CHAND'L,. Yes, sir.
Senator WALshi of Montana. I call your attention to another item
in your letter of July 11 to Mr. Arnold:
As a suggestion first to them, I would suggest that you write each inember
of the executive committee and especially Mr. Wilson and let us advocate and
put into ,ffect a campaign in this State to especially Induce Senator Fleteher
to support the general bill.
.ilnlt
Mr. CHANDLER. Yes,.ir.

Sew
of tile
Mi.

Seni

Mr.
Fort
and a

cu.st(
Sew
peoplt,

Senator WALSH of Montana. I want to interrogate you particu.

larly, however, with respect to your letter of July 17 to Mr. Arnold,
in which you say:

mne t
Mr. I

I have consultedI with various members of the executive committee and others
interested and we are of the opinion that possibly we had better let well
enough alone and .not take the chance of antagonizing any of the members of
the Senate Fluomce suieomnlittee, who, It st-,mw, have taken exception to the
activities of the Southern Tariff Association.

Sen
nlitte
Mr.
The n
Sen

Who was that, Mr. Chandler?

Mr. CH.INDLE-R. That was Mr. Arnold and hisSenator WALsiH of Montana. No, no. You refer to certain mem.
bets of the Senate Finance Committee who have taken exception
to the activities of the Southern Tariff Association.
Mr. CHANDULE. There was talk here on the streets and in hotel
lobbies, and from those outside, not the Senators themselves. The
only views we have ever received front any Senators or Congress.
men was that we should appear as growers and not from any other
organization other than that.
Senator VALSH of Montana. Wait, Mr. Chandler. You are re.
ferring to certain members of the Senate Finance Committee who
you. say have taken exception to the activities of the Southern
'Pariff Association. I want to know what members of the Senate
Finance Subcommittee you refer to.
Mr. CHANDLER. I can't say, because these various other members
from the delegates up here came in and reported that the activities of
the Southern Tariff Association were being criticized and were not
approved of, and therefore we should not continue our efforts as
coming from them.
Senator WAUSH of Montana. Mr. Chandler, this language is perfectly plain, perfectly plain. You speak about certain members of
the Senate Finance Subcommittee.
Mr. ChAiDLiR. Well, I don't know those certain members. If I
did, I probably would have named them in the letter, because I
figured the letter was confidential and there was nothing I should
hide about it, and I probably would have written their names if I
had known them.
Senator WALSH of Montana. Why should you hide it now?
Mr. CHANDLU. I don't know them, Senator. I certainly would
tell you if I knew them because I think it is no secret.
Senator IVALSit of Montana. You knew, or at least you said, that
certain members of the Senate Subcommittee on FinanceM1% CHANDLF.R. Yes, sir.

Iho

I& out

Per
Per
Bin:
I ho
lut oU

Wit
31r.
man!
[By of
did t'
MY.
Sent
Mr.
Sel
the S
the S
ciatiol
AirSon
What
Mr
Harr
sippi.
111oel
Se
Mr.
I remi
Sen
Iw
same
thP 1;4

LOBBY INVESTIGATION

1383

Senator WALSu1 of Montana. Had taken exception to the activities

of the Southern Tariff Association?
Mi1 CIANDI..R. Yes, sir.
Senator WALSH of Montana. But you did not know who they were?
Mr. CnANDER. No, sir; I did not know. A Mr. Hoadley from
Fort Myer, Fla., was one of the members of the Florida delegation,
and a grower who came up here, and I remember distinctly he discu.cd that situation with me.
Senator WALSH of Montana. Exactly; but you don't say here that
people, from Florida have taken exception. You say that certain
mienibers of the Senate Finance Subcommittee have aen exception.
Mr. CHA1NDLER. Yes, sir. That was the report that had come to
mne through the report front Mr. Hoadley, or a conversation with
Mir HoadfOy.
Senator WALsH of Montana. What members of the Finance Comniittee were reported to you as having taken exception?
Mr. CHANDI'.XE. I cant say, because I don't remember their names.
The nnines, as I remeniber, were not given to me.
Senator 1VALsii of 3ontana. Well, all right. You continue:
I hold no brief for the arguments that one of the Senators has seen fit to
iut out bout the southern Tfarff Association.

Perhaps that will refresh your recollection about the matter.

Mr. CHANDLER. I don't just get that.
Senator WAmisJ of Montana. You say:
I hold no brief for the arguments that one of the Senators has seen fit to
put out about the Southern Tariff Association.

What Senator was that?

31r. CIEAN'JMER. I couldn't say what Senator that was, because a
man named J. E. Bell, from gan Bernito, told me we had better
18v off as appearing through the Southern Tariff Association. He
(id that in January. He did it again when he was here, I think, in
Senator WALSH of Montana. But Mr. Bell is not a member of the
Senate Finance Committee, is he?
Mr. CHANDI.ER. No, sir.
Senator WALSH of Montana. But you speak about a member of
the Senate Finance Committee, or a Senator at least, "That one of
the Senators has seen fit to put out about the Southern Tariff Association." What Senator was that?
Mr. CHANDLER. I think I remember what-you have reference to.
Senator W~iLi of Montana. No; not what I have reference to.
What you have reference to in the letter.
Mr. CHANDLER. I think there was a statement put out by Mr. Pat
Harrison, of Mississippi. about the activities of Mr. Arnold in Mississippi, condemning or criticin g the activities of their collecting
money and funds over in that State.
S nator IVA..i of Montana. That refers to Senator Harrison?
Mr. CJIANDEJri. And there was a newspaper article to that effect.
Iremember now what I had reference to there.
Senator WALqH of Montana. This letter says further:
I would be glad to listen to any suggestions and to aid In carrying out the

same regarding an intensive campaign in this State under the leadership of

the southern Tiriff Assoetntion to vre that Individubi.

Ihmunes concerns.

1384

LOBBY INVESTIGATION

etc., In the State bring all pressure to hear on Senator Fletcher to vote for
tie tariff revision bill.

This lre&siur was to be brought through the Southern Tariff

Association, apparently?
Mr. CiIANnLI1,. No sir. Our campaign was to be--Senator WALSH of Mf1ontaua. I am speaking about your letter here,
Mr. CHANDtLEr. Maybe my wording sounds that way, but that was
not our intention.
Senator WALSH of Montana. Well, you clearly express it:
I will b6 glad to listen to any suggestion-. and to aid In carrying out tht
same regarding an intensive campaign. ii tlils Htato under the leadership of
the Southern Tariff Association.

Sell

Finan

Sen

Mr
Sen
bes C
Comn

Said
to the

Mr

Mr. CIANDLER. Yes sir; but to conic from Florida and not from
the office here in Washington.
Senator IVALSq of Montana. Certainly, in Florida, under the
leadership of the Southern Tariff Association.

Se
to do
Mr'
theni

Senator WALSH of Montana. You wanted the Southern Tariff

Association to follow this campaign to bring pressure to bear on
Senator Fletcher?
Mr. CHANDLER. Yes, sir.
Senator WALsi of Montana. To vote for the general tariff bill?
Mr. CHANDLER. Yes. sir; through the growers organizations which
they were supposed to represent.
Senator WALSH! of Montana. Here is another one on which you
may be able to enlighten us, your letter of August 8, 1029, which
reads:
3 2

Se
Ir
Ses

Mr. CHANDLER. That is right.

Mr. Fletcher and I have gotten together and confidentially we havo asked
for a confidential conference with Senators Snmot, Watson, and Shortridge.

This letter is to Mr. Arnold. Why did you want to convey this
confidentially to Mr. Arnold I
with
Mr. CANDMLER. Because we just simply wanted to discuss it of
forth
and
back
criticism
him, and there had been, naturally,
hold a
efforts and what had been done and we figured if we would
further
get
confidential conference we might get information and
along that way than the other way.
Senator WALsH of Montana. I. am speaking now about your letter
that
to Mr. Arnold. I will get to the other later. Why did you give
to Mr. Arnold in confidence
Mr. CHANDLER. Because Mr. Fletcher and I had agieed we would
first get his opinion about it.
Senator WmLs1i of Montana. Get whose opinion 1 that, or see if
Mr. CHANLUR. Mr. Arnold's. We would ask for
nave
we could get it. We wanted his opinion on it, naturally
Senator WALSH of Montana. Tou winter Mr. Arnold to say noth.
ing about this to anybody. Why did yo-." want him o say nothing
about it?
Mr. CHANDLER. Because if we could get it, we didn't want it made
publicly, because we thought we would get further along with it that

wa

wenator WALSH of Montana. This is August 8, 1029. The hearings

had entirely closed at that time, had they not?
Mr. CHANDLrER. I think so; yes.

it. I1

have

Short
We d

comieI
8v
Sonfil
Snio,
becon
M
__

that
that,
on,.
oie
ii
Now
to ti
els,?
M
'I
you
you
co.on
h
M
confi
8t

ne,

An

So
that
fidet

thin

LOBBY INVESTIGATION

1385

Senator WALSI of Montana. You had been here before the Senate
Finance Committee?
Mr. CIt.A l1-KIn.Yes, sir.
Senator WALSh of Montana. The public hearings had been closed?
Mr. CHAN D2.i. Yes sir; I think so.
Senator WAL9sH of Mon'tana. Did you understand that the memivr. of the Finance Committee, the majority members of the Finance
committee, after they had heard in public everything that could be
said for or against the tariff rates, were then admitting other people
.
to their Prlvato offices.

Mr. CHANDLF.O. No, sir; I did not understand that.

Senator WASMH of Montana. Well, that is what you were going
to do. wasn't it?
Ml'. C ANlDER. We thought we would ak to see if we could give

theii any further light or information. We didn't get anywhere with

it. They paid tus no attention whatever.
Senator WALSH of Montana. You wanted itMr. ('uANLF.u. We were so desperate in our need for a tariff.

Senator Wmsii of Montana. Just a minute. You were going to

have a confidential conference with Senators Smoot, Watson, and
Shortridge. What were you going to convey to them in confidence?
Mr. CHANR.n. Further information regarding our tariff light that
we did not think had been given, additional information that had
colne to light igardin ratespertient to our tariff.
Senator WAU.4it of lontana. Why should you give itto them in
confidence? Why should yon give this information to Senators
Snioot, Wat.on, and Shortridge in confidence, if it was only to
become information concerning shipments?

Mr.

CiiAxIILvR.

We understood the public hearings were over, as

I said a few niinutes ago. and if they would listen to us at all it

would naturally be in a conference in their office, or something of
that sort..
Senator WALSH Of Montana. Yes; bitt it was to be a confidential
one. That is to say, they were to say nothing about it to anybody.
What use was it to lay fats and figures before these three men if
they were to say nothing about those facts and figures to anybody?
Now, don't you know. Mr. Chandler, that what you were to convey
to them in confidence'was not facts and figures at all, but something
else?
Mr. CHNDm R:. ,. sir; I don't know that.
Senator WALSH of Montana. 1)o you know any reason now why
yon should convey to then any information in confidence that they
cold not inentioni to anybody? Do you know of anything you could
have told them?
Mr. Ci[.%zI)LER. No. sir; I don't say I do. There is nothing pertaining to this thrift fight that should be kept great secrets or in
confidence.
Senator WAUSIr of Montana. Exactly. This is all public gusinests, isn't. it?
Mr. CHANDLER. Yes, sir.
Senator WVALsI of Montana. Then, how can you explain this letter
that you wrote Mr. Arnold, that you were going to try to have a confidenlial talk with these people, and that they were not to say anything about what transpired there? As a matter of fact, you were

1386

LOBBY INVESTIGATION

going to saX something that would not bear public inspection,

weren't there?
Mr. CHANDLER. No, sir; I know nothing about this fight that
would not bear public inspection.
Senator WALSH of Montana. That is what your letter means?
Mr. CHANDLER. Possibly I have used the wrong terms in my letter
and left the wrong imp ression. That was not What I intended,
Senator WALSH of Montana. You continue:
We have been bombarding Senator Fletcher and Senator Trammell about

their vote on the general tariff measure and they have promised to support the
hill, providing the sune can be done without harm to Florida.

That is the right attitude to take, isn't it?

Mr. CHANDLER. Yes sir.

Senator WALSH of Montana. If it wouldn't do any harm to Flor.

they would support the bill, leaving it to them to see whether

ida,
it would harm Florida or not?
Mr. CHANDLER. Certainly. That is our understanding of what
they were going to do al al6ng. Senator Fletcher and Senator
Trammell have introduced measures that I remember about, no older
than I am, in 1922, 1 think as you mention, regarding tariff on
Florida products. We expected them to support the Florida sched.
tile, but of course realized that the general bill must 1e supported
in order to have the passage of it as a whole. We are only hunmi.A
We wanted to see the entire bill passed so thlt otr measure would
pass.
Senator WALSH of Montana. And that without any computation,
so far as you were concerned, as to whether it hurt or helped Florida.
Mr. ChAN-DLER. They had assured us they were acquainted with
all those facts and would not support the bill i ( it were so vicious
or so radical as to hal.m the rest of the country. but if Florida
could be benefited and it would benefit the rest o te coutry they
would support it.

Sf
kine
At
Se
M
the
at t
can

Se

bill

yo[

Se
81
you

I
81
A
S
you

S
war
A
men
S4
A
and
tion

on them ?

t
the

them that Florida as a whole wanted this measure and needed it.
Senator RonISON of Indiana: I understand, Mr. Chandler, that
in your activity you were seeking legislation that would protect the

did
I
as t

Senator WALSh of Montana. Then why bring all this pressure

Mr. CHANDLER. Because we wanted to show theiu and convince

*
interests of Florida
Mr. C0rANIDLEJ. Yes, sir.
Senator ROBINSON of Indiana. And of your association of growers

of Florida?
Mr. CHAND.R. Yes, sir.
Senator Roi.Nsox of Indiana. I take it from what you say the
sentiment in Florida was for protection-reasonable protectiou: is
.
that right?
sir.
Yes,
Mr. CIANDLER.
Senator RoBiNsoN of Indiana. And the people of Florida, being
for protection on Florida products, were for reasonable portection on
products elsewhere in the country; is that right!
Mr. CHANDLER. That is true.
Senator Romisox of Indiana. And that, assuming the tariff bill
were passed with reasonable protection to the products of the coun.
try, you were for that kind ofa general bill?

act

ar
Ar
A
wal
the
wer

cor
tha

we
We

1387

LOBBY INV, STATION

Mr. CHANDER. Yes,

sir.

Sentaor Ronizqsow of Indiana. I assume that you still are for that
kind of a billI
Air. CHANDLER.

I am 4e

Al'. COIANDLER

Yes, sir.

sir.

Senator RomoNSO of ndiana. What do you think of the prospects?

Mr. CHANnLFtn. That is too deep for me. I am still in hopes that
the general bill will pass a bill that will be fair to the country and
at the same time give Fiorida the protection which she needs and
can not go further without.
Senator RomsoN of Indiana. It was in the interest of a protective
bill of that kind that you conferred with your Senators; is that what
you mean to say?
Senator RoBizsoN of Indiana. I think that is all.

Senator OAR-AY. Mr. Chandler, you heard Mr. Fletcher say that

you all grew suspicious of Arnold and the Southern Tariff Associa.
tion and quit your relations with it early last summer?
fr. CHANDLEIt. He and his organization did. Mine did not.
Senator CARAWAY. Yours did not ?
Mr. CHANDLER. No, sir.

Senator CARAWAY. You knew where the expense money was and

you stayed with Mr. Arnold?

Ar. 3IzqDLEt. Yes, sir.
Senator WALsH of Montana. I thought you and Mr. Fletcher were
working for the same end ?
Mfr. CHAxDLvR. We are, but not necessarily by exactly the same

means or approving of just what each other has done.

Senator JARAWAY. Oh, there was a rift, then, between you?
Mr. CHAN.ERn. No, sir; there was no rift between Mr. Fletcher
and ise.
Senator CARA~WAY. You heard him testify he had severed his rela.
tions with the Southern Tariff Association?
Mr. CHANDLTER. I knew he had stopped putting more money into
the Southern Tariff Association.
Senator CARAwAY. You didn't know he had stopped taking it out,

did you?
Mr. CHAN'DLER. No, sir; I was not acquainted with the exact figures
as to what he had or had not done with them.
Senator CARAWAY. It seems like lie wasn't, either. You are still
actively cooperating with the Southern Tariff Association, Mr.
Arnoldf
Mr. ChANDLER. No; I can't say I am, because I figure their work

was done after the Senate Finance Committee had met, and after all
the general details had been discumed back and forth, and that they
were here to look after any work that might be necessary.
Senator CARAWAY. This correspondUnce shows you were still
corresponding with them and they were paying your expenses after
that.
Mr. CIHANDLER. Yes sir.
Senator CARAWAY. What do you say about that?

work was done.

ir. CH

LuI.ER.

You said their

Their principal work, in our minds, was done.

We had appeared before the two principal committees.

Senator CAUAWAY. Is your association still contributing?

1388
Mr.

LOBBY INVESTIGATION
CHANDLER.

No,

sir.

Senator CARAWAY. When did you stop?

Mr. CHANDLt.-R. About lost June, ftt the end of our tomato season.

pay to them.
We had no further funds from which to collect andstill
In force?
them
with
Senator CARAWAY. Is your contract
anything
Mr. CHANDLER. No, sir; we have no contract that I know

about; just simply a verbal agreement.

at contract.
Senator CARAWAY. Well, a verbal agreement may be
You know that.
Mr. CimNLEU.R. No, sir; it is not in force any longer
Senator CARAWAY. When did it terminate?
w
Mr. CnAxin.En. At the end of the last tomato season, which was

S1

wan
matM
lk
like
M
Am
Art4

May and Jume.

Senator CARAWAY. They had no further relation with you since

May or June?
rit'.CIIN-,JER. Not that I know anything about.

Senator CARAWAY. Then, why were you getting expense money?

Mr. CHANDLEr. Because the money had been collected and put into

that flght for that purpose, and until the fight was completely over
the fumd was supposed to pay the expenses of that fight.
Senator CARAWAY. You still have money on deposit with' Mr.
Arnold
Mr. CHANI.ME. I don't know whether there is any there or not,
but there was up to the time I had turned in this expense account.
Senator CARAWAY. Do you expect to draw any more
Mr. CHANMULER. No, sir.
Senator CARAWAY. Do you expect to contribute any more?
Mr. CnAINu.ERi. As I understand-I have had no audit report or

figure-I understand there is no more money. Naturally, if there

is no more money I couldn't draw any more.
Senator CARA A . That is the only thing that would stop yon
.5r. Ci. xwnE:.Xo. sir; I would have no further connection with
the Southern Tariff Amociation.
Senator CARAWAY. Do you expect to have any?

you]
IV
fan
S
inte
1
the
We

rec
this
hav

timl
tin

Mr. CHANDLER. No, sir.

Senator 0AnAWAY. You are through with them?

Mr. COrANDI.ER. Yeq, sir.
Senator CARAV AY. Win or lose?
Mr. CIAw..n. Yes, sir.
Senator CARAWAY. Why?
Mr. CzrHxnr.En. Simply because of the unfavorable report and all
of the things that have come to light about them.,
Senator CARAWAY. If they had not come to light you would have
been perfectly satisfied?
Mr. CHNI. R.Eu. I would inot have known about those things. We

didn't know abfht them ourselves except what they had actually done

in Florida. We are 300 miles irom the State flne in Florida and
don't know nil those things.
Senator CARAWAY. But you were up here every month. Did you
ever got any information Whatever out of Arnoldvs office?
Mr. CHANDIER. Some; yes.
Senator CARAWAY. What was it?
Mr. CHANDLER. I am trying to think of something specific to
answer you.

ma
dra

Wi

son

the
the
at
hin

me

LOBBY INVESTIGATION

1389

Senator CARAWAY. You know there wasn't anything. There

wasn't anything done except-Mr. ChANDILER. Nothing but general information. I mean, information we put in our briets which we got up ourselves.
Senator CAUAWAY. All Arnold did was to collect money and people
like you drew it out?
Mr. CHANDLER. On expense accounts; ,es.
Senator WALSH of Montana. When did you first learn that Mr.
Arnold was getting some $12,000 a year out of the funds thus co1lected, together with his living expenses at the hotel, and so forth
Mr. CtANDLER. I think that was in May.
Senator W.811 of Montana. How did you come to learn thatI
Mr. CHANDLER. By asking the question.
Senator WALSH of Montana. Asking it of whom?
Mir. CHANDLER. Himself.
Senator WALsH of Montana. That was after you had obligated
yourself to contribute?
Sir. CHANDLER. Yes, sir.

Senator WALS11 of Montana. To what extent had you obligated

yourself?
ir. CHANDLER. We agreed that each of our growers and all organizations should pay into the funds one-half cent per crate shipped
1ast season into a group fund for the expenses of this work.
Senator WATIH of Montana. What more did you learn about the
internal affairs of this so-called Southern Tariff Association?
ir. CHANDLER. I didn't learn. That is the reason that we put
them on notice that we were not going to put up any more money.
We asked for an audit and check-up on the figures, which we never
received a full accounting of but which was promised to be delivered
this past October. Meantime they have never had that meeting, so I
have never been given that full information.
Senator

WALqH

of Montana. Did you make any inquiry at the

time you thus obligated yourself and those who were associated with
you as to what compensation Mr. Arnold and his associates were getting out of this?
Mr. CHANDtvn. I asked Mr. Lorenzo Wilson who was State chairman and one of the leading businessmen in Florida and who had
given his approval and sanction-in fact, had brought to us the
Southern Tariff Association idea-and he said Mir. Arnold was to
draw a salary. What salary I did not know. I left that tip to Mr.
Wilson. I presumed it would be something in reason, certainly.
Senator WAL.P of Montana. And Mr. Muse solicited you personally as I understand it.
Mr. 6 HANDLER. Yes, sir.
Senator WVALsH of Montana. Did you interrogate Mr. Muse about
this matter I
Mr. CHA-.DLER. I asked what salaries were being paid. He said
the., were being paid various salaries,- but they were nominal and
the exact figures, he would oay, were to be in the audit and check-up
at the proper time; that he was not acquainted with all the figures
himself.
Senator WALSH of Montana. That was a rather indefinite state-

ment, was it?

Mr. CHANDLER. Yes, sir; it was.

1390

LOBBY INVE.TImATION

Senator WALSH of Montana. It satisfied you, however; didn't it?

Mr. CHANDLER. No, sir; it did not. We were asking these ques.

tions because it had seeioed to us we had put in enough money, all

that could reasonably be expected to finance this operation, and they
continued to call for more money and naturally aroused our suspi.

cions to that extent.

Senator WALH of Montana. When did this call go out for more
money?
Mr. Cir x~u.I.
.
At various times during the season. Not any par.

ticular time. Most any time I would see them or be in communica.

tion with them they would want to know if some one had paid in his
pro rata, his half cent a crate.
Senator WAlsH of Montana. Just reviewing the matter now, Mr.
Chandler, what do you feel was done by Mr. Arnold and his organi.

Mir.

of or
opii
Sent
Mr.
it IAs
ule )II
too 1
Sen

Air.
infor
Beni
b,sivw
Mh.

zation toward your end I

Mr. CHANDLER. Not near as much as we had a right to anticipate or
expect.
Senator WALtsh of Montana. Could you indicate to us just what

down.
Seni

Senator WALsH of Montana. Coordinate doesn't help very much.

What was it they did to get this result for you here?

denre.
Mr.

that organization did do?

Mr. CUIANDLER. The main thing it did was to coordinate the efforts
of the Florida groups.
Mr. CHANDLER. Not a great deal of anything.

Senator WALSH of Montana. Can you think of anything

Mr. CHANDLER. They did gather some information and give us the

S.n

City,

0ito

Sen

service of an attorney. I think he is an attorney. I won't say that

positively, because I (lon't know, but a man by the name of Mr.
Loomis who was supposed to be a statistician and acquainted with
work o1 that sort.

Mir.
Se
rende
Mr.

committee that he was an employee or attorney for this Southern

Mr.
yeaIt
deavc

Senator W.%Lsn of Montana. But Mr. Loomis is an officer of the

Dairymen's League, isn't het
Mr. CHANDLER. I couldn't say about that, because I don't know.
Senator WALSH of Montana. You wouldn't undertaoke to tell this
Tariff Association I
Me'. CHANDLER. I don't know in what capacity, but. he was sup.

posed to oive us his services and his advice in the making of these
briefs and'see that that was put in proper form and complete. He did
give us some service. We had the use of their stenographers when
we wanted them, and their offices in case we wanted-it. I say we;
I did.
Senator WAsih of Montana. That is the sum of what you got for
whatever money you gave to the Southern Tariff Association?
Mr. CHANDLER. Practically speaking.

Senator Ww[ of Montana. You got a good many letters from

them?I

Mr. CHANDnLEn. Yes air.

Senator WAL;s of Montana. That didn't help very much?
Mr. CrANDLER. No, sir.
Senator CARAWAY. Did you know that Mr. Fletcher had lost con.

fidence in that association and had quit?

Yes, sir.
Senator CARAWAY. When did he tell you that?
Mr. CHANDLER.

ssoc!
Se

indw
SB,

with
Mr
Se
count
Mr
S
WhIr
Allh
S,

Sc
Mir
Se-

.1r

ment
S,

LOBBY INVESTIGATION
A

1891

Mr. CiIA.'xiLR. Last January, but he was only one out of a group
of organizations, and that was his opinion. But it was not the
opinion of others at that time.
SSenator ('AtAWAY. Did he tell you what was the reason?
Mr. CKANDLEi. He said he thought they wanted too much money,
it was going to'cost us too much. that they were possibly not spending
tie money in the way it should be spent. In other words, there was
too muclt salary paid,

Senator CARAWAY. That didn't excite you enough to make inquriy?

Mr. CHANDLE. Yes, sir; I made inquiries. I didn't get all the

information I wanted, but I was partially satisfied.

Senator CARAWAY. When you failed to get information, as a

businvs man, why didn't you go and insist on a showdown?
Mh. CIANDu.LR. I attempted to do so and was prontised a showdown.
Sector ACAn.wAY. Well, that is all.

TESTIMONY OP STEPHEN H. LOVE

J'ie witness was duly sworn by Senator Caraway.)
Senator CARAWAY. Give the stenographer your full name. resi-

dence, and occupation, please, sir.

Mr. Lov.. My name is Stephen H. Love, my residence is Salt Lake
City, ULtah. I ant president of the United States Beet Sugar Assocaflton.
Senator ('CAWAY. A s president, you have $5,000 a year salary
Mr. LOVE. Yes. sir.
Senator CA1tAw.%Y. And in return for that what service do you
render. Mr. Love
Mr. Lovu. I have general supervision over the business of the
association.
Senator CARAWAY. I know, but what do you doI
Mr. LovE. WVel, we hold quite a number of meetings during the
year. and we have been engaged since I have been president in endeavoring to let the country know the condition of the beet-sugar
industry with reference to its economic value to the country.
Senator CARAWAY. How did you attempt to acquaint the country
with that. Mi . Love?
Mr. loV:. How is that?
Senator C,
.nw~
What nicans did you iste to acquaint the
country with the needs of the beet-sugar growers?
Mr Iowr. Dealing direct with the farmers.
Senator ('AWAY. I didn't. ask you who you were dealing with.
What means did you use. publicity -agents?
Mr. LIo.
WO ised a Ipblicity agency since 1027 or 1928.
Senator CAAWAY. What agency did you use, Mr. Love?
MIr. LOVE. The Inter-Ocean Syinlicate in Chicago.

Senator CARAWAY. How muci did you'pay that syndicate?

Mr. LovE. We have paid them $3,00 a month.

Senator

ARAWAY.

Since 1927t

MAri.
LOVE. I just don't remember the (late we made the arrangement with them. I think it was in 1927.
Senator CARAWAY. What were they to do for youI

1392

LOBBY INVESTIGATION

Mr. Lovz. They were to put out information letters based on in.
terviews, statements, and matters of fact that could be gathered
from authentic records.
How were they to put it out? That is what I
Senator CARAWAY.
get.
t0
am trying

ti
pub

Mr. LOVE. I have one of their circulars here.

Senator CAUAWAY. You just tell me generally. I haven't time to
f
read a circular.

stop and
Mi LovE. As I say they were to isue these statements to news.
papers. They claimed that they had a regular mailing lit of news.
papers throughout the country and agreed to send these statements
out to the newspapers from time to time under our direction.

get

Senator CARAWAY. What do you mean by a mailing list, Mr. Love?

They had a mailing list of newspapers throughout the country.

What do you mean by that? Anybody can get the address of a
newspaper.
What was covered under that, "They had a mailing
list "11
Mr. LovE. This agency claimed to us when we made the arrange.
ments with them that they sent out from time to time news artik],el
which bore the stamp of their agency and they were sent out free of
themselves
charge to the newspapers, and that if the newspapers
them.
accept
thought they were worthy of publication they would
Senator CARAWAY. They were releases, then, sent out to news.
papers. which they hoped to get published as news items?
Mr. LovE. " For immediate release," I think was 'tampei on
them.
Senator CAUAWAY. That they hoped to get carried in the news
columns of the various newspapers?
Mr. Lovw. Yes, sir.
Senator CARAWAY. Did they give you a list of the newspapers they
had such relations with?
Mr. Lovi. Thev furnished us each month with a list of clippings
and a statement of the newspapers in which these articles appeared.
Senator CARAWAY. I didn't ask you that. I asked you if they fur.
nished you a list of papers that they had on their mailing list in
which they had a right to expect such articles would be published?
Mr. Lovw. No; they did not.

Senator

CAIRAWAY.

Did you ever ask them about it?

Mr. LovE. How is that?

Senator CARAWAY. Did you ever ask them about it?

Mr. Lon.. No, sir; I did not.

* Senator CARAIWAY. You just took their word for it and paid them
$3,000 a month?
gave us
Mr. LOVE. -Wepaid them $3,000 a month provided they
what they claimed.
Senator CARAWAY. What did they claim?
Mr. LovE. They claimed these articles would appeztr in the news.
papers throughout the country, and at the end of each month they
would furnish us a statement showing the newspapers, the name of
the newspaperE, the circulation, and the States in which those news
articles appeared.
Senator CARAWAY. That is what I am getting to. Was that information to be confined to one section of the country, or could they

to

cer
bor

inte

ye*
wor
ta
Tim

yea
to

tar'

.OBBY INVESTIGATION

1393

satisfy their contract with you by publishing it in any newspaper

published in America?
Mr. Love. In any newspaper published in the United States.
Senator CARAWAY. You were not at all concerned in that. If it
appeared in three newspapersMr. LovE. That is all we were concerned with.

Senator CARIAWAY. And whether they had any circulation among

the farmers wasn't of any-Mr. LovE. No.

Senator JARAWAY. And I thought you said you were trying to

get out information to the farmers.

Mr. LovE. That is one of the things.
Senator CARAWAY. But now you tell me you didn't care whether
the newspaper had a single farm subscriber.
Mr. LovE. You didn't let me explain the things we were trying
to do.
Senator CARAAwY. Well, I let you get as far as that one. I didn't
let you explain the whole purpose. I let you take one thing at a
time. Now, did you pay anything else except this $3,000 a month?
Mr. LovE. Nothing else.

Senator

CARAWAY.

Senator

CARAWAY.

And that contract is still in force?

Mr. LovE, That is not in force so far as our organization is concerned. We only carried it for a short time.

Then, you transferred it to whom?

Mr. LovE. Then the Hawaiian Planters Association came in and

bore a portion of the expense. Then when the Domestic Sugar
Association was organized they took over this contract.
Senator CARAWAY. You are a member of that association?
Mr. LovE. Our a.ociation is a member of that association.
Senator CARAWAY. So that the contract with reference to the sugar
interests is still in force?
Mr. LovE. Still in force.
Senator CARAWAY. Is it a written contract?

Mr. LovE. It is a written contract.

Senator CARAWAY. How long does it continue?

Mr. LovE. It. expires, I think, on the 31st of December of this

year to year.
It. was
made from
year.
Senator
CAHAWAY.
So (hat
you were satisfied their services

were

worth what you paid them, and you renewed it each year?
Mr. LovE. We have not renewed it for next year.
Senator CARAWAY. But up to this time you have made three contracts with them. You made contracts in 1927, 1928, and 1929.
That is so?
Mr. LovE. I think that is right.
Senator CARAWAY. Do you purpose to make it with them for next
year?
Mr. Lov. Well. I don't know. That.is a matter that will have
to be decided by the Domestic Sugar Association.
Senator CARAWAY. You have only one vote in that?
Mr. LOVE. Only one vote.
Senator CARAWAY. You represent the beet sugar. And the whole
purpose of the publicity was to get what you considered adequate
tariffs on domestic sugar. That was the purpose of it?
Mrt. LOVE. No, no; not the whole purpose of the publicity.

1394

LOBBY INVESTIGATION

Senator CARAWAY. What was the other purpose?

Mr. Lois. We had four purposes in view. We are imbued with

the idea and obsessed with -the idea-that is, the beet-sugar people
are-that the beet-sugar industry is of distinct value to the heet
growers of the country. That is, beets to be used in 9 scientific
system of rotation with other crops. That is one thing we were
trying to put over.
Senator CORAWAY. Does the agency do anything along that line
Mr. Love. Yes.
Senator CARAWAI. That is one. What was the other?'

Mr. LovE. The other, we have been opposed to the free importa.
tion of sugar front the Philippines.
Senator CARAWAY. And what was the other?
Mr. Love. The American Tobacco Co. have been carrying on a
campaign in "Reach for a Lucky in place of a sweet." We have been
combating that propaganda.

tr

co

an

co

Senator CARAWAY. You want them to leave off the Lucky and take

a sweet?
Mr. Love,. Yes. We wanted them to leave off the Lucky and take
a sweet.

ar
ob

Senator CARHAWAY. That is a battle of the giants, whether you shall

fu
tb

lut it on the market at a differential of 20 cents under cane. Our

W
of

smoke a Lucky or something else?

Mr. Lovw:. Yes.
Senator CARAwAY. That was the third. What was the fourth?
Mr. Love. We have been selling our sugar ever since we started to
product is just as good.as cane.

Senator CARAWAY. You have sold beet sugar 20 points cheaper than

cane sugar?

Mr. Lovw. Yes.

Senator CARAWAY. You do that because the public won't buy yous

when they can get cane, is that it?

Mr.Love. That is the idea, and we have been trying to convince the
public that our product is just as good as cane, and we have been
carrying on )ubhcity through this.agency to get rid of that prejudice.
Senator CARAWAY. That is curious. The cane people have been

helping you carry on a campaign to displace cane sugar and use

beet sugar
Mr. Lovx. No, no.
Senator CARAUPAY. I thought you said the cane growers were mem.
bers of the contract, parties to the contract.
Mr. LovE. I was talking about the Beet Sugar Association.
Sentaor CARAWAY. I was talking about this publicity campaign
you carry on. I don't know when you switched.
Mr. LovE. Since they took it over-they only took it over last
spring. I don't know whether that bureau has carried any pub.
11city o1 that particular question since, but that was oiie of the objects
we had in view when we entered into that contract with them.
Senator CARAWvAY. And that is one of the things they are still
under contract to dot

Mr. Lovz. Well, I don't have anything to do personally-I didn't

have anything to do with the making of the last contract.
Senator CARAWAY. Well, does it differ from the one you made with
itfirst?

Co
ci

fr
0

be
w

LOBBY INVESTIGATION

1395

Mr. LovE. Well, it does, so far as we are concerned, because we

set out-I have a memorandum here of the very thingsSenator CARAWAY. I am asking you now, Mr. Love, does this contract differ from the contract you entered into in 1928, for instance I
Mr. Lov. I don't think so, in so far as the written form is
concerned.
Senator CARAWAY. Then the Philippine Sugar Association, Which
wants of course, the right to import sugar into this country free,
and the cane.sugar people, who want their sugar grown, and you
who don't want these other people to come in free, and who want
your sugar to sell as high as cane sugar, are all contributing to one
common fund with three different objects in viewI
Mi. Lovn. Vel, the cane people would like very much to have
our sugar put on a parity, so far as price is concerned, with them.
They have no objection to that.

Senator

CARAWA.Y

They haven't?

Mr. Lovw. They know perfectly well, so far as the two products
are concerned, they are of the same intrinsic value. They have no
objection to that.
Senator CARAWAY. They are perfectly willing to contribute to a
fund that will give them no preference in the market and to combat
their personal advantage?
Mr. Lovi. From that standpoint, yes, I would say they are.
Senator CARAVAY. Are the Philippine sugar growers perfectly
willing to contribute to this common fund to shut their sugar out
of the market?
Mr. Lov. The Philippines are not members of our organization.

Senator CAHAWAY. The Philippine Sugar Growers Association?

Mr. Love. No.

Senator CARAWAY. Then I am very much confused in what somebody else said about it.
Mr. LovE. Porto Rico and Hawaii and Louisiana and ourselves
compose the association.
Senator CARAWAY. And the"Philippino sugar growers are not associated with you?
Mr. LovE. Not associated with us.
Senator CARAWAY. I got the impression from what some one said
thpy were. I shall go back and examine his testimony to see if I was
mistaken. What other expense does your association incur, aside
front paying the $3,000?
Mr. Love. Well, we have our Washington office and our Salt Lake
office and the expense of keeping up those two offices.
Senator CAHIAWAY. How n1uch is that?
Mr. LovE. I think our total expense would run in the neighborbond--t would average probably around $50,000 a year.
Senator CARAWAY. Do you make any special contributions, or did
you make any, toward the present pending tariff bill?
Mr. Love. No, sir.

Senator

CARAWAY.

Just. your regular annual budget?

Mr. LovE.. Our regular annual assessment against producers of

beet-sugar is one-half cent per hundred-pound-bag. I don't think
we have ever used the half cent. I think it is under that.

1396

LOBBY INVESTIGATION

Senator CARAWAY. What I am getting to is: There has been no

greater contribution this year than there was in 19271
Mr. LovE. Not a cent.

Senator CARAWAY. If it is only a half cent a bag, do you under.

take to tell me the production has been the same every year?
Mr. Lov. No; but our expenses have never run anywhere near the
half cent a bag.
Senator CAfAWAY. You have just levied this $50,000 expenses?
Air. LovE. The expenses do not run anywhere near it.
Senator CAOMWAY. I mean you have collected about $50,000 a year.

You are sure it has never exceeded tlat?

Mr. Lovz. I am practically sure of it. I can't be sure.
Senator WALSH of Montana. Mr. Love, are you interested in any
of the beet-sugar companies?
Mr. LoVE. AliI interested?
Senator WALSut of Montana. Yes.
Mr. Lovi,. I am interested in the Utah-Idaho.
Senator Wimti of Montana. What is the Utah-Idaho?
Mr. Lov. The United Sugar?
Senator WALsi of Montana. Yes.

Mr. Love. It is a company with 16 plants in various States

throughout the country.
Senator WALSH of Montana. What States?
Mr. Lovp. Idaho, Utah, Montana, Washington, South Dakota, and
one plant in Canada.
Senator WAustI of Montana. You own a Missoula plant?
Mr. LovT. No; Amalgainated owns that.
Senator WALsH of Montana. Those are both Salt Lake companies.
That is, their headquarters are there ?
Mr. Lov. No. 'The headquarters of the Amalgamated is at
Denver Colo.
Senator WALSH of Montana. And the Missoula plant is an Amal.
gamnated property?
Mr. LovE. Yes.
Senator WAiSn of Montana. And yours is a Chinook property?
Mr. Lovi. Yes; ours is the Chinook property.
Senator WALSH of Montana, The Chinook factory came from
where?
Mr. LovE. The Chinook factory was moved from Toppenish,
Wash., I think.
Senator IVAts of Montana. And the Missoula factory?
Mr. LovIm. The Missoula factory, I think that was moved from a
Utah point. I am not certain of it.
Senator WALaH of Montana. In which of these companies is the
American Sugar Refinery interested?
Mr. Lovw. .one of them.
Senator WALsH of Montana. It was at one time?
Mr. LoVE. Yes.
Senator WAxen of Montana. Which one

Mr. Lov,. I think they were interested in both of them.

Senator WALsn of Montana. They controlled the Utah-Idaho at
one time, did they not?
Mr. LbvE. If they did, it wa.s before my doy. I think flint the
Utah-Idaho people bought the Aterican .slgiril interests jll-st before

the'
time.

Se
Mr.

the I
INM
thev
Idal

Utah

Se
owie

AM
Sc

SI
can
M
FCC

S*g
Sr

M
Co.
in

Lowe
injy

meN
Mi
M
Wa,
1)ose

pron
and
trodi

I de!
IW
the
mittl
COr,
"iW
siste
wo
and
cont
agre
gene
agre
that

the
nice
wen
but

LOBBY INVESTIOATION1

1397

beginning of the war. I was not with them, however, at the

the
time.
Senator WALSii of Montana. I was speaking alout the other ways
Mr. Love. Didn't the' Ilavenicyer interests acquire 51 per cent of
the Utah-Idaho?
Mr. Lov.. I don't know. whether they did or not. I understand
they had a very substattial intere.st prior to the war in the UtahIdAho company, and that was bought, just prior to the war, by the
Utah people.
Senator WATAIu of Montlna. So that the company is now locally
owned?

Mr. LovE. Locally owned; yes, sir.

Senator WAT.Su1 of Montana. That is, the Utah-Idaho?
Mr. LovT.. The Utah-Idaho.
Senator WATASH of Montan. And did you say there Is an American Co. also?
MAir LOVE. The American Beet Sugar Co. of Denver, Colo., have
have bought
the Amalgamated,acquired
recentI
tle company.
of Amalgamated
controlthe
That is, have bought
interests.
Sugar o.'s
Senator WALSnh of Montana. 'Or control of the Amalgamated?
Mr. LovE. Of the Amalgamated; yes. The American Beet Sugar

Co. is not connected in any way with the American Sugar Refining Co.
Senator WALSH of Montana. Our attention has been called, Mr.
Love, to some correspondence here showing there is some friction
inyour Domestic Sugar Producers' Association between certain elements thereof and the Corn Sugar Products Co. Do you recall that?
Mir. Love. I recall it.
Senator VALStof Montana. Do you remember what it was about?
Mr. LovE. I think it was the (lay before the hearing before the
Ways and Means Committee Mr. Cathcart, Doctor Catheart, I suppose is his right title, came to me and claimed there was some sort of
promise made that the beet-sugar people and the Louisiana people
and the Hawaiian would support a certain bill which they had introduced some time ago in the House of Representatives. Of course,
I denied that there was any such agreement between us. So far as
I was concerned, I knew nothing about it. I asked him the status of
the bill. I understood him to say it was now in one of the committees of the House of Representatives. I said. "Is it likely to
come up at this session of Congress?" He. said, " No." Then I said,
"Why bring that up?" To use a common term. He was very insistent about it and said there had been some proise made that we
would support that bill. Well. I said. "So far as I an concerned,
and so far as the Beet Sugar As ociation is concerned, there is no
contract or agreement of that kind. We have never made such an
agreement. So far as I am personally concerned, I have only a
general idea of what your bill pu'ports to do, but I certain ly will not
agree to support any legislation unless I have a chance to see what
tlat legislation is." So we objected to supporting the bill. Later on
the th ing was hashed out in a.meeting which we had, and at that
meeting our association-that is.the Domestic Sugar Association-.
went on record by resolution that .they would not oppose the bill,
but they did not agree to support it ii any way.
78214-20-T 3--l

1398

LoBr

IN 'ESTIOATIOX

Senator WAMLSII of Mohlnaifilt Wheic Was that meeting held?

Mr. Love, I think it wits held here in 11ashington.

Senator W,%LSit of Montpina. Were you present?

Mi'. Lovi:. Yes, I think I wua..
Snator W.iisj of Montana. I find in the minutes of the meet.
iug of tie 1omestie Sugar Prioducers A.sociation the following,

nlet (late of April 2$:

h'ulred. Thati he ltI)ncsll 1kugur Producers As-sicchtlhum does not Oplos

R
Ihi, Iitu1rl-le.,I Iitll! IiI'Ing tlk',ll * * * deelrilhul fill Ih1 l. I
is an
lhigilent in ;mixed foml Ia0itlels.

That is the resolution you referred to?

Mr. Love. 1 think thit is the resolution. Isn't that tinted Wash.

Mr.

I, en C
Sen,

3r.

Sent
Seerel

Menol

t0
iI:

er

inill"r

11f yolir
if,tI Ill

ingtonl f
Senator 1AJ.,4It of Afonfna. Yes: Washington. April 25. When
(lid the Corli Productlis As:ociationj"become a1 lllember of the Do.
itiest ie SIIgar Prohlicers Associlt ion?
MI'. LOVE. I canll't, tell you.
Seiltor 'AL.su1 of Montana. Some tine prior to that?

I Ilihlk

MrI.lvi:. Slouie tiii, prior. Last siiinier some time, I think.

Very 1
for us

W.Lsii Ioof Moimnn. Did you solicit their meniber'ship

inllSenator
dit association'

to Pi
joil

tariff (j

Jis
Cori'
M'r.

Mr. Lov:. I did not.

Senator WA.sH of Montana. )id you have any talk with any of

the officer's of the Corn Products Asociation to become meiibers of

the Sugar Producers Association?
Mr. LovE. No, sir; I did not.
Snator WALsn of Montana. So that if any Ipromises were made
to induce them to join that organization youi know nothing about

itT
Mr. Lovr.. I know nothing whatever about it.
Senator W.msl of Monitana. Who is the secretary of the Sugar
ProdlerI Association?.

M1r. Lovim. The )omestic Sugar Producers Association?

Senator WALsu1 of Montana. Yes.

Mir. Lovy.. hMary V. Bromberg.
Senator IVALISM of Montana. What relation does Mr. Austin sus.

(I ilt to the Organization'(

.Mr. ].(v.. Well, at the time -thati r. Pratt. the executive vice
president left tlie association, our aociation allowed Mr. Austin
to take cale (of ill their aitrairs ove' there temporarily until they
, ic plresitlCnt. That they have not (lone,
cml get a new executive
so lie has doe s5(le of the work there for him.
SInIultOr WVALSII of Montlnll1. That is, (ie Domestic Sigar Pro.
tlllers AsNochtttion oil refer to(
Mr. Love. Yes.
St'lIlor WAL.S

of M[ontani. And how long has lie been (loing

this work, whatever it amounts to?
"
Mr. I.ovEF. Well, I think since about last-the biggest part of this
year, I shou l sIty.
SRnator WAI.sn of 'lontann. Had lie b(,en associated with you in
fny waly ill comiection with these sugar' matters prior to the time
he thlislbecame active for the Sugar Producers Association?
MP. LOVE.. Mir. Austin?
SPlltOr WAI.Il

of

Montana. Yes.

8enu
leer
The-

'

must
Mh'.

Mr.
Si.

Mr.

Stm
Mr. 1I,

ishid,
ill. If

we fi,
lhe gr
midba

sOre. w

V.lmu,.,

Tile.s s
artile.,

III In,
but tI

Will
Mr.

Aan(l

tle P

1399

LOBBY INVESTIGATION

Mr. Lomi~ He was. le has been our secretary over since I have
1xenl connected within the organization,
Senator WALSH Of Mon1tanail. Secretary of what?
Mr. JdLoIie United Stte(s Bee.t Sugar.Association,
Se)tor WAs~it'of Molitana. I find at letter' wichl lie has signed as
secrettIr Old trt aHIW)',r directed to Mr. Mecornmic president of the
metwillinee Beet Sugar XA.,ocition, Menontinee,.AMwh., of dto July
12,
.1, in whieli It($ salys:
Ifyour liil

(lit!e Vo'ltl.

ull10I.esi it

(Ile
' lt'u*lse wai h.tt
nwt O.uuI

jrt.1

Ill ile liti'dilU.C. ulit iley Ill 'tttwit 14iial iv. sivir turn11ig lilt a Ilhe fni-:410411. MI
I lf''k It wold1w mii
(S11111)1
advatl'i 1114t' to) hiave flit-lit Ill. tiivdttl11y
t ilt-

*just what Ildvantalge

(toil
ot vive would ttcelllc friin hitiig the
Cori Produets Atsfujtfttoii ib, Mr. 1431e?
,Ii-. JLomE Tre doinestlic migar Industry ais at whole hils be in
riy bad Oldit ionfl ar
t golld niny years, andl we felt thatt in border
for lls to survived it wouldjb ICwI
ecesNary for its to get aun odmqute tariff,
so we stated outt with flt, Wdeal of ge'ttintg tll t'he domestic interests

to joill ill onle iusovilittioi for that putrpo(se, 1111( that puirpm-e only.
Set'iltt(1 1WAII Of MOnltanail. till-t whalt, id~ Or Coinlort did( 'pill

ex et to get fromt the (Corn Produtets Ass.oeiition?

M. oVE. Well1, tlhey aire it (Iomet'$ ic indtistry. rTey a nakindug
WO),Otmi tons of stigmr every year. They tire at Very big factor in the
~uml'ibsiness of -tho Cotlatiy.
Sentor WAL-41 Of Mon1tin. I Waulit to CAll youw attention to a
letter mudraes;sed by you, under' ditte of February 1'3. to Mr. Aturtin.
fromii -wf;eh it comes is ptot indicated, but I timsinlO it
It is daited Februaury 13.
.Nil-. I'm&i. I ima~gifle o
Senator A1A.ShI Of MlOitanaif. W1'hat k' thatl ?

Tilt-

N-pirct,

flilist

have Ibeell wvrlttcu frinb Sailt Lake.

Mr. LovE. I inuagna'll that is tiuile; or. Cicago. I don't know which.
Setuaor WAmsu of Montait. It reaid., as fid lows:
St.r'eitry.
Mimi $lit: I tit

sorry thant I did not get to see ire' Bennett tfi'fo levin~g
Wa1.1ishiglon lut,
h
to) he f'r1an1 with Vimt. I flit riot imphjiW.4i d with labs attitude t
oi.I
t1
aeo sat ti
eie.
tillt! ~i ij'ist
e
lit
ii
we tl keep away from this bird the better. However, visi id Mi':'et tire to?
the grotindi atnd knolw iiiore about Wtin (imt I do0, but I ecrtunly dott't like, to Ile
saittl~mlg ( 'pto a deal (if thiq kind.
Titv lust t'dliorli tit him aiudi I notticed. ditted FbilnrY 3. mude(1 mue awfully
6are. wheareini hli stated : 11It tony be taken foir graituted that all tittles oib oigplrultutal tiroduiets will lip hture'twed with the postile exel-ptkion of sugtir."1
Thnis stttitetlt 1K4nlAINge1tler out -of harmtony with the- gentril tenor of tht,
artile.- liive It ('('t'iitiy has the n,,ihsartewe of being pt (tilt for tile oine midt
ibi)' liurpoKv of ok Jig us tomne through with a conttribtution. It we werpe Ini
Mitt jimirkut ithI uour mug.ttr, there would lbe eoime coisIsteicy lit tiaktig Space,"
but to pny out nIouty for a news stoiy docs not optical to tue ttttall.

Wh'Io is tite Iral Benbnett referred to here' 1

Mr'. LOVE Ile is thie editor of the Post, in this city, as I under-

,(nd it.
Senator WAL.81 Of 1Motnit.
the Post about this mattter?

TaVe YOUt 11a1d tIlly alrangelent With

1400

LOBBfY INVE'STioATI )

Mr.Lov. I understand that Ii advertising men had alproched

Mr. Austin on several occasions and tried to get him to take an ad,
a full page in his paper for our sugar industry, and just as I say
there, we sell no beet Sugar cast of the Ilhnois-Indlana State lite, and
I could see no merit from an advert'I1t*g standplnt in taking space
in the Wnshington Post. This advertising man insisted oi our
taking a page in there, which would cost upwards of $2,000, and just
as I say, ifthiat was the purpose-I don know tit that was the
purposes. That may have beeni the advertising man's idea. It may
not have been Mr. ]lennett's idea at all, but eJtorahs that were op.
pearing in the Post along tlat tlie-llrist, I nmght illustrate by
were very m111ch opposed to limitation n0( hipllnnt: fronm te
Ig h11k)hy
Piln)l)niles, but. their editorials aplpeaIed to favor Cuabi, ad so I
exprcs.ed tie idea that they were on both sides of the question, and
if it was a question of "stand and deliver 1"we did not propose to
go into that kind of business. We never have. We have never paid
out a nickel in advertising space in any iew.q)al)er, or for any news.
paper story in our whole existence, allnd as long as I am president of
that organimlio1 we never will. I Will say that.
Senator WALSn of Montana. This states:
It certainly han the appearance of being put out for the omie and only purpose

of waking us come through with a contrIbuthin.

Sen
before
Mr.
Citbar
Statedid n
coulnt
Sen
1923,
Mr.
pa
filed

got o
Sen
Mr. I
Coin)
made

dent
Si.
Sen
Mr.
Ai

What was the contribution?

Mr. Lovx. It would be just like taking money out here, so far as
advertising is concerned, and throwing it in the ditch.
SenatorW-V.8sJ of Montana. Oh, yes; it refers to the same matter.
advertising.
it Mr.
is aLovr..
bid for
Sure.
Senator WALSh of Montana. I have hero a telegram that you sent
Mr. Waters, under date of November 21, 1928, from ofWashington.
the Utah.
It is addressed to Mr. Waters its general manager
Idaho Sugar Co., of Salt Lake City, Utah, and reads:
Conference Senator and President Just concluded.
What Senator was that?
Mr. Love. Senator Smoot, I imagine,

Sen
h re
befor
in wh
Bel
onsi
r
Sen
Sen
thatr
Air.
reduce
Sen
you t

Latter very sympathetic but underlaw can not act in absence of recommend.
tion from commission,
What was the matter to which this telegram related?
M. Low. Oh, that was the matter-the price of sugar was going
down at such a rapid rate that we feared our losses would be co.
lossal for lost year, and the suggestion was made that I come on here
for the purpose of seeing if we could not get our case before the
Tariff Omnmission, and under the provisions of the present law
get a hearing for the purpose of getting a tariff advance, and I went
to Senator Smoot wit-h it and suppose he went and talked with the
President about it.
Senator WVrAsn of Montana. That is, you had in contemplation
making an application for an increase in duty?
Mr. Lov.T. Yes. I also went down and talked with the chairman
of the Tariff Commission about it, as to how long it would take for
us to get a hearing and results, and he rather discouraged me, said
it would take a considerable length of time.

Se
dent
the r
oc
tion
Frost
and,
in%'
form
o

Senator WALS1 of Montana (reading):

Mr

Letr

menda
Mr

Se-

ion
Mr

1.0111Y I XVESTIOATION

1401

Senator WALSH of Montana. You had gone through this struggle

before, had you not?
Mr. LovE. Yes. Before the ink was dry on the bill of 1022 the
Cubans inade an application, or filed complaint with the United
States Tariff Commission, claiming that the present rate of 1.765
did not reflect the difference in the cost of production in the two
countries, and we had been all through that, in a long, long struggle.
Senator WA.Ist of Montana. That struggle went on through 1922,
1923, 1024, and 1025t
Mr. Low. lhey filed a ciniplAirit in November of 1022. The bill
passed CongresCs In Septenubisr. I think. of 1922. The complaint was
filed in November, and it was next )eceinber or January before we
got our hearing.
Senator Vumtr~s of Montnna. So ou understood perfectly well,
Mr. Love. that utudetr the law an ,pjileatlon would be made to the
conmi.sion. a hearing would be had. and after the commission had
made its recommendations. it would 'to to the President and the President would then be called upon to act about the matter?
Mr. Lovr. Yes. sir.
Senator WAISAI of Montana. Bitt on this particular occasion you
went to the President first?
Mr. LovE. Oh, no.
Senator WALSII of Montana. There had not been any hearing
before the commission. had there?
Mr. LovE. The President had not acted on the complaint that was
before them, and we thought that there might possibly be some way
in which we could interest the President in that feature of it.
Senator WALSH of Montana. Yes; but the application which was
considered by the commission was an application to reduce the rate?
Mr. LovE. Yes.
Senator WALSH of Montana. And, of course, you were opposing
that?
AMr. LovE. Well he had power to raise it or reduce it. He could
reduce it or raise it, either one.
Senator WALSh of Montana. That is, on an application to reduce,
you thought he could raise it?
Mr. Love. Sure, if the facts warranted,
Senator WALS1I of Montana. What you went to see the President about at that time was to get him, if lie could do so, to raise
the rates upon a hearing had, which closed in 192-5?
Mr. Lov. Iell, I was just explaining our condition to Senator
8moot at that time, and I don't know whether he made the suggestion or whether I made the suggestion. I didn't. go up to see the
President myself. But our people was frantic over the situation,
and, of course, they wanted to know if there was any possible way
in which we could get relief, and I was simply conveying that in.
formation to the general manager.
Senator WAms of Montana. The telegram continues:
Iktter very sympathetic, but under the law can not act In absence of recom.
mendation from the vtommlsson.

Mr. LovE. I understand that to be trite.

Senator WALSH of Montana. But you understood the commisPon had recommended away back in 1624Mr. Lov. Recommended-

1402

LOBBY INVO'ETIOATON

Senator WALsTI of Montana. What is that?

Mr. LovE. I understand three of them made that recommendation,
yes; but the President had never acted on their report.
Senator WAL81 of Montana. Didn't President Coolidge act on the
report?
Mr. LoiN.. I don't think so. I think he held it in abeyance. .11
Senator WALSJI of Montana. Didn't he, as a matter of fact, decline

to grant the petition for a reduction?

Mr. Lov:. I don't think it, in effect, is a declination. I think if
you will read his report, he refused to act at that tithe and said
Rointhing about in case the prices should go up or go down he might
(id soinetblng.

foil
Bugg
Cubt

tiati
T

Senator W.sis of Montana. Of course, ho would not be permitted

under the law, would he, Mr. Love, to enter into any in(pulry its to
whether prices did go up or whether prices did go down? 'l'hlt is
the Iiines,, of the conitission, isn't it?

Mr. Lov,. I thlik you are right about that; but I think you will
find in the lrensiten6; statement that he mentioned prices, and the
condition of the-industry.
Senator WAT.RsII.

You add:

This fi'aure disagreeably perthienit

daf
106

iulder existing coidilons.

Just how was it disagreeable, Mr. Love?

Mr. Love. Disagreeable?
Senator WALSH! Of Montana. Yes.

Mr. Lowv:. Well, the condition of the industry.

Senator W.%Lsii of Montana. Your association lind a meeting out

in Kansas City in December, 1928, didn't it, Mr. Love?.
Mr. Loes:. Yes. sir.
Senator WTtr of Montana. Do you recall now the various inter.
tests that were represented? Your own beet-sugar aociationAMlr. Lowr:. The Beet Sugar Association, the Louisiana Cane Asso.
ciation, tie Porto Rican representing the Porto Rico industry, the
cori-stitar people, and the Hawaiian interests.

for

get

Sig

llAF

Senator W, -su of Montana. Five?

Mr. LovE. Yes.

Senator WALSh! Of Montana. Was there any difference of opinion

among you there as to what course should Le taken or what you

should ask for?

I 1V

Mr. Lovn. A very gloat difference of opinion.

W ,iaSI of Montana. What different opinions were can.

wa Senator
rsed I

s
spe

We
0011

and

ca
i

Mfr. Love. Well, there was a difference of opinion among the beet.

sugar. I)eople themselves its -to the rates we should ask for. 'lhe

Louisilna people, their ideas about what we should ask for were
very mu111ch higher than our own. Hawaii and the I)eet-sugar peI)!e
w 'il fairly well united. and I doubt whether Porto Rico took any
active interest in that phase of the matter, although they were rep.
resented thri; but we hail no discussion over whit rate we should
ask for them when we went before the Ways and Means Committee
of the House, and we finally, after two or three days' session, agreed
to ask for a rate of $2.40 a hundred against Cuba, or an increase of
0.05 of it cent it pound.
Senator W.1.sn of Montana. And that is what the House gave

you?

ne
of

LOBBY IN VESTIGATION

1403

Mr. Love. That is what the House gave us.

Senator WALSh of Montana. I note from the resolution the
following:
itwas then moved, seeouded, and umnilniously carried, tht the Domestic

Sugar Producors' Association urge ulon the Congress the iecessily for blecreashug the full duty rate of (100 sugar to 3.02f per hundred Im)ulds, making the
Cuball rate 2.40 and 2.00. reslpellvely. It iiso urges Ulmii Congress substantially Iureasing the duty on blik-aip molh.s-es.

That was the conclusion airrived at ?

Ur. Lov:. That was the decision arrived at.
Senator WAL411 of Motitana. And you all stood for that rate?
Mr. Lov.. We all finally agreed tothat program.
Senator WArsit of Montana. That is all.
Senator CARAWAY. This is not at all important, Mfr. Love, but you
said the corn-sugar production was 500,000 tons a year?
Mr. LovE. Yes.
Senator CAAWAY. I ask you that because yesterday or the other
day when Doctor Calieart was here, he saidl the production was
106.000,000 pounds.
Mr. Lum . I think he had reference to the refined article.

Senator CARAWAY. And yours is raw?

Mr. Love. I have reference to their total production, which is used

for some other purposes.
Senator CARAWAY. It is not at all important. I was just trying to
get an explanation. That is all, thank you.
Senator WALsH of Montana. Mr. Love, there are a few matters
that I want to ask you about. Who is Mr. S. W. Sinsheimer?
Mr. Lovr. He is president of the American Beet Sugar Co.
Senator WALsit of Montana. That is a Denver company?
[r. LovE. Yes, sir.
Senator WALSH of Montana. I have here a-copy of a telegram
signed by him to Mr. Austin as follows:
DEINVER, COLO.
hARiY
AursTrx,Unted States Bret Ruptar Assolttmi.
wet'rc-taryl

Wlashington. D. 0.:

Senator Ca per, at Mark Hlopkins Hotel, San Frnncisco, hais made one
to spwak
.selhMlthd
speech attacking Hawley ,11, and sugar partleularly. Is

Wednesday and again Prilay. Consider lmportaitt tihat ftrlh. representa.

tons l)e made to him Inmedlately of our cause. suggest youl have Chcster Uray,
and anyonO else you in touch with. wire MO.' still lVrstk:eo comtcihetlowts to see
Capper personally Immediately wI ll view giving hint ficls which nmy case
prtleuharly sugar, whit he Is doing.
him desist attacking litwley hill. tittil
H. W. 8IXNSIVIR.

Has your attention been called heretofore to this telegram?

Mr. Love. No, sir.
Senator WAuR1 of Montana. You have never heard of itI
Mr. LovE. I heard of Senator Capper's activities out there, but I
never heard of that particular thing.
Senator WALSH of Montana. I)o you know Chester Gray?
Mr. LovE. Yes, sir. I know Chester Gray very well.
Senator WALStt of Montana. He is the WAashigton representative

of the Farm Bureau Federation?

Mr. Lovx. Yes, sir.

1404

L.OIBY 1XVISTIOAr'IO

Senator W
1 A.ms of Montana. Do you thibi. it was quite practicable
to get such facts to Senator Capper out in San Francisco as would be
likely to elhtngc his attitude with respect to speeches he was making
or would make?
Mr. LovE. Well, I think that Mr. Sinsheimer was very much in
0 . If SLnator Capper was attacking
]11goof
favor of securing a tariff on sugar.
the rate out there, I presume lie felt that he had a perfect right to
express his views to hi.
.
,
Senator W u~si of Montaia. But that was not. the point. rlie
)oiiit was to have Chester Gray wire bis connections out in San
I'iuwisco to see Capper pesonally, iliuediatoly.
Mr. Lovi. Chester Oray was sil.Pnrtit~t the tariff on sugar.

me-

Capper-the facts which iight c(uts him to desist from attacking

and

Senator Wmmot of Mohtna.

With a view of giving him-that isA

the Hawley bill, and partlietlarly sugar?

.
Mr. Lov..Chester Oray had been supporting the rate on sugar,
and I presume that Mr. Sinsheimer thought that his representatVes
out in California should make that fact known to Senator Capl)per.
Of course, I am putting my own construction on somebody. ese's
letter. I probably ought no to do that.
Senator WALsmi of Montana. Apparently you wired accordingly
yourself, Mr. Love, to Hon. Arthur Capper as follows:
Reports reach us that in interview and slo.-h uit San Frani.Isco you Indicate

S
as

your present pIsitlon on Mose

.Fuar
Qledule I one of strong opposition.
This report may be Inaccurate. Nor do we mean to Interfere In the slightest
either with your independent judgment or your public and private expression.
But hoping that your mind is still open to presentation of facts on this sugar
Issue we respectfully suggest that your final vwrdl(t be held In abeyance uifl
we can present fully our side of the sugar question. Speaking for domeitle
sugar Industry with hundreds of niii'lons Invested and interests of several
hundreds of thousands of farmers at stake, we believe you wish to be fair to
them. American Farm Bureau Federation. National Orange. numerous other
farm organizations, are strongly on rec)rd In favor of sugar tariff Increase as
pag.sed In House. Moreover, measure Is still In hands of Senate Finance
Conmmtttve, and as a piece of unfinished legislation It merits further stidy
on your part Iending committee's report. We are asking Frank Sullivan and
George Rolph, two representatives of domestic industry in San Francisco, to
call upon you and offer all Information they have on sugar question. Hope In
meantime you may see way clear to withholding further adverse comment on
sugar schedule It not to take steps to offset damaging reports already attrib.
uted to you. Sugar is a basic agricultural crop in many States. Sugar cane,
sugar beet, and corn-sugar farmers Iii United States naturally look to support
from agricultural State like Kansas ili effort to protect American sugar pro.
du('eu4 In the American market froin foreign Imports produced under tropical
condlitons. Woild otl)i'.hate acknowledgment of this and address to which
we nay Intuitdintely forward by niall additional Information.
STEPHENr, II. LovJ,
Pe(S'h-nf (mlii d S:atc.* liet Sugar Assoclutio.

Mr. Lovt:. I renwmnber sending that telegram. I had a talk with

Senator Capl)er before hi, left on his trip, at his office in the Senate
Offe Building. and he )romised to give iue an opportunity some
time to explain mlly views on the Augnte question, lie went away
and I nove' got an Oj)portunity of .saying anythingto him, and I
was surprised when I get tie t'elhgranT front Mr. Rolph-I did not
get it fromt Sinsheiier; I got it from Mr. Rolph. as I rememberand I wired back as you hiav'e read.
Senator WALHsl of Monttana. Are they operating a sugar factory
in Kansas now

1mm
will

L.

did
ti

an,
an

W
gr:

to

Ca

Fr
no
fag

by

1405

LOBBY INVESTIGATION

Mr. LOVE. Yes; they are operating it.

Senator WALs of Montano. Where isthat?
Mr. LovE. At gardenn Cit..
Senator WAIsn of Montana. That has been in operation quite a
good many years?
Mr. LowE. A good many years yes.
Senator WALSU of Montana. resuniably Stiator Capper would
know something about beet suiar, then?
Mr. LovE. I ihink he does. The only thing was that I had not had
a clhance to 0 over our case with him. iud he had promised to give
mo-le Sa"ilile would be glad to hv, me cOie
C 11 p 11Som time.
Mr. Rolphi?
Senator WALsH of Montana. Who i.4
Mr. LoyE. He is president of the Californin-1lawaiianw Sugar Co.,
and Frank Sullivan is president or the Western SuarilRefining Co.

Senator WAm.tl of Mont ann. Tiat is not the Roltph who was so

long mayor of San Francisco?

Mr. Lov.. A brother.
Senator WAlsh! of Montana. I notice you wired Mr. Sin.heinmer
as follows:
S. W. SzNsurF.MEB,

American Beet Sugar 0o., Denver, Oolo.

W. P. Lwprn'r,

Great Western Sugar Co., Dearer, Oolo.:

Regarding Copper, have wlied llin direct. Wired Sullivan, IRlph; stv him
immediately. In communication with Chester Gray. Appreciate your trip and
will do utmost along lines tugge.ted.
STEPUIRN

II. Lov&

Do you recall sending that telegramI

Mr. Loim. I really do not remember it; but I probably did send it.
Senator WVALsH of Montana. So, it seemed quite likely that you
did know about the Sinsheimer telegram.
Mr. LovE. We were sending out a great deal of stuff just at that
time, and I can not remember just how many telegrams I sent out.
Senator WAuSi of Montana. It would seem likely that you did
know about the Sinsheiner telegram, then?
Mr. LovE. Well in a general way, but I do not remember getting
anything direct from Sinsheimer. It was directed to Harry Austin,
and they were handling the communications, and so was I, and so was
Mr. Sam Freed, who was in the office at that time.
Senator VAiLSh of Montana. This is dated July 23. Yo u were in
Washington at that time?
Mr. LovE. I was here; yes, sir. They may, have written that telegram and brought it over for my a)provl anid said, 11 Is this all right
to send out ?"
Senator WALSH of Montaita. Anyway, the itha was to get Senator
Capper to deter making these speeches.
Mr. Lovw. Absolutely. That was the idea we had in view.
Senator WAsit of Montana. Another telegram to George Rolph.
C. & H. Reflnmi
Co., Munson Building, San Francisco. alif., and
Frank Sullivan. Spreckels Sugar Co., 2 Pine Street, San Francisco:
Same telegram going to RIolil Sutlllvan. Senator Arthur Cippertat Mark
Hopkins Hotel, San Francisco. Relinrted lie itInterview and sleehes attack.
Ing sugar schedule. Suggest you two gentlenn see him earliest Ipis lblo. We
have wired him dfet statig you would do so. We stated you were fit
posi.

1400

LOII1Th INVESTIGATION

tion to give lili further iii'orinatlon (in sugor Iss'ue. Under.0tand Senator been
Sent
that is mind 0til1 open. lHe wil
quoted rather strongly lit litervit-W- 111141
(Il1i'recioate that his iejOri'( (I11osilIlmn Is conil'uiry to standc American farinM
evell
Bureatu. NIatlintal Oraiige. anda nuinertim. Wther foirm organizations Ilawo taken
before
lit favor of Bouse rilt"s. Ile protkiblyv ftels thtat atumber of beet faranlerg too
over t
~sali to warrinit taxing ('4itsiiiters by igar tarif, but Pr'obalbly oiverlooks
dt es not know real hlutiti('ue of Inihwtry hi nuwderoiig S1tates.&n
(013) sugsir t1114
hijKrte lihe think.ks failure to restrIct 11I1jiippies4 negatives any tariff Increase.Scl
r 1
~ uge
Earnestly reconiimd you intake be.: poii~~h effort chatige is sugar tiiriff
OPc
views, provide liuau fuhkcst available information, and persuade hini desist
SEHN1.L%.bt.(
attacking sugar pending further study.
(cell'
STE~nX
H. ~vE.lie

Mr.

sent that. telegram, also, I Su1ppose?

3Mr%LovE. Yes, sit'.

1,Ol1

Stl

Stinator WV.uISu1 if o' ntlna. What Other Senators did( You1 wait
()31 ini this illfttert besides Senlator Calpl)Cl?
Mr'. Love. The only Stiators ltz I Atilked to were Senator Smnoot,
Senator Broul!sard, lindl Senator' Tfhomas of Rialto1. I iadle, one ciii
IHii'-i*oii (ii at it3iIitllauuttet'. 1111( it wis at Senattor
(
On 811n1itor
"itonlas's sliggestionl that I camne to s'ee Senator Capper, and( he
arra111ne for the interview%, but Senaltor Capper was so busy at that
timeip I ma11de three trips." to hlis office, but n1ever gfot ai chance to talk
to hill. I talkcetl to Iio other Senator iii the Senate. I wrote one
letter to Senlator 11or111.
I' Mon~tanal. ]10w jiiiu' of yoiti' t'imc have you
Se1101natSHor.[
spent here last year?
Mr. LOVE;. I have bevn ihere since Aprlil, (devoting abont hlal omythy'
timie to the interests (if the association andl the other half to my
private business.
Senator WtAi.811 of Montana. And prior to April, and going back
to thle 1st,of Deeelir of last year, were youl here during that period?
Mr. Lovr.. I was here several times, Ilacik and forth.
Senator WATARn Of Montana. Youir'lbore is in Salt Lakce City'?
~Mi.OE Csir-.
Senator Wm.i of MNontana. I find also a telegramn from Chester
11. Gray to Alex Johnson, secretaryi California Farm Bureaui Fed.
elation, 103 Ililgard Hall, Berkcele~y, Calif. It is marked "1onfi.
dent lal." It reads as follows:
JuLY 24, 1020.
ALEz JoiNso,
gce'Ia'j
c'l~or~ha 4i'm
14rkcleJ/, Otili,.:
Iteports here Seantor L'appvr sithickisag higher duties In Hawley bill onl sugar,
Formi Isurean tt1)15 tivoen:ttd 'een igher rilies thanb Hawley bill esirriv's antd
('4)isIers sugar a-4 muuch an agrilui'ai prouiIct de.4eri'yhig proetdIin gis c~lor.
ivhenui. livestock, or' ittiiaffa $I'el. It you could~ $14.' Sentotir O'il&301, Ailark 110opMr
ktuas lHotel. Siu'an
u'so 0114l QXtilaitul 1115 matteIr with rqus
tItat)1
3t111(kon3 swt~ur 13111(1 by Wain acimauilng to pr'"s reports Ahzould lie dioti5C
ut-di'E
would
iiht
li vr hlfu.ClIESTWU
11. (lnsx.

D~o y(itt 1kuminy r11'ieatson wily that telegramn should b~e confidcenitial?
Mr'. Looii:. I do not eve any r'ascii whyv it should lie. None of my
telegrams are confident lit. .
Senaitor Wm,'.(iEf Nltaii. Ile savs thait thie Farti Biu'eau has
adIvocatedl even higher rates than thep Hawley bill carries. What (10eil
you kinw about thtat?
Mr. LovE. They did.
'

flitl to
3Mr.

preSCH

ISQent
that t

Haivie
Mr'.

Semn

rezUS801

M.r

the fil
)in

for, till
Palil'S
fiuline!

SeIl
ealppe
not to
Mr'.
eiflw.
Sella
Grayt
Mr.
8111)1)01
be all_
Sf
tile
f h

Mr.

SRena

Seula

got it,
Mr'.
Ile
tile mlli
partic-

JAMIRY INVEISTIGATIOX

1407

senator WAJLS-11 Of Montana. What (lid thiev advocate?

gr. LovE,.. They adVoctited ',' cents agilnsi Cuba.

Sonme of themi
thint
appeared
farier
tvery
Practically
thlalti
that.
eveni high101
before the W~ays and Means Comniittee adviocated a 1.( ett ndvantce
over the, present rates.
Senator Wmit of Montana. I observe tMat in your. telofgrans You
suggest that tlik,e local geflntlmn suhitnit filets and1( figures to Senator
Capper tihat might Op)eraite to .chian1lge his view about thle Itiatter, Ni~t
bit. (h'ay just merely wi'ants Johnlsonl to go 1111(1 r('ques! Caipper tihat

lie (.(!Ile hIis tItttt(k.

Mr.

Jdol".

Wh"lat is thet 9 i1'.tioll?

IVALII of "110tilnil. I wanlt to knlow whlethler you thoughtt

tilat that was- the pr1opelr mtethtod Of (oniilncv- entr
Mr11.
LoVE. 1 do0 not. I think whlen it 111011 a got a proposit ion to
present to flny1io(y., lie onght, to hfve the falets within him.
Senaitor. WAlH of Mtinia. You wilt observe that 'Mr. (I'av say
f"Int thle loot-Ii Bure-aul hm.s uIlhilted even kigher.I Itt(es tian tle~
Howley hill carrici ?
. 'I4(itrl. Ye.141o NAlontati. Do yout findl in tflt tiny3 particular
s ttlld~?
ttlId
reason il y Senator (411per shot10 111111
Mr. LOVE.. Excep)t fintt the Farm IBuro'an relpresentat ive know that
the farmers thiroughiout the country are working under at participatilngi Cont ract witil tMe Iteet-stigmt r ltc('r, lind thle nIotty it"I
Wi('h
they receive for their beetfs. tite uiltimaite amoinout wichl tlteb: rT(Sive
for their. beets. is lWised upon the net amount whlichl thle sugar comtpanlies flially get for thcir- sugar.
Ill that respect they halve a
fluinali interest ill thle outcome.
Senator' WAUiMI Of Mfontanatl. yw Bt, a morpi 1Q( Ipi('t of SESittitor.
Capper beCaulse the~ FilIl Bureau111 Federation takes th at Vie%% . ought
not to influence hlint ought it?
.Mr1. LOVE:. It Shoul1d n10t. atbs;olutelyV. 1 (1o Itot thlinlk it would(,
.Seintorl

Senator01 11'Al.K14 Of 1Mont1111. What (10 you know aibouit thiis ('ite.ter
Gray tehegi-11 in. 'Mr. oe
Mr. Lovi:. I cain not r-eall thiat I know alvtiing v'ery n11110 about it.
We lhad at number of interviews with Chester (haiy. and (%
i wats
Supporting the beet sligarl people's re(litest for what we considered to
be all adviquate toniff oil suigarl.
SPHator' WAJ..q, of Montana. Do you know if lie was opposing iy
of the industrial rates?
Mr. LoviE. If lie waq opposing anyl
Senator WAL~si of Mlontana. Yes.
Mr. LovpE. I never heard of hiis dpposing ally.
.Senaftor' WAL~SH of Mtontana. Whten you got this tolegrait froml
Sims.-iinier. or when Sinshiiner sent this telegram, I mean, or You
got it, didoll oue Ches0.tet' (ay?
Mr. LoAit. I dont k(now wftethker T (did-or not. I ('ailt not saty
ifliethio'in I(did orptot.Isa Cetr(hyagetttwie
d in
tile "'1n11ne1r. but 1 (10 not know whetiter I talked within him aioint this
particular matter or not.
S(.nator1 WAlANI Of Motitaf ita. This seems to be a pat'ticulor o(''tsio~n
Wheln Senatltor. Copper wits 'ut in San Francisco and you were re-

1408

LOBBY INVESTIGATIONS

quested by Sinsheitner to appeal to him to get into communication

.Sel
with Senator Capper.
certain
about it.
have
done
so.
I
am
not
Mr.
Love.
We
might
d0not really that weAdid,
say we t may have clone Icopy
it.
do but
no Irecal
Senator WAlSh of Montana. You do not recall whether the Chester

Gray telegrain emanated from your office or not I

Air. Loi', Oh, we never sent out anything from our office that

belonged to Chester Gray.

Air.
Ar.

C
Semi

bir. iv
Sugar

lI(we

Senator WAT.su of Montana. I have a letter here from Senator

Capper, as follows:
UxN11nI STATES SEAT
September I.|, 1029.

Sion to
this 1,
8ACotukh
AR01
adtioit

hitfr-,lato atlonol Bon, Kansas Oity, Mo.

P].Ai 31n. IovF.Y: I thank you for your letter of September 11 indicathg your
Interest iII on Inereased tariff Insugar and uote that you think enatmeint of

tenter-h
uninecff

Air. Ganta.: H. iIovxx,,'

Oi the
legislat

this measure would be of great benefit to our country. Frankly. I am either

doubtful about this. Every ftailly would lie obliged to pay a higher price for

Thn

sugar If the tariff is inereusied. We have n beet-sugar factory In Kansas whieh

is a inrt of tile Great Western Sugar Co.'s property. Only a few hundd

MI'.
Sella

Iummias farmers tre directly Initerested hitthe beet-sugar Industry. All of the
Indicate that the Great Western Sugar Co. has been making good profits
relrs
for y(mrs.

If I thought an Increased tariff on sugar would help agricultural

Industry of Kansas. I would certainly tie for It, but It looks to me very mnuch as
if It would be an additional burden to the farmer so far as his cost of living is
concerned.
The situation might be different if we did not have free Importation
of sugar from the Philippines. For my own part I favor limitation of Philippine
Imports. I do not believe it Is fair to the domestic sugar producers and that
make. it very difficult to set up a tariff schedule that will be helpful to the
American growers.
I am always glad to hear from you. Be sure to let me know whenever I can
be of service to you or your friends.
Cordially yours,
ARTHuR CAPE

Did Senator Capper indicate any such views to you when you

interviewed him?

Mr. Lovw. No,

sir.

Senator VAL su of Montana. You were unaware what his attitude

was, then?
Mr. Lovr.. I was absolutely unaware what his attitude was. I want
to say however, that the factory which Senator Capper refers to
there (oes not belong to the Great Western Sugar Co.
Senator WVLsi of Montana. To whom does It belong?
Mr. LovE. I think itis an absolutely independent company of any
other companies. The Holly interests may be interested in that par.
ticular plant, but I an not certain .
Senator WALSh of Montana. No; I think not, Mr. Love.
Mr. Lov.. Well, it is not the Great Western.
Senator WIAL1s of Montana. You are quite positive about that?
Mr. LovE.. I an positive about that.
Senator AVALsnt of Montana. However, the fact is, is it not, as
stated by Senator Capper in his letter, that the Great Western has
been doing very nicely?
Mr. Lovr.. They have been doing fairly well.
Senator WA.sii of Montana. You say" fairly well "'
Mr. Lo,. Yes. Fairly well.
Senator VAL9.s of Montana. Haven't they been doing extraorili.

narily well?

I still
standpl

we are
counter

Tha
cdatioll

Mr.
Sen
As y,
the fall
it the t'

eolItc
an lier
ains!de

mile( o
in thut
in favor
which"
We cn
an iner

Did
Mr.
tSe
Mr.

Sella

II l1
wlith fh
foregn
as IxI
0nstle
are r:v,
this hg

will ll,
let it lie

LOBBY 1XVESTJOATl0N

1409

Mr. LOVE,. No; they have not.

SenatorWIALSiK of Montana. You have the figures, of course'!
Mr. LiOV. Yes. I filed the figures with the Sentate and you have a
Copy of my report.
Senator WALS-11 Of M101t01n1. -1 have a letter' fromi Mr. Austi to
Dir. WV. 1). LIjppitt, general lmanager of the Great Western Su ar Co.,
Sugar Buildinig, Denveroi, of (date lFebruary 4, 1029, in Which le says:
il(tweverl, lil tatlkinig with

i',cor ('alilicart here IaulitWsingzicn. I too~k oeviu-

Sion to exjcresm thle optii thit lie Mitle eedita very iii0111citurtle time too roreeo

gts Issnav; (liat the-re wats no itinlate1

;mi
111111e
thult I
lie.hth
sl~igu hiave witited tunt (lie Ilext ineetitig of tile Domestic 18tigar Piroducers!
AssOeia1tIUII, wheat the inatter could be lnmpaissiohtoi dlis si and furtid
atctitin taken fly the association, I extained too him a t everybioty wit'. 111
teliter-ifiEks busy it the lieurmigs, mild thtat, III Illy o~InISa111i, St wlis rather
untwtfiii to tittenilit to divert thefmi flhIik hmsiesrc ii ni'eier to tit (ate ilm-ee~
on i i~,
oositioli wichel the Ismiadattiw, inighit foarmially takhe tin fli'
i'rtaliased
icglslatitoll.
hant is thne so-call('( (ole bill1, 1s ite
Mr'. J4Ivr. Yes.
Senaitor I.-oi Of .110nt1ana1. lie Continn1VS:
I still II)) of the opihan thatt It would hes politic aint] ateivlsable from at st ste i('l
standpoint to endorse this proposed legislation, notwithstainding the fliet that
we are encoutiterliig 501110 compeatition front vorn stigar, its we ure allso entcountering cipetit ion from Louisiana, h1awalim, anti Porto Itlvnii Calie.

TChat view, apparently, wits not eventually adopted by your assoelation, Mr. Love
Mr. I~ovi. It wits not.
Senator WAl.141 Of Mo11nft . He continues:
As you probitl)13' know, iHeaatiar Cappelir, One of th! promuinent leaders (if
the filII tahole III the Senltme. atil! Coangressinaitl Code. ia(Idin~g it like poIntio.
lit the Hiluse. huave slooausur'1 the (ciii suptar hills. Both (f thom getitli-neit are
rxrmpley frien-hly to fts liet Indlustry :aid I iave Pstaldllyhel very frieili.y
Conitacts w Ih uhenii titIl. 1 Ithik we will find them aiggr-slvely for us, cai
an incr('itsc lin the sugar tariff. I know that when President Coolid-e wits

ainshdering thle report oft tlm Tariff Coinmls'kan lit thi si-vr iias.' M C:1e
coiletl onl im personally andi urged him to resfus.e tooaccwept ft- meomintiidton
of the imtijorily for it rednetciu in thiv fluty. I believe It s support aid(,d us
in thut case. Senator Caiaper Iitw l('jwatedly advised tie tit ht- Was4 sirsan1gly
in favor of euicoui-aging the leet.sugar inditstry. Hitt If we oplitse at bill

which lie is sponsotring lin the( interest, a,. hev believes, oif flit! American i rmers
we can hardly expxet Win to enthu~masiteahiy Pnlifirt u-; lit our eifoils too -.* cume
an increae in duty inI order to protect (Ut' Industry.

Did vou kitow of that letter?

Mr'. tLovE I did iiot.
SenaRtor WALS1 of Mlontana. Do yoit indorse the views expressed
there?

Mr'. LovEF. I do not.

Seaftor WAI.S1n Of HOntAna. Ile continues:

Iii ewv of fltis I blieve It wtalld plaice us ii a very enibarrtss4ig jio.itiiii
w~ith these two iprimilieiit M1t04eimu.n teaoo M1s.
lmiis%which the y hold nidead(4
which iley li' eve Would I~ Of imidit Ito Anwriepoi farmier.- iby mshutting (out
ffireigit suir'4 11tiad j'ro11Chuing as nmh (if flhat commoidity oni American farms
as Itmis
bliiit. Tirder, 14 no doiWlit Ilit the (ornut~lgir hiellitWie at Very
ce'ti1qhcleitiile fillowig In CoIfngrovss it1id thitt the bairge foarm1 (irgaIli~zit bus'
are f.-wiprlng their propmmed ieglatian, and isiule front thle tjuesr'on of whether
the Oinestie Sugar Produeers-' Asgceattomidc or didt tint agree to Indarmab
this ir-gislation lat tMe Invein III Chicago. I believe. Inl View of (lie fluhit we
will hiiive 4-1 tho mugalr ttir~ft lin the next ('omigress. It would lie a wise icliey to
let It lie known fhint we fav or their I4'.t lirmgtam.

1410

LOBBY IN VESTIGATION

Yllt were ilot able to siilb.-Crile to thiit jView?

Mr. lov:. No, sir. I think that every proposition should ImIni
sented to the louse aind S inate on its own merits. If it hsli't mill
nierits, it ought iiot to be considered.
. eliitol' CAliAWAY. In view of tlhiit stiieilPlt, why did 311 eilter
i tliU oti!would hlot Olj)to.e their bill anid thit4 tiley
into till aigree'int
should collie into tle iisocititon11
A'.. LoyuE. Bieciuse we did lot know Vliat the bill liUrloired to
io, olll ii aI general way.
eimiitor ( uW.%v. Wliv"did yOU tie Your haidis not to oplOSe It?
Iyf ol thiiik every bill olglit to stilid Oil its OWl, ilerits, why did
Voi n11lk0 aill%" agreetllnt tollellilg it lt all?
.9

Mr."
selill

to risk
ig eY

Mr.
Mr.

agreenl

31r. Love. WelIl, quite a nlajoitv of the people ill out. oi'gliiza.
would iot say in lour oigali/itioii but in tile lowest ic-sigar
io-I

Mr.
,i'1ll

Mr. Lovi.:. ''hey thiink it hals sonO iierit, so they could see no
hirn1 iin lijisihig tiat sort of it resolution.

Mr.

orgaliization-feel friendly toward that bill.

neltlilOl ('.l.wRA . ''hiA; is not What I asked 1,Oil.

Selitlor C..WA., I wias not asking you what they thought. I

w asking voi: You say you ig'ced to this resolution. That was a
trade oil legisliion, was it ,lot?
Mr. Lovi:. A trade
0enatOl' CARAWA.i'

Well, jilSt wait a1 miliniute.

You agreed you

woild not oposo theirs and thoy would support yours?

Mr. LovE. No. They did not Igl'ee to support ours.

Senator

('mAW.my. Of

course they did.

M'. Lovr:. Not in the resolution.

Semiator CAIAWAY. Well, the whole correspondence that led up
to the resolution-you have iad itl
Mr. IovPE. I know all about it, but we did not itake any agreelelit
with thieni at all.
Senate' C.AIRAWAi. Isn't that ain agreement when you will not
Olose their legislation?
Mr. Lily.. No, sir; that is not an agreement.
Senator

says t
Mr.
Sent

Of CousIO.

.Mr. Lovi. Why, no.

SenAtolr (.A.AwA.

Mr.
slll

:.AWY. What is it, then?1

Mi'. Lovi:. If a person has something that lie is going to pi'esnt

to Congress and lie comes around to you and you say you don't know
what. it. is, but you say, "Well, I will not oppose your proposi.

tion "-

Senator CAiiAWAY. What did you mean by saying you woihl not
o)l)pos it? Why wore you called upon to act upon it at ill if you
ve'e not making an agreement?
Mr. lm~vr. iReeuise there wits a sentiment there, and theiv, was a
division of the seuiilielt.
Senator CAIiAWAY. Part of their wanted to indorse it and youl did
m)t? You comlroiised by saying yO would not oppose it?
A[r. Love. Well, that is your opinion.
Senator CAlRAWAY. Well, what is yours?
Mr. ILvt:. Mine is that we made no agreenwmit.
S10ator 1( liARAW . Your resolution speaks for itself.

rteoliit
Mr,

fellow
Pll
a.kin,
YOU VMr.

bill.
Seni
yoll

yell i
Mr.
Syil

Mr.
Sen:
Sel

rtsohil
Mr,
Sen
Sm
hve
Mr.

the bi
Sen
thit Sen
nlore

LOBBY INVESTIGATION

1411

Mr. lov. Well, We will let it go lit that

No; we wil not let it go at that. I ant going
Senator C, .w,.
to ask you if you do not know that that was an agreement. An
sgeemeit I1itMitins ai contract. Isn't tlnit so?
Mr. IAlWe. Well, the1 did not agree to Suplort our bill.
(.mit.VW.Y.
the resolution tinl correspondence.e4ititor
l(s not say anythlig about their
-( 'I'le lhei
l';oliitiol
Mr. LOtVF.
agiteei
kenit. (',
Senator

wA'Y. The resolution was based i loni their coming

your

into
a.mociatioll. You have read Doctor Clthcart's letter?
Mr. Lover. I read his letter.
S'llltor CAI.\WAV. Wasn't that true ?

Mr. 1oVE. No; it. was 11ot. le*is all wet on that thing.
selliltor C-c,\IA.Y. Ole, yes.

Mr. Lov. Absolutely. All wet.

Sellator (',.mWr. fie said yol all went back on yolr ngireentent.
Mr. lovr:. Well, lie wits tnt there. lie domis not k{now anything
about it.

Seluitor CARAWAY . I donkit care whether lie was there or not.

He

says there was anl agreement.

Mr. Lovr There wits no agreement.
Senator CARAW.AY. WV'e yo

there

Mr. Lor:. Yot bet I was there.

Stenator ('A.AWAY. Thebn why did you ever enter into this other
iesohition if there was not an agreement?
Mr. LovE. I have explained that to you, because a majority of our
fellows were .m.vll)athetie.;
Senator CAiAWAY. I ant )iot asking you about a majority. I am
asking you if you (lid not have sonie kind of till understanding why
yoU 'intered imto this resolution?
Mr. LovE. We had no understatling that lie vould support our
bill.
Seiato' (AHIhAWAY. I was not asking vou, about that. You are
trying to get around the question I ant asking you. I asked you if
you . lid not have some id of an agreement with hit. why (lid
you have a resolution that you would not oppose their bill?
'Mr.
IovpE. Becallse, as I have said. a great many of our 1)eople were
symiathetic with their bill.
Selltor CARAWAY. O11, no. Tint does not answer the question.
Mr. Lov.:. That is a good answer, too.
Senator OARAWAY. No, it is not. I asked you if you dift not have
some kind of an understanding with them, why did you pass that
resolution ?
Air. riVm. The resolution speaks for itself.
Senator Cn.,w.tY. No, oit. Why (lif you lass it if you did not
have some kind of an agreemnetit?
Mr. Lovr.:. Because of the syl:nathetic feeling there was there for
the bill.
Senator CARAWAY. Everybody knows'that is not an answer to
that question.
Senator WALSH of Montalla. I will (all VOur attention to a little
more of this correspont(lekeo.
lhpre is5 o1), f-i.,, A. A mftl to W. 11.

1412

LOBBY INVESTIGATION

Wallace, president, Michigelian Sugar Co., Saginaw, Mich., tinder date

Mr. I

of December 22, 1028, in wich he says:

I have

I inet Mr. N'oon at tile meeting of the American Form Bureau Feilertin
lie was oDithe resolutions coumllittee
Inl after I spke before that teethig, Wanted to know where I iatd beell all
this time tht hie hal iul heenu Ini toUcl WiI Ilt. 11 til itis ie;l of the
Mleihlgan Plirm Ihureaul, lie wIas going aroup mi l get the fIrtiers Itroused~ to
Iltl',se litthe -ugar tariff mid thait lie would like to litire
tile am-wIty tita
m
hii
101emi
till
tie shtln4 I could. lie s a it'ery bright Mn Illid iI go(id hlker,
and I. wondler Ifyou (Ould n(t get hiItI to ainpeair before Ise WiV.s aid Mean$ls
Colmitit
oilliehlilf (of the Farm Ifiirctt of Mlehilgall. I thlIk we should
have one or two fli6r14 from e eidItbeet sectlitiu go (ill the talidl.
I woIlddl
glad to have yoll aivise inu If you get In touch with Mr. ,os'n.

farmer.

Just before our IKiiwsts City meeting.

said thi
to them
Ilse$.

ilivO to
oWl) Ili
Senat

fields II
I
Mir.
Seilt!

M. r.
Mr. I

Wits that in Conforlity with your idea of getting some farmiers

front each beet section?

Mr. l
Xes.
Y1'i:. It was- our idleta to iaiVe o11V practical men in
the industry appear before th various committees,
Senator WV.saa of Montaim. The idea wits to get some farlnlers
there?

fo Vll

Alr. L4wI:. Well, yes; they grow the beets.

Senator W
i,.lof Montiln. A telegram to youi'self tmider date
of Janimar 5,1921), front Mr.Austin, its follows:

Mr.
n1rch
seiiut
Iaee, as

rl.
illscat

S. 11. Levi'..

youl kn(

Care of UtahlIdaho .HagarCo.. Xalt Lake (Ity, Utah:

lhtve consulted (iester (Irny regarding lppearaicet filtIlrsm before oill-.
tatittee. lIe suggests you Ittdvse FIrank I.VIvlIIS ik oplitio fua'a representatives
better appear 21st itld 22d by all neaniS.
li.xtity A. AUSTIN.

Air. I
oI
one is
Beliat

Who is Frank Evans?

Mr. Lovf:. He is general counsel for the Farm Bureau Federation.
Senator WAIJ-41i of Montana. Where does h live?
Mr. Lev:. Salt Lake City.
Senator WA.sH of MontA6a. So the idea was to get farn.ars down
here to appear before the committee?
Mr. LOvL'. Yes, sir.

SUgar C

Senatr WAmsi of Montana. I have a letter from Mr. Wallace,

Lippitt

Father

or others
This:Beet S
Mr. L
when bthey pa
absolute

manager of the Miciigan Sugar Co., to Mr. Austin, front which I

Senat

read:

took to

'ailher also received it letter from Mr. McCormick, of the Menomlnee River
Sugar Co., qu"sthloihg the advi.nbilify of our paying file expeses of farmers or
.ti..s whom we tok to Wit.stillautn o tlli'lf Illatr.'., otl Iher ieglsltliln.

to Wits
Mr. I

Is that in accordance with the facts?

Mr. LovE. I did not hear the question.
.I
Senator W.ml.a of Montanar. isay is t lat illm cordaice with the

Semiat

facts, that yott brought farmers here whose expenses you paid to

their lit

coRle hero?

Mr. Il
not

Mr. Liv-.Absolutely trot.

Senator W .su of Montata.

way?

a Mr. (
from L
think o

)on't you understand this letter that

Mr. Lovm:. I don't know anything about that, but we paid no

faller'*s ex

e s-olr assO(plliatlli.

Seaoer W.AL.s,

lint

sight b

Senat
Mr. 1.
Senit

,I

of Monilttna. 'l'his says:

Father ailso received a letter from Mr. Mecornlek, of the Menoilnee River
Sugar Co. quiestlolihg the ailvi-ahilly of our paying the expenses of farmers
or others whom we took to W04s8lllglsin.

LOBBY INVESTIGATION

1413

Mr. Iovim. I don't know anything about it. We paid no farmers.

I have absolutely opposed that in quite a nunbor of cases when
farmers have been asked to come down to Washington, and have
said(that.they were not able to pay their own expenses. I have said
to then in at most frank nianner that we would not pay their ex.
senses. If they caine and if their expenses were paid, they would
have to be pliil out of their own organization, but not out of our
owl) I1Oiov.

Senator 1V.l'sAL of Montaita. These beet sugar growers in most

fiels hIve thibir own associations, haven't theyI
Mr. Loot:. They iiitvO; yes.
Se,,uor WALsu of Montana. And they have their own funds?
Mr. fjovr:. They have their own funds.
Senator WAi.Mi of Montana. There was not any particular reason

for your 1tialng their expenses down here, was there?

Yr. Iove. Absolutely not.
Senator W.Isii of Mo1tt1na. In your Viw, the tariff is just as
much good to them as it is to youth
Mr. Lov.. Absolutely.
Senator WAmmis of Montana. 1his is written by a Mr. R. N. Wallace, its assistant general manager of the Michigan Sugar Co.

you'i know '. Wlidltcel

I)o

Mir. Li:. There are one or two boys there. I dont know which
one is I. N. I know the father very well.
Senator WAl8sh of Montana. He says:
Father niso received i letter from Mr. McCormlek of the Menominee River
Sugur Co. questioning the advisability of our Ipying the expenses of farmers
or others.

This is addressed to Harry Austin, secretary of the United States

Beet Sugar Association.
MI. Lovt. Vell, that is the Michigan Sugar Co. lie is talking about
when lie says "our." I do not know who inade the suggestion that
they pay tie farmers' expenses. I know that Mr. Mceornick, Mr.
Lippitt, and Mr. Petriken, and others of our association have been
absolutely opposed to paying anybody's expenses to Washington.
Senator Ai.sn of Montana. Anyway, lie continues whomm we
took to Washington." Do you know of any faripers who were taken
to Washington?
Mr. Lovp.. I do not.
Senator WALSH of Montana. What farmers actually (lid appear
her ?
Mr. LovE.. Well, the record will show. I do not remember all of
their names. I know who appeared from Idaho and Utah. I would
not undertake to say thie names of the other nin. T know then by

sight but I can not recall their niqmes. There was a Mr. Carlson anl
a 31r. Ctnunnings, wlo came from Colorado. and a M'r. Ferguson
from Utah. There was It 1mn1 caie down from Wyoming and I
think one from Mlolitala.
Sena1tor WAl.lsn if Montana. Do you remember the Montana manI
Mr. Lovi:. No: I can get his nae.ll.
Senator WALsM of MHontan. 'Mr. I. B. O'Donnell, was it not?

Mr. Lovt. I think that is the man.

0*8214 -20-PT 3--12

1414

TABBY' INVE*ST10IAT10N

Senar11V41'W I.II Of Mondltilna.l

Mr. Ali-, lti did ntot sectil to have quite

tile SaiBO vie1ws- li)Ilt this loliL'Y as voul lilt ep1 ssefl. I have hlis
letter 111111cr datte of Janumary 10, to Mrt. it. N. Wallace, fissistautt geln.

cral tiniager,.AMichigim Suigar Co., Saginaw, Mliei., ill which lie says:

I amu li rcetc&i o yours tof January 7 itaut it glint 1.) kniosw Ithat yfill Ilre in
touci wMilt Mr. Noont. lie was tll-i till resxoutions cou- illlt
opt tile' Aimeiie,
Farm i 'leritiou Bulreaut wlmti I 11u11101red WM'v)e tlwai liiU~g ilU114191114
ll
!tll4Y
to J4'i at ro'limo lhroulgll Iiisrsig limt IlIve&se lin the vugur W tai ndI ali,.,
the6I'liliiimpilet rest riellon. Ile Iajqommae1 to lie tol be it live wire dull1 espt-thiilY
Intert'sile'4in till Ilierense. tariff ti sugur. and i e askedo ale to fll him til %vtIliile.
dojK- fil WylgV ii' 3flt' It. Fiiti IllS. cr4Iss-ex13iltl.onl isf 33it' I ril'Illtat
Ile wVim-i In ll) whoII would~ lit, h1I.
ol
Il 1 l s fio-t 111dtitiSiotrl
f.)1.1.ills
Is JIl.-I willit
T..t'Il

WRtiLf1itlIldiI)'le so1311 lieit'imill41

will

us ittid wvill itsk questions wvitl ht

lilt, C.iiiii1ii1tteet't

Do
Feder

warSilil
AD
unot t

good!
li

dlid 114

tils

wh'vi opposeheo

a1f lilt-a'i
iuhii
111911 W1v1iiu'ss lintil io.sl,
1610rMid
us I soay, I think 31r. Noon could l haille hiteif wvell Ini a ons' for this kiul(].
As futr ns fihe coiupimies' gsaylnig the xjmeu-g 4f tMe fotrmers. I cim sePe
no
objection to letting It be known filmit tII%- Is (Ilite.
Afr. Lo)ve. I will .411Y' 1iih BOW thalt tile' tI('~elllt tll Wouild Hlot ill.
dose that luitt Wouild not. 3lEli'ilt(
iPHUMPiY for. that purp'lose.
Senator 1VAr.n (of
tAna.fil-Ikr. Auistin Could not s44eany objet'.
tion to eveit letting it he knownk thait You Would ply thle expenses.

You
) 11 'ii'f

Wou- 011Wm
'
olijt'tioi
I
Mr. LovR. Absoltely.
Senit(Ol' WAISU1 Of M[ontana. Aiiothei' letter fromt Air Auistin of

Mr.
S

Thle

See
went

becanl'
from

Lefor
Sell

date Januilary 19 lo Arr. J1. WV. T'l'ilro1. iesitdeit nllintgel', Utah.

inle,
Ur'

I~lliile tit 3rt'stlit to Ill ( P11.

We havwe been bus-y till weik getting ofur oioqk'lit
uiiituee. 0Our tutu ibascele de fori Molmiliy 11134"J'lesdoiy. it'presvii st IviN. of
praclticalhly every~ iit't'tstigtr tisilt
lit fit- (lcti 3'. both.1 fanr llo
nd nu*

hiave

1(111110 Suigni' (o., Bellingham, Wash., it) whichi lie sayx:

facteirer, airt' lit-re ond have reqluested 111,opportunity or presmiting their vims.
It lils bien tln' Jill) oif fill.%01h.4, to cutlIA1Ihiiitl theoill Ini sit a 1llIllIl'r it. toso
compily)3 wih tMle cliflitI'L'4.s 3'eih'ist 11im1l 1111t hlve hillf a dim-'n ppoeijt (.4veriig
theSilt'$111 groundo.

Just What imS

ilean-ft 1) thttt. cooI'dilI-fttici)l of lllpose?
Mru. T.ov,. You knowv when pee4)1 al)lwil'l before 'olflitiitteps, a
O
bit (lozel 1110i1 will Covell tie SUM 110111oiid. It bwits onr ithat as,
far um the beet end( of tile thing wasu (convemhWel here. the farmers
Should Cover thalt And certain Othier filaturlem of the bill Would be cur.

orcol by different itm~.

We xveke (tring to work out soni sort of a

systcniatie way of )re'sehtintif ll' (')1'O htfith i'(1, oilliilitt'"4.

Senator WAIS-If Of M0ollaitil. I liave anoicther. lette frontm r

Austin

to. Mr. Mcecormliec of tile Mettoininlet Itiver. Suigarl Co., ats follows:

fl7i
stronger citse tHil 11Ilei thosit at any
tilm ntill?
li' pst. romwmi'd tile Will of tie10c.Vl a I W118 a HitMO fiatiuh that
we had1( tired tlie comnitteo It%- having so mny faarmewrs nui represeiitaIves of
formu orgatlzamtionu: a wabr. hult, aus a ialtt'r oif fact. I tink thereio lay the
smiegtla of our case. "it is thie flrst titmle thait we, litive 13114
sueb. a pre'jilInlerte
mllss of tetximy fropia farmers and10 fourmi orglzIaitio. tint I believe It lliit1k
a1 good ilimhresslou iEN boilt Itcpubilean 1mid1Di~mmuericl
mnembers of fte con11vi
Bly

(fie li

said,

tumild.
And
to) estil

It coait

Son

estub
A

Irith
Sur',
Tile

fib! Imrgi'. I tink wit presenteit'o

mittee.
It I,., also thep firs-t litlet we) ihave ever idi tie two larige farm orgatzntlons--.se
the Aumericamn Fom rneatt l"llerimtioli a11ol4lithe Nilloiail (I311llgi'lthusiasVealiy muiptorling tiiill'1o Inces ilt lmdty till sugar. antd I tMink tilt
If the
ore than11 to esatsti11'4 mm-t' a
Waiilingtoui oftfice i 1never
13CV(.
1111'1g
miyimlm
friendly eoluet wilt hv-mi'tw liowerIf~il itri
olrgauitflos 11 coldeve Hum))
i~
rest onl 1it lalurels-.
Trwo of flipa largest mu.,; ,terviee *rmlitoIllii
Washinmgtoui. 'which, of
cours', tire0 tisittresit'oi, preollet that wit will utvt it sttii~mitia tiI:l(rea1si i the'
sugar duty.

TIh
MIA

Mfr
that t
Ai

SOe
ingto
Aht
t

LOBBY INVESTIGATION

1415

I)o you know !ow it eao about that the Americati Farm Bureau
Federltiol and the National rangee have betn here during all these
.ear.-at least. since 1920--and that this was the first tine you got
themt .
Mr. Lovw. No. I itever could lder stand wihy the farmers. would
lnot take an interest in the ditty on beet sugar. I have said that it
good many thles in adres es tiat I have miade, breauwe they are Just
as deeply ift(srested ill it as we are. They get inure than half of the
I never cold understand why they
i1moITey we take in for sugar.
did nut take an illtere.,t in it, but I do not recall that those organizations wiro Ilire in 192"2. Thoy way have been.
Senator W.AL4n[ of Montana. ThI National Grange certainly was
lere.
Mr. Lovl.. Probably so.
Senator WALSI of Montana. That is an ancient organization.
'lile Farm )Bureau Federation, my recollection is, was organized by
Secretary Houston wlel h Was St'l'tary of Aglieulture, and lie

went out in March, 1921.

Indeed, lie went out before that time,

becallse lie called Secr ltary of the treasury, so that it dates at least
from 1919 or 1920.
Mr. Loi.:. It is possible. I have no recollection of then being
before any of the coiIittee..
Senator W. rsu of Montana. And 'ou. do not know what was the
influenee that brought then in line tlis time?
Mr. Loer. Wiell. I have beeln saying in our news releases that we
lave been putting ot-i
have been calling attention to tile Value of
lie beet-sugar industry to th, farmers of the country, and we have
said repeatedly that the beet-sugar industry is e.sentially agricultural.
Senator WAL-s11 of Montana. He continues:
And I thhik Ilt If the Washltgton olilCe hal I-ver do, to anything more than
to)estamslih such a friendly conltuet wit these two IK werflul far'li organizations
It cou(l even then rest on its laurels.

So that Mr. Austin apparently gives your ofice credit for having
established this friendly association.
Mr. LoV,. Well, that is his idea of it. We have friendly relations
with Chester Gray. I don't know about the other organizations, but
our relations there are very friendly.
Senator WALSH of Montana. This letter continues:
The Kipltnger Weekly Letter Service says: "Sugar tariff rate -stuation looks
much better than a week ago."

h'lis is February 1, 19 2.
Do you have any relations with the
Kiplinger WVeekly Letter Service?
Mr. LovE. None whatever.
Senator WALSH of Montana. Do you kIow about their letter
service?
Mr. Lov.. Yes; we take their service.

Senator W.Jsir of Montana. What elge of the character of stuff

that they put outI

Mr. I:ovp,. We take that Whaley.Eaton service and Kiplinger.

Senator WAT.jsi of Montana. ''he Kiphinger service is in Wuashington I
Mr. LovE. Yes, sir.

Senator W.rsI of Montana. And the Whaley-Eaton?

1416

LOBBY INVESTIGATION

Mr.LovE, I think they are here as well.

Senator WALSH of Montana. They put out a weekly letter purport.
ing to tell what is going on?
Mr. LovE. What is going on in Washing'ton. Yes.
Senator WALs of Montana. That is al.
Senator CAHAWAY. You know Mr. Royal D. Mead?
Mr.Lov . Very well; yes, sir..
Senator CA.AWAY. He wits present at a meeting about which
J)otor Catheart wrote, as to entering into an agreement, which you
say was not an agreement, between the Corn Products Co.--is hat
the name of their a.sociation-the Corn Sugar Co.?
Mr. LovE. I really do not know tie name.
Senator CA11AWAY. Well, that is all right. It makes no difference.
I say, Mr. Mead was present?
hr*. Love. I am not sure.
Senator CARAWAY. Well, do you know Mr. W. Parker Jones4
Mr. Lovw. Yes, sir.
Senator
nA11AwAY. Who is lie?
Mr. LovE. Attornew for that organization.
Senator CARAWAY. Was lie present at Kansas City?
Mi. LovE. Yes; I think so.
Senator CARAWAY. Mr. Mend, when lie was before the committee

the other day, was asked with reference to the Cathcart letter, and
Senator Welsh of Montana read this:
At the present time the representatives of the corn.sugar lnuustry do,not knmw
whether the understanding definitely and clearly arrived tit as i comil [on of
your participating in Domsetle Sugar Producers' Association is to be fulfilled or
repudiated. We wish this situation clarifiled by action of tile board its ear;y as
possible.

T
ar
men
p

Po
you

Rl
Say'
in
Sug

liev
11y
Peo
git!

Me
ne
and

Stigil
reca
MAmi
T
pres

into between the domestic ugar and "orn sugar. I say that is Doctor
Cathcart's letter.
Mr. LovE. Yes, air.
Senator CARA AY. Mr. Mead was asked, "How did you clarify
it "; that is as to how the agreement stood, and Mr. Mend said:

Lea
,or
A.A
L. 1
ThoCiT
prob

Clarified it by adopting a resolution which I offered, that we would not oppose

and on my statement tlat that was alt that was ever offered
the
pi-oph,,
corn-sugs ir bill.
the corii-,qugar

the
tion
offce

So. something had been offered the corn-sugar people according to

Mr. Mead.
Mr.Love. Offered them?
Senator CARAWAY. Yes.
Mr. I4)v's. I do not recall flint anything was.
Senator OA.MrAy. According to his language something had been
offered.
Mr. Love. WVell, let me explain-Senator CARAWAY. Well, now just wait one moment. - I want to
get this straight. I want to Iad again. This is reading from the
Catheart letter:

Cole

At the present time, the rcpresettativws of the corii-sugar Industry do not

know whlnhtr the Uliuerstalllmig defliiltely 1d clearly arrive tit a.4 a condi.
tion of our participating In imonwstle Sugar Producers' Assoe'atlon, Is to be
fulfilled or rjlldlaited. We wish this situation clarified by action of the board

Now, that undertakes to say that there was an agreement entered

us crly ts possible.

T-

all
men

then
Ussis
b
S
r.
Mr
me

is Ir

LOBBY INVESTIGATION

1417

Then Mr. Mead said they clarified it by adopting this resolution

agreeing not to oppose corn sugar. So tiiat there was some agreemeit, and this is the result of that agreement I
Mr. LovE;. Well, if you want to term it an agreement.
Senator OARawAY. I am staying tlat is what Mr. Mead says it was.
Do you contend that he was wrong about that?
Mr. LoVE. Well, I do not contend that hie was wrong. I have given
you my opinion about it, That is his opinion. My opinion is
different.
Senator CAIAwY. Mr. Jones, you say was present.

Of course, I

ain not trying to make you adopt Mr. Mead's opinion. I am just
saying that is What lie understood. You started to make a statement.
Mr. LoVw:. I was going to say this, that there is not any question
in the world but what some people connected with the Domestic
Sugar Association made some promises to these corn people. I believe tiat. I believe that that is true, hut as an organization, we
never did, and we can not be responsible for individual acts of those
people. The only thing we can be responsible for is what the organiiation does.
Senator CARAWAY. Of course, I am conscious of that fact, but Mr.
Mend thinks your organization did enter into some sort of an agreement. Here is Mr. Jones's letter. It is written to Mr. Cathcart,
and reads as follows:
lieferring to our discussion as to what transpired at a meeting of the Domestic
recall that I attended this meeting as counsel for the Associated Corn Products
Manufacturers together with Mr. Chapin, Its secretary.
Tho others who were in attendance at this meeting were Ernest A.Burguleres,
president of the association, and Frank L. Barker, of the American Sugar Cane
League of the United States; Stephen Ii. Love, W. H. Wallace, G. W, Mc.
Cormick, W. L. trken as proxy for W. D. LUppitt, F. L. Crawford, and Harry
A.Austin, of the United States Beet Sugar Association;-R. D. Mead and Henry
L. Scott, of the Hawaiian Sugar Planters' Association; F. A. Dillingham, and
Thomas Subirana, of the Association of Sugar Producers of Porto Rico.
The president of the Domestic Sugar Producers' Association extended to Mr.
Clhopin and myself most cordial welcome and Invited us to state definitely what
problems there were confronting us in the way of legislation. I stated that
the problem In which we were primarily concerned was to bring about legislation by Congress which would remove the discrimination now made by the
officiaht' administering the food and drugs net against corn sugar. I also
invited attention to the bills introduced by Senator Capper and Congressman
Cole to remove this discrimination.
There was a considerable discussion of this problem in the course of which
all of those who participated expre.sed their sympalthy and several of the
members, especially Mr. W. L. Pet riken, stated that all wo had to do was to let
them know when we were ready to act and they would render us all possible
assistance in securing the desired legislation.
Sugar Producers' Association at Chicago on August 13, and 14. 1028, you will

Now, you were present?

Mr. LovE. Yes, sir.

Senator CARAWAtY. He says that is what was agreed. Do you think

Mr. Jones was mistaken about it?

Mr. LOVE. I do not think Mr. Petriklen ever made any such statement.

Senator CAR1AWAY. Therefore, Mr. Jones was mistaken about it?

Mr. Lov,. That part of it.
Senator CARAWAY. Well, that is all the letter was about, so if he
is mistaken about that, hio is nistalen about everything. That is all.

1418

LOBBnY iN. vvrl0ATlt'?X

I onl1Y

Senator Wamisu of Afotinti. I have before late here whatt purports

to be a ciecuiltr letter selt, wit by you September 21), 1924, addressed
Io youl recall Mr. slemp?
r. . Ws~lt4ton I.
to. Sem,
Mr.111
oR.1hae 0it R&Ihre-Ssed 1111y (trs to Mr. SleMp ill thle
last year.
Seitoi Wmi.s, of Mojd-inn. *thwt look tit it. Tis is 4924.
Mr. Lov,,. Oh,$1024!
14enator WA,.slr of Monitana. Whio is M.Slemp?
Air. Lo'Vv lie wits the stretilry to thle President at that time.Sel
Senator WAM.5If1 Of Mon0Jtatinl T'hat is (turl friend Baiscom Sleinp?
r.Lv,.Yes.
.SetIattor WALAH Of Mon1tanail. YOU St " ShinC Senlding ouit thiS
particular communl tt)ication

lvn
goitill
bad anl
they!% s
wvrote
thle Pr
that tm
sonit
the
)If-.
I reliI!

"

la'

Mr. LoYF:. D~id yout say that wtuc it circular letter?

Setnator IVrUsii of Motanaui.

Mr. Lovc. Oh.

Senator WALSlI Of

A circular letter is attachled to it.

pa t i(c

Sla
31r.

tA10
nalll (relding) :

I lntve l1.1ii
siiie st-111lliag out till.%, iat clire.aiitln h I
''iff
mvat
I uiiilerslitli i, I* um.wuz'r (or tit( sim-ut
yWhai.
at Mrs. Arli
is lePr tlie tivl viih'.' mem! llawa Ill il!yV lWIWI
thon, 1--4
I4e$sllil

~i~

Sella'

Mr.

'1'hut refers to tho faccomlpaning cir-cular letter to wh~ik I retii'edI

cenitt(1

bearing thestmle late, Saidt. Like C(t . U tah, Isi'pteinber -.4, 1924 :

'1o till trtaIe.g: A hprivilte 34mvm

svia Ii.
l
. aRwo
aldisel1 Its clit1s In1sutltiII41' i.M i 11t. t~1U
,ar
imurie.-ts for cil~ire
l ,1o, ie (lomivg'llgmr AMVD11niutll got thiat 'Stilts' Ill
CQ1tI.VSIll fvail t h'ttr, .14111MIIVs
T e
'fillI.s1.
1
jcs'n-tlei'nis1fl ur,"hij c.0ntrlulii1 .fe life- M.111lmtl 'fl'aiII
V~tiitis
et)iijlhtIII ifliI t vlm51 fr~imi(1 t(c(Irilhig Ii this report, us tot giv tho i'14res241411
thalt O( 0111 culsls
u hlec41 wsitl lit-1,1 p'igh
oe.d to t!$ 1111li4i I, ti tl111liit" f1U4.Iiit
mids ai 5iujSy fii ielet014-1 Wilm i'ithitie re'Jijiptltlutt off Vo)ltulisims) IA-w h.?-.
'15h4h.ligi l it i141h.. sto WIsqI(ak, 11114 of jiaing~~ It virluiily
111u1lingu Pre~sdent ("i

s.
th h letter was u4it out, a.igned by ('vril.aia M('1olltdl
r
App
1)i1tl
to vi'iiis
gciithlel'au uirging coidibut iomi. to tlip Nttional TIaritr
Colusel. D~o youl renwi'm wr tat
hiiuisis-Ililt' fuor 11111 t ohiXi-11tj1jisiit All..

Mr. Lovi:. f remember it.; yes.

Senator W. %.si of Montana. What is tile fact about that?
Mr. LovE. It is 0one of Arnold's various scemes. to get money,.
Senator WAI.SIt Of Montana. TIhis is iii your letter to Mrl. 81lenip:

.% v. selnthltig flit 1114 uttlliir 5I~~IItI.i h t ill) Iithlislt. pollt it 41'.

ofI it Cchlit 1h'tl(r wiesi I, d~ieteIlci 0' sr tiilmn41 (ot trulstees~. I.8uuco semisung
Out (Ii.S 1itrtlcullar coiltuilfent toll-

8411111(1-1
hasiai
JIttelo.

inadvi.sel thit Mr. Aruinishd. Whail. I al 114141i ilut. I. tatuiti1gi. sfi tileSl
Iff~l tssuh~u sr'j~slh
fell. thle tts11V11155 liltel1itlted ill Ply

So you tt

lerstooil

that Mr. Arnoldl wa

Wild

IS
M r.

tile U(
(n,

tol
th

tioll

sen:

Aso r.
Seut

Mio
siio
ikeIl
lk

st-11

Mel )

N, i 1(

the National TariffMr

Mr. Lov.. I mtiderst4ooil that hie W~'is- rexi~jhsible for that activityLei
ait the tits. 1,11t i.4'thle iniformantiont I got.
Senattor W.,Lm; of Montana. The letter went Out under tile name0
of (lte (overnior of Colorado.

Sella

% li'lhlAi
g,

IiMi

Trhat is the circutlar letter -I hia1t ivl

~(

tssmit-

Mr. LovEF. Yes, Sir; ta dned by Governor McDonald, of Colorado,M.

Soliciting funlds, uIS. 1 11114 lerstand 'it. I never saw ip original letter.

Sell
Sugar
v

1419

LOBBY IN VESTIGATION

I only saw what I say in my letter there. It was published in the

1)) s. atil I want'td our tristees to know right away that we lad

nothfig at all to (to with that.: that none of our beet-sugar people
liad an.ytling to do with that.

After calling theoi onl the telephone

they said they knew nothing about it. The'n I was told after I
wrote to Mr. Alenil, and I su1 p)OSe I did that s6 that lie could show
the President that we' hadinot ting to do with it. I understood after
that that Mr. Arnold was the istigator of the scheme.
Senator 1WA1.'li of Montana. YouI understood he was promoting
Solie sort of an owgali'.atltoil that was passing under the hne
of
the alit onal rTiaiff ('Ollleil .
Mr. loi E. lit, had bet('n out in that coiintrv trVing to organize, its

whit,h be hIoled to
I elhit'lliber it, the. Westerii laril" Altoein
have work ill h)r1iiiy with his Southi'rn rariff"A.soeiatioll, but this
partticillitr oll, wav it llt'W olie. oil l'. I had not. heard of thit.
S(1litr(01 WAt.SIJ of Montatia. This National Tariff Association?
Mr. Lovp:. Yes. I had tlot heard of that.
ellil|or
ofV.r-ot
Montlli. l)o yol know whre we could get it
cowpy of this better sigild by (overlor McDoiald?
,Mr. Lov:. No: I do not. I never saw the letter. All I saw was
whizit wits )thblihed in tilt lWiislfp'.er. I think thero wits it letter
Cent (lilt al right.
Sellator AV,u.-sif of .MHoitail. You tl'ver h1l talked with anyboly
who gave you infor'mtiol is to how governorr Mc l)onald caet to
SOWI out that letter?

Mr. LOV . Only over the telephone. I immediately called either

the Great Western Sugar Co. or the Holly Sugar Co. or the Ameri(an, some official, and asked them if that wits true. They did not
vcent to know very much about it, but somebody connected with one
of those companies evidently ran it down and gave me the infornation that it was Mr. Arnold.
Senator WALSH of Montana. Whliat become of his Western Tariff

A.-ociation?

Mr. LovE. I think it went on the rocks.

Senator WALSH of Montana. It never materialized, as far as you
knowI
Mr. Lovw.. It never materialized. There was a great deal of opposition to it in the West. Mr. Arnold had one meeting held In Dpnver
in which he made a great splurge, and our Western people did not
like his methots anld they would not have anything to do with h0n.
Stiilator AiVAI.I 4E+-f Mtnllll. Rive yo
(Io

his Nitiolal Tarifr Council?

Mr. ]obVr.. No.

8taliibor

I donl

Allsu of
Mcl)onald wits il Itil

an

V father inforinatioits

know atlmlhinlu tllolit thit.

It ht' let tter

Moliltalla. Xpplltllt
of cotll l'l)iltiills.

wlli'

(if

(overllolr

were to go to) lhe

Xational Tariff Coiluncil.

Mr. Iorpi. I tllderstood
'
o. ''llha pr'..' I'tj):t's faid the object of
Iullecting these flnds wits to lt'f'lt thit, reallilitltnltent of David .1.

LeWis, it Iniltber of th 'rarille

(.'olintsion.
Senator WA SI If Monitani.
Under ite heaiing of -4Facts Abnut
Su1glr.". by Mr. Alvo. (1oMr. . llsllil. AV!.!l is Mr. Malvo?
Mr. LovE. lie . Ili Iiliiu-l or %tit
b
Abou,,oit Sugar.

1420

LOBBY INVESTIGATION

Sen1

Senatol'WArsn of Montana. May 23, 1929:

Mr. II. A. AUSTjq0,
lVashhngton, D. .
My DFAn AUsTI. : Inclosed Is a letter received from the Daily Mirror and a
copy of my reply. Apparently they were planning to br.ng out some kind of a
story bout the publicity atclivitles of the sugar interests, so I thought It best
to reply. to their letter and to mtake the reply the briefest and most positive
statement that I could.
Very truly yours,

1uart
E.
M. MAlYo.

Mfr. LoeB.. E. W. Mayo, I think.

Senator WALSH of Montana (reading) :

DAILY M1oH,

5J Prank fort ihrvet, ANew Yor*, May 21, 1929.

DOMESTIC SLOAII PRODUCERS ASsOCiATIOx,

New YOrk O1tly.

GBEmir..tiv: In the Publilshers' Association Iullit' of Mny 20 It stnlc. that
the Inter-Octan $y~ndiente of Chicago guartintees to you free space In the ls.
papers. Will you be so kind as to let its know If this Is true?
Yours very truly,
WAmma Howzy, Managing Editor.

This is evidently a communication from the editor of The Mirror

to the Domestic Sugar Pioducers, and the reply thereto:
MAY 23. 1029.

The DAILY MIRROR,

Now York. N. Y.

(Attention Mr. Walter Iowey, managing editor.)

DARA SIR: Referring to yours of May 21 would say that this company has no
business relationship whatever with the Inter-Ocean Syndicate of Chicago and
never has had. In other words, our answer to your question Is 11No."

Very truly yours,

DoMEsio

SUAR PRODUCERS (INC.)

PRESIDENT.

Your association had, as a matter of fact, at that time the con.

tract you spoke of, had you not, with the Inter-Ocean Syndicate?
Mr.LovE. What is the date of that?
Senator WALSH of Montana. May 23, 1920.
Mr. LoVE. Yes.

Mh'

Sen

fenl

Mr.
Sell

fact

in the
,
iStrun
Mr.

Sen
Aoe
'U.
8ynl1"
Sell

in tie
catin
Sell
Mr.

a certeed f
te

a nte
qndi
Unite

prett

mont"

Sen
a1on1
Mr.
Sen
by w'
Mi'

Senator WAL.S1 of Montana. You were president of the associa.

tion at that time I
Mr. Lovyg. Not of the Domestic Sugar Producers Association.

Sen
Air.
much

Mr. LovT. Ernest Burguiers.

.
Senator WALSH of Montana. When did you become president?
Mr. LO T.. I have never been president of the Domestic Sugar
Producers Association. I am president of the United States Beet

hveNMi..
Se
be In:

Senator WALSH of Montana. Who was?

Sugar Associaion.
Senator W\ALSt of Montana. But you are a trustee of the Do.
mestic Sugar Producers Association? %,
Mr.Lovt. I am a trustee of the Domestic Sugar PIroducers Asso.

ciation; yes, sir.

Senator WA.st of Montana. Has your attention ever been called
to this matter before?
Mr. LoE. Never.

Sen

Mi'.

CollVQS'
Mr.

Sn

York.

I'roi,
or sen

LOBBY INVESTIGATION
t

1421

Senator WAtLsH of Montana. Do you knowany reason why your

relationship with the Inter-Ocean Syndicate should thus be deniedV

Mir. LovE. Should what ?

Senator WALS1 of Montana. Should thus be denied.

Mr. Love. I do not get tlie purport of your question.
Senator W,%jsh of Montana. The Mirror calls attention to the
fact that there is a report current that the Inter-Ocean Syndicate
guarantees to the Domestic Sugar Producers Association free space
in the newspiwjers.
Mr LovE. There is no reason why I should not know that if it
is true.
Senator WN.vsu of Montana. Well, it is true is it not?
Mr. Love. No; it is not true.
Senator WALSl of Montana. That the Domestic Sugar Producers
A1oeiation has a contract with the Inter-Ocean Syndicate?
Mr. Lovr.. Yes. Thty have a contract with the Inter-Ocean
Syndicate.
Senator WALsH4 of Montana. And that contemplates the inserting
in the newspapers of material free?
Mh'. Love. 'There is what goes on every one of our letters [indicating].
Senator W,8L1S of Montana. Well, please, make this clear.
Mr. Love. Thie-y have never guaranteed .us that they were to get
a certain amount of space in the newspapers. They have guaranteed from experience that they have had in the past-they represent
a great mnny industries besides us, and they evidently know by
sending out the so-called news article, that certain papers in the
United States will take it for its news value and they can come
pretty near guaranteeing that. they will get so much circulation a
month.
Senator WALSH of Montana. But I an not speaking about the
amount they get, but whatever you do get is free to you?
Mr. Love. Absolutely.
Senator WALSH of Montana. So, they have a contract with you
by which they guarantee to you free space in the newspapers?
Mr. Love,. Well, if you call it guarantee.
Senator WAirsn of M4ontana. WVell, whatever space.
Mr. Love. Our experience has been that they have gotten in so
much each month that they have kept their contract with us.
Whatever space they get. you do not
Senator WA'.i .Is of Montana.
a fih!ng for it?
lve to i lpy
Mr. l.mc. o. We do not IpaV anything for it.
Senatur. W..sii o t Montnn. 'fhtei;. why should such an answer
be Imade to this inquiry?
Mr. lO"vE:. WIll yu are speakinig there, of two or thre.. ditf'erel.t.
COIItPei'll.. I dio t1t get tile purillrt of voll. filestioil.
Senamtor WAl.SI I(or mo[ntalia. The I)aily W rrrMr. LovI. Who is- lie )aily Mirror?
SPnatlor WALsIl (if MontaIa. Tht is a pIapei published in New
York. ThIe )aily Mirror addressed a letter to the ])nestic Sugar
Pro(Idcers As.,iwiti Jsiving tihat inforlinatio:i has l)een lu'oad'ast
or sent oit to the effect that the D)mestie SIg.ar Producers Associa-

1422

LOBBY INVESTIGATION

tion has a contract with the Inter-Ocean Syndicate, under which the
Inter-Ocean Syndicate goartntces to get for the Domestic Sugar
Prodiit'es Association news items in the newspapers without any cost
to the ])oinistie Sugar Producers Association. and the Mirror asks
if thot is true, and the )omestic Sugar Producers Association on.
swers that it is not trule. and they say in addition to that, "Tiat
this company hats no business relaiionsliip whatever with the Inter.
Ocean ynieait(, of Chicago, and never hits had."
Mr. Idovo. Did the Donestie Sugar Producers say that?
Senator WV.AAsn of Montana. Yes.
Mr. Low.-. Well, they are mistaken, of cour.e. If you will permit
me, there is the Doauestie Su r A-seiat ion (Ine.): in New York,
which owns Facts About Sugar. That pl ication I think is
what they have reference to.
Senator WALsI of Montana. What he mean. to say is the Domestic
Sugar Producers (Inc.) has no such agreement
Mr. LoIVE. Yes.
Senator W.u.sir of Montana. But he does not saty the I)oanStie
Sugar Producers Association hats none.
Mr. Low,-. No lie does not.
Senator AVALSit of Montana. I say, the question was addressed to
the Domestic Sugar Producers A.ssociation but was answered by the
Domestic Sugar Producers (Inc.).
Mr. Lov. Well, they are located in New York and they publish
"Facts About Sugar."
Senator CARIAWAY. Who ows that publication?
Mr. Iovj... It is owned by various interests of tie Doutestic Sugar
Producers Association.
Senator CAHA~wAY. Well, it is your property. It belongs to the
associate ion Ifll(
Mr. Lov. Yes.
Senator CAIIWAY. That is aill, thaInk you.
The committee will mieet tomorrow at 10 o'clock.
(Whereupon, at 1.30 o'clock p. in., the committee adjournd to
met tomorrow, November 22, 1929. at 10 o'clock a. in.)

T
C
md
1
Esr

ters
boo

S
tin

1%
ass(

offic
to
wit-

LOBBY INVESTIGATION
RIDAY, NOVEMBER 22, 1929

UNITED STATS SEATT,

Co.1.Ii'iIrrA tX THE TtDWIAImy,
Washington, . 61.
Tiho subconnittee met, pursuant to adjournment, at 10 o'clock
n.m., in room 212, Senate Oifhce Building, Senator Thaddeus 1.
Caraway, chairman, presiding.
Present: Senatois Caraway (chairmn), Borah, Robinson of
Indiana, Blaine, and Walsh of lontana.
Present also: Senator Carter Glass, of Virginia; John G. Holland,
Esq., counsel to the committee.
Senator CARAwAY. Mr. Arnold, will you come aroundI
SuRco.NTttrir * O TINI

TESTIMONY OF 3. A. ARNOLD-Resumed
(Tho witness was previously dily sworn by Senator Caraway.)
Senator CAUAWAY, 1Ir. Arnold, I want to asc you about two matteins. Mr. Fletcher, from Florida, disputes the accuracy of your
books. le said that he grew suspicious of you and ceased all relations with you, and that lie only got $130 from your association. He
said he got the rest of it froni his Fruit Growers' Association. Is
that correct?
Mr. AItnOLD. The books would be the best evidence of that. We
have the canceled checks.
Senator CARAWAY. The books show he got it through your association.
Mr. AnNOLD. The canceled checks would be the best evidence of
that. I ca get them for you.
Senator CARAIWAY. Have you got them?
Mr. ARNOLD. I can get them f6r you.
Senator CARAWAY. 91r. Love testified yesterday that von were out
in Colorado organizing or attempting to organize tlho national
tariff council a year or so ago. Is that correct?
Mr. Amxowl. No; we were out there organizing the western tariff
association.
Senator CAUAWAY. Yes; lie told us about that also.
Mr. ARioLm. They ]teld a convention there at Denver and elected
ofileers, and I think they ran along about a year. I was not an
officer of it. I helped organize it and neglectedl the southern work
to (to it, and came on back South and I had nothing further to do
with it.
Senator CARTAWAY. Did it ever pay?
Mr. AiN.OLD. HloW is that?
Senator CAtAWAY. Did it ever pay?
1-12:1

1.oWnW0 INVESTIGATIONN

1424

Mr. ARNOLD. I don't know.

Senator CARAWAY. It never paid its expenses, did it?

Mr. ARNxoL. Well, the expenses of organization, it paid that.
Senator CARAWAY. D)id it pay that?

Sehn
frei
Mr'.

Mr. AR,,OLD. How is thit I

Senator C.1wAY. Did vtU contribute to financing it, Mr. Arnold?
Mr. ARNO.L. PersonallyI
Senator CARAWAY. You, or did your Tarift League, or one of the
otlier organizations?
Mr. Anxi.LD. No; they sustained themselves.
.
Seni

Mr.
I a)k
e)
part a
Sen
MIr.

larag
Sn

Mr. AnxoLD. Ol, yc..

Senator CAIAWAY. Or dit. you pay that ?

Mr.

Senator CAWAY.I aim talking about the organization. You were

not theri to organize it.

Mr. ARXoLn. We went out there 01n(1 held a convention.
Senator CAR.AWvY. Who paid yor111 CXeeSS?
n
ir. AliNOLD. They did.
Senator CARAWAY. How is that ?
Mr. ARNxoLD The organization took it out of the receipts, when
they organized it.
senator CARAWAY. Did you make the people contribute to it?
Mir. ARNOL. The l)COI)eop( , contriletd as they went along, and I
think they had some $10,000 in the treasury when I left there.
YOU never heai'd Of it any moe
Senator CAA Yw..
M[r. AmOLD.NO; I had nothing more to do with it.
Senator CARAWAY. It didn't thrive, did it?
Mr. ARNOLD. Well, they worked awhile, I think a year. They
were up here, the manager was, once or twice.
Senator CARAWAY. You worked it as long as the $10,000 lasted?
Mr. ARNOLD. Well, I can't say. I had nothing further to do with
it, and I didn't go back out there.
Senator CARAWAY. Did you have any correspondence with it, Mr.
Arnold?

"gieIn
gln
Tha
M1.
th o1
seit o
Sen:
tAr.
take r

officers?
Mr..ARNOLD. No.

MAr.
until'
Sen

Mr.ARNOLD. With who?

Senator CARAWAY. Did you have any correspondence with its

Sel
Apr
Insul,.

sied
Do
Mr.
Seni
'Dov

council

give III

Sen

not do
Mr.

# Senator CARAWAY. Never had any reports from it?

Mr. ARNOLD. No; not that I recall. We were busy here. After it

was organized and set up und officered, we were not associated with
it and paid very little attention to it.
Senator CARAWAY. What was the purpose of it I
3Mr. ARlNOLD. Fundamentally our interest was that we had livestock and wool and sugar and miany commodities in which the West
and Souih were interested.
SeitOlr 'CAMtwAr. It is not necesssary to tell me that. I say wiat
was the purpose of the association?
Mr. A,.ti.. l1roteetive tariff.

Son
You
didn't
Mr.
zation
Sen,

Mh'. AitNxoj.. 'Tlirewas no national tariff council, so far I kiow,

sure there was not. It was discussed and there wat'
rl'1)illizel. I till
i letter of some sort sent. out signed by western Ipeople concerning it
and hiivigi refeeilve. in i paragraphi, to i vacancy in the tlail'iff

l1iin t
Sen:

y01 IV

Mr.
good

Senator (',RAw,%Y. What was tile national tariff council?

('O1lilll4,sliill.

and Ii

Sen

Tlt' Iii., [ saw of ilub iettel' wilm intile newsplipes.,

this n:

-w", -l
.1.1,

A-A - .,.

LOBBY|\

INXVIESSTI(ATIO).

1425

Senator CARAwAY. The object of i!was to prevent David Lewis

from being reappointed to the Tariff Comnuission.
No: it had no object of that sort. There was some
YxOLn.
M.

liaiagraph in the loiter sent out at that time.

Senator CARAWAY. Who sent out the letter?

Mr. Auxo). I wired Mr. Muse about it. He was out there, and

I atkdihint if he was connected with it, and lie said lie was, and the
J)aiaraw ) was.misinter)reted fhere, and I aked him to leave that
Part ai come back lere.
Senator CARAWAY. When did you wire hint that?
M'r. An'xoi.. At the time Ite came up.
Senator CARAwAY. .Well,When did lie co 1up61
Mi. A. xOLu. I can't tell you, 1924 or 1925. Mayle 1920. I don't
know. It was somewhere back in there.
Senator (.IAWAY. YoU say:
A private news service ,wirating fit Waslington, D. C.. has advised Its clients
In sillItAtice that the beet-stiglil' iIterests tiu('oloralo recently sent out a letter,
sgied by former governorr MeDonald-

Do you lnow him?

Mr. ArcO'LD. I have met him.
Senator CA RA AY (continuing)
Slate urging contributions to the national tariff
TIN various persons in tit
counel. The comiumutleallon wits so fromeq. according to this report, as to
give iie Impression that the funds would b6 employed to build tip sentiment
against the reappointment of Commissioner Lewis.

That is true, isn't it?

Mr.ARNOLD. No: I don't think that statement correctly interprets
the object or purpose of the letter. There wai. a letter of that sort
senit out.
Senator CARAWAY. Who sent out the letter?
Mir. AiINODn. I don't know who sent it. Mr. 'Muse would have to
take responsibility for it.
Senator CARAWAY. He W1as working with you?
Mr. ARNOLD. He was working with me. I didn't see the letter
until it appeared in the newspaper.
Senator CARAWAY. Let. me ask you this question. Mr. Muse was
not doing anything contrary to your direction?
Mir. ArNoLD. Well, he did that.
Senator CARAWAY. I am not saying you know the letter was out.
You knew lie was trying to organize the national tariff council,
didn't you?
Mr. ARNOLD. Well, I would say that was rather a paper organization.
Senator CA AWAY. Of course, all of the embarrassing questions
you waive aside, because they were dreams, and so forth.
Mr. AuNomW. No; I didn't know about that. You are going a
good ways back and talkingabout something that never materialized.
and when that unfortunate paragraph appeared in there I wired
him to stop it and come on back.
Senator CARAWAY. Then you do say that he would take his in.
struetions from you I
Mr. AnOLDn. 'es; he would do that.
Senator CARAWw. And didn't you know he was fixing to set up
this national tariff council?

1426

LOBBY INVESTIOATION

Mr'. ARnxow~. Not ili ftt way.M.

Senaitor CARAWAY. Not ill tilt Waly, buit (lidii't Volt 1ki10W thait.?

Mr. Aux-ow. We discuised it.

Senator (Afi.AWAn. Andu lie Wats ticting under

Senat
1Mi '.

your. ilnstrIttiwinSt'it
Mr.
whl' lie tried to) -SO it up ?
Selut
mle.
with
h wis working
Mril. AnixoIm. Wt'Il, le
Th'len
(4)
(uifIt
tryv
Senfatoa'(.ilA. Well, let's dotA itdibble. 'Julst
31i'. -i'
it. I think
lie1141IL~ll
t
Zilswei' at ques'4ti dii't'fIV find! see if I-otti .i
Seliui
A101l (111 Sitil'i vt (1hat1 tilt fioligli I (lwifit ifr ol ever triedi it. Y(Il ,;:I
(lit
they
reappoituilii.
itwats 114)t to bulild iii) .sentimuent to (lefeim Lewis's
lllppos?M.
1hen whalt wits the
mil
Mr.AliNvlI. It would lit# jiroitetive-ttiriff senltimenit. We would
"lu

it() 11i011( OpposeSenator' CARA.WAY.

I aOM nt asking

that (jItest lu. I '..fy whallt was

fte puirpose of (lit, 11rsfW-illiiolf

arily'fall down the line, front t(le pr'eCi
MrIi. Aim-oim. P'oitetivt(u
Onl down. We Wouldl bet for p lti' oll.
Si'iitao' C'ARA~WAY. YOU wer-e setfilugr ip it pr'otective fiatilt z~.ldO
('i11114)l

ill Colortidiif

Mr. Auxonw. Well. yes. I ioitt think that wits it Statte ordgani.
zaition.
is 'whieirt volt Wentt to trv
tlii'i't
Sta'iltor Cm.w.Y I know. ltit
06Sellit
to put it oil its feet.

Mrit. Aitmimo. 'Ihat imwhere lie- wits; ves.

Set'1lor01 CARIAWAY. 11'. Love sti l thalt Your kind of St'hetns did
iuit find itue fivor ont inl the WVet. Is thatt true?
woulldn't ;no(; not with life.Sl.I
M'. Aixon). 'lThat oneit
nlot tidhking about Witi oit.
SP1ntator ('.Il.WAY. X4 HO. 1 11111

But fit'- lpeople woildii't take to it, and it Wouldn't paly. Wits hlia
N*01iI' t'xl'i('nt(TOO Now. you tietd to set up1three organsil.at bus illi'
Coloriado, didn't y-oul
Mi'. ARNO~L). No.

i. Q

"ugid (it;.

Se'nat

tried (o
i
Pil
and Stt

M. i,
all. 111i1
Sla

31r &

Mr.~
Seiit

~
3f r.n

.:

S~'4 entto' CARAA.

hitt wats your ban

king us'sociation?3fr
"Mr. Anxu ). (OhI. yes; (t(n Antitin TIai xpayers 1Au.
'4eittor.Cm.A.Y Wert' flwre So iu11u1y (of thlemi v'ol forget t helifo'
Mr'. Aunso. I t(ioli!.dlt voil were iefei'rnig( to taitkff.
atlniek1er'.' ivsst'iatioii. Y11'*1
S1ena1tor. ('.%uA'V . You trimld to!,eit u11
w~t lit (o D)eliver to f(1111itt.
eha

Mr'. A11'on.). No; (111t wats

tj)

ilbeeoiiierol.We1111

nfcwIt ing thlire.

Siluoi' Cm-my But voti Went to Dl)iver to tiy to

Mir. Auu'xoi1.i.

WHiIMl

lie ideta!?

tiu
h
3r

become~
t'ut

Mi.r.
Set't

Not to Denivet' tmyor'e thanl tinlyotlur Soute.

Well, IDenver isnl't atShite.

SvIito' ('AiA.m
Mi'r. Auxoaun. AWell, finly other cu'f ionl.

Let its, do not fence ab~ouut it. I wanut to try toSeil

find out lkow~
man
Ssociaitiols .oil trd to -set lij) ill Denive'i. 'toill
(ried to sevll this ideat of t(he Ntiouial Banklers' Assmeitition tit sonic
timew there.
Mrj. Als41.) Ini IDever?
si'iua11l'(.IV. Yes : Yon w~t'it tlivrei'( 1111(h,
i"t $lwt('l 11i11l

11

8Vt'tfol' C'ARAW~AY.

tr6eol (o (1104'loatiA' it.

Mr'. A11N.1vi.11. Nil : I fbuiit ujiught' "ipi'ilii's.

Se'ntoi' ('.%Yi~.. You luid 11 meeting.

oup

M'. 1

. ;(lhe Bill
hie*ell f
at the ir
Senlit

42
1427

1.01111Y IX VE4TtOATIOX

itivsoaui. Not in lkeaver amy more tiit amy other p)ifce.

lic'kt oll('.

Stl,,tmol' CARAi~WAY. I U-lSked voll It' I-oil

'J'he otleiti ly you sitid you dlid.

Mr. Auxt'OL. I don't thinkc so.
Sentor)I (CMAAAY. Thit'1 Y~OU hld .tlki N~i 1111ll taiiff eonne1il.
Mha1d tihe WeO.tei'n '1.1riff Assovinti101.
'IIiai~lI
Stiitol (uimWy.

Mr..A iliXOII. ye.

ou tii

C~l %WY
Senatdor '~

ll three (if those3 (*11 Coloradto mido

dhie'dl. '."i'e Wi-stera Tfirid Assoeitition, my.

,Ir. tINNOLD. W~ell.
pali of it tliveil. I lft,"it there in, goodl haiilk of thiri own st'et ion.
8S11111001 (XuI tm.%Y. Xoia woulidnat hatve lialldoiwed it ifr it h1Idt paidl,

I didn't go out there to) do ally aiaoae 0l1nai ordgaIiA it

.Nil.
ajead (urn it. over to miena of their sieetioii.
.SelialOr CAR:AWAY. I Wi~la

YOiU

Wvoiih jih4-, sit 4i0%Vl

huta
iid 1llllilfm

list of the at 'ocilitiolas 111141 orginnr/.nlt i(ills thalt you halve pronaiot'd or'
(t'lI to prolnote. either di rectly ort through yo;ur pirz3tler. Mr. Musa.,
Write its 1 itt'
.Il( grivto us tile dates auiih purp'fo$s or eatu Ii. *ist
fnd et tha1t "Iuut.
Mr. ikitoimi. I doiit know whet li'r I Cain1 do thalt ors uot.
uIl
8mnator c.IAvA. I do(ii~t know wliu'lii you V1111 rt'ilieilw hei
all. lilt[ get w~it hiii ll imilred or two of thle diuumher. 11f1d let Its ha:ve it.
Seniattor BJAi. I)0 youl know at 0Gorge C. Purl, of l~nls, 'I'cm.?
Mr. An\xoiua. Yes.*1

Senadtor llJAlIN. Yil). 5 e

1AINER. 11110 is IhMa?
Sciltorl.'
Mri. A11xp11 ). Ali tttol"vy there.
(Reaator Bijmxv. At Ialaum, 'kx
Mr. AuxoIun. Yes.
iu.1)0 vo(J1 kulow~ wleie([ or nlot lie is a clliliate
Senator' l.

for the IUnTiited stattes Sena1te!

31r. Al.0111

No.
Selintoi' BI1AINVE.

haive voln 1111dtillay eirou't, to get. Ir.

becomec ateiuidite for time Unmitedl State-s Seviate ?
Mr. Aim-oIu. No; I lievem' haenid or it.

Senlator. l3i,m.~i.

to
11hin

TIhait is ti.

TESTIMONY OF FRED 1. KENT

(''11V witiness wans duhy Sworn Imp sena-tor 'unaat.

ilit
Seutatot' C'ARAWA~Y. WVill \'(lt govive voi' ll.11ia" tuid resideale'
Occulpaitioni to tile )tellog!-i'aJiei. pjelilN', sir.
Mr11.
KF;N'r. My' iiiite is Fre 1 I. Kent : lil nosidiee is Scamsdle,
(lt'Clipit ion halts ad1watys liven it bunk1er.
.\. Y., mvnu

I aunt1 direcor of

tlie lhilct 's*'I'a'it (Co. 110 W,bt, two vel1i'5 aigo I asked to be rehievedl fromn exect'ive dilty, so thalt 1 1111 )lot ad ilig lis till exctive
at thle anlonuenlt.
Senaltor' C~ m

Are you at nattive of New Yoi'k,11Mr. ]%ent ?

1428

1.o1311

INVE.TIOATIO

Mr.

Mr. KEN'T. Am I what?

Senator C.\ArWAY. Are you a native of Now York?

Mr. KENT. No; I am1a native of Illinois.
Senator CA.w.Y. flow long have you reside in 'oMw York?
Mr. KE'NT. I moved to Now York in 1909.
Senator CAu. w1xA. Did you move there to become connected with
the Bankers' Trust Co.?
Mr. K-x'r. Yes.
wWhat institution had you been affiliated with
Senator CARtAWAY.
t
prior to coming to New York, Mr. Kent?1
the Bank.
of
director
and
officer
an
been
have
I
Why,
rMr. KENT.
ers' Trust Co. and director of a few other organizations, the Seatrs.
dale Nationa{ Bank & Trust Co., and tlio Overseas Swurity
Corporation.
Setutor (?.utnw.'-. What is that, Mr. Kent?
Mr.KE:NT. h'lhat i5anl investnint trust.
Senator ('. t.uw~x. 'Tihe Overseas Security Corporation?
Ihe Over.eas Security Corporation.
Th.
Mr. K
Senator C.AAwAY. Does that mean investments in Etiropeani

a coming
Sent

Mr. KENT., They have bad investments in 20 countries, but they

isetlso
lmnge back and tforth.
itS cpital Stodk?
Senator CARAt,\wAsY. What is'
I'r. KENT. Its capital stock is a no par stock, and they have out.
shanding $15,000,000 in debentures. Th'bey have cash of $1,s0OOO0,
and securities which at the lowest point were always sufficient to more
tlian tlke care of the debentures.
Senator ('ARAwAY. What is the character of its business, Mr. Kentl
.Mr. KIENrT. Th elthruacter of the business?

000; its

tions.

Mr.
Senat
Mr. .
Senal
Kent?
Mr.
before
I was
national
Sent'
Sena
New Y
Mr. I
Seti
nti its

3r.
Smvt
to soni
the r,c

Mr. If

I. Kent.
tat tIt

Senator CARAWAY. Yes.

Mr; K .

111e 1:,:.

It is a business that is aimed to give tho. e wio desire an

olTortunity to have diversified investments a chance to (10 so.

line? Does it
..I know, but what is theconntiesI
CAR
r ('aw,
SenatE1

lore:whi
m
w,,u'ldilttsll
,,

deal in

th, bonds and securities of foreign countries?

Mr.KrEN. B1.(ods and stocks. It buys and sells bonds and stocks,
SntatOr CARAWAY. Of foreign companies, or does it buy the bonds
of 14i1'eign coulries?
Yes; it bluys bonds of any country where it feels it may
mr. K T:x'r.
be good business to do Qo, or stocks in any country.
-SPnatorCARAWAY. It buys government bonds of foreign countries
Mr. K -x'r.Oh. yes; soIe bonds; oh. yes...
8nator CAR.WAY. 1he other institutions are purely banking con.
cerns Wilhi whiI(h you are connected?
Mr.I(Ex'r.. What aholmt the banking-I, omnercial banks?
Senator C., wA. The others are i't
D'r.
I)o I own stock in it?
Mr. K
Senator (An.wAA.

to exiIll
Mr. ('
ilropa..giI

eat we

tent Ilk
arrest

we C.,
3h'. II

ntlte to

.t. C,

1)o
fl'oln t
Mr.

NO,o1.

Seu
Mr.

Mr. I(ENT. I am sorry.

Senator CAA W.%Ay. I.ay the otlier corporations with whieh you ate
affill aled-Mr. K..xr. Oh, yes.
senator C.AR.wY. Are th,,y just coinmnerciaI banks

,it',

no

the

Sti

1429

LOBBY INVESTIGATION

Mr. Kr!NT. Yes, sir; except-well, this security company is hardly

a commercial bank.
Senator CAHAWAY. I understand that. I said the other instituiotns.

Mir. KE.NT. The others; yes.

Senator CARAWAY.

31r.

Whiat banks were you with in Illinois?

Ti'.'
ieo F~irst National Bank of Chicago?
Senator CARAWAY. What position did you occupy with it, Mr.
Kent?
Air. KINT. I went there as a boy of 17. I had to leave school
before I finished high school and I wag thero until I left Now York.
i was, inananer of t ~ie foreign departmient-had charge of the international business.
Senator CAUAWAY. Senator 'Walsh wishes to question you.
Senator WALS11of MAontana. How long has the Bankers' Trust of
N-ew York been in existence, Mr. Kent?
Mfr. KF.-NT. I think it was organized in 1903i.
Senator W.AL81 of Montana. And what is its capital and what
ni-e its assets?

MIr. KENxT. Its capjitatl is $-25,000,00)0; its regular surplus is $50,000,000; its undivided 1)rof Its about $34O.0..
Senator W.mims of Montana. Making tin aggregate ofMil. KimT. About $109,000,00().

Senator WALsi[ of M~ontanai. Your presence here, M1r. Kent, is (lue

to some extent at least to thle proceeding.-s in the Senate appearing in
tile record ais follows:
.Alt. Ifms 'Mr'. 1'rezslilki't. I W1l III iret1 Itlie stitleuit

Ilaule lliy Mr. Fred

1. Kent. director of the*, h1ikerm' Tist 0). o~f Now Yin'k. fit wlih heitz
aseris
mthtth ii.e('t'4Iflot i
wI~l1
i
we band it grvat erus it
file stock iuaket-twio or
III, moieittest 111111110111 h111hiles 112154
vunitry, has evi litt-wis the'
l~tutiit
(lie 11n9ilt'd 81ilhilnte. 4111, i
11111(1111111111t In this Semiute 1114 uile to
nletgil
mhe inwat:..Ir fit ivii
we linZvo 1i.tit ilsi'ii4
met. wiU
it qvvis ft nw. mr.
vmrAileiit. titit this I-- pi~rm)1lutil. hletl'e 1 St111$l~i)
1111111
fill i 1Ilt'uIeI
woitiss
file111
trumtitl or the .sitteimnt.
I
toi usk tN, cluiiitt
oif [lit,' l11111V limi'stl r11ilig 4 flumiitttei wlgtii'.
hIII%,- oJiliilu1. Aft. Ki'iit coihi llit! 1wi h~ro~lllit lit-fuuc its, tt'iiiitit't i12(1 itkeij
to0QNe1is111 l)l~.V hit'a1410e sathelith(filloll).
Co
31r'. ('s.f.r.
~~. 1,liFflhetI. I lumim boi
uuit hl ind
Mt K~ent's ileged
~r.
isrohI:Iminili f11114 dIret-t .Vt Id111
11w~ p~urvieiof thp --mmil lim', bu1t I do8tltik
mai~t itrtt we. sttti itivesitithg 31r. It-1it. we' ollilt lit Ivilst to Willi 1111thi lit
leamt wI' 1,0mn0 tilt! Jolie vouhnnss. heitulse u1i.Ailuy who W4111u41 jut foruihl I) itattc.
audit likc. ihitt, m1114
expect .aiybld it
h
11111~Ii it. lof 4.411ise. bssu.e- i from
arrestil imtmitgih detvt'loiiit. .8htia tmere. Is it ihwitinul for It. Iiiweri'r. I think
we (.111let 11111 wiv..isie til hourll millminiig 11[ilIn ll.-t ii,11.IIuI 'liet.-C. i1101i1111S4

oh-lih

31r. Iliwrs. I:414111mnidhke hiuhuh11ly to. reit'ist flit' 'Imuriimuohthfie hobbv etuli.
fltiu'e it) :mtiilon Mr'. Kent.
311. (' flAWAY. it will lit tiont'. sir.

1)o %'(1it recall tliv sixt'eit to wijie.l 'rift'Si4e i.. made ill this Lextract
fiout thile r.4'cotd wihel I halve resiui you ?
Mr11.
KRNT. I linvo leiiid abloult it: but I hadiA' read It.
Semiator AVs of Montana. N.o; I itan1itr.
Youi'imstt
lit
lie speech I miale ?
Setor WAIshr of iolanail. Xe.
VS214-211)---T :-13

1430
3Mr.

LOBBY INVESTIGATION
KE.N-T.

Yes; I have copies here.

{The document above referred to was received in evidence, mIarked

"EOXhibit No. 170." and is us follows:)
ADnlEss or Mi. Fam T. KEN't, DliRcT", IIA.MERS 'IlltST CO.. AT THE ELVE.NTH
ANNUAx.L DINNER OP TilE AMEII.N AC(E1'T.%NCB CoUNCIL, NOVEIMtIER 11, 192,

NEW YOnk

tgalust
uaiunto
VMn.
The tt
totuls 0

Samo tc

The history of the world covers lanany intent periods during which very little
progre..:q wits sceningly imde for ittiny generations. This was Inevitablle whi.
humanity wis slowly developing understanding through Individual experlenct
which ciuld not be effectlvely trasmitted to others. Almost from the beginning
of our Nntion, however, the worhl has moved much faster, the conservation of
discovered facts has become possible, ail each generation huts had |he benefit
culinulinted hmn experience upoll which to build. New methods for
of
produchigiand utilizing power havo tit tiho same time beoom uncovered so rapidly
that the methods of living fit the United States have been it n i almo-st constant

Aga11
exli-Isl4
31,tli,
bet liia
It Is
credit ii
for Its e
There
aun1oulC
the idol]

of such a development has been the creation of new conditions almost over.
night that have been attended by problems difleult of solution,
Due to the Inertia of thi, humiain inid the first Indications of the develop,
moat of such problems have not been followed by anticipatory studies as to

uneerta
or of tli
on art!
natural

The natural result

busiles,

how they might be met. Instead, itien have gone Olt in the even tenor (of their
way.st along the lines of least resistance until they li.-.o suddenly been con.
Intelligence to the
fronted with a new condition. whereas the application
- ,
easily have resulted Ili g! " ~l developments along
growhig situation light
moro soumid lines.
Ignoring new conditions or :ctually being unaware of .htem because t(e busl.
ness of each daiy follows on the business of the preceling day Is more than

Tho V
business
feur Ilia
is entire
Stuatiol
When
the bad

Intelligent public opinion except slowly ld after great stress. On the

hand, when a situation has developed that seemingly carries it menace or great
uncertainties because of lack of understanding, It suddenly becomes a football
of politics. Then instead of there being Intelligent procedure toward under.
standing, guiding, and correcting, there Is an fort to tear down the good nines
of men of high Intent because their success has had nt important hearing upon
the development. Consideration as to whether such success may not have lken
of tremendous value to the people is entirely overlooked.
Such a situation has occurred time anid again during our history and oflen
enough so that if we tare endowed with lho Intelligenco whilh we would like to
believe we should now lie able to nove forward with less friction. The
exercie' of re:tson Instead of passion would result lit the recognition of the
good in each new phase of our national life and succes'sfully control such
elements s might be of public harm.
One su.h development that is somewhat snullar in character to a present
situation which now tikes such nn Important place li the public eye was that
having to do with the insurlnco business. Tho growth of life hsurnlcel I the
United States was so rapid, anitd the necunmlulatlon of fund. in the haind. of it
.o
%:lSgreat, that (1i4 more investing of ihe money
colaratively few men w
could not help but carry to those making the Investments a conslantly whulen.
ling power (if control of ninny inportatit national entorprises. It is doubtful
lss
foresaw or even realized I ItN
If any men connected with the insurance busin
litter stages what was going to happen. Critlilsn ot certain kinds which
developed therefore wals unforhintIe anitd wouhl htiv been uttieci-.:istry to lhe
cor'reetiiill of the .4ltllI m If Ithe, prl,,|len had bieei setvit as It was growing. ntd
could have beon corrected on a basis of intelligunt con.hderatlon wiIhont
clmtilllhi'.
i)urig (lie last few years another hugo accuinubWt i. (of funds has oc.urrml
talitl wly. that1 it 11.1s
and inctnpreolnsisle '
which his Ieet, so rail
caused great concern. Further, as Is always the cast iogishltors with thle let
iltreAtsg 'of thtir country III mn1d, ind dentlggogtls who endeavor to utilize
sluch dvelojlilits to Iiervaso Iheir own poiiwer. have ieen witching the matter,
Iiltil(h'r with liii' Iiisiwss iltresis (of (h, (.utitry. '11l1$ great nieW dovel(ip
brokers' lons from $1.3500.000 ii 11124 (o
li-cieild
miit i.4 the literelise in
it on.tlitly Increasing proporlon
$6.801.000.(0( Octoler 2. 19. together i h a,
of lenilers lting oulsile of (le liliks. The Impnlortait (tle.ln I,; whether this

at lcist
every II
wlah t
Whiell t
the publ
withut
a lut
a 11ltg
[*gold q
for the
fir taS
Tis
hutld"
wh
houd
Theell
directly
re. erve
gather
Ti(,
the stlo1
Petitlvo
Thea
tive co,
i Octo
a iresll
onwnt.
eml stil
Such II
Par'leut
should
such 0ii
the int1'
The
the Ir.it sl tet
View
Is seen

state of flux with very few and short-lived lttent periods.

an
natural, particularly as men do not move lit sullielent numbers to develop
other

difficult

LOBBY INVESTIGATION

1431

total, which no one can deny is a hugo sum, carries within it anything that Is
against the public Interest. The figures covering the total of brokers' loans are
jiaunted in tle face of the public every week tind yet no one knows what they
Mean.
The total is large, but It uuy not be tit all out of Ite when measured by the
states which have grown during the
totals of other activities In the United
same period tremendously. We tay thInk it is hrlniful, but we do not know.

Aga.n, the use of these funds may be such that they further the poroler
e.liqoislon of the business of tile United Stutes, but we do not know.
methods under which brokers' loans tire obtained and c carried on ay be the
I(Nt that can be devised, but we do not know.
It is entirely possible that the utilizlilon of such t tremendous amount (of
credit lit brokers loans many not be taking front industry funds which it requires

for Its exlnslon. We miay think so, but we do not know.

There Is one fact, however, that is tent to nil, ntmely, that the weekly
announcement of this total, together with the wide and rapid fluctuations lit
the motney rate for such loans, lias caused great uneasl,.s on the l)Ilrt of
business 'iten and hIts carried into our ilnanil. structure ti element of great
uncertainty. Many who know nothing whatsoever of the ijiovelelts of credit
or of the pritcilples under which sound financial transitetlitIs can le carried
on art! trying to Jump into the limelight with corrective schemes. This
nturai evolution.
The complexities of the subject tre such that tlioso who tire engaged Ili tile
business. of dealing in credit have hesitated to move during the development for
fear that more harm than good might be done. It Is very sinlh, for ttle wilo
Is entirely Ignorant of it subject to devise Idealistic remedies, as the facts of the
situation do not trouble him.
When it conies to the question, however, of welghilg the good ,flect.; against
the bad effects of aly new method of business iprocedurt! it Is at ties very
difficult to determine Will certality beforehand where the lorepouderanceo lies,
at It-aust u1tl after a most careful research hits been conducted which discloses
every imiol'tant element that les within the situation.
'redit beig the most
volatile eletnent in the construction and distribution of thc world's goods upon
whkl the icopile depend, first, for their livelihood and thcn for their convenlence anid enJoymnlt, experimenting will it is certait to result in haird-hil. to
the public. Credit when frightened runs to cover aund |industry can not liteed
without It. Credit is subject to himn who his it and in the Unitt'd Stales to-ittv
a hlag' proporton off the loulihe Is dealing li credit. Unfortunate hgisltion
w('tulh drive, It frotit our niiarke.s. Unwise investigations might ellsily do so.
Legislative inovestigatiotis ore alnost certati to work against the public Interest
for they ltnan inlmmunliy without ecoiltonte responsibility but Willi Ioltleil
bi~ls its tile Investigttor and responsibility without intimnnlty for tile investignted.
'Tits clearly nneatts that the problem entailed in lIrokers' ioans ; otto thitt
should be worked (ilt by those, who tlIdetsrind tile ineaiing of the use of credit
atud who arta fanillitir with its every ntthn through hlrge exleritnce wvllit it.
There tire three great forceslit this colllry wlihi d(l with credit that art,
directly ciijcerned with this inirtlcutur rlohlei. 'Theso forces tire fhe F.'ederial
reserve system, the lonnig banks, aind the stock exchange authorities.
Altogetler tile%* tire aff.eted by every lubt.' of th. brokers" lati (levelopplenlt.
Thi( l.'cderal reserve sy.w(n rerl4r,.el.ii4 the Itlelh., l
it
.
leniters.
,
tiand
the slik txeltilte liN, iarrower . Acting Iogelh(,r they wislid Carry it c'inpetitive force that should proveilt preJudicial result.s.
The Anitericn luinker.s' Assiseittlon. therefore, lit the tiitnhig of Its, (,X,.Utie, .iuncii April 17, 1929, and agoin lit the colvelllt hihlitlitn Sttill Iratll.ive,
(it October 3. 1029. recommended that those tilret gr'tiuli: cooirate lit making
a reCsearch ind stltldy of till the coudillions surroundhil.g theI
olker. ' litlin ,Itv(,!.
opnient. ThIis. niturally. call olly lie (0l1e effectively i. colllectiltt Wilh i 1ieml study (if th lloney aitlrlkt. including tho qusthtit,of Iankers' ncpit'mtt-w.
Such till itivestigatloli ('1ll Ile e arrit till without (llslurl1lig busin
In lilly
pariculhr and wlli (erluatty that undistorled facts 'n be nserthivol. It
should ther be possible to weight the whole matir with int.llaivce tun intake
such chalnges in procedure, itany, ias are found desiralale for the protection o1f
the l1u1e.
The Interests- tif ll three lorain.hes of lhe Investligtlia
groull demmuaud thlt
the lorukers' lotan figure shouhl carry within It a gudluag ltt(,lligtnce andul wit
a speclacular dlsrltl lve uncerlninty.
Viewtng conditioits imparthilly, In view of our laws ns they exist to-lty it
Is sectualnlt..ly entih',ly wlthu tile Iswer if tile three lubnirs of tial- resa
,'h

1432

LOBBY1

INVE~STIGATION

group~ to chagaige ally methaod.- of procedure shogt mHiyb

foun
ttIflh

1o iieavs.'ry

or desiraible Without resort to further legisiali.to of lany Wild. Menl 11111t patsec
Upllhl11atters of this Oharacter. It Is difficult whent the fils oare kiiowii, but
It is normally litipmssIl to successfully meet eaiiergelieies wich lzhave liert'r
ariseit, midt the growth of our Nation Is at times overwhelming.
The Fedleri reserve system, tile banks, and the istocek exChange Shoul4
therefore be Iont free to tieet their problems am timsy, arise. Without eiasticiap
the Federal reserve system would of necessity lose the voilue of the ktiowieqge
or etirreitt devemoptineidt, without which no body of men, however wist. aeaau
suaceesstuly dleetminie such proteedule as should bo for the hest iteremstN of
the iweople. With anl lInsigition being carried on lit the ma~imer suMICestei
by the American hankers there would seem no doubt whatever but that those
from
In 001' national legislotivto hiiiahei, wh-o tire only Interested fin the :41hb)ect study
the standjoit of the good of the people, will hit satisfied to allow the
to proceed without intertereitte and itwiit Its results.
Aside from oily question of values, there Is not the 8s.lihtest dout hult that
thou Federal tax onl capital gain has hild a great Iiltelc hI lpreveiltiig the
stock market fromt adjusliiig Itself in a more orderly mannuer. This taa~t.
which Is of ainbtful. propriety In time of war, is4 unethicaal anud unsountd in
time of peace mnid. In so far tis It ran reach. has it dk-tiiet tondeney to liiet
indiviohutils from adjusting anid rvadjustiag (heir Invemuent hoingsII1 fri'umu1 flme
to Ilitit fill a sound basis uts they otherwise Would do.
Tite men, trawkffer of property does~ not create walth, and while atnomlinal
. vv fill tile capital gal Involved Is ww~ng
transfer tox might be Justliled. r'
iaavrko-t it
in priiamiphe andt harmful in exa'iiitioii lit Its eMoet upon)3 the stocotk
hats residleil fin ildilula~ holding %icurities wheii till%. market priee reaehied
it point where they preferred it) sel ad readjust their holdings. wieh limni
had( it tendency tio decrease file number of shares oil the market of those stocks
whieh Were risit:i raily. so il t every att'lipt to hity tiffeCt(i this piee uore
liu aaitialy at-lei) to wveaken [lie general 4fa~y
than It shoituld. Again It. ha1
posilin Ihiait every holder of securities should. mniintitin.
Onilant hticisnit's IN%toltil Iieitermlitll 11$iath' ta x for linly title 11VIImt In
wiould
Now York wild iti-h 2.1 peKr cent. lit it risig stixck market ony motn eamt
of
hesiluale lt sell at seeurity kiiawlim. Ilhiat lie would have to pamy 2$4 per
hII prolit #ut InI ellsa Mlib fiolliiwimg year tain i'Vt'hl Hlmsi ivhiog itiones retire

Great

C_
delirihi
AMR$ III,
IRbO1i1141
depthIl 1
p~rIi1l1'1
IIIfls (if
It Willa1resear
die :411114

InstII

badl 11C
nere tic
woIIllI

political
Tito s
to) C(IIIC('

day suil

Fhares It

ier.A
gil
-tlsfor

for tile

York 81
Colistalit

tectel it,
tiol frofilacttlial

greater

werll e'

finit. Jill

prices ti
buying.
On1(h1

front a
s111014,16 percentage of tlix have slitiwit greaattsis millt .rmier r('laiteie to,
H'i
moree~
sllms tiitlli paper jIrIl-46ct iave iereaised amni scate., wiltild metan ureateri
tria
.leirivedlfihi' market or sales alit
hutMIA
evetapl
A slutti.1hreoe
ISS 111
othierwise, wo i'd have lits-ua itaoe Ilit tHat winhld have haul it teaasismaIey if,
restors.
rise'.
it
rapid
toE1)
11'vteiit
It m1
To be sur.' litt' Feulera! (loveranmett hans received Itirge sus III taxes ba.aNl
bus(i
oil e.1tilil galln. vs is ilso tri1e With the, 88ute-of New Yoirk. lan thN le; imaijier
Witt, till
ve'ry real loitus) Wily thit'it .41i4111d he' noi suelh Iix. It Is absu41rd torl the
libiin
(loversine'n-t of theo Vlited Stliale- to lot, subject to lie 11-o' ta11 intfll III lte stevk
possible
Yiirk.
Ne~w
of
%'tite
the
for
true,
eqjualiy
is
d
mlthisn
nin
niarket fill it:4
for yeit Mten I-; nto 4caipitmih-gaiaa taix. Itsit
iveat III l'nglail whlere(, taxioma is1?4 htigh10
the splell
Is fully aefagni'/.ed that snih it lmox Is .unsonnd. A~gain. bewituse f fte niamintt".
(lit' t
ntiy hIaawil"ss it- whto
1111111e
MIMtI,# Of tbe hit1oltit' tIx Withi suib1 high
therefore'
Ithlied~
lilt
It
11illilt
till,
of
atieets
thieir
4f
eitre
haike
Iii
iicomie
sutihiient
have'
DMation
arry lile orl Ito return If they lu.'lev' thait over It
to hetay sce1rtit' whc
Credit
IfIl. 'i'iih;
iwrh'ni oif t liii' flhey camain wo~mihl I-xpIet fin Inup11o,11rt: 111si1eeiltI
irteilige
aLmil hams, it tewmnieic to emairy Mhe jtrhes of n1111ny seci-tIes filr adieuIf
uiiprl'(J
icone
hprest'ill 1taimingI. vlue.tv 'liii hoidlig of shik ito1ivoiih exuirieli illt
Marlk(
tax.es*. toteivar with tMe purchased oif -4tiuk for' Ii-tig-tittapt' iplore.*lt ota witlaoili
prosper
imiui11(4111t1 11101aln0 Oll 11'js It te'iiuley to reilu!. thll 1111n1ul1-1 of sliures' I lte
to
market which i tvoiiit'tilol withi sN11 currelnt lmtsliss 111141 it trsooh 11eia411matIoeint
itoraah
Th1wir sieuai to lot,- no iimteat
ouit iask fierea-s heuyeres to play higher isrie.
On thle
n1milenmn 11i1i really Iai-aaimmd
it
he' vieniitt'red 11111t
%0a,0itimb.1 mutt1e (e'1tala
f4)3II',
Ihe1041114
flli iimteries of'tl.
Feeill if
l,silmi giewiha ort imlve'sttlimt (iasis hats temiporarily Willd It siemit-wtat
va4rl
IIn'makt is
the aauinaleeor of shares. II ill
~t- III -:I foi sr edui
.0111u1i1.irt
i'lisp(c11as
I'VINI
.. eecerIel.ils growili lai,- lit-elm amn1ilill MeIw d(WvoIoiiit'mt 1li1t
try 110(c
is1 1not yet stiuidlizelh so too speakth.
111ht
1mii
wlIII exet 'tig 1rim111. 1hillty
ditii'i14c
ifouit leut (Milt investinent tris seatiert haive heewn
"'iatrt Wietld seamm1161
Ws1riii
4.41101l
Ian 111211 haiam filit' saiviint power oif fll-- %t'aii'rai 1i1m1hih.
i11111et 1-m11111p11ly
iiftel~di
ash's'eahe, h.1si iaaestmamsleika'r have haid nto mieaias of sa'i'ut i14-u11y anleA.iiIMm11
us much of itan imikitowit
filt .41111:11i ba Ilecaaiis Ili. hriekers,4 blm !oltl 14is-,
ijuatiltiy to) tilt-it 1.I;its cotaailsil loll uit Ito1 v'vemyl lilt, ect'.
it

NoM

LOBIIBY INVESTIGATION

1433

rjerelit eovia
Io~lkw 11(- Allied ('Iackanbel & Dye I'm. tis I'nllcd H.1tatt'4
lge- ('orjioratliii. the (lemeral 1-Neetie (lip.. ve., viorry ('Xl1('isilt' rvstitrcl
delmirIIIWit5 W11e
iS CI tr c('ilttiths seelig f6r ihtt'~r *aas of tieitwn)llslhlig thu
N-111t tiliig (ir wsuy,4 tit do hetter things. Ioivisi4 orgiiiizali Ital(1 ii1wuch
Ijqo1lat1t1oy servI'ce sit titeliviI Up their oisitl aiii,. Teo tits imrL' ltey litie .4ltitIst Val.
III solil1t. few 11111".5 (if
derl Hi'fl('llP, Ilnt t-oiiti stieh deltiiiieit Isl iisilst

wheicas Mle gtteridti1)ritpirtl(eitar imi)ioriamee to tile liaalvilutil company.

Iofln (if bulsinless affect 1t011 al.
It111 d..ll
MIts- uS Ihiigh tiewPsiiotid lis' t'$tuli)hid fit dl(w~iwii Nt-%r York
a
fVerill
lil Itoiy where lii1' ~tAndy of 11111a(*0111 fiJ't'3itlls
Io)a
il
h gIvenl
lipd
tlt -e
klil (if iltetisive setnthoy owl it ilytkeal thoiiiizi by Ilioti' uiaied
III suchI nuftters Whoi Were' Iitetlvt'5 111511 f~iai flit- olkititow flat Wiho
hail av1.to( tiit'ii. a-15Is tolie fly greatZ1 Iiii lits ln third liIUtiso55. If OhN
nwere Itiiliii(4.Oaulltis

sti

I b~rook *rs' lomlis

itK- tlhuise witlih suroid

iive' voiishletitttlon fF011 tIItv stiliifiliiit (of tile 11111111t g,',ai without
p(111lii bit,.1131(1 the polulli goioid Is always (if itII-Ilt touial it4111t14s
wtiiljl

(1 itil 0
Vie, stock market i~elf is it wouide'ful orgiizatlon. It Is4itlia11t14
ft 4.000.00D sho4rex a
day bmldely con~fronited With the necessity (If taiking etrt' (1t over, 10.000,000
Fbari-, and being atlk to doa It Without Upsets anid pt that Is exactly whalt wits
11colw)I-ie(d fit fthe stoelk (?xchige Tuiesiloy, Octobler' 9.
Agaill. It iq dtlliciitt fii coleilve of a1fluatiildil estalilshnieiit Wihils-ted seur.
j tl(-s foir iii excess- of $100.000I,00.000 hit valne, itl of WhIIi
istlit lie iiresviitt'd
for sale atfit ty IiiO11iwbtt Alioutilig Witli the certainty thaut is; tinte, of the 'Newv
York Stock Excliotige. It evidences the ti'emhenii(ts supprinxilig force thm11t 1111st,
colistatfhit lie back tif time market If the great sectimrhy-owuuing pulia 14 toon
lit, pro.
tested altu, furthmer, What Is eqimiy Imeportant, the great ela.sticity tiit Is essen.
tial fromn Li sttuiiht (if credits tHMtiare avahlatile tip thp market ilasi on
filawttiathuug prices. The, great general pulic is; protected boy this slntiii to at
greater extent than It dreams4 or. hIMt when itiillons of indivIdwals till over tie.
weriti change their psychotloagy and deterjoi tot sell their seturItle4 tit tlit, sayne,
tiln'. not group) of mita itii coimmnand fil'ent Wealth 1to nmt sieh it stiui lt
prices that tire noit stitllclentiy Row to attract to their 111(
great (iitsbie Iaivtstnut
buying.
On tIds necolnt thie banking interest-. WhIih deired to proitec't Met jumarIet.
from a possible, toltiast realized that It would be futile for Itemn to ititt'uiit to (o,
more than try und miniituihitin orderly market until prices ret(hid at level thaat
carried stiffielently great Investment opportunities on the batsig of (i'i.i
lItioi.
nm's rather Manm jrobiable future business to attract to fheIr idd otshde 1mmto) coiltt'ii of at mavtillile geared lt luailie from 3,04300

it joulst lit' liortie In mind that no one can sell stocks unless soimet one f'ise
buys thein. F~urthier, that men will not buy except tit their own volition. Oithe'r
with the liojs' of profit or att has Just happened for the general good. IiI.
libritti muist lie maintained and In order -to do so theme must be the greatest,

possible frocahonil from unwise legislation. Men who have not dealt vouistiant hy
for years [in credit. are positively Incompetent to understand its volatility 1111(
thieswPed of Ihm.' diverse ditections in which It will flow. Mlen whose ilitlp' to
t~l, piubif e are coyerd In providing legislation to meet chanlgin~g neeai intist,
therefore of necessity depend upon those engaged In dealing In credit for inforniailoui as to what. Is for the public Interest.
Credit operations have two sides, the borrower and the lender. Consecol I;y
ItitellIgent inisliess considerations of the problems Involved must be
jts.','
uiapi'eJ li ed consideration of the greatest good for all.
Marikets for' securities tire primarily based- on,.(urrtt business plus hiuiiem
prosipets. When the earning power of Industry Is growing and all tcoiltni
point to it coui inted growth for a considerable period of time, prices of sec-uritieps
atrmolly rim, above current earnings'In anticipation oi( greater future t'arnhiigs.
01i file other laittd.- when. business senmx to be falling off and futurac eonaliins
apiar wiffivorabhle. security prices are apt to go below values that would
twtin ti lie niirmnil. liaised on current earnings. -T'his being tit'. (.uii'hluI'uit.ul
oaturally etaafrnvor too obtain funds through the Issuauce of -stck When theo
liriisiects fir lhuslics tire good, and this coincides with this leriodt; Mien Industry Ineeals (te fuatals. for bulsiess, expansion would be tbsutrd Iii h flitMt apt voin.
I1ltiaiiia4 wili Isirtauadt- it tleviluihig liiying pMwer. 'flit' Issttiive of coiirato
securlilks. thiera'h'urt'. (oil a risig stoek malurket relorr('swt't miuid midua ardlnijry
Procedalurt from the stondtiwiimt (if Induistry.

1434

LOBBY INVESTIGATION
The distribution of securities at such times
is much simpler and the people
who buy securities so Issued of sound, well-managed Institutions, place them.
selves in position to obtain a portion of the profits of rising Industry and at the
same time by taking part in such operations they enable the greater expansion
of Industry which, when soundly carried out, works to their direct or Indirect
advantage and for the public good. When this process Is carried, too far,
however, it can develop a menace represented In prices of securities that are
too high, together with total stock Issues outstanding but undistributed, that
In case of concerted selling, make marketing difficult. Investment bankers,
therefore, should be In possession of better information as to the manner in
which the market as a whole is absorbing new security issues.
With ,normal Investment readjustments, which are only possible with freedom
from capital gain taxes and the development of some means to better control
new capital Issues for the good of all concerned, great market safety would seem
possible. It Is conceivable that a committee taade up of representatives of the
clearing house and the stock exchange, might be given some character of author.
ity to maintain the Issuance of new securities within reasonable bounds based
on current conditions. With the power of the stock exchange to pass upon
applications for listing securities this would seem feasible and bankers should
certainly have a position In the matter as those who purchase Securities for
distribution look to them for their funds either directly or indirectly.
Before we attempt to further measure this situation, It might be well to take
a brief glance at business conditions In the United States, say, since 1924.
Banking figures compiled by the commerce and marine commission of the
American Bankers Association and production and income figures compiled by
the National Industrial Conference Board (Inc), have been used.
The value of the production of minerals in 1924 was $,800000,000.
This value
has been exceeded every year since, but has remaalned fairly steady, as it was
$,400,000,000 In 1928. The animal products of agriculture In 1924 were $3,084,.
000000. They were close to $0,000,000,000 In 1923, 1020, and 1927, and were
6.13,0000000 In 1028.
Crop values In 1924 were $10,513,000,000. They were just under $10,000,000,000
In 1925, were $0,202,000,000 In 1920, $10,071,000,000 In 1927, and $9,727.000,000 in
1028.
The value of manufactures In 1024 was $7,897,000,000 and It Increased In 105
to $02,008,000,000. In 1920 it was $03,062,000,000; $62,610,000,000 In 1927; and
in 1028 was $02,895,000,000.
The total value of this gross production In 1924 was $78,800,000,000, and In
1028 was $83,077,000,000.
Hallway operating revenues class 1 for 1924 were $5,921,000000, and in 1928
*ere $0.112,0o,000.
Net national income has been estimated by some statisticians as being about
$90,000,000,000 for the last few years, but a careful study of this subject made
by thq National Industrial Conference Board resulted in figures showing that
the national Income in 1924 was $TO,''68,000,000; in 1925, #77,813,000,000; in 1020
$78,849.00,000; and in 1927, $783,000,000. The figure for 1928 could only be
estimated based upon matter in hand at the moment but it is expected that it
will be about $707000000,000. This figure has been fairly steady but its buying
power has Increased as commodity prices have decreased.
'.he utilization of this tremendous sum by the American people I of interest,
We will eliminate the ins and outs of foreign funds In our analysis.
New capital flotations in 1924, including domestic and foreign, were $5=,0
179,000. They increased every year to 1028 when the total was $8,050g815,0.
But In the first nine months of 1020 the total was $,419,924,000. Of this tre
Mendoust increase in 1029, $2,000,000,000 represented investment trust securities. The total of new issues for the five years previous to 1929 was $3,984,.
014,000.
Total savings deposits June 80, 1924, were $21,188,734,000. June 80, 1028,
they were $28,412,001,000, an Increase of 7,,224,2.,000.
Individual bank deposits June 80, 1024, were $16,875,085,Mo0. June 80, 1028,
they were $22,786,303,000. Savings deposits therefore increased $7,224,227.000
and itidividual delmsits $2,911,288,000, or a total of $1,185,495,000, or roughly,
21/1 pet, cent of the $379,110,000000 net national Income for the five years went
into Increased bank deposits. Eliminating Individual deposits as loans may
have accounted for their Increase, we find the Increase in savings deposits was
1.0 per cent of Income for the period. Brokers' loans; increased during this
period by $2,452,000,000 and member bank loans against securities in the lead.

Ing cit
014,00
figurat
Saving,
of nati
The
securIt.
broker
loans
stocks.
The
tonal
for the
o22,0
June 89
utilizat
Then
new se
crease
value
In o
1924 to
nine mi
Acce
ingly a
for the
income
$3,557
securit
$5,57,
But d
$1A4,
of new
20 per
$1,'00,
banker
into sa
But
basis a
were IF
Issued
savings
aeoun
positive
nations
real pa
in the
itself
such c
The
veber
last tw
But
security
default
prestige
system.
It al
furnish
New Y
When
the we
amon
by $991
ollaps
million
would

LOBBY INVESTIGATION

Ing

1435

a total of $5,845,512,000. Therefore, of the $33,984,cities $M803,512,000,

014,000 in new securities Issued during the five years only $28,68,02,000 were
Income.
figuratively purchased outright from earnings or 7.6 per cent of national
1
Savings deposits plus new securities absorbed therefore represented 9 / per cent
of national income.
The increase in brokers' loans meant in effect that only 7 per cent of new
security issues had not been distributed allowing for normal replacement in
brokers' loans of new securities by outstanding securities, and including bank
loans against securities 15 per cent, but not allowing for increased prices of
stocks.
The picture in 1920 is quite different. Accepting the first nine months national income of 1929 on a basis of $/8,000000,000 a year we have $58,500,000,000
for the nine months. We flad that Individual bank deposits decreased $410,722,000 to June 30, 1029, that savings bank deposits decreased $195,05,000 to
June 80, 1929, thus leading to the belief that the purchase of securities required
utilization of bank balances already ,ecumulted In 1929.
Then added to this situation we find that for the first nine months of 1929
new securities issued amounted to $8,419,224,000, whereas brokers' loans increased during this same period $1,700,000,000, or about 20 per cent of the
value of new issues.
In other words whereas the Increase in brokers' loans for the five years of
1924 to 1928, Inclusive, was about 7 per cent of new security issues for the first
nine months of 1929 it was 20 per cent.
Accepting the proportion of 9%A per cent of national income that was seemingly available for investment in new securities and Increased savings deposits
for the 5-year period as fundamental and applying It to the estimated national
for the first nine months of 199 and we find that
income of $,00,000,000
$5, 557,500,000 was all that could be utilized for Investment purposes. The new
security Issues of $8,419,294,000 were therefore l,811,724,000 in excess of the
$5,557,1500,000 available from national income for the nine months of IM2.
But during this time rights were taken up amounting to the huge sum of
$2,884,628,908 which represented in effect new stock Issues. Therefore, the total
of new securities issued the first nine months of 1 2 was $1,803,85,908, or
20 per cent of national Income for the period. As brokers' loans only Increased
$1,700,000,000, the balance must have come from abroad and from increased
bankers' loans against securities and funds which otherwise would have gone
into savings deposits which increased $2,000,000.000 in 1927-2&
But this is not the whole of it. National income for October, 1929, on the
basis accepted would have been $0,500,000,000. During October new securities
were Issued, also omitting rights, amounting to $789,912,000, and rights were
Issued to the amount of $90,895,000, or 12.7 per cent of national Income, aid
savings deposits went off also. While there are many cross currents not
accounted for in the development of these figures they would seem to show
positively that new security Issues were put out in 129 faster than the
national income could readily absorb them and that they played a very
real part In creating the calamity on the stock exchange. But with a let-up
In the Issuance of new securities that has now occurred, America can right
itself in an inconceivably short time, as its national Income means under
such circumstances a monthly surplus for Investment of $00.00,000.
The great drop In the prices of securities In September, October, and November and the payment of $1,752,000,000 of outstanding brokers' loans the
last two weeks has undoubtedly fully corrected this situation.
But what a marvelous exhibition of the Intrinsic soundness of American
securities Is shown in the repayment of $1,792,000,000 In two weeks without a
default. It Is an accomplishment almost beyond conception and adds to ho
prestige of all concerned bankers, brokers, and our great Federal reserve
system.
It also speakii for the soundness of American Industry, whose securities
furnished the collateral back of the loans and of the conAidence of the great
New York bankers in that soundness and their great faith in our country,
When "others" were cashing In their loans to the amount of $1,880.000,000 in
the week of October 80 and out-of-town banks were calling their loans to the
amount of $707,000,000, New York bankers increased their own commitments
by $992,000,000. Further, they stepped Into the market and saved a general
collapse by purchasing outright the securities of industry, thereby saving
millions of our people from the Atlantic to the Pacific from needless loss that
would otherwise have ensued,

1436

LOBBY INVESTIGATION

They have met their trust as no monetary emergency in history has ever been
before. that were demanded for advances against
met
Margins
securities were clearly
sufficient to protect the lenders, but were they great enough to protect the
borrowers? If the base value of securities upon which margins are figured
had been at a point sltghtly below attractive Investment prices, measured by
the interest value of current earnings against price, Is It not probable that
the tragedy of those who were sold out would have been avoided? To be
sure, buyers of stocks themselves demand the highest base they can obtain; but
Is it not plsible that the greater protection should be forced upon them?
The popular Idea that people of small means were the principal losers in
the recent markets should e dispelled. Great numbers of such buyers of
securities realized their paper profits. Others still own securities purchased
outright, and if they are stocks of sound corporations they will be profitable
as time goes on. Many had to be sold out, but the great losses were taken by
those who had from $100,000 to many millions in the market and who saved
nothing or little,
There is very positive evidence that during tho last few weeks the issuance
of new securities has been the dominating feature of progress in brokers'
loans. Take, for instance. the increase in brokers' loans which occurred qn
September 25 of $192000.000. There had been real evidence of stock liquida.
tion during this week which could have been expected to result in a decrease in
brokers' loans; but this was offset through the carrying In part of new capital
issues which came out that week that amounted to $241,501,000.
Further liquidation developed between September 25 and October 0 that in
Itself should have resulted in a tremendous decrease in brokers' loans, and yet
they only fell off in the two weeks $48,000,000, clearly because during this same
period new security Issues were floated amounting to $299.928.000, and rights
were taken up which required many, many millions more.
It Is Inconceivable that investment bankers would have been willing to
attempt to float new securities under the conditions which existed If they had
been aware of them, but brokers' loans have been an enigma and their compe.
sition has not been understood.
The weekly issuance of the total has been spectacular, as was stated by the
American Bankers Association, but it has carried with it no intrinsic knowledge
of the nature of the developments that resulted in the total.
. The fact that when the great liquidation of brokers' loans came about and
that in two weeks, In round figures, $J,700,000.000 of such loans were paid, did
not mean that this amount of loans was entirely the result of speculation, as
securities which were purchased for distribution that were being carried In
brokers' loans were sacrificed as to price and sold, together with other securities
which were being carried,
That there was Justification for a great rise in the stock market over the
period is clearly seen in the study of index numbers bearing upon production,
For instance, factory production on.a base that 1928-1925 equaled 100 was
94 in 1924; 117 in January, 1029; and 122 in September, 1929. Mineral produetion was 96 in 1924; 117 in January, 1929; and 118 In September, 129.
reight-car loadings were 98 In 1924; 92.4 in January, 1920; and 128 in Sop

lied, bai
paper p!
The
prices
ments
of their
resulted
the bon(
oonl
the coal
of this
industry
was the
way thi
tariffs.
sible fox
the prel
ploymem
for indt
was spp
As th
more an
securitil
The resl
selling
been P_
Such ac
necUon
who, Ins
mined '
values.
With
hearing
and bu
orderly
buyers
basis am
to be ne
It iS
with th,
hu.4lness
loss an(
necessat
and boi
Hess ma
must m,
meant ap
the Stat

in September, 1929. Farm prices were 06.0 in 1924; 95.0 in January, 1929; and
101.7 in September, 1929. Weekly earnings of labor were 98.0 in 1924; 105.6 in
January, 1929 and 105.1 In August, 1929. Department-store sales were 99 In
1924; 105 in January, 1929; and 128 in September, 1929. Electric-power proauction was 98.1 in 1024; 164.8 in January, 1929; and 159.5 Jn September, 129.
Electric-power gross revenue was 09.4 in 1924 and 162 in January, 1029.
No one can deny that this showing, particularly In connection with the
electric power industry, clearly warranted higher prices for securities. The
electric power industry expanded enormously on a sound basis because of the
new uses for power that have come from Inventions such as electric refrigerators and many similar devices that have resulted In the utilization of power
In an Increasing number of homes and in constantly growing amounts. Consolidations also resulted in greater economy in operations.
During this period our foreign trade has also developed soundly. Our exports
In 1024 were WK084,000,09; in 1928, $5,84,000,000. Our imports in 1024 were
$8,,95%000,000, and in 1628, $4,497,000,.
By and large, therefore, there is not the slightest doubt but that increasing
security prices in Important percentages were sound and that they were just

emerge
the fac
the ban
Anothe
trying
threat
It wo
whatso
use bad
ways w
the "re
ten,
tentet
tent to
and not
um
normal
gain ta

tember, 1929. Wholesale trade was 98 in 1924; 101 In January, 1929; and

utility

LOBBY INVESTIGATION

1437

fled, based on business conditions, although In 1028 commodity buying against

paper profits has undoubtedly been superficial.
The direct and particular forces which caused the tremendous crash in
pries were, first, capltal-gain taxes, which prevented readjustment of Investments as prices reached a point where men would otherwise have sold certain
of their stocks and naturally would have Invested the proceeds in bonds. This
resulted in the security market going forward too fast and caused stagnation In
the bond market.
Second, fear engendered in the mind of the business public by the action of
the coalition bloc In Congress in connection with the tariff bill. The activities
of this bloc and their methods aroused a feeling of uncertainty on the part of
Industry, and uncertainty Is the most difficult thin for business to face. There
was the fear that if this bloc succeeded In rewriting the tariff bill In Its own
way that It might come to believe that it had the power to reduce existing
tariff. The real fear was not due so much to the questions involved In pos
sible forward changes over the present tariff as In such changes as might reduce
the present tariff In such manner as to injure Industry, and result in unemployment. As soon as dealers In securltl , who are constantly on the watch
for indications as to business changes realized that this feeling of uneasiness
was spreading throughout Industry, they began selling stocks.
As the days went on and the power of the coalUon bloc seemed to be growing,
more and more selling entered Into the market. While this was going on new
securities issues were being offered which could not be satisfactorily distributed.
The result was that the market became so top heavy that the first adjustment
selling carried values down in such proportion that a vast publto which had
been purchasing securities both outright and on margin began to sell at once.
Such action, together with the uneasiness caused by he coalition bloc In con.
niection with the tariff, changed the psychology of millions of potential Investors
who, Instead of being willing to buy on the prospects of growing business, deter.
mined to hold off until prices had reached what might be called current business
values.
With a tremendous public trying to sell and the potential buying public not
caring to act, It became necessary for financial and business men to step In
and buy stocks which they did not want In order first to try and create an
orderly market while prices were going down to the point where Investment
buyers would come to the support of the market on a strictly present investment
basis and then to supplement such investment buying to the extent that proved
to be necessary.
It Is Interesting, important, and valuable to note what happened In connection
with the great market break of Tuesday, October 2. On one hand we had the
bu.4ness interests of the country, wl/o in their desire to protect the people, from
loss and catastrophe and to enable the continuation of production on a basis
necessary and valuable to every citizen, be he rich or poor, went Into the market
and bought stocks before they had reached what hight be called a current busi.
ness market Investing level with the certain feeling that for the moment they
must meet with loss. On the other hand, what of the politicans? An announcement appeared in the paper Tuesday morning, October 29, that the Governor of
the State of Now York had said that the next Investigation would be a public
utility investigation. Was there anything helpful about that fn an unfortunate
emergency situation? A Senator from Iowa was quoted as calling attention to
the fact that the situation that was developing might result In bankruptcy of
the banks. Was there anything helpful about that to the American people?
Another Senator, a leader of one of the great parties, followed the break by
trying to capitalize It for his party, and all kinds of Investigations have been
threatened.
It would seem well for the people to ponder these things. There is no doubt
whatsoever but that In every great human activity there are those who may
use bad judgment, and, what Is more unfortunate, those who may carry on In
ways which are not ethical. But a situation such as that which developed In
the recent panic sale of securities In the United States Is one where the good
of the people requires the application of sound judgment In weighing the expe.
riene, and knowledge through research of what has happened by those compe.
tent to carry It out without prejudice, political bias, or unfortunate publicity,
and not the breaking of men for the purpose of adding to political power.
Summarizing, we find that sound business growth was at the bottom of the
normal rise In the price of securities, that politics as exercised In the capitalgain tax prevented sales of securities which would have acted to hold the prices

.,,

1438

LOBBY INVESTIGATION

within bounds, that uncertainties caused by political blocs in Congress changed

a forward-looking national psychology into one of uncertainty, that 1ew set-url.
ties were created and issued more rapidly than the public could absorb and that
their inclusion In brokers' loans and other security loans wits not intelligently
understood, that certain of these forces worked to create high prihs for securl.
ties and others to undermine such prices after they had been attained.
The great question of the moment is what can be done to add further safety
to our security dealings while maintaining a great open market that will enable
industry to expand as it should and continue the employment of labor and
allow those who desire to buy and sell stock to do so on the soundest possible
basis,

goed.
Rovoll
through'
At the
agifletic
sufferih
tend tc
still ho
as a "
world
protect

RECOMMENDATIONS FOR OONSIDERATON

was on

Suggestions for consideration in developing it better protection for the public

in connection with stock-exchange operations:
Legislation removing the Federal tax on capital gain and that lit New York
State and other States where such a tax may be Inforce.
Take the tariff out of polities In so far as is humanly possible. Prae.
tically, this would not be difficult of accomplishment. Politically, it undoubt.
edly will be.
Create a joint committee of the New York Cleariltg House and Sleek Ex.
change whose duty it shall be to develop a basis of value upon which nargins
for stocks should be figured from time to time on the principle of net earning
percentage to price which would represent Interest return and having due
regard to current and near future money values and in the case of new issues
on clearly defined prospects.
Require changes in methods of bookkeeping of all houses which buy securities
for distribution in such manner as to enable them to report to the stock
exchange and enable the banks to report to the Federal reserve system total
loans that represent funds obtained for the purpose of carrying securities for
distribution,
and Stock Ex.
Create a joint committee of the New York Clearing Hou
change, the lenders and the borrowers, to pass upon the listing of contemplated
new security Issues on the basis of the figures showing the progress of total
loans obtained for the purpose of carrying securities for distribution, together
with the general conditions which prevail in the money market,
An exhaustive research carried- on under the auspices of the Federal Reserve
Bank of New York with the cooperation of the New York Clearing House
and the stock exchange of our money market, having in mind all the ques.
tons involved that have a bearing upon the sources of supply, both domestic
and foreign, the methods of use, the market for bankers' acceptances, and
the requirements of agriculture and industry, to be followed by recommend
tons for such changes In procedure, if any, as may be found to be necessary
for the public good.
The American Bankers Association after careful study saw clearly the menace
that lay within a tax upon capital gain 'and recommended its abolishment
in 1928.
The suggested changes In procedure are not presented with the recommend.
tion that they be accepted now but are offered for the purpose of showing
that there may be ways and means which can be made effective to better
protect financial operations having to do with the purchase and sale of securities

Inour great market.

It is fully realized that the research that is recommended If carried out

may clearly show that entirely different methods of procedure might accom.
plish better results. There would seem to be to question whatsoever but
that without research the best means to move forward constructively in the
maintenance of great broad markets for securities can not be determined.
Those who know nothing about money or credit or the real purposes of the
sort of plans for the
stock exchange, with the best of Interest are developing ill
so-called control of speculation, but intent does not make a plan workable and
neither does blissful ignorance. There may be those who would break prosparity with the hope that a discontented people would add to their political
power, and they would, of course, bind to destroy. But this Nation would not
seem to furnish a proper background for such efforts.
The United Stqtes of America is a great country with a wonderful record of
human efficiency. It contains within it forces for evil, but greater forces for

At t
governmen to
and as
played
the lie
Those
would
but wii
without
and co
under
This
that ab
efforts
eountr
nothing
only sp
coumntri
There
would
not con
so eleal
their bi

Sen
record

Mr.
Sent
the er
Mr.
it was
Sent
Mr.

Sm
Mr.

gain t

unnat

Mr.
Sena
Mr.

.ew
crease

based
Sena
of s

Mr.

LOBBY INVESTIGATION

1489

good. A great underlying purpose has seemed to follow its development from
Revolutionary days to the present, aimed to broaden the lives of all the people
through increasing their conveniences of living and their power to obtain them.
At the same time it has shown a marvelous unselfishness whe catastrophe or
affliction has reduced groups of people at home or abroad to hardship and
suffering. The envious, and the would-be destroyers of our progress see, or pre.
tend to see, our economic efforts and success as a worship of Mammon. We
still have great wrongs to right in politics, business, and In our national life
as a whole. But ther, has been tremendous progress In the great business
world toward better understanding of the necesity and the desirability for the
protection of all people. This progress has been based upon knowledge that
was only obtainable as a better stabilization of business pursuits has developed.
At the meeting of the International Chamber of Commerce in Rome in 1923
governments were advised to utilize the experience and knowledge of business
men for the reconstruction of war-torn Europe. This advice has been followed,
and as a result, through developments in which American business muen have
played a tremendous prt, there has been successful accomplishment far beyond
the hope of the world.
Those who would sell America short do not know their country and they
would sell to lose. But those who recognize It as It is, with its human faults,
but with Its great underlying purpose e In striving for the betterment of all men
without regard to their eltizenship. in material ways to enable greater comfort
an. convenience in living, nnd in those ways which lead toward a greater
understanding of high principle, will win success as they give their confidence.
This Is your country and my country. Our love of country Is not based upon
that abstract fact, but upon the realization that It Is the result of our combined
efforts to meet our responsibilities as we see them. Our duties are first to our
country, because without the r-cognition of such duties we could accomplish
nothing for humanity or for any other country. The influence of man can
only spread as It goes out from his family, his community, his State, and his
country.
There is no effective Jumping across these duties to an Internationalism that&
would serve a mystic outside world at the expense of our own people. It is
not conceivable that America can fail while its purpose Is that 'which has been
so clearly marked in the growth among men in business of the knowledge that
their business effort must have as its background the public good.

Senator WVALSix of Montana. Are you accurately quoted here in the

record Mr. KentMr. kENT. Wait a minute-

Senator WAL H of Montana (continuing). As having attributed

the crash-

Mr. KENT. I stated that was one of the reasons, but I did not state

it was the whole reason, nor the principal reason.

Senator WAlSH of Montana. However, you gave it as a reason

Mr. KmT. Yes.

Senator VALsH of Montana. What other reason did you assignf

Mr. KENT. I assigned as another reason the fact that the capitalgain tax had resulted in an increase in the price of securities that was

unnatural.
Senator WALsit of Montana. On capitalMr. KENT. Capital-gain tax.

Senator WASn of Montana. Had what?

Mr. KrET. The capital-gain tax, the Federal tax, and it is also a
New York tax as well-that that capital-gain tax had acted to increase the price of securities more than would have been normal
based on business. That was one reason.
Senator IVAusn of Montana. That the tax had increased the value
of securitiesI

Mr. KEiT. Yes.

1440

LOBBY INVESTIOATION

Senator WALsH of Montana. That seems a rather remarkable

statement to an ordinary layman, Mr. Kent.
.asigr
Mr. KENT. I can explain it very easily.

Senator WALsim of Montana. Well do it briefly, please.

Mr. KENT. When a man has securities that go up in price because
of good business, and he sees that he has a large profit in those
securities, when the time comes that he feels that the price of those
securities has reached the point where he would like to sell. and
possibly buy bonds to readjust his investment position, he hesitates
to do it and does not do it often, in more cases than we have any
idea of, because lie sees that if he does, it is going to mean the follow.
ing year he will have to pay a large tax. It deters men from selln,
It results in a tremendous number of individuals holding their securities who would have otherwise have sold them. If they had sold
them, that stock being put in the market would have had a tendency
to hold down the price so that it would not have risen as high as it
did. A large part of the increase was based on new business and
was very legitimate.
Senator VALiH of Montana. Those are the two reasons you
assigned?
Mr. KENT. No; I gave other reasons.
Senator WAILSH of Montana. What other reasons did you assign?
Mr. KXNT. I stated that the increase in the issuance of new securi.
ties during. 1929 was so great that it had contributed to that fall.
The securities that were issued in 1929-Senator IVALsH of Montana. That is, too many and too large
securities were issued?
Mr. KieNT. Too what?
Senator WALsm of Montana. Too many securities were issued and
in too large volume?
Mr. Kuwr. Exactly, yes.
Senator WVALsH of Montana. Securities that had no real substance
back of them ?
has a substance
Mr. KENT. No, no. I didn't say that. The security
other business
any
or
business
industrial
an
represents
it
if
it,
back of
which is sound and is capitalized properly.
Senator WALSH of Montana. And making money?
Mr. Kw.-T. And making money. The price is based Senator WAsH of Montana. And there were too many securities
put on the market of companies that were actually making money,
in our udgnment I
Mr. KINT,. That is not the idea. The point is this: The American
people have a .certain income. From that income they buy their
necessities and they also buy their luxuries. They put some into
savings accounts, and they buy securities for investment. Now
during the five years of 1924 to 1928 inclusive, the total amount ;j
national income, in o far as it could be figured, was three hundred
and seventy-nine billion, one hundred and sixteen million, and of
that total about twenty-eight million went apparently into new
securities.
Senator IVALsH of Montana. Mr. Kent, we don't care to have you
justify your position at all. The committee is not interested in that.
All we want to know is what your position was.

Mr
Sen
Mr
secon
becan
charal
Sen
such
conse
chan.
of the
Mr
opinii
Se,
Mr
Ser
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Mr
some
mark
No o:
make
think
are
in
er
late i
the r
in w

Mr

of th
those
youSe-Mr
Sel

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Mr
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Mr
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Mr
idly
loans
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to ur
Se
incid,

LOBBY INVESTIGATION

1441

Mr. KzT. I will try to explain that to you, Mr. Walsh.

Senator VALSH of Montana. Now, was there any other reason you
assigned?
Mr. K NT. Yes; I think there was. Just let me look at this a
second, if you please. I didn't attempt to assign all the reasons,
because there are many little intricate things in a situation of that
character.
Senator GLAss. Mr. Kent, did you omit from the reasons assigned

such a statement as that contained in the New York Times, a very

conservative paper, that 90 per cent of the transactions on the exchange were as much gambling as if -one were to bet on the point
of the arrow at the roulette table?
Mr. KENT. I didn't mention that, because that is only a matter of

opinion that it is very difficult to see through.

Senator GLASS. It is a matter of universal conviction, isn't itt
Mr. KENT. It is what?

Senator GLAss. I say, it is a matter of universal conviction, isn't

it,except in your opinion?
Mr. KIET. Why, I think without any exception speculation has
something to do, quite a little to do, with the rise in the stock
market, but you must remember speculation is stopped by something.
No one is going to speculate unless they think they. are going to
make a profit. They won't speculate by buying securities unless they
think the securities are going up, and the won't think securities
are going up unless they feel the business of the country is progressing in such a way that there is going to be greater earning power.
Senator GLAss. Do you think one tithe of the people who speculate in stocks examine the securities in which they speculate or have
the remotest knowledge of the earning capacities of the companies
in Whose stocks they bet ?
Mr. KENT. A tremendous number of people do, but the balance
of the people are affected psychologicaly by the knowledge that
those have who do watch the matter -from that standpoint,
Senator WALSim of Montana. Now, if there was any other reason
you assigned, let us have it.
Mr. IENT. I said: "Summarizing
Senator WASr of Montana. Never mind. Our time is limited,

you know. Is there any other reason you assigned?

Mr. KENT. I spoke of the issuance of securities and their inclusion
in brokers' loans.
Senator WALsir of Montana. You told us about that.
Mr. KE T. The brokers' loan total is a spectacular total.
Senator WVALSH of Montana. Did you mention the brokers' loans?
Mr. KmnT. Yes, I did.
Senator WALn of Montana. Please give us what you said about
that.

Mr. KEXT. That new securities were created and issued more rap-

idly than the public could absorb, and that their inclusion in broker'
loans and other loans was not intelligently understood; that certain
of those forces worked to create high prices for securities and others
to undermine such prices after they had been attained.
Senator WWASH of Montana. You mentioned the brokers' loans as
incidental to the isuance of excessive amounts of securities?

1442

LOBBY II VESTIG.tTION

Sena

Mr.KENT. Yes.
Senator WALSH of Montana. What was the order in which you
mentioned those? We have three reasons: First, the action of the
coalition; second, the capital tax.
Mr. KENT. Yes.
Senator WALSH of Montana. And third, the issuance of too many

reason
Mr.
them w
Sena
of brok

Mr. KE.NT. Yes; and then the other, the psycholooical effect upon
the people of the fact that the Senate did not function in connection

Mr.
stand t

securities.

ner of

with the tariff bill.

as cha"

enumerated.
Mr. KENT. No; that was not the first. You mentioned it first,
but I didn't mention it first. I didn't mention them in the order
of their force.
Senator WALSH of Montana. I wits simply designating how many
reasons there were. Three reasons you assigned.
Mr. KENT. Four; because I covered brokers' loans.
Senator WALSH of Montana. But you mentioned brokers' loans as
incidental to the issuance of excessive securities.

Stock'.
to find
Sena
loans,
Mr.
only a
ena
Mr.
Sena

Senator WALSH of Montana. What was the order in which you

mentioned them?
Mr. KE.NT. The order wasSenator WALSH of Montana. First?
Mr. KE.r. First was the capital gain tax. "Summarizing, we find
that sound business was at the bottom of a normal rise, and the
capital gain tax presented sales of securities; that the uncertainties
caused by politicAl bloas in Congress"Senator WALsu of Mont'ana. That is the second.
Mr. KNT. That new secm'ities were created and issued more
rapidly that the public could afisorb, and their inclusion in brokers'
loans and other loans was not intelligently understood.
Those were the particular things that I mentioned,
Senator WALSH of Montana. There are agencies here in the city
of Watshington, to which our attention has been called which send
out to people around the country circular letters telling what is
transpiring inWashington and what is the probable effect of what
is transpiring.
Mr. KENT. Yes.
Senator WALSH of Montana. You get letters of that kind, do you?
Mr. KE.NT. No; I do not.
Senator WALSlK of Montana. You have seen them?
Mir KHNT. I have seen ihem. I don't take them, because I have

Mr.
tuate
Sen
about
Mr.
as this
Seno
issued
The
able rm
and Co
system
factors
signed

no need for them.

Senator WALSH of Montana. It wasn't from any such source as

may im

Senator WALSH of Montana. That is the first, however, that I

Mir. KE.T. No; it is not incidental.

that that you got the idea that the coalition was responsible for
the stock-market crash?
Mr. KExT. I did make that statement, but I didn't get my opinion
from those letters.
Senator WALsit of Montana. Of course, you keep advised as to the
Senior
ontna.Of
ALS ofours, yu kep dvisd a totheto
action of the Federal Reserve Board?
Mr. (ET. I do; certainly.

Banker

$1100

enee an,
Durli
system
emntry

since th
sloned

volumeo
Com

dueet
duced
cent In
these e

The:
tion to
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tfvely
Wteo
tion of
aceemn
take
stances
Use, elt

LOBBY INVESTIGATION

1443

Senator WALSH of Montana. You know they had quite a different

reason for the stock crash, don't you?
Mr. KENT. They gave their own opinion about it, and some of
them were sound, in so far as I recall.
Senator WALSH of Montana. You know that the mounting volume

of brokers' loans more than a year and a half ago gave them all man.

ner of concern don't you?

Mr. KENT. It gave them all concern, because we could not understand them. We did not know what the brokers' loans included, and
as chairman of the commerce and marine committee of the American
Bankers' Association I asked that the Federal reserve system and the
Stock Exchange and the bankers examine the brokers' loan situation
to find out just what it meant.
Senator WALSH of Montana. What was the amount of brokers'

loans your bank was carrying

Mr. KzN4T. Well, our loans were very small. I think they were
only about $40,000,000.
Senator WALSH of Montana. $40,000,000?
Mr. KWIT. Yes.
Senator WALsu of Montana. With a capital aggregate assets of
$110,000,000?
Mr. KENT. That is capital assets. They have deposits which fluc.

tuate from $450,000,000 to $550,000,000.

Senator WAJiSH of Montana. And you think, as a rule, you had

about forty or fifty millions out on brokers' loans?
Mr. KPNT. I think we had; yes. They are perfectly safe loans,

as this recent collapse shows.

Senator IVALsH of Montana. I call your attention to a statement

issued by the Federal Reserve Board on February 6 last, as follows:
The U'nited States has during the last six years experhneed a most remarkable run of emnomnV activity and productivity. The production, distribution,
and consumption of gods have 1en in unpretedented volume. The economic
system of the country has functioned efficiently and smoothly. Among the
factors which have contributed to this result an Imimrtant place must be as.
signed to the operation of our credit system atnd notably t) the steadying influence and moderating policies of the Federal reserve system.
During the last year or more, however, the functioning of the Federal reserve
system has encountered interference by reason of the excessive amount of the
ciuntry's credit absorbed in speculative security loans. The credit situation
since the opening of the new year Idicates that some of the factors which occasioned untoward developments during the year 1928 tire still at work. The
volume of speculative credit is still growing.
Coming at a tipie when the country has lost some $500.0O0,000 of gold, the
effect of the great and growing volume of speculative credit has already produced some strain, which has reflected Itself in advances of from 1 to 11 per
cent In the cost of credit for commercial uses. The matter is one that concerns
every section of the country and every bushlie.q Interest, as an aggravation of
these conditions may be expected to have detrimental effects on business and
may impair Its future.
The Federal Reserve Board neither assumes the right nor has It any disposition to set itself up as an arbiter of security speculation or values. It is, however, its business to see to It that the Federal reserve banks function as effectively as conditions will permit. When it finds that conditions are arising
which obstruct Federal reserve banks In the effective discharge of their function of so managing the credit facilities of the Federal reserve system as to
accommodate commerce and business, It is its duty to Inquire into them and
to take such measures as may be deemed suitable and effective in the elreumstances to correct them, which, in the Immediate situation, means to restrain the
use, either directly or indirectly, of Federal reserve credit facilities in aid of

1444

LOBBY INVESTIGATION

the growth of speculative credit. In this connection the Federal Reserve Board,
under date of February 2. addressed a letter to the Federdl reserve banks,
which contains a fuller statement of its position:
"The firming tendencies of the money market which have been in evidence
dnce the beginning of the year-contrary to the usual trend at this season-.
make it incumbent upon the Federal reserve banks to give constant and close
attention to the situation in order that no Influence adverse to the trade and
industry of the country shall be exercised by the trend of money conditions
beyond what may develop as inevitable.
"The extraordinary absorption of funds in speculative security loans which
has characterized the credit movement during the past year or more, in the
judgment of the Federal Reserve Board, deserves a still further attention lest
it become a decisive factor working toward a still further firming of money
rates to the prejudice of the country s commercial Interests.
"The resources of the Federal reserve system are ample for meeting the
growth of the country's commercial needs for credit, provided they are competently administered and protected against seepage into uses not contemplated
by the Federal reserve act.
"The Federal reserve act does not, int the opinion of the Federal Reserve
Board, contemplate the use of the resources of the Federal reserve banks for
the creation or extension of speculative credit. A member bank is not within
its reasonable claims for rediscount facilities at its Federal reserve bank when
it borrows either for the purpose of making speculative loans or for the purpose
of maintaining speculative loans.

"sThe board has no disposition to assume authority to Interfere with the

loan practices of member banks so long as they do not Involve the Federal
reserve banks. It has, however, a grave responsibility whenever there Is evi.

dence that member banks are maintaining speculative security loans with the
aid of Federal reserve credit. When such is the case the Federal reserve bank
becomes either a contributing or a sustaining factor In the current volume of
speculative security credit. This is not in harmony with the intent of the
Federal reserve act nor Is it conducive to the wholesome operation of the
banking and credit system of the country."
The board begs leave to call the attention of the Senate to the fact that the
purport and language of its statements do not agree with those in the
preamble of the Senate resolution. The board's statement concerned itself with
credit conditions. It disclaimed both the authority and the desire to "set itself
up as an arbiter of security speculation or values." That still Is the board's
opinion.
At the time of the issue of its statement It was the belief of the board that
It could count upon the cooperation not only of the Federul reserve banks
but of leading member banks everywhere in the country in making successful
an effort to bring about an orderly readjustment of the credit situation; and
the board has been confirmed in this belief by what has taken place since.
This also is the view of the Federal advisory council, as will be seen from
the following minute of Its proceedings which was presented to the board
February 15 on the occasion of its recent quarterly meeting:
"The Federal advisory council approves the action of the Federal Reserve
Board in Instructing the Federal reserve banks to prevent, as far as possible.
the diversion of Federal reserve funds for the purpose of carrying loans based
on securitleq. The Federal advlso y council suggests that tll the member
banks in each district b?. asked directly by the .Federal reserve bank of the
district to cooperate in order to attain the end desired. The council believes
beneficial results can be attained in this manner.

You understood that, did you not, as a warning to bankers to

restrict their brokers' loans.
Mr. KNBT. That was last February. I understood that.
Senator WALsi of Montana. To what extent did you restrict your
loans in view of this admonition f
Mr. KXNT. Very materially. Wait a minute; I would like to take
that back, because it might give you the wrong Idea. I don't know
that our loans came down at that time, but they were not loans that
were made from the proceeds of other loans that we had made with
the Federal reserve system. Forty million dollars in loans, If that

was th
$4o,oo

investr

Sone
the Fei
Mr.
borro,
the t
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Mr.
Sent
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be vei

LOBBY IN VESTIGATION

1445

was the total at that date, whicl no one could remember, naturally;
$40,000,000 in brokers' loans would be a very small amount of the
investment of the bank.
Senator WALSHx of Montana. What effect did this admonition of
the Federal reserve system have on youI
Mr.

KuT.

It had absolutely no effect on any bank that was not

borrowing of the Federal reserve bank for the purpose of lending on

the stock exchange. There was no reason for it to have any effect.
Senator WAlsh of Montana. It didn't have any effect on Mr.
Mitchell of the National City Bank?
Mr. ZiNT. I couldn't say or Mr. Mitchell.

Senator WALSH of Montana. Let me give you some information

about it. I have here the Financial Chronicle, which is a recognized
journal in financial circles, is it not?
Mr. KENT. Yes.

Senator WALSH of Montana (reading):

President Mitchell of National City Dank says his institution will continue
to aid in critical money-market situations.

He says:
The credit crisis of this week Is a closed book; that is obvious from the way
money acted during the past two days.

That was the panic of last spring.

But on the heels of this assurance Mitchell warned against overconfidence
on the part of the public. For if the public were to assume that an "all clear"
signal has been set for speculators a recurrence of the crisis of Tuesday would

be Inevitable, he said:

"It would be unfortunate," he said, if any action we took to meet the

crisis had been construed by the public as indicating that our warning, again
and again repeated, In regard to the undue credit extension had in any way
been changed.'
Mlithell's statement was made to newspaper men summoned to his office.
Although he may have been' actuated by the criticism directed against him
by Senator Carter Glass, of Virginia, In Washington last night, he declined
to discuss the statement In which the Senator said Mitchell should resign as
a director of the New York Federal Reserve Bank.
"I have nothing to say about the Glass matter," he said.
He then launched upon an analysis of the present credit situation as Indicated, although he did not say so in so many words, that he felt it incumbent
upon him to make a further statement of his position in view of the great In.
fluence the announcement he made Wednesday had had upon the subsequent
course of stock prices.
His own bank, he said, had Increased its loans in the call-money market by
something more than $25,000,000 Tuesday and Wednesday. At the high point
of the back's "street loans" Wednesday the figure stood at $150,000,800.

You remember these transactions, do you, Mr. Kent?

Mr. KENT. Yes, I remember that.
Senator WALS of Montana. Did you make a speech at that time
denouncing Mr. Mitchell for his attitude of definance to the Federal
Reserve Board?
Mr. KENT. I did not, because it seemed to me his idea was to try
to protect the market and prevent a collapse. In other words, if
these brokers' loans are called, and the brokers who have to pay
these loans can not obtain money from anyone else under certain
circumstances, then there are conditions that can arise where it would
be very important for the business interests of the whole United
78214-20--im 8---14

1446

,/

LOBBY INVESTIOATION

States to have someone else step in and make those loans rather than
have sales.
Senator- GLASS. Mr. Kent, if you were a sworn officer of the
Federal reserve bank, would you regard your obligation to the stock
market above your sworn duty as a director of the Federal reserve
bankf
Mr. KaNT. Absolutely not; but I don't think that was involved at
all Mr. Glass. I can see why you might have that view.
Senator GLASS. Involved f Mr. Mitchell textually said so.
Mr. KiNT. I think, Mr. Glass, you have to bear in mind this: If
the banks of the country allow anything to develop that is going to
mean a crash, it is going to hurt business in the country; and the
interests of the country and all of the people demand business be
kept on an even keel.
Senator GLASS. But when you speak of business you are speaking
of stock speculation.

Sen
to do
alreac
autho
ment
Mr.
other
indus
Sen
to th
Mr.
Sen
Mr.
were
They
show

Mr. KENT. No; I am not.

Senator GLass. You know there is other business in this country

sente
were

Mr. KEXT. Senator Glass, I see your point of view clearly, but you

proh"

Federal
uny
Wye feel that we have an obligation which is Paramount to
reserve warning, or anything else, to avert, so far us lies within our power,
any dangerous crisis in the money market.

ing "

besides stock speculation, and the Federal reserve system was set
up to protect that business and not to protect stock speculation?
do not appreciate the fact that a business industry in this country
can not sell its securities, industry can not expand and employ labor
and develop the things that are necessary for the people. Conse.
gently you must have a stock market that is handled in such a way
that people will buy as well as sell.
Senator GLAss. Here is what Mr. Mitchell said:

Would you take that position as a sworn officer of the Federal

reserve system ?
Mr. K eNT. It doesn't seem to me that I am iustfled in taking an
position about anything of that character until I am drawn into i
Then I would take the position that seemed to be the one for the
publid good.
Senator GLASS. But you seem to have thrown yourself iuto the
position of criticizing the Congress of the United States or, rather,
Ihe Senate of the United States, for the crash in the stock market.
put it quite that way. You must
I didn't
Mr. Glass,
Mr.inKENT.
bear
d this:
Does the
Senate of the United States interest the
people of the United States or does it nott Now, if the Senate of
the United States in its routine matters does not interest the people
of the United States I think nobody will deny that when the Senate
is working on a tariff bill that business, industry, is vitally interested
in what it does.
Senator GLASS. Mr. Kent, right there, at that point: How do you
1ust

now account for the then unprecedented volume of brokers'

loans when the Senate was not in session, when the Senate was not
operating, when the nature of any tariff bill could not possibly have
ben foreseen by those who were speculating in stocks?
Mr. KEsT. That was an entirely different matter. It had no
reference whatever to the tariff. That developed-if you would like
to have me tell you-in this way. Business was progressing-

Sen
of the
for sti
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Mr
Sen
Mr
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Ser
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the p
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Mr

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iba
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*rBel
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Mr
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M
Mr
M

LOBBY INVESTIGATION

1447

Senator GLASS. I want you to tell me how the tariff had anything
to do with that unprecedented volume of brokers' loans that was
already alarming the country, already alarming the Federal reserve
authorities, and that was not checked by any authoritative statement from the then existing administration.
Mr. KI T. That was only one feature of this development. Another feature was the necessity that was developed in the minds of
industry as to their future business.
Senator GLASS. But that was a feature that carried brokers' loans
to the then unprecedented point of $6,000,000,000, wasn't it?
Mr. KENT. It reached $6,800,000,000 about the middle of October.
Senator GiAss. Yes.
Mr. KENT. But those brokers' loans were proved to be good. They
were brought down in two weeks nearly two billions of dollars.
They were paid without one single default. The brokers' loans
showed, when they were worked out in that way, that they repre.
sented the securities of the industries of the United States which
were sound and no one lost a dollar.
Senator GLASS. It is not a question of security; it is not a question
of the soundness of the loans. When the law textually and explicitly
prohibits the use of Federal reserve credit, Federal reserve facilities,
or stock-speculating purposes, nobody has any right to use them for
that purpose.
Mr. RiNT. Did anyone use it for such purpose?
Senator GLASS. Ye:; you did.
Mr. KENT. No; we did not. I beg your pardon, Senator; we did
not.
Senator GLASS. When you say, at the very time you are borrowing heavily, or any bank is borrowing heavily - from the Federal
reserve bank, that you are not borrowing on your eligible paper for
the purpose of making loans to brokers, that is an evasion of the
fact. You are borrowing to make loans to brokers.
Mr. KENT. No, sir, Mr. Glass. I take exception to that statement
because it is not so. In the case of the Bankers Trust Co. I know
ositively it is not true. The Bankers Trust Co. and every other
bank in the United States has to invest the money it has on deposit.
It invests it in certain ways. A part of that money goes into brokers'
loans. It is a good place to put that money. It represents a secondary reserve.
Senator GLASS. Let us see whether it is trite or not. I am not talking about a good way, nor I am not talking about the security. of
these loans, whether good or bad. At the time you were loaning
$40,000,000 to brokers, had you any rediscount at all with the Federal
reserve system?
Mr. KiET. A large part of the time; no.
Senator GLASS. I am not talking about a large part of the time.
At any time, had you any?
Mr. KHNT. Very probably so; but I will tell you why, Mr. Glass.
Every day when you check up your business you find your reserve is
over or short. If the situation is such that you carrySenator GLASS. Why over or short? Why over?
Mfr. KENT. Why over?
Senator GLASS. Yes.
Mr. Kiwi. Because-

1448

LOBBY INVESTIGATION

Senator GLASS. Because you are making $40,000,000 of loans to

brokers.

Mr. KEzT. No, sir; because deposits have come down. They are
over when deposits go down. If deposits go up, the reserve has to be
increased. Those deposits will change millions of dollars day by day,
and sometimes a bank will go into the Federal reserve system for a
day or two or a week to take care of this fluctuation in deposits, on
its natural business, and it may hold its investment in brokers' loans
right straight through that period. They have absolutely nothing
to do with the extent of the borrowing from the Federal reserve bank .
I am very glad you brought that up, because I think you gentlemen
ought to understand it, because that business is done on a perfectly
sound basis.

Se

mar.
nowM
Siadv
X
did
Se

Senator CAmAWAY. Let me ask a question. Don't your brokers'

loans fluctuate from day to day?

earn
M
pro
Se
wha
M

down, and y ou don't segregate the money you get from the Federal
reserve system and loan it to investors, do youI You loan it to
brokers or anybody else?

posi
rese]
ord"
remi

all.
Senator CARAwAY. Don't you let brokers have any money you
get from the Federal reserve system?

wou
that

Senator GLASS. We think we do understand it.

Mr. KENT. Yes.

Senator CARAWAY. They fluctuate as your deposits run up and

Mr. KENT. No, you are mistaken. We don't handle it that way at

Mr. INT. No, sir.

Senator CARAWAY. Do you keep it separated from any other fund?f

Mr. KENT. We handle it in this way. We have a certain invest-

ment in brokers' loans a secondary reserve, if you want to call it so.

Senator CARAWAY. But you make it out of your deposits moneys.
You don't count one dollar out to an industry and another to a
broker, do you I
Mr. KENT. Certainly not.

Senator CARAWAY. Well, .I know you don't, and there wasn't any
use to say you do.
.0
Senator GLASS. My interest in this matter is that of preserving
the integrity of the Federal reserve --ystem.
Mr. Kz. Yes.
Senator GLASS. And prohibit banks from violating both the spirit,
the intent and the text of the law, which has been done in New York
during this tremendous expansion of brokers' loans. When a bank
is head over heels in brokers' loans it ought not be permitted, on its
eligible paper, to rediscount at the Frederal reserve bank, because that
is a violation of the law.
Mr. KeNT. Mr. Glass, possibly I can explain it to you so you will
see the point in a different way. Securities are being issued in New
York constantly, securities that represent funds that are desired by
industry to carry on their business. Those securities have to be held
by the syndicates who buy them after they have paid the indus
the funds unless they can be distributed. WhiFe they are being
distributeA they borrow and they go into brokers' loans. Now, that
is not speculation. That is business,

Mr.

loan

tion

situl
S
aver

M
Fec'
fro

thai
15N
S
Un
fro

tion
A
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the
in..
di
wil
by
pro,

LOBBY INVESTIOAMON

1449

Senator GLAss. Oh, I understand that, Mr. Kent. That is primary, that is elementary. I understand that, but don't you know

now-

Mr. KENT. May I askSenator Grass. Don't you know this; that stock after stock was
advancing away beyond the earning power of the industry?
Mr. KENT. Yes, sir; and I also know that the Bankers Trust Co.
did not accept those stocks as collateral on any such advanced price.
Senator GLAss. I am not accusing the Banker' Trust Co. What
I am saying is that numerous stocks were advanced far beyond the
earning powers of those companies which those stocks representedMr. KENT. Yes; for the present. They were discounting future
profits.
Senator GLASS. Oh, they were discounting impossibilities. That is
what they were doing.s
Mr. KENT. Possibly so. I am not trying to measure their value.
Mr. Glass, I take it then that you would mean this: That if the deposits of a bank, or its reserve position, required it to increase its
reserve for a day or two or three or four days, and it borrowed
ordinarily of the Federal reserve system to do that, its broker loans
remaining the same constantly, that you would have them call those
loans instead of borrowing to meet that situation. I think that
would develop a very unfortunate situation in the New York market
that would be harmful to the country.
Senator GyAss. It wouldn't develop any more unfortunate situation that the banks find themselves in now, would it?
Mr. KENT. Well, I don't think the banks are in an unfortunate
situation.
Senator GrAss. In other words, obedience to the law might have
averted this situation instead of aggravating it?
Mr. K aT. I really don't consider that the borrowings of the
Federal reserve bank to meet the reserve position as it is necessary
from time to time here and there for a day or so represents anything
that is against the law at all.
Senator GLASS. The curse of the Federal reserve system is that
15-day provision-.
Mr. KE. Yes.
Senator GrAss. Which allows banks upon their own notes with
United States bonds and securities, to borrow money for 1 g days
from the Federal reserve system.
Mr. KENT. Yes, sir.
Senator GLASS. That is a tremendous factor in this stock specula-

tion. Don't you know that?

Mr. K'ENT. I wouldn't attempt to say what factor it is, because I
never have had access to the figures. What I have done, Mr. Glass
is to try to get the Federal reserve system, the New York banks, and
the stock exchange to make a careful research of the money market
in New York, and I believe that that can be carried on by those three
different forces to the good of the United States. I believe they
will find ways to be helpful, and I asked to have that done in April
by putting it up to the American Bankers' Association and they approved it. That is, I was going to them, as chairman oi the commerce

1450

LOBBY INVESTIGATION

and marine commission. In San Francisco, the first part of October,

a resolution was presented on the floor and approved, requesting an
examination of this whole money market by those three interests,
because they represent the public on one side, the Federal reserve
bank, the lenders on another side, the bankers and the borrowers i
the stock exchange. Until we have all those figures it is quite impossible for me to tell exactly what you would mean. Whether your
thought is correct or not.

Se.
and
comr
Mr
Set
coul(
Mr
ing

which we haven't done yet. how the Senate, not yet assembled, and
the tariff bill not yet conceived could have run brokers' loans up in
New York, nearly a yeat ago, when the Federal reserve system issued
its warning, by billions of dollars. That is what I would like to
know.
Mr. KENT. lVell. Senator Glass. I think I can explain that very
easily. There was no one cause that brought this stock.market
development,
Senator GLASS. I know, but you assign as a cause the so-called
coalition that did not occur until a year after the period I am talking
about now.
Mr. KzNT. Yes, sir. I am very glad to explain why I feel that
way, if you would like to have me.
Senator GLASS. Yes.

Se.
any
M
Se
M

Senator GLAss. What I really meant was to ascertain from you

Mr. KENT. The Senate met in June.

I think it was June 12, at

the request of President Hoover, to pass a tariff bill.

Senator GLASS. But, Mr. Kent, what I am calling your attention to
is that this extraordinary and then unprecedented advance in brokers'
loans occurred before Mr. Hoover was elected, before any Senate
assembled, and before there was any conception of what sort of
tariff bill, if any, would be attempted.
Mr. KEsT. But no harm had come at that time. The harm didn't
come until October.
Senator GLASS. There hadn't been this crash at that time* there
hadn't been this wreckage at that time; but I have understo.a from
what has been said that you were ascribing this to the tariff bill that
then hed not been conceived at all rather than to the riot of specula.
tion which occurred a year before. the tariff bill was even projected.
Mr. KENT. Mr. Glass, suppose we accept your idea that brokers'
loans-the increase in brokers' loans-constituted the main reason
why the stocks fell off. Stocks then were sold we will say, in Sep.
member or October because of that situation. Now, who is going to
buy those stocks? Somebody has got to buy them. Before the ncertainty developed on the part of the industry in this country that
was induced because the Senate of the United States could not
function we had a forwardlooking lot of buyers-Senator GLASS. The Senate had not then convened.
Mr. K.ziT. But as soon as that situation developed those potential
buyers disappeared.
senator CAnAWAY. Let me ask you a question. You said these
same securities were selling at an inflated price, far beyond their
industrial worth
Mr. KENT. I did not say how far. No one can measure that.
Senator OAIAWAY. Yes. They were, were they not?
Mr. K.NT. In my opinion, yes.

earn

Se

M
to th
earni
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and
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M
had

LOBBY INVESTIGATION

1451

Senator CARAWAY. Then ought you to have permitted to go on

and palm them off on the unsuspecting public? Is that what you
complain of?
Mr. KENT. No. I took no part in the distribution.

Senator

CARAWAY.

No action which the Senate could have taken

could have made those bonds worth what they were selling for?
Mr. KENT. That depends. That depends on whether you are buying on current earnings or whether you are buying because future
earnings are going to make the price better.
Senator CARAWAY. I heard you say they were selling far beyond
any possible future earnings.
Mr. KENT. I did not say that. Senator Glass said that.
Senator CARAWAY. Well, they were, were they not?

Mr.

KE.NT.

No. Not any possible future earnings.

Senator CARAWAY. Well, any probable honest'earnings.

Mr. KE-r. Well, I don't know. Let me just call your attention
to this one thing, because it might give you an idea: In 1924 the
earnings of the public utilities were 99 per cent, based on 1928 and
1925 as 100. In January, 1929, they were at 162. That was a tremendous increase in earnings, and you could expect a further tremendous increase.
Senator CARAWAY. Would the tariff have anything to do with
public utilities earnings?
Mr. KiT. Yes. That is, the gross earnings of public utilities.
Senator CARAWAY. But does the tariff affect the earnings of public
utilities?
Mr. KENT. No; but the tariff affects the opinion of people who
are looking to a forward situation, and I will tell you why. Public
utility earnings come from power which they furnish industries,
and if industry falls down because of the tariff situation, then those
public utilities earnings will fall off.

Senator

CARAWAY.

Just a minute. What industry fell down on

Senator

CARAwAY.

In other words, the people got afraid of you

account of tariff legislation? Name an industry that fell down.

Mr. KzNT. What fell down in connection with this tariff
situation?
Senator CARAWAY. What industry fell down?
Mr. KENT. What fell down in connection with the tariff situation
was the forward-looking attitude of the people.
folks who were speculating in New York?
Mr. KENT. Oh, no. I am not a speculator.

Senator COAAwAY. Well, you are defending them and of course,

that is the same thing. You approve what they d0. What I am
asking you to do-you are posing as a great economistMr. KENT. I am not posing as anything, pardon me.

Senator CARAWAy. Then you have got a correct appraisement.

What industry fell down by reason of the Senate not passing a

tariff bill?
Mr. KrNT. The interest of all industry--

Senator

CARAWAY.

No. What particular industry fell down.

You don't know, do you?

Mr. KENT. Now, wait a minute Senator. You are asking for
something that did not have an influence, and we have not claimed
had any influence. The industries in the country, when they saw

1452

LOBBY INVESTIGATION

this development in the Senate, more particularly during the last

two month, when they saw that the Senate could not function, be.
gan to hesitate, and there was a feeling of uneasiness in industry,
Senator OCRAWAY. Well, what industry commenced to hesitate?
Mr. KENT. Suppose you take the chemical industry. I am rather
inclined to think that in the chemical industry they had to stop
because they did not know whether they would have to import
chemicals or make them here.
Senator CARAWAY. Well, what particular person engaged in the
chemical industry-what firm commenced to hesitate?
Mr. KE, T. I have not investigated the matter on the basis of firms.
Senator CARAWAY. WellMr. KE T. I have talked with hundreds of men.

Senator CAIAWAY. Who did you talk with?

Mr. KENT. So many individuals, I haven't the slightest idea which

particular individual gave me any particular thought, but what I

was doing was this: I was studying this matter on a broad basis.
Senator CARAWAY. I know what you were doing, but tell me what
men you talked to. Everybody knew what you were doing while you
were doing it, but we want to know now on what facts you pretend
to speak.
Mr. XKewr. My facts were the consensus of opinion of a tremendous
number of people.
Senator UARAWAY. Give me the name of anyone.
Mr. KENT. I could not give you the name of any one man who
influenced the situation, because that is not the way you get a con.
sensus of opinion. You take it from conversations of hundreds
of men.
Senator CARAWAY. You get it by just asserting it without having
any facts back of it; is that the ideat
Mr. KENT. No, sir. I consider that the opinions of men carry
facts. I talked with possibly two or three hundred men from all
parts of the country. In San FranciscoSenator CARAWAY. One would think you could remember them if
you talked to two or three hundred.
Mr, KENT. I can not remember particularly any one of those that
I had talked to about this particular situation.,
Senator CARAwA . I know, and you know if you were to name
somebody we would call him and find out whether you correctly
quoted him, and therefore you decline to name him.
Mr. KeNT. If.I could give you the names of a hundred bankers
that I talked to in conversation, it would be unfair to them, because
I could not say. that any one of those gave meSenator CAIRAWAY. You are afraid to do it for fear they will come
here and say that you did not quote them correctly.
Mr. KENT. No; I am not,. am not quoting them. I am telling
you how I received my impression.
Senator CARAWAY. You are trying to let on like you had informa.
tion and you know that you haven't got it, are you not?
Mr. KENT. No, sir.
Senator CAAWAY. Then you give us the name of one man.
Mr. KENT. I do not know the name of any bankerSenator CARAWAY. No; I know you don't.

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LOBBY INVESTIGATION

1453

Mr. KExr. That, I could tell you, fairly gave me this whole idea,
because no one banker did.
Senator CAnAwAY. Is it not remarkable that a man of your large
experience can not recall anybody that told you anything?
Mr. KENT. Senator, when you have been studying a matter for
six months and you have talked with endless individuals about it,
and no one have you taken up the whole subject with, you are just
studying it without. consideration of the particular individual that
you are talking with, you get a consensus of opinion.
Senator CARAWAY. I know exactly the reason you do not tell it.
Everyone knows that.
Mr. KENT. My reason is that I do not want to be unfair with
anyone.

Senator

CArawAy.

The reason is you haven't got the information

and you don't want to reveal that fact.

Mr. KENT. Senator Caraway, I prepared just a short statement
here that might be helpful to you.

Senator

CARAwAY.

No, no. You are being entirely helpful to me.

Senator

CAaAWAY.

No, no.

I just want to know when you come here and under your oath swear
that people told you certain things, then you can not remember one
of them.
Mr. KzNT. It would be impossible to say that any one man gave
me the opinion that I advanced here. It was my own opinion based
upon hundreds of conversations, and it would be perfectly unfair to
anyone to claim that any one man had given me this.
Senator CARAWAY. I know it is because they would repudiate it
immediately, and then you would be up in the air immediately. Go
ahead, Senator Glass.
Mr. KNT. I have a statement hereMr. KNT. I thought I was called down here to give you the facts.
You don't want it.

Senator CArAWAY. We don't want you to come down here to read

an essay, you know. Go ahead, Senator Glass.

Senator GLASS. Mr. Kent, let us go back to the period of which I
am talking. You of course recall that before the last presidential
election there had been such a tremendous expansion in the stock
market as that there was a very general alarm through the country
at the enormous total of brokers' loans. It had proceeded so far as
you will recall, that the President of the United States, Mr. Coolidge,
felt it desirable for him to make a statement to allay the increasing
alarm of the public to the effect that business was sound and people
need not apprehend any serious result from this enormous expansion
in the stock market. You recall that do you not?
Mr. KENT. I recall that Mr. Mellon made the statement. I do
not recall what he said.
Senator GLAss. The President made the statement for Mr. Mellon.
[ concede that; yes.
Mr. KNP,,T. Yes.
Senator GLASS. Had any contemplated tariff bill or any failure
of the Senate of the Unitel States to function, as you say, anything
to do with that?
Mr. KENT. If we had had a break at that time, I should not have
considered that the tariff had anything to do with it.

1454

LOBBY INVESTIGATION

Senator GLASS. I am trying to have you say, if you will, what

was the cause of the break. Don't you know, Mr. Kent, that at that
very time there were scores and scores of stocks being dealt in on
the stock exchange at rates far beyond their potential earnings?
Mr. KEs. That was my opinion, but it was only one opinion.
Senator GLASS. You do not allege that at all as any cause of this
development, do you I
Mr. KzNT. You are mistaken. I figured that as a part of the cause,
I admitted that.
Senator GLASS. You did not state it in this speech from which the
quotation was made.
Mr. KzxT. You must bear this in mind, that when you have a de.
velopment that has been caused for the reason that there was--if they
were entirely caused by those reasons, then you begin to have selling.
Now, if people who have been considering values based on future
earnings become fearful and uncertain because the tariff operations
make it seem as though those earnings would not be as great, you lose
your buyers; and instead of having a normal readjustment, you
have a great fall, and it is the great fall that caused the trouble.
Senator GLASS. Wal, why the great fallf If the stock market is
not fictitious, how in thename of heaven could two and a half bil.
lion dollars be lost overnight in the potential earnings of any set of
industries?
Mr. KENT. Why, I do not think paper profits can be figured on
that basis.

Senator GLASS. Then you do not ascribe any of this trouble to

paper profits, do you?
Mr.KLNNT. They are paper profits until they are taken.
Senator CARAWAY. Until you can find a sucker.
Senator GLAss. And when the stock is taken, the collapse comes,
doesn't it?
Mr. KENT. They collapse because the whole mental attitude of the
people had changed. Potential buyers would not buy.
Senator GLASS. Oh, Mr. Kent don't you know-don't you know
just as well as anybody knows that that market had reached such
a degree of expansion that it was impossible for it to go forward?
Don t you know that?
Mr. KXNT. I should say that it could not look forward in most
things at that moment, but there were some securities that might be
different,
Senator GLAsS. In other words, that might have, in the event we
should have been able to function, we might have passed a tariff
bill that would have made those fictitious prices real, is that the
ideal
Mr. KET. Possibly, Mr. Glass, if you would let me read this little
short statement you would get a better ideaSenator GLASS. I am not conducting the hearing.
Senator C nAAY. We have a rule in this committee that we do
not read statements. We make them. You will be permitted to
extendyour remarks by putting it into the record.
Mr. KrNT. Oh, I see. That is entirely satisfactory, of course,
(Mr. Kent's statement reads as follows:)

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LOBBY INVESTIGATION

1455

Doe%the Senate of the United States have any influence on the minds of the
people or does It not?
If we grant that the people take no particular notice of the action of the
Senate when routine matters are being considered, it is still impossible to
conceive of any action of the Senate in connection with a tariff bill as not
having a profound effect upon the industry of the country.
Therefore, when the Senate Is called Into special session by the President
of the United States for the sole purpose of passing a tariff bill and is unable
to function and present a bill for five or six months because of the action of
a coalition bloc, industry, which Is vitally dependent upon such action as
aiy be taken, can not avold being concerned, as ItIs faced with an uncertainty
which become more and more harmful as time goes on.
When industry Is faced with great unc-i aInty, which Is the hardest c.)ndl.
tion that business must face, and future earnings can not be soundly estimated,
it must affect the prices of those securities which represent industry, in which
case the selling of securities 14 inevitable.
The Senate of the United States Is a great deliberative body; In fact, It Is
one of the most important deliberative bodies In the.world. To it, the great
industrial Interests of the United States must look for their protection In
many things which are vital to their business.
POINTS TO LONG DELAY

In June the United States Senate convened at the request of President

Hoover to consider a special matter, the tariff bill. Now nearly six months
have gone by and no bill Is ready for conference with the House. The Senate

seemingly could not function. The reason why It couid not function was
clearly due to the division of the Senate caused by the coalition bloc, In so far
as the public could see.
Industry can not proceed, employ men, buy and process raw materials unless
It can feel confident of markets. Every consideration of the tariff develops
uneasiness on the part of industry. While uncertainty as to the final result
prevails, regardless Of whether those concerned desire a greater or less tariff,
or no change at all, during the consideration of tariff questions they are In
the dark is to what conditions they will have to face following its enactment.
When, In addition to such uncertainties, a situation develops wherein the
Senate as a deliberative body can not function, It can not help but cause concern to business and develop unrest and hesitation In the carrying out of forward policies.
Such a situation also inevitably breeds anxiety on the part of thinking people
and adds a touch of pessimism to any colldition which may have previously
prevdled.
UNCERTAINTY HAS ITS EFFECTS

Wihte the psychology of a great people begins to be fraught with anxiety it

Is certain to have Its reflection in opinions as to the value of securities because
such values are based upon the industrial earnings of the securities outstanding.
It Is not conceivable that a great deliberative body such ns the Senate of
the United States could stand before the people for months as unable to fune.
tion without Its affecting an Important portion of those whose business It Is to
deal In securities. Under such conditions selling of securities was Inevitable.
Further, potential buyers could be expected to hold off for better prices for
the same reasons.

Senator GLASS. As I say, my part in this is by permission and is

taken with a view to preserving the integrity of the Federal reservebank system. That system is not charged by law, as a great many
people think, with restraining the stock market beyond the literal
requirement that the credits of the Federal reserve.bank system shall
not be used in the stock market.
Mr. KrnT. If that were done in special cases, I think it would be
wrong. I know of no such cases. You may know. The Federal
reserve system may know such cases. I do not know anything about
it. There may have been such cases.

1456

LOBBY INVESTIGATION

Senator GLASS. Then, if there were no such cases, why did the
Federal Reserve Board issue that warning nearly a year ago?
Mr. KENT. Because the Federal Reserve Board was interested in
trying to maintain a control of the money market.
Senator GLASS. It is not the business of the Federal Reserve Board
to control the money market.
Mr. KE.T. But outsiders in the banks had more money on the
Stock Exchange than the New York banks.
Senator GLASS. I am not talking about New York banks. I am
talking about the entire banking community.
Mr. KENT. Well, I think probably they had more than all the
banks. Outsiders' loans were reduced I think, $1,3802000,000 in one
week, and outside banks withdrew $07,000,000 during that same
week. New York banks increased theirs by $992,000,000, in order
to protect the market.
os
k
Senator GLAsS. I am not undertaking to exculpate outside banks.
The fact of the matter is, as you know, that is the vice of this whole
transaction, that money that comes from the outside, corporations
that are not chartered to conduct a money business, are dumping their
money into the New York Stock Exchange for betting purposes.
You know that.
Mr. KENT. We have all been watching that situation with anxiety,
because we had no way to determine just how it was going to
develop. This matter came on us in a very comparatively short
period.
Senator GLASS. You found out how it developed.
Mr. KzNT. And outsiders put more money into it. The money
came here from Europe, and money was put in, as you say, by corporations. That was not Federal reserve money.
Senator GLASS. Oh, no.
Mr. KENT. That is what made the great swelling in the total.
Senator GLASS. I know that that was a large contributing factor
in the extent of the thing, but you know perfectly well that banks all
over this country, member banks of the Federal reserve system, were
sending their money into this gambling maelstrom and rediscounting
with the Federal reserve bank in order that they might do it.
Mr. KENT. I know nothing about that.
Senator GLASS. Oh, well, ihen,'if you shut your eyes, there is no
useMr. KENT. But I have never seen v.statement of any bank out in
the country that has done that. I haven't any way to tell.
Senator GLASS. You have seen statements time and time again
of money in New York from outside sources?
Mr. KENT. Y~s, sir.
Senator GLASS. From other banks?
Mr. KENT. Yes, sir.
Senator GLASS. What Is the meaning of it, then?
Mr. KENT. But I have no way of dtermining that it came from
the Federal reserve system. How could it
Senator GLASS. Because all of the national banks of the country
and 80 per cent of the capital of the State banks belong to the Federal reserve system. That is why. A child could see that, much
less an economist.

them
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LOBBY INVESTIOATION

1457

Mr. KE.%T. But, without seeing the statement of the bank that sent
the money to New York to be put out on brokers' loans, I would have
no way, nor anyone else, of telling whether that represented borrowed money or not. It might represent proceeds of deposits.
Senator GLASS. Well, what about the bank examiners of the Federal reserve system?
Mr. KENT. They ought to know,
Senator GLASS. Of course, and they do know. A stop ought to be
put to that sort of thing.
Mr. KENT. I imagine that is done in some cases, but I haven't any
way to prove it.
Senator GLASS. Yes but you are not simple enough to say that it

was not done, are youi

Mr. KENT. I am not what?
Senator GLASS. I say you are not simple enough to say that that
was not done.
Mr. KENT. I think it probably was done, but it would be foolish
for me to say it was when I do not know.
Senator GLASS. Well, I say it was. The Federal Reserve Board
knew it was. Hence its warning to its member banks to desist.
Mr. KENT. Well, of course, that was in the line of their duty, but
not in the line of mine.
Senator GAsS. If you had been a director of the Federal reserve
bank in New York, it would have been in the line of your duty,
would it not?
Mr. KENT. Yes it would, in so far as the New York bank was
concerned.
Senator GLAss. That is the reason I criticized a certain bank
official, because it was in the line of his duty, and he came out in an
open statement and said that his obligation to the stock market was
paramount to his obligation as a director of the Federal reserve
bank.
Senator CARAWAY. Are you through Senator?
Senator GLASS. Yes. I think probably I ought not to have
started.
Senator

CARAWAY. Well, of course, you were wasting your time.

I knew that when he came here.
Senator BORAH. Mr. Kent, are you a student of the tariff?
Mr. KzNT. Am I what?
Senator BoRAH. Are you a tariff student?
Mr. KmNT. Not so that I would feel competent to talk on matters
concerning the tariff.
Senator BOnAH. Well, have you made any particular study of this
bill?
Mr. KENT. I have not made any particular study of this bill, but,
Senator, I do know this-that its my understandig or my recollection that in one of your speeches you stated that a stuay of this
tariff bill was not alone one which applied to the question of increase.
ing the tariff or maintaining the tariff as it was, but of diminishing
the tariff, and when you say that how can you expect the industries
of the UMited States not to sit up and take notice?
Senator BoRAH. Now, Mr. Kent, is that as nearly accurate information as you have been giving this committee this morning?

1458

LOBBY iNVESTIGATION

Sena-

Mr. KENT. Accurate information?

Senator BORAH. Yes.

Mr. KENT. In my opinion, yes. I have done my very best to tell

youSenator BORAH. Will you take some little time and ascertain when
and where I said that?
Mr.

KENT.

I will try to, Senator. If I am mistaken, I would beg

your pardon.
Senator BORAH. Now as a matter of fact, the position of the so.
called coalition from the beginning was not to touch industrial
schedules at all, and we undertook to put through a resolution to
leave them untouched and came within one of passing it. So the
sole program was to increase the agricultural duties, so as to give
reasonable protection to agriculture, and to leave the act of 1922,
which gives industry 97 per cent of the home market, untouched,
That was the position of the coalition announced time and time
again

Sr.enT.

Well, it was not announced in a way

Mr.

I have not paid any attention to the details of the

Senator BoRH. Yes; it was announced.

Mr. KENT. It was not announced in a way that impressed people
that way. I know that there was fear among industrialists as to
how that tariff was going to develop. I do not think they paid so
much attention to it the first few months, because they realized it
would take time to get it in order, but I do feel that the last two
months they were very much exercised about it. I think it had an
effect in changing the psychology of the people.
Senator BORAH. Now another thing: Do you know of any indus.
trial rate which the coalition has undertaken to reduce?
KENT.

tariff bill, because I am not a tariff expert.

.eMr.
Senator BORAH. Have you seen anywhere in any newspaper any
account of any industrial rate assailed by the coalition I
Mr. KE.T. No. I only know that there was a feeling that that

was the point of view. faybe that feeling was wrong, but that was
the feeling on the part of many. Maybe they were wrong.
Senator BOAr. Have you made any study of the rates as they

have been passed upon by the Senate thus far f

Mr. IENT. No. I have made no study of that. I was studying
the psychology of the people, based on the development.
Senator BORAH. You have no detailed information then, that is to
say, no fact which you can give to the committee based upon any act
of the Senate which would justify the criticism that you have made?
Mr. KENT. The statement that I just attributed to you, that I
thought you had made-but if you have not, of course, I will take
it back-was one thing that was in my mind, and then I think you
have to bear this in mind, Senator, that when the Senate is working
on a tariff bill and it reaches a point where it seemingly can not
function, those whose business depends upon what that tariff is going
to be become much excited. May I call your attention to this, if
remember correctly, Grover Cleveland, as I recall, was elected on a
tariff for revenue only principle, and I think he was requested many
times to call a special session of Congress in 1892, but he would not
do it, and the result was a panic in 1893. I think they were very
closely connected. It was because of that delay.

tariff bF
Mr.
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has dis
hr.

LOBBY

NVESTIGATION

1459

Senator CARAWAY. What caused the panic in 1907? There was no

then.
pending
tariff
correctlyIf remember
KENT.
Mr.bill
Senator OARAWAY. Well, I don't guess you do.
Mr. KENT. If I remember correctly, in 1907 Senator Root made a
speech in December, 1018 In which he showed that the banks in the
South, in Georgia, I thin had 180 per cent of the reserve that they
required; that they had drawn from New York, and that other
States were running along the same way. The banks throughout
the country had drawn from New York more money.than they
needed in order to protect their reserves, and consequently it had
made a money stringency.
Senator CARAWAY. Well, to show you how absolutely incorrect
your memory is, the trouble was, because everybody knows that
except you, that the banks out in the country could not get their
reserves that they held in New York. You would not give them up.
Mr. KENT. No.

Senator CARAWAY. Oh. I know that to be the fact.

Mr. ICNT. I would refer you to Mr. Root's address.
Senator CARAwAY. I don't care what you refer me to. I can refer
you to the figures. I know personally at that time I happen to have
een connected with a bank that had reserves in New York, and you
would not let us have them.
Mr. KENT. The New York banks loaned money to the banks out
of town, and they shipped currency until they had no more.
Senator OARAWAY, 01, please talk about something you know
something about, because that happened to be just the other way.
Senator BORAu. Mr. Kent, did I understand you to say you had
read this tariff bill?
Mr. KENT. No. sir; I have not.
Senator BORAI. Have you read the proceedings showing the
changes which have been made in the Senate?
Mr. KENT.- I read such proceedings as appeared in the newspapers
now and again. I read those constantly.
Senator BORAH. You have made no study of the tariff billI
Mr. KENT. I have made no study of the tariff bill as such. I got
my feeling of the fact that the Senate was not functioningSenator BORfAH. That seems to be a familiar phrase with you,
"not functioning."
Senator WALSH of Montana. I would like to have him explain that.
Senator BORAH. Just a moment. I would like to know whether
you have read the record which the Senate has made so as to determine from the record the number of rates which it has passed upon,
the schedules which it has disposed of, whether or not it is fu -.
tioning.
Mr. IeNT. I have not read that.
Senator BORAH. You have no idea how many different items the
Senate has taken up and passed, have you?
Mr. KENT. No, sir; I have not.
Senator BoRAi. You have no idea how many schedules the Senate
has disposed of?
Mr. KElT. No, sir; I have not.

1460

LOBBY INVESTIGATION

Senator BORAH. Do you know how many items there are in this
tariff bill
Mr. KNT. I know there must be a tremendous number.
Senator BORAH. Twenty-one thousand. You do not know how
many of those items the Senate has thus far disposed of, do you f
Mr. KENT. No, sir.
Senator BonkA. You do not know whether the Senate has de.
creased any industrial rate or not, do you ?
Mr. KzNT. I do not.
Senator BonsA. You only know what you have called psycho.
logical knowledge which you have gotten out of the atmosphere or
some place else?
Mr. KENT. Which I have received from conversation with many
men in industry,
Senator BORAH. Now, do you think it is fair for a man in your
position to go before the public and denounce a public institution

Sent
spirits
Sent
and th
ferenc
duty t4
votes
Mr.
in try
agree
Sen
pasec
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items in a week
Mr. KENT. I would recognize that that would be quite impossible.

does h

like the Senate for failure to function when you have not familiar.
ized yourself at all with a single day's proceeding of that Senatel
Mr. KzNT. Senator-Senator BOnAir. Now, just answer that question. Do you think
that as a banker, a man who is supposed to deal in accuracies and
with accurate figures, and conveying to the public accurate factsdo you think it is fair to say that a public institution is not function.
ing when you have not undertaken at all to advise yourself as to what
it has done?
Mr. KENT. The detail of a matter of that sort might not necessarily
have any influence on the situation as a whole.
Senator BORAH. But, Mr. Kent, here were 21,000 items. If you
suppose that there is any conscience behind the men who are dealing
with that at all, and want to know anything about the facts and cir.
cumstances of each particular item, how are you going to determine
what you should do as a Senator until you familiarize yourself with
the facts and pass upon it? How are you going to pass upon 21,000
Senator BORAH. Yes.

Mr. KENT. But, unless I am mistaken, there was a time when the
majority Senate committee had a bill ready to put in that could have
been passed if the majority had all stood for the bill.
Senator CAnAwAY. That is your idea of legislation ?
Senator BORAH. Exactly. Now we understand you perfectly.
Your idea was that when the Finance Committee had reported it out,
although it was reported out by a bare majority of the committee,
that what the Senate should have done was to have moved to make
it unanimous and pass it, without consideration ?
Mr. KzNT. No. I would- not say so. I should say that those
people who are in one party, if they were the minority in that party
and could not convince the majority that they were right, might
have stopped to think that possibly they might have been wrong. It
seems to me that the only way you can function in this country is
to have men stand by their party in things that have to do with a
number of principles.
Senator BORAH. You are not related to Grundy, are you?
Mr. KENT. I have never met Mr. Grundy.

Sene
Sem
Mr.
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purpo4

LOBBY INVESTIGATION

1461

Senator CARAWAY. You ought to do it, because you are kindred

spirits. Arnold would be a fine third party for you to take in.
Senator BORAN. Let us suppose you were aMember of the Senate
and the tariff bill was before the Senate; it does not make any difference which party you belong to. Would you not feel it your
duty to advise yourself as to the wisdom or unwisdom of the diff6rent
votes which you were to cast?
Mr. KENT. Yes, sir; but I am not sure that I would feel justified
in trying to form a coalition that would try to force the majority to
agree to something that they did not believe.
Senator BORAH. But, mind you, there has not been a single rate
j)assed in the Senate that did not pass by a majority. It is the
majority doing business all the time. What you are trying to do is
to make it appear that the tariff bill ought to be passed, regardless
of its merits or dements, if it has the approval oa majority of a
certain party?
Senator WALSHt of Montana. No; a certain committee.
Senator BORAH. Majority of a certain committee.
Mr. KENT. No* I would not say that, but the people of the United
States elected a President whose views are well knownSenator GLAss. What are they on this tariff bill?
Mr. KENT. They are given in the platform of the Republican
Party.

Senator

CARAWAY.

Senator

CARAWAY.

You said the people know what the President

stands for. Which one of these tariff bills does he stand for?
Mr. KENT. Oh, he did not interfere with the Senate in its duty-=

No. That is not what I asked you. You made

the assertion that the people knew what the President stood for.
Now, where does he stand?
Mr. KENT. The President, as I understand it, stood for the
Senator CARAW.%Y. Well, ay it.
Mr. KENT. For the reconstruction of the tariff. That induced him
to call the Senate together.
Senkitor CARAWAY. Well which one of the rates that are proposed
does lie stand for; do you know I
Mr. KENT. The rates I know nothing about.
Senator CARAWAY. Do you know where lie stands on the whole
bill
Mr. KENT. I do not.
Senator CARAWAY. Then why did you say the people knew, when
you knew the people did not know ?
Mr. KENT. No; I did not put it that way.
Senator CARAWAY. Oh, yes; you did.
Mr. KE-,T Possibly it seemed so.
Sehator CARAWAY. Oh, yes; you seemed to say It.
Mr. KENT. I will try to repeat it in different language. The Presi,
dent was elected on a certain platform.
Senator CARAWAY. What did that platform call for?
Mr. KENT. It called for a revision of the tariff.
Senator CARAWAY. How?
Mr. K%,xr. He called the Senate back in special session for that
purpose.
78214-20--PT 3---15

1462
Senator

LOBBY INVESTIGATION
CARAWAY.

Wait a minute. You know you want to run

away. That seems to be your normal gait. What kind of a revision

call tor
did the pY
Mr. 1rafT. K revision that covered Senator CARAWAY. Oh, say it.
Mr. KENT (continuing). Anything that would have to do with the
protection of agriculture.
Senator CARAWAY. Yes.
Mr. KErT. That was one phase of it.
Senator CARAWAY. What was the other?It
Mr. KzxT. I can not recall.

Oh, you never read it, did you?

read it long ago.
probably
I
KrNT.
Mr.
Senator CARAWAY. How long ago was it.
Mr. KENT. The session was called together, I think, June 12.
Senator CAIAVAY. Oh, no. That is as accurate as any of your
other information.
Mr. KENT. Oh, I might be mistaken..
three months,
Senator CARAWAY. Oh, you are just mistaken about
platform, did
the
read
never
You
you.
but that is mighty close for
you?
Senator CARAWAY.

Mr. KENT. Yes.

Senator CARAWAY. What year did you read it?
Mr. KENT. When?
Senator CARAWAY. What year did you read itt
Mr. KENT. What year did I read itt

Senator

CARAWAY.

Yes.

Mr. KE T. I read it before the election.

Senator CABAWAY. What year was that
Mr. KexT. What was in 1928.
Senator CARAWAY. And what month?
Mr. KENT. That I read it?
Senator CARAWAY. No i that the election was held.
Mr. KENT. Oh, It was in November.

Senator

CAnAWAY.

What day?

Mr. KENT. On the 4th of November, as I recall it. The date is not

of particular importance.

not

Sen
est

is t
tio

tot
not

the
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an

up
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S
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bef

Senator CARAWAY. Was that the day you voted-the 4th of No.

twC

Mr. KENT. Well, we will call it that.

bee

vembert

Senator CARAWAY. All right. Go back and look it up and see if

wor

I do not see what influence it has

wit

you did.

Mr. KENT. It is not important.

dup
on this matter.
Senator CARAWAY. I do not see any importance to nNthing you
have said, because you have not yet given us a fact. Did you actu.
ally read the platform of the narty?
Mr. KNzT. I read the platform, yes; but I did not commit it to
memory.

it f

IN
tha

tha
i

Senator CARAWAY. No. I see you did not do that.

Senator BORA!. Now, going back to the tariff question a minute,

did
bus

assuming that you are not familiar with what the Senate has done
in the way of voting upon these different items?

pro

and the action of the coalition. I understand that I am correct in

LOBBY INVESTIGATION

1463

Mr. KENT. I have tried to make that plain; yes.

Senator CARAWAY. You did.

Senator BORAH. And you are not familiar with it. Now, you are
not in a position, then, to pass upon the question of whether the
Senate thus far has been right or wrong in the rates which it has
established, are you I
Mr. K ENT. No; I would not attempt to pass on"that.

Senator BORAH. The only complaint that you have of the Senate
is the question of time, is it not?
Mr.

K xT.

No; not entirely. The question of time and the ques-

tion of the developments that led to the feeling that the Senate could
not function.
Senator BORAH. But if you say you do not know how many rates
they have passed upon, how many schedules they have disposed of,
and what (hey have doie, how can you say that you think it is not
functioning?
Mr. KsNT. Well, it has not, has it? It has adjourned, has it not?
Senator BORAH. It has passed a resolution to adjourn, but that
was long after you had made your now famous speech.
Mr. KeNT. But it was clearly coming. That is, it seemed so.
Senator BORAH. You were glad it was coming, were you not?
Mr. KENT. What?

Senator BoRAzz. You were glad the adjournment was coming?

Mr. KiNT. I was glad it was coming, did you say?

Senator BORAH. Yes.
Mr. KENT. Why, it seemed to me as long as you could not come to
an agreement that is much better, but, when the subject is brought
up again, for the good of the United States I hope that it will be
possible to handle it very quickly so that business will not be uncertain.
Senator BORA i. How would you handle it quickly when there are
21,000 items to be disposed of I
lMr. KE4T. By "quickly" I did not mean in 15 minutes; but the
Senate has been working on it for five months, with nothing else
before it, as I understood it; five and a half months.
Senator BORAH. The Senate has not been working on it but about
two months.
Mr. KENT. I thought it convened on June 12.

Senator BORAH. But the committee which you think ought to have
been accepted without any discussion at all spent the summer in
working upon the matter, but the Senate has only been working upon
it for some two months, and you are apparently wholly unfamiliar
with what the Senate has done in that time in the way of passing
upon these rates.
Mr.

KENT.

I only know what has come to us through the news

that has come out.

Senator BORAH. Well, do you know of any rate or any set of rates
that is objectionable to business?
Mr. KikT. I don't know of anything in particplari but business
did not know what was going to happen and that is what hurts
business. It is the uncertainty that hurts business.
Senator BORAH. The coalition had announced that they did not

propose to interfere with industrial rates, and they have not inter-

1464

LOBBY INVESTIGATION

feared with the industrial rates as they were expressed In 1922.

Therefore how could the uneasiness arise?
Mr. KENT. I wish people could have understood that. I do not
think the industrialists throughout the country understood that that
was the attitude of the coalition. If that is the attitude of the coali.
tion and you announce It to the public before the tariff is taken up
at the next meeting 'I think it will have a very beneficial influence.
Senator BORAH. Hr. Kent, the first move of the coalition was to
limit all action to agricultural rates and to have nothing to do with
industrial rates. That was the motion voted upon, known to the
United States, and certainly you know about that.
Mr. KzNT. I Could not determine just what that situation meant,
the way it was quoted, as I recall it. Of course, if I am mistaken in

what I thought you said and what many others thought you said,
it would carry a different thought in my mind; but I frankly
thought, Senator, that you said three things: That they might be
increased; that they might be held as they were; or that. they might
be diminished. I thought that it was misstated.
Senator BORAH. In view of the fact, nevertheless, that I offered
the resolution to confine the action of the Senate to agricultural rates
alone.
Mr. KENT. You offered the resolution yourself. Yes. I recall
that.
Senator BOnA. Do you think that was rather significant of our
position, in view of the fact that we only lost it by one vote
Mr. KENT. At that moment it might have been, but this has been
a 6-month proposition, nearly, and things have changed as they
moved along.
Senator BORAH. How have they changed? We have not decreased
any industrial rates. We have not assailed any industrial rate..
fr. K-NT. I do not pretend to know what you have been doing.
Senator GLASS. Yes; we have increased some industrial rates.
Senator BORAu. The Senate committee has.
Senator GLASS. Yes.

Mr. KPET. Of course, those things that come out affect industry.
Senator BORAH. We have not decreased any industrial rate.
Mr. KENT. That is, the Senate has not.
Senator BORAH. No. The Senate has not.
Mr. KcxT. Even though the committee has.
Senator GAss. They are just as Mr. Grundy framed them.
Senator BO AW. Then I would like to know what it is we have

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actually done, leaving out the psychology that you talked about,
what i is that.the Senate has actually done in the way of attacking
the industrial rates, that you can put your finger on as specific, that
beei
caused you to be disturbed.
for
Mr. KEr. Why, the thought that it could not function clearly had
a very deep depressing effect upon industrialists. They could not
toll where they were at. I am confident that they had the feeling
affe
that rates mi ht be'reduced. If the were wrong if the public is
all wrong on this, then they change their psychoogy in errOr..Iethis
am not saying whether they were right or wrong. That was the idea
the public got, and the public having that feeling, it resulted in their
you
psychology changing so that there was not a buying force in the
that.
about
question
any
not
is
market that there had been. There

LODBY INVSTIQATION

1465

Senator GLAsS. They did more buying in the market than ever
before in the history of the country. That is the trouble.
Air. KENT. Not during September and October, except that you
always have to bear in mind nobody can sell unless somebody buys.
Senator GLASS. Oh, yes. The brokers' loans went up in September
and October too.
Mr. KENT. But part of that, Senator, was due to the issuance of
new securities. For instance, take September and October, the
brokers' loans increased during a period in those months $584,000,000.
During the same time $1,860,000,000 in securities were issued. Be.
cause of the liquidation you might have anticipated a reduction in
the loans of $500,000,000, which made it look as though new securities
which were issued were being carried for about a billion dollars in
the brokers' loans, but of course we have had qo research. We want
research. That is what we are anxious to have the Federal reserve
and the bankers and the stock exchange undertake, so that we will
have an intelligent idea of the situation.
Senator GLASS. Don't you think you could have made some research before you indict the Senate of the United States as you did?
Mr. KENT. I did; and my research was based on what affects the
buying public.
senator GAss. You did not know anything about an item in the
tariff bill
Mr. KENT. Psychology affects the buying public, and that is quite
inevitable.
Senator CARAWAY. What you are complaining of, the sucker list
gave out? Wasn't that it? The sucker list gave out before everybody unloaded?
Mr. KzNT. I am sorry.
Senator CARAWAY. I beg your pardon. I say what you were com-

plaining about was that t e sucker list gave out before all the stockbrokers unloaded; was that not it?
Mr. KENT. No; I have not seen those circulars, so I know nothing
about thatSenator CARAWAY. You had better look it up, because you find

yourself in their company.

Senator BoRAm. I noticed in the newspaper the other--day, going
to your source of information, that the steel industry's income was
larger for the last six months than it had been in any six months
since 1924.
Mr. KCET. It was larger, you say?
Senator BORAII. Yes.
Mr. KENT. Yes.
Senator BORAH. Can you give us any industry where there has

been a falling off In business, as evidenced by their income, and so

forth?
Mr. KExT. Any business that has fallen off?
Senator BORAtE. Yes; outside of those which are immediately
affected by the stock exchange crash. I want to find, if I can, how

this tariff has affected Industry.

Mr. KExT. The tariff affects industry in this way-.

Senator BoRux. But I mean in facts and figures. I know what
your conception of it is. We have had that, but not facts and figures.

1466

LOBJS2 INVESTIGATION

Can you give me any facts and figures which would really be a
warning to us that industry is suffering?
.
Mr. KENT. Industry has suffered from uncertainty, and that is
just as positive as anything else..
Senator BORAv. But has that uncertainty crystallized into the
question of profits or want of profits or falling off of profits?
Mr. KEiT. It has crystallized into uncertainty as to estimates of
future earnings, and that is an important thing when it comes to
the question of value of securities.
Senator BORAn. This is still in the future, then I You have no
evidence of things having actually thus far happened, which indi.
cates that industry has been hurt?
Mr. KENxT. I do not say that industry was hurt at the moment.
I say that the forward-looking vision of industry was stopped and
halted, and the question of future profits became a different question
than it has been before. There was uncertainty developed. Now,
Mr. Borah, if by coming down here I have succeeded in carrying to
you gentlemen the thought that industry is watching the things you
do inconnection with the tariff, and you will therefore endeavor to
have industry feel clearly what you have in mind, I think it will
have been worth while.
Senator BORAH. Well, assuming that industry has the intelligence
which it is accredited with having, it could not have had any other
idea before your coming here, in view of the fact that the coalition
which, fortunately, is in charge of the SenateMr. KENT. Fortunately is what#
Senator BOJAW. Fortunately is in control of the Senate.
Mr. KpNT. Of course, that is a matter of opinion.
Senator BORAH. I know, but that is my opinion; the coalition has
never proposed any program in the nature of an attack upon industry,
never at any time. Now, industry knew that long before your coming
and lone before your speech was made.
Mr.IZExT. I am very sorry they have not had such a feeling. If
their feeling has been wrong, why, that is something else again.
Senator GLASS. Whose feeling? Do you circumscribe the public?
Do you think all the public is within the confines of the New York
Stock Exchange ?
Mr. KENT. Industry covers the United States. I was talking of
industry.
Senator GLAss. But from your testimony you would think it covered the floor of the stock exchange.
Mr. KExT. Oh, no. I have not taken any such position. The
stock exchange is a place where the securities of industry are bought
and sold. and unless there was such a place that was carried on
successfully industry could not expand as it must in order to increase employment as time goes on, and to take care of the produce.
tion for new inventions and things of that sort, and things that: are
necessary for the daily lives of the people.
Senator GLAss. You are an eminent statistician. What proportion
of the transactions on the stock exchange are actual investments and
what proportion is sheer gambling, or, if you please, to tit it more
politely, what proportion are speculation and what proportion are
actual investments

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LOBBY INVESTIGATION

1467

Mr. kENT. I think, Senator, it is better to say "speculation" than

"ga blin," because it is not gambling, technically. Gambling is
throwing lce, and so forth-things of thlat character.
Senator GLASS. Yes. We have had a very interesting distinction
drawn by a bishop of my church between speculating and gambling.
Mr. KE.NT. Mr. Glass-Senator CARAWAY. Just a minute.
Mr. KENT. May I answer him?
Senator GLASS. Well, if you will answer it without a dispositionMr. KFNT. I would like to try.
Senator GLASS. Well just answer that question. What proportion
is eculation and whatproportion is actual investment?
Ar. KPNT. That could be possibly figured out, but it would take
a vast number of compilations, and I will tol you whySenator GLASS. And you could not function?
Mr. KENT. I will tell you why. You take a corporation which is
earning $6 and paying $6 to the holders of its stock, you might say
that it was worth par or worth $100 a share, because the income was
$6 a share. On the other hand, there might be those who had a
feeling that money was going to get easier and they might be willing
to pay 105 or 110 and obtain a lower rate of interest return. It
would be justified. The next thing is that in some certain industry
they might feel that it had a wonderful future, such as the public.
utility business-things of that sort, that future being based on the
fact that new inventions are coming along which increase the use
of power. Then they would be willing to pay a little higher rate.
Now, when it comesto a question of figuring out that proportion
mathematically, it could be done if you accept as a base to start
with the fact that some certain interest return is the one that would
represent a proper price. Even then it is a matter of opinion.
Senator GrAss. Do you invest or does any man invest when he
bets to-day what will be the price of the stock to-morrow?
Mr. KENT. Absolutely.
Senator GLAsS. What?
Mr. KENT. But you do not call it on the basis of betting.

Senator GLASS. You call that investment, do you I

Mr. KmxT. No. Every merchant in the United States buys his
goods before he sells them in the ordinary way. When he buys them
he expects to sell them for a little higher price.
Senator GLASS. But he does not expect to sell them the next day,
does he?

Mr. KENT. Why, in many cases.

Senator GLASS. He puts them on his shelves to meet the normal

demands of business, does he not?

\

Mr.

KEXNT.

Suppose

Senator GLASS. Oh--Mr. KrxT. Suppose, for instance, you had money that you wanted
to invest in the securities of industry, and it is perfectly true
Senator GLASS. I do sometimes, and I have got them now. I did
not buy them with a view of betting that they would be either higher
or lower to-morrow.
Mr. KzNT. No; but you thought they were safe.

1468

LOBBY INVESTIGATION

Senator GLASS. And I never sell something that I haven't got,

because I think that is bettin..

Mr. KE:XT. That is a question that has nothing to do with this.
Some men claim that short selling has very great value in supportng
the market. I would not argue as to that situation, because I think
it requires very careful research,
Senator

GLASS.

What is the average length of time that stocks

which are dealt in on the exchange are held by purchaserst The

average length of time?
1Mr. KEN.T. I do not know that anyone could answer that. I ques.
tion whether anyone could answer that.
Senator GLASS. It has been answered by statisticians not so distinguished as you, and it has fallen from 47 days to 221/* days. That
is the average.

Well, I do not know whether it is or not. I do not

think -you could find out without taking the stock records of all
securities and checking the names in and out.
Senator GLAss. Well, it has been done,.approximately.
Mr. KENT. When it came to the stock in brokers' names, you could
not tell anything about it.
Senator GLASS. Well, my idea of investment is, a man buys stock
with some knowledge of its intrinsic value, related to the actual or
potential earnings of the industry which the stock represents.
Mr. KENT. Yes; plus future prospects.
Senator GLASS. And that he does not invest by speculating to-day
what will be the market price of the stock one hour hence or one day'
hence or one week hence.
Mr. KENT. Senator, suppose you wanted to invest money and sup.
pose you knew you had money coming along because of the nature
of your work, that you would receive a month or two or five or six
months hence, and you had a feeling that the business of the United
States was moving forward, that earnings were increasing, and you
could see that the prices of securities were going up because of good
business.
Suppose -you wanted to buy a hundred thousand dollars worth of
those.securities, because you felt you could pay for them over that
period. We will say you have $50,000 in cash on hand. You buy
$100,000 in securities and put up $50,000, and you have a two for one
collateral. You feel safe and conservative, and you can pay that
down as you go along. That is what a tremendous number of people
did, in effect, in this country, but that is because our public was not
used to the situation. They were learning, and they did not know.
They went to.sleep on this collateral and when the price went
down so that their collateral was worth $75,000, instead of selling
$19,500 and reducing their indebtedness to 37,500. against $76 000
collateral, they just stood there and they held it, and then wen
the price went down toward $50 000, they did not reduce again.
They just stayed there, because they thought they had been conservative on the two for one basis, and they were sold out. It was
unfortunate, and a large part of it was due to the lack of understanding.
Senator GLAss. Do you think really that any appreciably number
of persons who speculate on margins go to sleep on it I
Mr. KENT.

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LOBBY INVESTIGATIOX16

1469

Mr. KENT. Yes; I think they do. It is incomprehensible, but I

think there is no question about it.
Senator CARAWAY. What did you mean a while ago by "paper
profits "I
Mr. KENT. The paper profits would, to my mind, represent the
difference between thie cost or purchase price of a stock and the value
of the stock at any time when that value exceeded the cost. For
instance, if you had bought United States SteelSenator CARAwAY. Now, you know that is not paper profit. Paper
profit is the difference between what he put up his margin on and
what the market then showed the stock would sell for.
Mr. KENT. Oh,no Now, suppose, for instance, you bought United
States Steel at 16 and United States Steel went up to 200, your paper
profit would represent 50 points that it went up.
Senator CARAWAY. That is what I said. That is the speculative
value.
Mr. KENT. Not on many securities it is not. It may be the forward
looking value, but a great concern whose earnings show an increase.
every year-

Senator

CARAWAY.

Well, you have answered it as far as I care to

go, because we will never get to the end of it.

Senator WALsh of Montana. Apropos of Senator Borah's interro.
nation of you as to the extent to which business had been actually
injured by anything that has transpired in the Senate of the United
States, I want to call your attention to this statement in the monthly
bulletin of the National City Bank for the month of November:
All over the country generally business Is proceedlag In a healthy and orderly

fashion, which Is In marked contrast with the chaotic conditions In the stock
market. Recent reports from Industries have been favorable, Indicating that

confidence Is unimpaired.

Do you agree with that I

Mr. KENT. Confidence was not unimpaired.
Senator WALsu of Montana. So you do not agree with the National
City Bank?
Mr. KENT. I agree that business was moving forward but there
was also a situation which showed hesitation, and they did not know
what was coming ahead.
Senator WALSH of Montana. Did you tell this committee a while
ago that it was your opinion that business was proceeding forward
without any interruption at all, despite the chaotic condition of the
stock market?
Mr. KENT. I think you misunderstood me. Perhaps I did not
state it correctly. What I was trying to say was the feeling of busit.
ness was that they could not tell how-long business would continue as
it was.
Senator WALSH of Montana. Yes. We understand it was psy.
eholpgy..
Mcr.l
T.Yes. That Is what makes the question of buying and
selling stocks.
Senator WALSH of Montana. But let us get it now. This state.
ment says, "All over the country generally business is proceeding in
a healthy and orderly fashion.' Do you agree to that?
Mr. KENT. The building industry was falling off some. The tex.
tile industry was a little difficult, and the car loadings fell off from,

1470

LOBBY INVESTIGATION

I think about the middle of September. The automobile industry

had fallen off a little more than was seasonable*
Senator WALstH of Montana. So you do not agree with this?
Mr. Kr:ET. On the great average it was fairly near right. In
many special lines it is wrong. I do not think it is intended to--Senator WALSH of Montana (reading):
Receitt reports from Industres have been favorable.

Mr. KNTr. Suppose -you read on further. I think you will find
they refer to the textile industry and also the automobile industry, do
they not?
WALSi of Montana. They referred to the textile industry
as Senator
in a depressed condition more tha.n six months
,did they not?
Mr. KENT. The textile industry has had a difficult time.
Senator WALSH of Montana. Tihey referred to the building in.
dustry more than six months ago as being in a depressed condition.
That is, as having fallen off
Senator GLASS. Oh, no. We destroyed the building industry by
list.
putting shingles on the dutiable
I Vj
Senator WALS of Montana. Isn't that the fact?
Mr. KENT.. That the building industry has fallen off?
Senator IVALsji of Montana. Yes; more than six months ago.
Mr. KENT. In connection with residence building it had to a
certain extent, but in connection with public construction it had not.
Senator WALSH of Montana. Neither of those conditions, then, is
attributable to anything which the Senate did since this tariff bill
came in ?
Mr. KE=T. I never said that was true.
Senator WALSH of Montana. Then, recurring to Senator Borah's
question, do you know of any other injury that thus far has been
done to the business interests of the country by anything that has
transpired in the Senate?
Mr. KENT. I do not think that is the point.
Senator WALSH of Montana. Never mind whether it is the point
or not.
Mr. KENT. I never have claimed that that was true. I claimed
that there was differences int attitude. -Men in industry were un.
certain as to the future certainty in business, and future uncertainty
in business always causes people to hold back.
Senator WALgH of Montana. I want to interrogate you about that
after a few minutes, but just now I want you to tell us whether you
know of any business that has been injured by anything that has
transpired i the Senate.
Mr. KENT. I would say no. I have not claimed to.
Senator WALSH of Montana. All right. That is a categorical
answer. I want to ask you about a few other things. Now, you said
repeatedly that the Senate has ceased to function. Just what do you
mean by that?
Mr. K.*T. Well, it was called together in special session for a
special purpose and it did not accomplish it. 1Vhen it was called
together the public, I think, was led to believe that it would be pos.
sible to work that matter out during the time that it had before the
regular session.

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has a

LOBBY INVESTIGATION

1471

Senator WALsn of Montana. Then when you say that it ceased to

function. you meant that it has not finished tip its business as rapidly
asyou tlink it ought to? That is what you meant'
Mr. KENT. That is possibly another way of putting it.
Senator WALSU of Montana. But the two do not mean the same

thing at all, do they? When you are asked about it, you really say,
do you not, that "ceased to function" does not express the idea at
all? Isn't that the case?
Mr. KENT. I am not so sure. If you can not put a bill through,
you cease to function. You have a different situation in foreign
countries. They have their blocs, where men are elected ina different way, and they often are unable to function because they can not
get enough men to go on to any one side to do it, but they are not
elected in the same way we are. We are elected largely from the two
parties, and if the party that is in can not function it seems to me
that it does not represent the will of the people. If the party that is
in is allowed to function and then what it does is found to be wrong,
the people can upset that party and put another party forward. But
when you make a bloc between the two parties, you make it very
often impossible for the Senate to function.
Senator WALSH of Montana. As I understand you, then, really
what you would like to have done is for the majority party to appoint its committee; that. committee will prepare a tariff bill and
report that tariff bill, andl then every Member of the majority party
in the Senate vote for that bill, just as the Senate Finance Committee
reports it?
Mr. KENT. Not necessarily.
Senator WALSH of Montana. Not necessarily?

Mr. KENT. There might be this, that or the other, but in the long
run it undoubtedly would be of greater benefit to the public.
Senator WALsH of Montana. Well, let us see what you want. You
do not want that, then? That is not your idea of how legislation
ought to be enacted
Mr. KExT. I think on the whole probably it would be better.
whether it would be
Senator WALSH of Montana. Never mind
better-or not. That is-what you wanted?
Mr. KE.NT. I would like to see it tried-out.

Senator WAsiM of Montana. Yes. So that every individual Member of the Senate of the majority party shall surrender his own voice
and convictions to whatever the majority of the Finance Committee
sar. KE.T. Now. Senator. you can not possibly have a majority of
any party defeated through a bloc without having that ma ority in
a position where it may have to give up something that it does not
believe. Now the question is whc in princile, Is better-to have
the minority give tip their opinion temporary y and possibly prove
that the majority is wrong, or have the majority do it. If the minoritv can not convince the majority that they are right, is it not possible they may be wrong
SSenatorWALsH of Montana. Yes; of course, it may be possible;
but what I want. to kiiow from you is whether it is your judgment
that legislation ought to be conducted in that way, so that if a man
has an individual opinion as to what is for the best interests of the

1472

LOBBY INVESTIGATION

country he should surrender that to the majority view of the

Finance Committee.
Mr. KzNT. I think you would have to consider a thing like that
in special cases; weigh it on the basis of what was going to happen
to the country.
Senator GiAss. There are so many special cases, that is the reason
we have stayed here this long.
Senator WALsH of Montana. No, no. What difference does it
make to you whether the majority comes from one side of the Chain.
ber or from two sides of the Chamber? Are not the majority entitled
to rule in this country?
Mr. KENT. I think the majority represents the people and not a
majority that may be developed in the Senate. I think it is the
will of the people, in so far as it can be expressed.
Senator WALSH of Montana. You tin, like Mr. Grundy, that
our system of Government ought to be revised?
Mr. KzNT. No. I don't think our system of Government ought to
be revised,
Senator WALSH of Montana. Very well. I want to ask you about
some other things. You think that this stock-market crash was
precipitated to some extent by the capital tax, as you call it I
Mr. KENT. Yes; in a sense.
Senator WALSH of Montana. That is to say, that people held on
to their securities and did not sell them
Mr. KXNT. Yes.
Senator WALSH of Mpntana. Because if they sold them they would
be obliged topAy a taxi
Mr. KENT. Yes.
Senator WALsH of Montana. And not having sold them and a
demand existing, the price went up and uI
Mr. KENT. Because they did not put their stocks on the market
and the market did not have to absorb it.
Senator WALSH of Montana. The market being limited, the price
went up?
Mr. KENT. Yes. It is a supply-and-demand proposition,
Senator IVALsie of Montana. And it went up higher than the real
situation of business and the value of the stock warranted?
Mr. KENT. I think so. That is not all stock necessarily, but the
general average.
Senator WALSH of Montana. So that the crash was occasioned, to
some extent, by the fact that the price of stock was lifted to a price

eichn
it, fean
thi
te

Tbhe
able r
Yo
M1r
Set
the r
pros,

Mr

Se
erall.
Mr
as tht
Set
count
tariff
to ine
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$76,0
Mr
Set
Sena
Mr
notp

Sel

YOU
pro
to te
Mr
other
Sen
the 1
sylvat
Mr
Sen
pect.
Ee vex
Ar.

higher than the situation justifiedl

Mr. KzxT. e think so; yes.

the si
t Se.n

of business ought to lose their money-trying to evade taxation

Mr. KE.NT. Ought to what?
Senator GLASS. I say, don't you think that people who try to
escape legitimate taxation ought to lose their money? I do.
Mr. KExT. Well, I think it is very unfortunate that people have
had to lose money, but I do not see how you can prevent people
losing money when they are buying without due consideration.
They will buy securities that have nothing to do with the stock

you t
the
New
Penni
price
Mr.
to pre
Sen
that t
the S

Senator WALs of Montana. Exactly.

Senator GLASS. Don't you think people who engage in that sort

Sen

LOBBY INVESTIGATION

1473

exchange, that are not backed by anything, and you can not avoid
it, and the bankers are trying to avoid it al the time.
Senator WALSH of Montana. I want to call your attention again to
this sentence in the letter of the Federal Reserve Board:
The United States has during the last six years experienced a most reinarkable run of economic activity and productivity.

You agree with that t

Mr. K=_T. Yes; I do.
Senator WALSH Of Montana. You joined a year ago in telling
the people of the United States that we were enjoying unexampled
prosperity, did you not?
Mr. KENT. No; not unexampled prosperity.
Senator WALSH of Montana. You heard that statement made generally, did you not1
Mr. K.-T. I heard it made often; yes; possibly as extravagant
as that.
Senator WALSH of Montana. So that industries generally in the
country were enjoying a very high degree
of proserity when this
tariff bill was first proposed. Dil you understand that it was going
to increase the profits of the producers of the State of Connecticut
manufacturers of the State of Connecticut, to the extent of
$76,000 000 more
Mr. KENT. What was?
Senator WALSH of Montana. This tariff bill as it came from the
Senate Finance Committee.
Mr. KEN'r. I told Senator Borah, you may remember, that I had
not paid any attention to the details.
Senator WALShi of Montana. So you did not know that. Did
you know that as it came from the Senate Finance Committee it
proposed to increase the profits of the New Jersey manufacturers
to the extent of $747,0%000
Mr. KExNT. How should I know that when I did not know the
other? I have not paid any attention to that.
Senator WALSH of Montiana. Did you know that as it come from
the Finance Committee it proposed increased profits to the Penn.
sylvania manufacturers to the amount of $1,186,000,0o0
Mr. KENT. I have seen none of those figures.
Senator WALSH of Montana. Well, don't you think that the prospect held out to these people of getting these additional profits would
be very likely to lift the price of their stocks on the market?
Mr. KET. I do not think that anyone would pay any attention to
the situation in connection with the tariff bill, except to be uncertain, until it was passed.
Senator WALSH of Montana. Well, please answer my question. Do
you think that the prospect of adding $78,000,000 to the profits of
the Connecticut manufacturers $747,000,000 to the profits of the
New Jersey manufacturers, and $1.186,000,000 to the profits of the
Pennsylvania manufacturers would have a tendency to elevate the
price of these stocks?
Mr. KFT. If people knew about it and they thought it was going
to prevail, it would naturally have a tendency to increase.
Senator WALSH of Montana. Do you think people generally knew
that this bl proposed a high increase in 44 of the 52 industries of
the State of Connecticut2

1474

LOBBY INVESTIGATION

Mr. KENT. The question of what is proposed is not important until

it becomes a fact.
Senator WAml of Montana. Do you believe that the people knew
of these increased rates in the tariff bill?
Mr. KENT. I haven't any way to tell the detail of the billSenator WALsn of Montana. But you do have ways of telling what
the psychology of the people is?
Afr. KENT. Yes; that is true.

* Senator WALsH of Montana. Now, I want you to tell me about the

psychology that would be induced b that situation of affairs.
r. KNT. if they believed that that bill was going through, they
would consider that the values of the securities based on those indus.
tries would increase.
Senator WALsi of Montana. Exactly. Every man who had stock
in a company upon which the tariff was going to be increased natu.
rally expected that the stock was going to be more valuable f
Mr. KENT. If it were increased.
Senator WALSH of Montana. Don't you know that the bill, as it
came from the Finance Committee, increased the duties on number.
less industrial products
Mr. KENT. It very likely night have done so, but until it was
passed, no one knew.
Senator WALsH of Montana. But they expected, did they not, that
it would go through?
Mr. KENT. NO one expects anything in a tariff bill until it is
.
passed.
.
Senator CARAWAY. Then why did they get disturbed about it I
Mr. KENT. Because of the uncertainty, which is the hardest thing
business has to meet.
Senator CARAWAY. You just said that nobody expected anything.
How could they be disturbed about something that they did not
.
ex'p 'I
Mr. KENT. It is the uncertainty.
Senator CARAwAY. That is inconsistent.
Mr. KEN.-. No; it is not. It is positive in business.
Senator CRAWA Y. It is in business, but it is not in your-statement.
You sid tha nobody expected anything in the tariff bill until it
passed. Now, you meant that?I
Mr. KE.NT. What I meant in connection with the tariff bill it will
not operate-the can not act until the bill is passed, because they
have no way of determining whether the proposed--Senator V nAwAY. In other words, they pay no attention to it
until it is passed ?1
Mr. KENT. No. You are mistaken. They are in an uncertain
position. They don't know what to do.
Senator AVALsn of Montana. Seeing you do not know anything at
all about this matter let me enlighten you a little. You think people
did not know anything about these increases that were proposed y
the Senate Finance Committee?
Mr. KET. They did not know that they were going to be passed.
They had no way of telling they were going to be passed. They
never have been.

Fini
had
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has
r~aw

LOBBY INVESTIGATION

1475

Senator WALSH of Montana. But they knew that the Senate

Finance Committee, which you think ought to control in the matter,
had recommended increases, did they not?
Mr. K T. But it was proved conclusively that the Senate Finance
Committee was not recommending increases that were going to be
recognized.
Senator WALSH of Montana. When did the people learn about
that?
Mr.

KENT.

I don't know the date.

Senator WAlsH of Montana. Let me calI your attention to another

portion of this National City Bank bulletin of the month of November. Just while we are at that, amusement interests show an increase
of 65.5 per cent over the previous year, 1928. Apparel, wearing
apparel, shows an increase o.f 87.8 per cent; automobile interests
shows a decrease of 2.6 per cent. Auto accessories increased 45.5 per
cent. Building material shows an increase of 16.9 per cent. Business
equipment shows an increase of 83.5 per cent. Chemical and drugs
show an increase of 19.8 per cent. Coal and coke show an increase
of 84 per cent. Electrical industry shows an increase of 88.9 per
cent. Flour and baking 81.2. Food products, 11.8. Household
goods, 14.1. Iron and steel, 91 per cent. Leather, the same. Machine.
ery, 85.8 per cent. Merchandising, 18.7 per cent. Metal mining, 42.4
per cent. Paper products, 8.8 per cent. Petroleum, 46.4 per cent.
Printing and publishing, 12.7 per cent. Railway equipment, 19.6
per cent. Real estate, 100 per cent. Restaurant chains, 22.4 per cent.
Shipping, 180 percent. Textile products, 21.1 per cent.. Tobacco,
17.4 per cent. Miscellaneous, 80.4 per cent. Manufacturing and
trading, 20.7 per cent. Railroads, 17.4 per cent. Telephone and
telegraph 7.8 per cent. Other utilities, 17.6 per cent. We find from
this that leather and the automobile business are the only ones in the
entire list that show a decrease.
Mr. KENT. Yes, sir.

Senator WALSH Of M.fontana. Those people who realized, or who at

least were ready to believe from the report of the Finance Committee
that their commodities were going to be elevated so as to reach these
figures of additional profits, you think they did not attach any
additional value to their stocks?
Mr.

KET.

I don't think they did, because they had no means of

value until the bill was passed. The bill has

attaching
never
beenadditional
passed.
A
of Montana. You think that had no influence, then,
Senator
in elevating the price of those stocks?
Mr. KExT. No; I don't think so.

Senator BORAH. Psychology does not work to increase, but it works

to decrease?
Mr. K NT. Well, psychology can not work on something that has
not happened.
Senator GLAss. That is , xactly what you said it did do.

Mr. ENT. Wait a minute. I recognize your point. Where they

recognized the fact that it may not happen. That is when it comes
to the question of the increase in prices, but when a business industry
has to hire a man, has to buy raw materials, and has to process those
raw materials, and has to pay tremendous expense, they are going

1476

LOBBY INVESTIGATION

to think twice before they go to It, unless they are confident the

tion

mean. I have not claimed at any time there was any special drop
in business because of this situation, but a holding back, and the
forward-looking policy was changed to a waiting policy, and that
must affect the public mind. It does affect the public mind, and
it always has, I am very certain. It is the public mind that makes
securities,
Senator WALsi of Montana. It affects the public 'mind when it
goes down, but it does not affect the public mind when it goes up1

on
Uni
wo1
poss
8
is e'
S

are going to have markets. That is the kind of uncertainty

Mr. KzET. No. I don't say that. I said it was the uncertainty.

It was not whether it was going up or down, but it was the uncergo down.
mighwords,
and OiAAWAr.
the fear that
tainty
other
people are more afraid of what
In it
Senator
may happen than they are hurt when it does happen 1

Mr. INT. When a thing has occurred, then the business can

adjust itself to the situation that exists; but before it has occurred
it does not know just how to proceed.
Senator CARAWAy. In other words, a man is better off when he is
broke than when he is not broke? Then he knows what has hap.
pened to him IB
Senator WAL.H of Montana. Really, if you had told your people
up there that, with hopes of being excited of added profits by reason
of this increase in the tariff, it had been shown to be without foundation by reason of the action of the coalition, that might have been
a reasonable explanation, might it not?
Mr. KFNT. It might have, but, of course, I accepted the situation
.as it was. By that, I mean, as the people felt. Each man with
industry did not know, and industry was uncertain and they had
fear that maybe there might be a reduction. That made industry
hold back.
Senator WALsi of Montana. Then, as I understand yon, no matter
how high the tariff duties are they ought never to be touched and
reducedf because of the psychology?,
Mr. KzNT. Oh, no. I do not believe anything of the sort at all.
I believe the tariff should be taken out of politics,
Senator WALSH of Montana. How would you do that?
Mr. KEsT. Well that is quite *an order, Senator, but right on the
spur of the moment, without having time to measure ItSenator WALsH of Montana. That is why I put the question to
you; that is so often stated, and we are accused of being politicians
with a desire to keep it in there, without anybody proposilng how you
are goi to take it out of politics.
Mri. z.T. Well, then, suppose you did this: Suppose the President appointed a commission of men in business, who had a vast
experience in their own lines, and who had shown themselves to be
men interested in the public welfare, and that commission gathered
within it men representing competitive industries, men representing
labor and agriculture, and that commission set up a research. bureau
and from that research bureau those men received information as to
rates amd'as to business progress and as to everything that was going
on, and then the Senate was able to obtain the opinions of those
men, some on one side and some on the other of each of those propose.

repi

syst

M
S

plat

you
of t
8
in t

abo
exp.
bust
that
is a
81
is es
A
nevc
S
pub
M
the
S
then
S
Sen
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S

Det
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M
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S
M
S
Com
you
I

LOBBY INVESTIGATION

1477

tions, and then the Senate committee was in a position to weigh their
reports, the commission was in a position to give the Senate figures

on a nonpartisan basis from the standpoint of the good of the

United States, then) if you could accomplish that, I believe you
would take the tariff out of -politics, in so far as it is humaply
possible.
Senator WALSH of Montana. Do you happen to know that that
is exactly the system we have?
Mr. IKn. What?
Senator WAusH of Montana. Do you know that is exactly the
system we have?
Mr. KzNT. Exactly the system?
Senator WALsH of Montana. Exactly the system.
Mr. KENT. Well, I should say not.
Senator GLAss. Don't you know that is what Mr. Grund is corn
plaining of? Your theory don't agree with his. He says ttat when
you carried the election, the goods must be delivered, regardless
of the economic aspects of the various things.
Senator WALSH of Montana. He likewise says he has no faith
in the experts of the Tariff Commission.
Mr. KENT. That is quite a different thing. I am not talking
about the experts of the Tariff Commission. I am talking about
experts in business, who have had experience with all forms of
business; men that you can rely upon; whose record has shown
that they are interested in the public welfare, and the commission
is appointed from that standpoint.
Senator WALSH of Montana. You do not seem to know that that
is exactly the system we have got.
Mr. KE.NT. I know you have a Tariff Commission, but I have
never seen it function.
Senator WALSii of Montana. You are a little uninformed about
public affairs.
Mr. KET. I know about that Tariff Commission, but it is not of
the character I have mentioned.
Senator WALsH of Montana. Well, find fault with the President
then for appointing those men.
Senator UAAWAx. The Tariff Commission did not function; the
Senate did not function. Apparently what did function?
Mr. KNT. Apparently the stock exchange functioned.
Senator CARAWAY. Oh, yes. And that is all you seem to know
anything about. What governmental agency has functioned? The
Department of Justice has not, has it? There are so many people
out of jail that ought to be in. You name one department that has
functioned.
Senator BOIIAT. Prohibition.
Mr. IENT. It seems to me that the Government, in many ways has
functioned and functioned properly.
Senator CARAWAY. Just give us an example.
Mr. KNT. Some of those departments that you have mentioned.
Senator OAI aivY. What have they done? Has. the Prohibition
Commission functioned? You have got your liquor regularly, haven't
you?
Mr. KrNT. I have what, did you say?
78214-209-PT 3--"10

LOBBY IN'VESTIOATION

1478
Senator

OAR.AWAY.

I say, prohibition has not functioned. Haven'

you got your liquor regularly

Mr. KENT. As regularly as I ever did before or after prohibition.
I never had liquor in in house before or after prohibition.
senator CARAWAY. Then it did not have to function with you.
Your neighbors have not cried out? ..

the
h

Mr. Kix. My neighbors' business is their own business.

Senator CARAwAY. Oh, no. You have been making it yours. What
department of the Government has functionedI Just name one.
Mr. KrNT. Why, a majority of the departments of the Govern.
ment,
as far as I kLow. They are carrying on their operations.
Senator CARAWAY. Name it and tell us what they have done that

me

Mr. KpxT. What they have done?

Senator CARAWAY. Yes. What department functioned and what

th

shows it is true.

have the done that proves it? Just name them.

Mr. KENT. When it comes to a question of detail of what this or
that or the other department has done, it is absurd. The Post Office
Department for instance, has functioned.
Senator AERAWAY. What else?
Mr. KENT. The Department of Justice has functioned, undoubtedly,
in many ways. Whether you call it functioning when it can not reach
all the criminals or not, I do not know, but I do not see why not, be.
cause nobody can ever reach all the criminals.

ob
f
Pol
th
ful

Senator CARAWAY. No. I realize that, as far as the stock exchange

functions. Now, what other departments?

Mr. KzNT. The Navy Department and the War Department and

all the other departments are functioning in their various ways

They seem to be necessary at the moment.

Senator CARAWAY. Did you read Mr. Shearer's statement ?
Mr. KErT. Why, Mr. Shearer never interested me.
Senator CARAWAY. You don't know who he is, do you?
Mr. KfNT. I know who he is. I know that the papers said that he

represented certain interests in Italy. I think it wis a meetin, in

Italy or some other meetings.
I
Senator CARAwVAY. Yes. Some other meetings.
Mr. KzNT. But? he is a man.that I do not know; never had any
experience with him.
Senator IVALSH of Montana. Just one other line of examir.ation.

In
your address up there you called attention to the objectionable
capital tax*f

pe
of
yo
yc

g
Pu
of

M. KENT. Yes.
Senator WA.LSH of Montana. And of course, your purpose there

was in arousing public opinion about it so that that could be changed.

Mr. KENT. I hoped it could, because I feel it is of value to the
country to have it changed.
Senator WALSH of Montana. And so, you called attention to the
coalition?
Mr. K=Tn. Yes; hoping that the coalition would thereby see that
those acts were of interest to the industries of the United States.
Senator WApsH of Montana. So that the coalition should desist
from making further opposition to any of the rates proposed Uy the
Senate Finance CommitteeW
Mr. KENT. I would not say desist.

D
in
Ft
to

LOBBY INVESTIGATION

1479

Senator IVALsH of Montana. All right, what would you say?

Mr. KENT. So that the coalition Would take such means as were
necessary to let industry know what they had in mind. I mean from
the general principle. Of course, I suppose Senator Borah said,
"Diminish." Now, he does not recall it. It may be that he did not,
but that was my firm conviction.
Senator WALSH of Montana. Anyway, your purpose was to choke
off the coalition was it not?
Mr. Kiwr. oh, my purpose was to bring to the attention of the
public the necessity f6r consideration of the public in Senate acts
which had to do with the direct business of the public. Routine
matters in the Senate do not count so much.
Senator WALSH of Montana. Well, getting down to brass tacks,
the coalition was objecting to rates proposed .by the Senate Finance
Committee, and insisting upon setting forth their reasons for their
objections. You understood that did you not?
Mr. KENT. I understood that tAy were objecting, and that they
felt that it was their duty to consider a reduction of rates as well as
possibly increased rates or the maintenance of present rates.
Senator WALsh of Montana. Well, you were complaining because
the Senate did not function?
Mr. KENT. Yes. I think it is a great pity that they did not
function.
Senator WALSyH of Montana. And the Senate did not function because of the coalition?
Mr. KExT. It seemed to me so. and it seemed so to many other
people. I am not alone in it at all.
Senator VALSH of Montana. Exactly. You were endeavoring to
arraign public opinion so that it would not obstruct the functioning
of the Senate?
Mr. KENT. Vell, of course, you have to bear in mind that when

you are making an address before an audience that is in front of

you you haven't any way to determine how far that situation is
going to reach, and you are talking with those menSenator WALSH of Montana. Oh, I am not asking you about that.
I am asking you what your purpose was.
_
Mr. KENT. MNy purpose
Senator VALSH of Montana. Yes. You know at least what your
purpose was.
Mr. KE NT. My purpose was to try and have the Senate realize the
effect upon the public of inability to function.
Senator WALsH of Montana. Inability to function?
Mr. KENT. Yes.
Senator VAuH of Montana. Now, let us see. Here are some
Democrats, for instance, in the United States Senate. who are objecting to these rates proposed by the Republican majority of the Senate

Finance Committee.

Mr. KENT. They are thoroughly justified, for they have been educated on a platform that would warrant it.
Senator WALSH of MontAna. Exactly. You would not want them
to desist from expressing in the Senate, their views concerning the
wisdom or justice of those rates, would youf
Mr. KENT. No, I certainly would not.

1480

LOBBY INVESTIGATION

Senator W'u. of Montana. Now let us take the other gentle.

men. Here are certain gentlemen who are elected as Republicans.
They are in exactly the same situation. They conscientiously believe
that these rates are inimical to the interests of the country as a
whole and particularly inimical to the interests of the people of
their states.
hM
Mr. KENT. If they have proper reasons, why can't they convince
the majority that they are correct?
Senator WALsH of Montana. Well, who could convince you that
they were right?

Mr. KENT. If I went into detail with these things that they think
the were ri ht about, I would expect them to be able to convince me.

Senator

JARAWAY.

Oh, you would never reach that point of going

into details.
Senator WAmSH of Montana. Of this Senate Finance Committee,
five members were from the industrial Atlantic seaboard States;
five of the eleven of the majority. Four more were from the middle
section, from the Alleghenies to the Mississippi River. Each one of
them had some particular interest in that tariff bill. In the case of
the five from the Atlantic seaboard States they had the biggest
number of items that were of interest. There was not a member
of that Finance Committee from the great agricultural west; not
one member. How do you expect they are going to convincethose
five members from the Atlantic seaboard States that these rates
which they have proposed in the industrial schedules are all wrong?
Mr'. .ENT. Senator, I can not see any East or West or North or
South in the United States. I think it is one country. I think
industry is iust as dependent upon the prosperity of agriculture as
agriculture is on industry. I think they are dependent upon each
other. I think there should be nothing done that would seem to
separate these people.
Senator WAr..s of Montana. Well, we all agree to that.
Mr. KENT. The agricultural situation, as I understand it-they
want to have it changed because following the war the index of
industrial prices was 160 and the index of agricultural prices was
120. Now that index is changed so that the index of industrial
priceb I think is 189.5 and the index of agricultural prices is 146.
That thing has been regulated aid changed. I do not believe that it
is of value to the United States of America to have development in
a coalition that seems to put one part of our country against the
other when our interests are all the same.
Senator
iALSH of Montana. Exactly.
Mr. KENT. And that is one of the things that has caused unrest in
the United States.
Senator WALsH of Montana. Exactly. That is just exactly what
these gentlemen are fighting. So, you are quite in agreement with
them. They are fighting :or the equality of privilege under this
tariff law, but let us abandon that. I wanted to get your idea
simply. Your idea is that these Republican members, that is. the
members who have been elected as Republicans. being unable to
convince the majority of the Republicans In the United States Senate,
ought to simply quit and vote with the majority. Have I quoted you
correctly?

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LOBBY INVESTIGATION

1481

Mr. K.NT. In the great effect upon the United States of America,
I believe it would be far better if they did so.
Senator WALSH of Montana. Well, that is your view about the
matter That is what you think they ought to dot
Mr. KENT. In a great general way, I think they ought to stand
together. I think they ought to have the intelligence to bring themselves together. If I were a Senator of the United States, I-should
fight with all my might to get everyone in my party to agree on
something that they felt was right and not harmful to the United
States.
Senator WALsit of Montana. What is your party?
Mr. KENT. I happen to be a Republican; but I have exactly the

same high respect for a patriotic, conscientious Democrat that I have

for a Republican.
Senator GLAss. But you do not think there are any, do you? You
do not think there are any _patriotic, intelligent Democrats?
Mr. KENT. I should hardly put it that way.
Senator GLASS. You will have to make some research, won't you?
Mr. KENT. Senator, I should say that I am a citizen of the Uiited
States who has happened to believe that the principles of the Republican Party were those that would be best for the United States of
America, and at the same time I have every respect for thosewho
happen to be in the other party, and I do believe that if the Demo.
cratic Party is voted in by tie people that the Democratic Party
should prevail while they are in and if their principles are shown to
be harmful to the people, then they would be put out the next time.
The same thing, I think, is true in connection with the Republican
Party. There is not any way for the people to determine whether
the principles of h party are going to -be effective for them or not
unless they are allowed to prevail, and it is that great principle that
I think supersedes and is a little stronger than certain individual
opinions.
Senator WVLsn of Montana. You think our system ought to be
revised?
Mr. KzxT. No.
Senator GLASS. Yes. You are like Grundy. You think we ought

to change the form of government.

Mi. KE T. Oh, no. I never suggested that.
Senator WALsH of Montana. % ought to have tie English sys.
tem, you think, instead'of our own?
mr. KExT. Our system has been through the history of the country
fairly along the lines I have said until recently.
Senator WALSH of Montana. Anyway, to conclude, you have no
complaint at all about the attitude of the Democrats with respect to
this bill
Mr. KENT. Oh, no; I should not.
Senator WALSH of Montana. Your complaint is against the so.
called Progressive Republicans?
Mr. KENT. And the Democrats and Republicans getting together
and making it impossible for the majority to function.
Senator CJmAWAY. They make the majority.
Mr. KENT. If they are right, why can't they convince the majority

1482

LOBBY INVESTIGATION

Senator WALsH of Montana. But I understand you have no complaint against the Democrats? They are doing what is expected of
them I
Mr. K

xT.

As far as I can see; yes. They are trying to carry out

their program.
Senator WALsH of Montana. Your complaint is against the Re.
pu)blicans who will not vote for the bill as it was reported by the
Finance Committeet
Mr. KENT. Well, when you speak of Democrats, let us step back a
moment. I think that a certain group of the Democrats that joined
with a certain group of the Republicans to take the power of the
Senate away from the Republican majority that was elected is a
9o
mistake.
Senator WALSH of Montana. What group of Democrats do you
understand did that?
Mr.

KENT.

I don't know what they call the coalition group. I

would not attempt to name the men.

Senator CARAWAY. I had not heard of it. Nobody else has. I
think that was another one of those things that came to you out of
the air.
Senator WALsH of Montana. You understand, do you not, that the
Democrats, generally speaking, are voting together?
Mr. KENT. They are; and I think it is a good thing for the
country.
Senator WALsH of Montana. And, as I understand, you have no
complaint about them. It is only those rascally Progressive Re.
publicans that won't vote?
.e
Mr. KzNT. I have never indulged in any such phrase in connection
with the Republicans,
Senator WALSH of Montana. Anyway, your criticism is leveled at
them, Is it not?
Mr. KzNT. I have felt that in their leaving their party they have
made it Impossible for the Senate to function. It seemed to me if
they had kiet with their party they might have been able to influence the majority in all ways where they. were right. When they
leavd it, it becomes a fight.
Senator WALSH of Montana. And how would that influence the
majority?
Mr. kENT. By showing that they are right. If they are right,
why can't they prove they are right V
Penator WALsH of Montana. That is what they are trying to do.
Mr. KENT. Well, I don't know what conversations tiey have had

with the majority. I have no way to tell.

Senator WALsH of Montana. Don't let us talk about conversations
in a back room. They at trying on the floor of the Senate to convince the other Republicans they are right. Now, they are unable
to do so, and the other Republi.ans won t vote with them. Should
they then surrender their convictions when they can not convince the
other fellows?
Mr. IENT. When it comes to a question of conviction, I think you
must consider it from two points of view. Here is a eat principle
on one side and another principle on the other. The great principle has to do with the question of carrying out the intent of the
American people as it developed in the election.

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LOBBY INVESTIOATION1

1483

Senator WALn' of Montana. These gentlemen claim that is just

what they are doing.
Mr. KExT. Well, then, they ought to convince the majority that
is what they are doing.
Senator WALsH of Montana. And they are not able to convince the
majority they should vote with them.
Mr. KENT. Then it might be questionable whether they are right.
Senator GLAss. WOu think the majority is always right, do you I
Senator CARAWAY. Whenever you get out your book on psychology
and political economy I wish you would give us a copy of it.
Mr. KEI. It would bevaleasure, Mr. Senator.
Senator CARAWAY. It won t agree with anybody else who ever had
an idea about it.
Senator BLAuKE. Your particular objection" as expressed in the
speech that has been quoted has been an objection against the midwest and western Senators, hasn't it, the so-called Independent or
Progressive Re ubi:ans?
Mr. KENT. Yes, in a sense. I feel thatSenator BLAINE. Now, wait. Your objection is based on the proposition that you think a great principle is involved. I presume you
mean the principle of protection?
Mr. KExNT. That is one principle.
Senator BLAINE. Precisely. Do you know any Progressive Republicans who are opposed to protection as such, as a principle?
Mr. KENT. Well, as I have said before, I feel they had announced
they figured on diminishing rates, too.
Senator BLzND. No. Do you know of any one of these Inde.
pendent or Progressive Republicans opposed to protection as a policy
or principles
Mr. KENT. Only in the way I said.
Senator BLAINE. Now, you are'trying to apply this principle to
the Republican Party, its adherence to this principle, by adopting
the conduct and the action of a small, grasping, sordid group of
industrialists who want to build a tariff wall so high that behind
that wall they may develop their trusts and their combinations and
their mergers against all the consumers of the United States.
Mr. KiNT. Are you referring to the majority of the Republicans
when you say that?
Mr. BLAINE. I am referring to the majority of the majority party
of the Finance Committee.
Mr. KENT. That they are sordid and grasping?

Senator BLAINE. They come from a section where there is this

selfish, sordid demand for excessive -and exhorbitant tariff rates.
Take, for instance, Connecticut Pennsylvania, New Jersey, as Senator Walsh has pointed out. Row, you think that the Progressive
or Independent Republicans ought to join hands with this small
group in order to carry out their selfish desires and demands?
Answer that question. You can do that very easily.
Mr. KENT. I could answer that question if I agreed with you that
necessarily those Senators were selfish.
Senator BLAINE. I am not speaking of Senators.
Mr. KENT. But they are the ones that have to vote.
Senator BLAiNE. I am speaking of the sections which they rep.
resent.

1484

LOBBY INVESTIGATION

Mr. KENT. I am not satisfied, Mr. Senator, that business is as

sordid as you say.
Senator BAtzI. Oh, I see.

Se
pro

it is fair to state that industry is as sordid as you make it.

15. al

Mr. Ki. NT. M, experience with business is that as we have grown

in industry business has learned that the benefit of the people Is
to the great benefit of industry, and they are striving for it. That
has been my experience with industry.
And Mr. Grundy comes down to Congress frankly
Senator .
admitting it, that he had raised a million dollars for the Repub.
lican Party, and he figured that the million dollars was an invest.
ment, and that the contributors were entitled to a return upon that in.
vestment, and you now fall in with the same theory that these inde.
pendent progressive Republicans of the Mid-West and West should
swallow what Mr. Grundy demands#
Mr. KaNT. I never had Mr. Grundy in my mind.
Senator BIArm. No; but the psychology, using your own termthat is the psychology, Mr. Kent.
Mr. KENT. What is that?
Senator BLAMNE. That is the psychology about which you are
talking.
Mr. KpNT. I can't admit your premise because I am not sure that

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Senator BLAimE. I am taking the figures that Senator Walsh has

presented before you.
Mr. KENT. I never have seen those figures before. This is the
first time I ever heard them,
iSenator BLAIN:. I am building up no premise except as the record
discloses before the Senate of the United States. Now, upon that
record, the proposition here is to force through the Senate a tariff

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bill with exorbitant and excessive tariff rates that is going to affect
adversely the consumers of the United States. Now, you think
that the Senators from the Mid-West and the West ought to surrender their representative capacity from those States and swallow
the demands of Mr. Grundy. Is that your opinion?
Mr. KENT. No, sir. I think that those Senators should get together with the other Senators, talk over this situation, and analyze
it carefully.
Senator BLAINE. Yes; get together--Mr. KzrT. And let them see where they are right and where they
are wrong. If they were right, I think they could convince them.
Because the Senators vote, not these sordid industrialists.
Senator BAzz;L. Get together where? Behind closed doors and
drawn blindsA
Mr. KN T. To come to an agreement as to procedure.
Senator BLApN:. Do you think the independent progressive Re.

publieans could convince the other Republicans in a party meeting

any more than they could on the Senate floor?
Mr..KN T. I think they do. I think if they went at it right,
both sides determined to get to an agreement, you could come to
an agreement.
Senator BLAIN:. You think the Government should be conducted
behind closed doors and drawn blinds and secret conferences and
caucuses, don't you
Mr. KN. That has nothing to do with Government.

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I.OBBY INVESTIGATION

1485

Senator BLAINE. You are opposed, Mr. Kent to these independent

progressive Republicans, taking the floor of the Senate, out in the
are.it,interested
of opportunity
the United States
open,
to there
about
to knowwho
maypeople
have an
tariff al
bill the
in thiswhere
state the facts. You are opposed to that method, aren't you?
Mr. KENT. No.
Senator BLAINE. Yes; you are.
Mr. KENT. Wait a minute.
Senator BLAINE. Just a minute, Mr. Kent- .
Mr. KENT. What I believe they should do is endeavor to understand each other first.
Senator BLAINE. You are opposed to that open method of legislation. Now, do you think that the independent progressive Republicans and Democrats could write a tariff bill containing 21,000 items
within a fortnight or within two months on the floor of the Senate?
Mr. KENT. They have had six months on it.
Senator BLAINE. Oh, no, Mr. Kent, you are mistaken. The special
Senate convened in April. The time of the Congress was taken up
in consideration of the farm relief bill. The Senate then took a
recess for the purpose of allowing the Committee on Finance to
hold these hearings. That committee did not report until September
15. and the Congress-Mr. KENT. But the Senate got together again June 12, did it
not?
Senator BLAINE. No, no. It was in session from the time it
was called in special session until it recessed in June. That bill went
to the Finance Committee. The Finance Committee did not report it
out until September 5. The bill has been before the Senate since
that time. Now, in view of the fact that not a single representative of this great agricultural area from the Mississippi River to
the coast, from the Canadian border clear down toMr. KiNT. The Gulf of Mexico I
Senator BAINe. Almost. Entirely, so far as the progressive
independent Republicans are concerned-did not have a single representative on that Finance Committee
Mr. IENT. Were they not in position to present their opinions
to that committee?
Senator BLAINE. You don't seem to understand legislation. Do
you expect the independent progressive Republicans to go before
the Finance Committee?
Mr. KENT. Not as a committee, but I would expect them as Senators, interested in things, to work with them.
Senator CARAWAY. But those things were written in secret.
Senator BLAINE. But the only man who was allowed in that committee outside of the committeemen was a representative of the
Connecticut Manufacturers' Association when the majority were considering the tariff bill in the final drafting of that bill. Do you
understand that that was considered in secret by the majority members of the Finance committee and that the only person who was
entitled to get into that secret session of that portion of the coinmittee was Ar. EyAnson,.of Connecticut? Did you know that?
Mr. KENT. I read that in the papers; yes.
Senator BLAINE. You know that?
Mr. KENT. Yes.

1486

LOBBY IKVESIfIGAT[O'X

Senator CARAwAY. He approves it.

Senator BLAINE. NOW, h1ow could the independent Republicans
or the progressive Republicans get into the committee?

Mr. KENT. They couldn't get into the committee?

Senator BLAINE. Certainly not.
Mr. KENT. But aren't the Republicans constantly talking with

each other about those things, for the good of the country?
Senator BLAINX. Don't you know that behind closed doors the
tariff bill was written by a portion of the majority of that com.
mittee? Do you know that?
Mr. KENT. I didn't know it, but you have got to have somebody
write the bill. You can't have everybody write it. It has to be
passed on by the whole committee after it is written.
Senator BLAI%-. But I thought you said, " why don't the Inde.
pendent Republicans go before the committeel" They had no
opportunity to go before the committee.
Mr. KENT. I said why didn't they consult with the other Sena.
tors, why weren't they In accord, as a matter of understanding.
Senator CARAWAY. They didn't know the rates. Nobody could

receive the rates, you know.

Senator B.AAI E. You mean what they ought to have done was to
have gotten into consultation with the majority members of that
commi-ttee and tried to fix up a bill?
Mr. KENT. No; tried to show them the interests of their particular part of the country.
Senator BLAINE. Just what time could these Independent Republicans consult with the members of the committee Just specify
when they could do it.
Mr. KExT. Why, they are meeting constantly, talking about the
business of the United States, are they not?
Senator BLAtzE. In open session. That is what the Progressive
Republicans have been attempting to do. They have been doing
that.
Mr. K xqr. But men in carrying on things of that kind must talk
with each other. They must swap ideas. They must do that.
Senator BLIuxN.

Where?

Mr. KEnT. How else could they work together for the advantage
of the country?
Senator BLAIXE. Where and whent
Mr. KE T. Constantly, as they meet.
Senator BLAINX. Where?
Mr.'ENT. In their homes, and any place.

Senator BLi i.. Oh, I see.

Senator WAL.Ri of Montana. In the clubs.

Mr. iXzT. You don't mean, do you, that the Senators of the

United States never talk over Senate business with each other?
Senator BLAINE. I get your idea now. It Is that legislation for
the people of the United States ought'to be determined at homes,
at dinners, behind closed doors, in secret. That is my understanding.
Mr. Kz.T. ThatSenator BzLixE. Now, answer that.

Mr. KENT. No; that doesnt express the idea at all. You don't
mean, Mr. Senator, that you gent emen don't talk with each other
about the business of the United States.

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LOBBY INV'I8TIOATI(IN

1487

Senator BLAI.M'r. Well, you make yourself plain.

Mr. KENT. I didn't mean any question of trying to do anything,

or put anything over behind secret doors.

Senator BLAINE. Well just make yourself plain.

You expected

the Progressive Independent Republicans to go into deals and trades

and log rolling and swapping of votes?
Mr. KENT. No.

Well, then, what do you mean?

Mr. KENT. I expect them to talk the developments that are going
Senator BLAIXE.

on over with those in the Republican Party. Do you not have meet.
ings of the Republican Party, of all the Senators in the Republican
Party, at times to consider procedure?
Sdnator BLAINE. Right in the city of Washington, just specify
where you would have these Progressive Republicans or any one of
them or t group, when you would have them discuss the tariff bill
with the majority of the Finance Committee. In some room?
Mr. KENT. I don't see what that has got to do with it.
Senator BLAINE. I have got the idea you convey. I see I have to
hell) you. Would you have them do it in a room?
Mr. KENT. Yes; and if they wanted to do it outdoors I don't see
what difference it makes where they do it.
Senator BLAINE. Exactly. You want them to stand on a street
corner, I presume?
Mr. KENT. I presume you talk with each other on the street
corners many times.
Senator BLAINE. Now, Mr. Kent, it is very well for you to be face.
tious but is there any other conclusion to draw from your testimony
but that what the Progressive Independent Republicans should have
done was to have entered into deals and trades and contracts with
certain other Republican Senators in order to fix upon a tariff bill
in secret?
Mr. KENT. No. I haven't claimed anything of the kind.
Senator BLAINE. Well, then, Just make yourself plain, specify.
Mr. KENT. What I do claim is they should get togetherSenator BLAiNE. Get together where?
Mr. KENT. I don't care where.
Senator BLAINE. NOW wait. Get together where?
Mr. KENT. In this room if you want to, and talk with each other
about the situation.
Senator BLAINE. Now, wait a minute. We are in this room. We
must get together in this room and close these doors?
Mr. KENT. I don't think it makes any difference.
Senator BLAi.E. Will you admit the reporters into this room?
Mr. KENT. Admit who?
Senator BLAINE. Would you admit the reporters from the news.
papers?
Mr. KENT. In yourSenator BLAIME. Would you?
Mr. KENT. In your party meetings that are constantly held here,
as I understand, you may have reporters or you may not. I don't
know.
Senator BLAINE. No, no. We are in this room now. You have
got us in this room.
Mr. KENT. All right.

1488

LOBBY INVESTIGATION

Senator BLix,. You have got

progressive Republican and
the majority party in this room. the
You have got them here. We
are here. Would you close the doors and shut out the
newspaper.
men I You can answer that very well.
Mr. KPNT. I can see no possible
in a group of Senators get.
ting together in a room and talkingharm
with each other about a propo.
sition that they have got to vote on.
.
Senator BLAIN4. But you have been up in
air a lot, and ou
have engaged in a lot of psychology and a lotthe
of this balloon effect.
Now, let us get right down to earth, right down to
realities. We
are in this room. You would shut
the doors to this room, wouldn't
you?18
.Mr. KENT. I think it Is done constantly,
and I can't see any harm
in your having
a conversation with each other
behind closed doors,
and I don't see how legislation can be carried on
without Senators
talking with each other and obtaining the opinions
of each other.
Senator BLAINE. You have no objection to the progressive
Sena.
tors and the conservative Senators going into a room and
closing
the
doors and shutting out the public and the newspaper
men, but you
have objection--.
Mr. KeNT. To talk over the interests of the United
States. No;
I can't see any harm in it.
Senator BLAINE. To talk

over the tariff bill

Mr. KENT. Don't you do it-.
Senator BLAINE. biut you do object
to the progressive Republicans and the independent Republicans
doing
that same thing openly
on the Senate floor? Isn't that what you objected
toI
Mr. KENT. No. The thing at first--.
Senator BLUAMN. Wait a minute, Mr. Kent.
Mr. KENT. Is to try and get together.
Senator BLAINE. You can answer that question very
well. Isn't
that what you mean? Isn't that what you
meant by your speech
when you said the Senate could not function?
Mr. KENT. In effect, what I said wasSenator CAHAWAY. No, no. Just answer
question, please, Mr.
Kent. We have to quit at 1 o'clock, and the
you
must have an idea
somewhere in your head.
Mr. KExT. Well, I am sorry. It seems to me
Senator WALSh of Montana. The question
to you must
be answered yes or no. He asked you if thataddressed
was
your
idea. You
had better read the question. .
Mr. KEr;T. All right read it so I will be sure.
(The question was thereupon read by the reporter
as follows:)
Isn't that what you meant by your speech when you said the
Senate could not
function?
Mr. KeNT. No; I wouldn't say that.
Senator BLmiNe. vell, what did you mean b. your
speech t
Mr. KxxT: What I meant was, it was impossible,
apparently,
for
the progressives and the majority to come to an agreement
as
to
what
was for the best interest of the country. Now, I
can see no harm in
their trying to come to a mutual understanding together
in a room
by themselves, preliminary to such matters as are put before
the
public.

ob*
eme
the
cou
fair

we
of
The
to t'
M
P
der
that
an
Of

Gov
Con

it if
as t
thin

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othe
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LOBBY INVESTIGATION

1489

Senator BLAiNz. But you are objecting to that arrangement being

on tot.
the Senate floor in the openi That is what you are
made
objetIng
Mr. KEN . I don't think it should ever have to be done. except in
emergencies. I think that ordinarily it would not need to be done if
the Senators all had a mind to get together.
Senator BLAINE. In other words--Mr. KENT. I have attended many meetings in Europe where many
countries were represented, and we have had to talk those things out
to find the point of agreement which was fair to all concerned and
fair to their people, and we could always do it.
Senator BLAINE. We are not legislating in any country in Europe.
We are legislating in the United States, as representatives. Members
of the Congress do not hold their seats in .their personal rights.
The hold t ose seats in a representative capacity. The rights beong
to the people, not to the individual.
Mr. KENT. Yes. There is no question of that.
Senator BLAINE. You would have a Member of the Senate surrender that representative capacity, that right of the peopleMr.

KxT.

I believe that the Senators-no, I wouldn't put it on

that basis. I believe that the Senators should try to get together on
an understanding that they believed of value to the people, instead
of developing it into a fight.

Senator BLAINE. Aren't the people interested in their GovernmentI

Mr. KENT. Yes; the are.
Senator BLAINE. Well, how are they going to know how their

Government is functioning if it is not done in open session of the

Congress.
Mr. KENT. That Is all right, but before you get to the open session

it is perfectly legitimate as I see it, for Senators to come together

as to what might be to te best interest of the United States, and I
think they ought to do it.
Senator BIJAI.E. Oh, yes. That is the method of Secretary Fall.
That is the psychology of FallMr.

KENT.

I can't conceive of their not doing it.

Senator BLAINIE. It is the psychology of every man who wants to

exploit the people. Those who meet behind closed doors and drawn
blinds know full well that business so transacted may escape the
notice of the people, and they may get by with it.
Mr. KE.NT. DO you think-Senator BLMN!. That is too often the attitude of bankers. That

is too often the attitude of industrialists. Now, that should not be

the conduct of a Member of the Senate, and so far as I am concerned-and I think I speak for the independent progressive groupwe propose to function in the open Senate.
Mr. K..

Do You mean you never have any conferences with

ma
other Senators?
Senator BrAiNz. Now, Mr. Kent, let me ask you this: Under these
circumstances, with 21,000 items and over 1,7'00 paragraphs, do you
expect a Member of the Senate to fully discharge his duty unless
there is free and open discussion and consideration of every fact that
is material to that particular issue I
Mr. KzxT. I think you are justified in discussion. There is no
question about it, but I can not conceive of why you are not justified

1490

LOBBY INVESTIGATION

in going into a conference with each other and determining before

hand what you all agree as to the best interests of the public. Then,
when that is put before the public, the public will see.
Senator BLAINE. I will not get into a repetition. I understand
full well what you mean by conference, and everybody in the Senate
knows what you mean.
Mr. Kzxr. I think it carries those conferences on, do they not.
Senator BLAINE. You mean a conference of dealing and dickering
and trading of votes and log rolling
Mr. KzNT. No; I don't mean that.
Senator CARAWAY. Let me ask you a question.
Mr. KENT. Yes.

Senator CARAwAY. You know there used to be held party caucuses

in
which they agreed that everybody should submit to the majority's
will.05
Mr. KzNT. Everyone what

ea
O

ah
thA

of

Senator CARAWAY. That the party would get together in what they
called a caucus, and they agreed to bind each other and all must
accept.puthe majority vote. Is that what you mean?
MrK.
ICiT. in effect, yes; but to try itnd come to a mutual agree.
ment that they believe will make it possible for the Senate to function
along the lines that they consider valuable to the United States of
America.
Senator CARAWAY. Did you ever answer a question without making
a speech ?
Mr. KEzT. It does seem hard, Senator. I don't mean to, Senator.
I am sorry.,
Senator BLAINE. If the Senate functioned no better than the wit.
ness, it would never accomplish anything.
Senator CARAWAY. You believe that the majority party ought to
get together in whut they used to call a party caucus and agree on
what the legislation should be?

th.
wi

Mr. KENT. I think the individual Senators would also have to be

talking with each other.

Bu

in her life?

Sel
hip
of
reg

Mr. KmNT. I think that would have a real value.

Senator COARAWAY. Do you know that was the system--.

Senator CARAWAY. Now, you are making your speech again.

Mr. KENT. Pardon me.
Senator OARWAY. Did your wife ever get an opportunity to talk

Mr. K NT. Yes.

Senator CARAIVAY. Well, you were gone, weren't you? That was

exactly the old system, and that was exactly the system against
which the whole country rebelled. Did you know that

the

pec
so,
yo

Y
0

the

-Mr. KEzT. Well, I knew that--

Senator CARAWAY. And that your party abandoned it?

Mr. KE.NT. That some people had said so, just the same as the old
onventions for the elections of Senators.
You believe that was the better way?
wARAAY.
Senator C
Mr. KszT. I think It was.

Senator CARAwAY. Well, I am satisfied that Vare would agree

with you, without question.
Senator BLAINE. You recall, Mr. Kent, that was the system in
which a certain tariff bill was written and President Taft was de-

me
th
if

LOBBY INVESTIGATION

1491

feated. Now, perhaps there are those in this day who might profit
by that example.
Mr. KENT. Well, wouldn't your own forces, in a conference of that
sort, have an opportunity to show your position, and they would be
able to show their position; and you could come to an agreement
that would really be of value to the United States I

Senator

WALSH

Senator

CARIAWAY.

of Montana. Mr. Kent-

Mr. KENT. Yes, Mr. Walsh.

Senator WALSH of Montana. To make your position plain the
Minneapolis Tribune is a. Republican paper published in the ciy of
Minneapolis, Minn., with a very large circulation. It undoubtedly
reflects the opinion of a vast number of Republicans in the State
of Minnesota, and there are very few of any other class there. It is
opposed to this bill as it came from the Finonce Committee. It is
assailing many. of the industrial rates. That is the sentiment of
the people of. Minnesota. Senator Schall is a R epublican, and he is
frankly and fairly representing that sentiment of his State in voting
with the so-called coalition. As I understand you, you would have
him surrender his own convictions of the right thing to do about
the interest of the people of the country, about the interest of the
people of his State you would have him go against the overwhelming
sentiment of his State and vote with the majority of the Finance
Committee for the bill, wouldn't youI
Mr. KENT. I can't understandSenator WALSH of Montana. No, no, no. Would you or would
you not?
Mr. KENT. It is pretty hard to answer that by yes or no, because
it means something which is more far reaching-

You can't function, then.

Senator WALSH of Montana. Mr. Kent you are going to go to

Senator Schall now to advise him as to what he should do.
fr. Kz.*T. It is not my business to advise him what he should do.
Senator WALSH of Montana. Oh, no, but I am going to assume you
are going to do so. You did assume to advise him up in New York.
But you are going to him personally now, and tell him what to do.
Mr. KENT. Suppose I assume I was the Senator from Minnesota.
Senator.WALsH of Montana. All right. Let us put it that way.
You have been elected Senator from Minnesota. You believe, as
Senator Schall does, that these rates are not right, that they are too
high, the industrial rates are too high. The people of your State,
of Minnesota, believe that those rates are too high. You would disregard your own convictions about the matter, you would surrender
your views. to the views of the Finance Committee, you would wholly
disregard the sentiment of the people of Minnesota with respect to
the matter, and you would vote with the Finance Committee, would
you?
Mr. KEiT. No, sire I would endeavor with all the force I had in
me to convince the other Senators.
Senator WALSm of Montana. And if you were unable to do so,
what would you do? How would you vote?

Senator CRAWAY. He wouldn't vote with the Democrats.

Mr. KzNT. I don't see how I should be unable to convince them,

if I was correct.

1492

LOBBY INVESTIGATION

Senator WALSH of Montana. Oh, oh.

Mr. KnNT.I find that men get together-Senator WALsH of Montana. Just a minute. Just a minute.
Mr.KrNT. When they are both striving for the interest of their

country.
Senator WALsH of Montana. You think the people always reach
the right conclusion?
Mr. KxNT. No; I don't.
Senator WALSH of Montana. There are different views, are there
not, about what is wise and what is unwise?
Mr. KENT. Absolutely.

Senator WALSH of Montana. And these members of the majority

committee may be perfectly honest about the matter?
Mr. KeNT. Yes.

Senator

WALsH

of Montana. And Mr. Schall may be likewise.

Mr. K NT. That may easily be true, but I can't see why you can't

convince a man if you are right.

Senator WALSH of Montana. Now, then, you are.the Senator from
-the State of Minnesota. The majority of the Finance Committee
won't accept your views, nor the views of the people in the State
of Minnesota. Will you vote with the Finance Committee or will
you vote against them?
..

ha

the

co
stl
do
us
W(
th,

Mr. KxT. I think that I would have been able either to convince

the Finance Committee or they would have been able to convince me.
Senator WALSH of Montana. All right. They convince you and
you vote with them.
Mr. KEzNT. I would if I thought it was to the best interest of the
United States of America.
Senator WALSH of Montana. And suppose you didn't think so?
Mr. KENT. That is quite different.

Senator WALsH of Montana. Oh, no.

Mr. KENT. Yes, it is.

Senator WALSH of Montana. Do you mean to say Senator Blame

isn't doing what he thinks is for the best interest of the country?
Mr. KHPT. Not at all.
Senator WALSH of Montana. Do you mean to say Senator Schall

is'not doing what he honestly believes is for the best interest of the
countryI
Mr. KENT. Absolutely no.
Senator

WALSm

of Montana. Very well. Now, then, I want you

to put yourself in his position. You are convinced that what you
want to do with respect to the tariff bill is for the best interest of the
country, Is for the Iest interest of the State of MinnesotaMr. KEw. The best interests of the United States of America.
Senator WALsHa of -Montana. And the people of the State of Minne.
sota as well. They comprise a part of the United States of America.
Mr. KENT. Absolutely.
Senator WALSH of Montana. You are satisfied that that is correct,
but you are unable to convince the Finance Committee of that.
Mr. KENT. Well, if'I was so correct, I feel very certain I would
convince them. I recognize what you are trying to get me to say,
but I don't see why I should say it.
Senator COnAWiY. I don't either. You haven't done it yet, and

I don't see why you should.

ge
o
ani
ar
4

ab.
to
pe
co
ex

H
th

1493

LOBBY INVESTIGATION

Mr. KENT. I can't pass on a situation like that where I haven't

had opportunity to convince the other side.

Senator WALSH of Montana. I want you simply to put yourself in
S
depositionn of Senator Schall. What would you do
M r. KENT. I would try my best to convince the other Senators to
see My point, and if I was right I probably could do it.
Senator WALSit of Montana. But they are obdurate and they do

not agree with you. What would you then do I

Mr. KENT. It would depend entirely on the development of the

conversation and whether Ibelieved that they were right.

Senator WALSH -Of Montana. And then what would your constituents do to you when you next came up for electionI

ity

Mr. KENT. My duty?

n't
e
te

ie.
id

What do you meanI

Senator WALsit of Montana. No. What would your constituents

do to you when you next came up for election?
Mr. KT.
Well, they might turn me down and they might be
justified in turning me down,. but that doesn't mean i Itgought
I ought to vote the other way for the benefit of the country I
wouldn't do it, because I would not always be considering reelection.
Senator WALs of Montana. But I am always considerig you don't

think so. You want every one in the majority party to agree with
the majority of that party. At least to vote with theml
Mr. K .T.Not from that form of conversation. I want them to
get together and find out what they all feel is for the best interests
of their country and stand by it.
Senator WALSH of Montana. Exactly, but there are 56 of them,

and 18, or 14, or 15 are not able to convince the remainder that they
are correct.
Mr. KENT. Have they tried?
Senator WALSh of Montana. They have been trying for two
months, and you complain that they have taken too much time
about it.

Mr. KExT. Did they try before the two months?

Did they try

to show their position, what they thought was right for their State
to these men? I don't say you didn't, Mr. Blame.
Senator WALSH of Montana. Senator Blaine has indicated to you
perfectly clearly they had no opportunity to do that, except talking
with them on the street corners.
Mr. KENT. Well, I can't see that there is any harm in Senators

conferring with each other.

Senator WALSH of Montana. Certainly there isn't, but how do. you
expect legislation to be conducted that way, when you find they are
unable to be convinced by talking with them on the street corners?
fr. KENT. Apparently they have never tried to convince them,
from what Senator Blame says.
Senator WALnH of Montana. How do you make that?
Mr. KENT. I think they should try.

Senator WALsH of Montana. How do you know that?

Mr. KBwr. I am only taking it from what Senator Blaine said.

He said that should be done on the floor of the Senate. I think the
party ought to attempt to get to ether.
Senator WAwn of Montana. Let us determine anyway, whether

they had it in this room, or out on the street corners, or in the corri-

78214-29-PT 8--17

1494

LOBBY INVESTIGATION

dors, or the cloak rooms, or anywhere else and they are not able to
do it, what you would do if you were the senator from Minnesota.

Mr. KENT. If you are unable to do it, it is because you haven't

been able to convince them. The may have been able to convince you.
Senator WALsH of Montana. Exactly.
Mr. KENT. You can't vote on a proposition that has never devel.
oped, because there are ins and outs to it that are not possible to
measure. You can't do it, Mr. Walsh.
Senator WALsH of Montana. I just wanted to know from you what
you would do.
Mr. Kx-NT. I would do the thing that I felt was for the best in.
terests of the United States of America, regardless of State or any.
thing else.
Senator WALSH of Montana. That is what I want you to assume.
You believe that for the best intermts of the country the tariff bill
proposed by the Senate Finance Committee is not right, that the
rates are too high, and the people of your State belive the same
way and you can't convince these fellows you are right. What
would you do?
Mr. k xT. If I had reached that point, it would be only after
only.
trying to convince them.
Senator WALSH of Montana. All riglt. You tried your best, and
couldn't do it. What would you do?.
Mr. KET. I don't think it is possible to answer that, because you
can not weigh, Mr. Senator-you can not weigh a proposition like
that, because it may have a great many ins and outs as the thing
develops.
Senator CAtaWAY. Is that the last speech you want to make before
(he Senator asks you another question?
Mr. KENT. Yes; all right.
Senator RoBINsoN of Indiana. Mr. Kent, I have listened to your
several statements, and I am trying now hurriedly to analyze your
views as I understood them. First of tll, as I get it, you believe this
is a Government by party?
Senator CAnAwAY. He don't know you are with him, and is afraid
to answer.
Mr. KENT. I believe the Government can function better if the
people had parties.
the
Senator Riizsox of Indiana. That in the national conventions
candi.
their
nominate
two dominating parties make their platforms,
dates, and go before the people?
Mr. KExT. Yes.
Senator RoBiasox of Indiana. 'That one or the other secures a
majority of the votes?
Mr. KIE'T. Exactly.
Senator RomNsoN of Indiana. And has the indo.nsement of the peo.
pie. Is that what you mean to say ?
Mr. KENXT. Yes.
Senator BAix.. That if one of the parties succeeds in having in its
membership. in the United States 6 members and tine other party has
39 members, that the 66 who have been charged with responsibility
for conducting the Gbvernment ought to get together on legislation
in accordance with the platform adopted by the party. Is that what
you mean?

P
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and

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other
iteh
coit

1495

LOBBY INVESTIGATION

Mr. KzNT. It seems to me so.

Senator RoDnsoSw0

of Indiana. And you think to that end they

would be justified in holding conferences together?

Mr. KENT. I do. I don't see how men can understand each other
if they don't hold conferences together, and I have never been able to

see any harm in holding an honest conference.

Senator ROBINsoN- of Indiana. And there wouldn't necessarily be
as you see it, in such a conference, anything harmful or prejudicial
to the public good ?
Mr. KzNT. There shouldn't be in groups of honorable Senators
interested in their country getting together to get an understanding
of each other and of each other's ideas and the uieds of their separate
States. I can't see anything harmful in it at all, and I can see a
tremendous amount of harm when they stand off from each other
and try to fight each other.
Senator RoBINSON of Indiana. Now, as a matter of fact, you know
of your general knowledge that Senators do meet with each other
all the time?
Mr. KEzNT. I have always supposed so.
Senator ROmNSON of Indiana. Like other individuals.

Mr. KENT. But Senator Blaine rather led me to believe they don't.
Senator RoBINsoN of Indiana. And then when theyr are talking together they should exchange views and see if there if some common
position they can accept?
Mr. KENT. That they both feel is for the good of the people yes.
Senator RoBINsoN of Indiana. Now, in a tariff bill, where there
are 21,000 items, as I get it, your position isn't that they should
agree necessarily on every single one of these 21,000 items?
Mr. KENT. No.
Senator RoBiNsoN of Indiana. But that they should vote some way

or another and pass a bill?

Mr. KzNT. I think that they should-well, no. When I said no,
I spoke possibly too auiucly. I can not see why they can't get to.
father in the vast majority of cases, and it would seem to me that
& good of the country would be better served if they voted for a
bill they largely approved rather than to hold up the bill and prevent
any bill going through just because there were a few items possibly
where they could not come to an agreement.
Senator RoBINsoN of Indiana. Even though item by item they
could not all agree on various items, they could finally get to a
point where they could pass a bill by voting on the items as expeditiously as possible. Is that what you mean?
Mr. Ik.T. I think they could get together with a proper understanding. Isn't that what is being done now? Isn't the coalition
working on the bill in this wayI
Senator RoBINsoN of Indiana. Well, I am asking you for your

views.

Senator

LAINE. Read the Congressional Record.

youSenator
what the
coalition
doing.
ROBINSON
of is
Indiana.

That will tell

Now, Mr. Kent, see if I still fur-

ther get your position as you have outlined it here to.day. Congress was called together last April for a certain specific purpose.
It has been In session, either the Congress as a whole or parts of it,
committees, from then until now, or until about a half hour ago. A

1496

LOBBY INVESTIGATION

part of the purpose for which it was called has been accomplished.
he other part has not yet been accomplished, although the gular
session. impends, coming on the 2d of December. I understood, if I
did understand you, it is your opinion, and you have so expressed
yourself, that the people gradually felt as the months passed and
the purposes of the session were not accomplished, that there prob.
ably would be nothing accomplished, and the Senate was not able.
to act. Is that it? And therefore that brought about a certain
amount of uncertainty in industry. Is that correct?
Mr. KEN.T. Yes; but added to that was also a feeling that if the
power of the coalition developed an ability to reduce the tariff and
they exercised that ability it might be very harmful to individual
lines of business.
Senator Roerxsov of Indiana. That is what you meant by the
Senate being unable to function?
Mr. KENT. Partly. It was called together to pass a bill and it
didn't do it. It didn't do it. It didn't function.
Senator RomNsoN- of Indiana. Now, the Senate has adjourned,
and in your statement you meant, did you, that that was the result
really in the last month or two that that was expected by the people?
I mean, without action having been taken?
Mr. KENT. I would say possibly the last---a very short time. I
don't know how many days-it has been rather expected. I wouldn't
say how many days, but regardless of whether they expected it or
not, the fact is the thing that would count ultimately.
Senator RoiNSON of Indiana. And you think generally that the
Senate should have gotten together, or at least the party charged
with responsibility among themselves?
Mr. KEzNT. Yes, sir; I do.
Senator RomnNsox of Indiana. One way or another, in an agree.
ment to pass a bill of some kind, and if they couldn't agree on the
terms of the bill exactly, to at any rate vote and pass a bill and send
it to conference before adjournment. Is that the point?
Mr. KENT. Yes. I believe it could have been done in a way that
they could have ill felt they were justified in voting.
Senator Romu so-. of Indiana. That is all.
Senator WI.AqJ of Montana. Now that your attention has been
called, Mr. Kent, to the fact that the Senate Finance Committee pro.
posed increases in a great number of the industrial rates, in the case
of 44 out of 52 industries in the State of Connecticut, does it now
appear to you that in your speech in New York you were not reflect.
ing the disappointment of those people who were expecting those
great bir additional profits?
Mr. K rT. No, sir.
Senator WAiLqi of Montana. That don't occur to you now, even?
Mr. K PsT. No, sir; I don't think so. I think that there was a
certain feeling on the part of the people that was not a forward feel.
ing. There was an anxious and waiting feeling, and that meant that
there was a sale of securities.
Senator WALsH of Montana. Don't you think that feeling was
uppermost in the minds of those people who expected great big
increases In their profits?
Mr.
NzcET.
I don't think they expected anything. I think they
were uncertain and did not know what they were going to get.

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LOBBY INVESTIGATION

1497

Senator WALSH of Montana. The were expecting these addi.

tonal profits and they became unceain as to whether they were
going to get them or not I '
Mr. KrT. I don't know as they expected anything.

Senator WALSH of Montana. By reason of the activities of the

coalition.
Mr. KzNT. I don't know that they expected any additional profits.

They couldn't expect anything until the bill was passed. They were
in an uncertain position. They did not know what to do.
Senator

CARAwAY.

to effect that result.

Well, they put up a great deal of money trying

Senator WALs, of Montana. Let me remark that on the floor of

the Senate it was said that by reason of the expectation that the rate
on manganese was going to be increased a whole lot of companies
had been organized, expecting to make profits out of the increased
rate. Did you hear about that?
Mr. KENT. I didn't know a lot of companies had been organized

for it. I realizedSenator WALSH of Montana. In anticipation of the higher rate

on manganese.
Mr. KrNT. Well, you voted for that, did you not.
Senator WALSH of Montana. Well never mind about what I did.
I did not. But it was expected by them that the rate would be in.
creased to 112 cents, and it was charged that in that expectation companies were organized and stock was sold.
Mr. K

NT.

I never saw any of it or heard of any of it.

Senator WALSi of Montana. Do you undertake to say that many

people were not led to believe that those stocks were going to be
valuable because of the increased duty on manganese?
Mr. ENT. In that particular case provided those companies were
organized with that purpose-and I presume you are meaning to
say they were--I don't know anything about it.
Senator WALsHm of Montana. I am telling you what was said on
the floor of the Senate.
Mr. KENT. I don't know as to the fact.

Senator WALSt of Montana. Neither do I. But nowt although

companies were organized, manganese companies were organized and
stock was being sold upon the anticipation of an increase, you think
that these other people who actually got a raise did not anticipate
any additional profits at allI
Mr. KENT. Of course, I don't know whether stock was sold that
way. I dont' know anything about it.
senator WALsH of Montana. I am telling you it was so said, however, on the floor of the Senate.
Mr. KENT. Yes. In that particular it may be so. In other words,

they were all dressed up and no place to go.

Senator WALsi of Montana. And you know, as a matter of fact,
that some of these companies were organized and selling stock.
Mr. KENT. No; I don't.
Senator WALSH of Montana. You know that some additional man.
ganese companies were organized. Did you not say sot
Mr. KzEN. Well, you said it was read from the floor of the
Senate.

1498

LOBBY INVESTIGATION

Senator WALSHt of Montana. But did you not say that you knew

those companies had been organized I

Mr. KENT. No, no. I didn't say that, Mr. Walsh. I don't know
they had been organized. I was accepting what you said as being
possibly true.
Senator WVALSH of Montana. Anyway, you think that those people
who owned the stocks in those companies upon which the rates were
to be increased, If the Senate Finance Committee's proposal should
be accepted, so as to make those additional enormous profits, paid
no attention to that?
Mr. KENT. I can't conceive of anybody being willing to count

on it.

Senator VALsH of Montana. That is all.

Senator ROBINSON of Indiana. Just one other question. As I get

your position, Mr. Kent, you consider that the Senate was called to
perform a certain taskV

Mr. KENT. That was my understanding.

Senator RODINSON of Indiana. And has adjourned without per-

forming it I

Mr. KENT. Yes.

Senator ROBINSON of Indiana. And, therefore, has failed to function?

Mr. KzNT. It would seem so, wouldn't it?
Senator OARAWAY. I think now I get you. Whenever the President calls a Congress into extraordinary session to do a certain thing,
it must do it?
Mr. K T. I wouldn't say that.

Senator CARAwAY. All right, that ends it.

Mr. KExT. I suppose---.
Senator CARAWAY. No, no, no. Let's don't have a speech, for the

Lord's sake. I thought we had exhausted that. You wouldn't say

that, but you would say that the party in power must have a caucus
and get together and agree that this program will go through?
Mr. KxNT. And develop something they can all agree to.
Senator CARAWAY. Just "Yes"
Mr. K'r. Yes.

or "No."

Senator CARAWAY. And therefore you would have the legislation

affecting all the people written in party caucuses.

Mr. Kent, they ought to be able to report you wobbling your
head, but the can't. Yes or no.

se
to:

Mr. KENT. I was not wobbling-

Senator

CARAWAY. Yes, you were.

Yes or no.

Mr. KENTP. I was studying itSenator CARAWAY. NO; you weren t studying it.
Mr. KENT. I would say yes; I can see no harm in that.

Senator CARAWAY. Allright. That will be all, Mr. Kent.

Mr. KENT. Thank you, r. Chairman.
Senator CARAW.AY. There will be. no meeting of the committee
next week. It was first agreed that we should-meet, but the program has been changed. We will adjourn to meet on call of the
chairman.
(Thereupon at 1.15 o'clock p. m., the committee adjourned to
meet at the call of the chairman.)

pr

LOBBY INVESTIGATION
TUBSDAY9 DWEXBFE

10, 1929

UNITED STATES SENATE,

SUBCOMxwrEE OF THE COMMITTEE ON THE JUDICIARY
Waskngton, b. 0.

The subcommittee met, pursuant to call,' at 10.80 o'clock a. m., in

room 219, Senate Office Building, Senator Thaddeus H. Caraway,
chairman, presiding.
Present: Senators Caraway (chairman), and Walsh of Montana.
Senator Robinson of Indina appeared later, as hereinafter noted.
Present also: John G. Holland, Esq., counsel to the committee.
TESTIMONY OF X. (. LAXIN-Resumed
(The witness was previously sworn by Senator Caraway.)
Senator CARwAY. Mr. Laki, you have just returned from Cuba
Mr. LAKIN. Yes, air.
Senator CARAWAY. Was your business to Cuba in the interest of the
legislation now pending on tariff?
Mr. LAKIN. No, sir.
Senator CmARAWAY. Dealing with the Barlow claims
Mr. LAmN. Yes, sir.
Senator CArAwAY. Was Colonel Carroll with you?
Mr. LAKIN. Yes, sir.
Senator CARAWAY. Who else was with you?
Mr. LAKI.. Mr. Shattuck and Mr. Yates.
Senator CARAWAY. Who is Mr. Yates?

Mr. LAKIN. Mr. Yates was, for a number of years, the private
secretary of Senator James Reed.
Senator CARAWAY. When did he become interested in these mat-

ters Mr. Lakint

31r. LAeuN. I think about three or four weeks ago.
Senator CAAvAY. Who employed him?
Mr. LAKIN. Colonel Carroll.
Senator CAHAWAY. He was employed in this after he had been
acting with this committee?
Mr. LAKIN. Yes, sir.
Senator CAPAWAY. Had you h.
in correspondence with him
prior to that time?
Mr. LAKIN. No, sir.
Senator CARA AY. Did you know him?
Mr. LAKmt2 No, sir.
Senator CAAAY. What service was he expected to render?
Mr. LAKIN. He is looking up for us the title of this property
which Barlow claims to own.
1499

15M0

LOBBY INVESTIGATION

Senator CARAWAY. What peculiar qualification has he for work of

that kind? Do you know, Mr. LakinI

Mr. LAKIN. I only know that he is a lawyer.

Senator CARAWAY. When did he commence to practice law?
Mr. LAKI. That I can't say.
Senator CARAWAY. What I am curious to know is he was in the
employ of the committee, and without notice he was n your employ,
dealing with some of the questions about which we had been inquiring.
Mr. -LAKIN. I didn't employ him, and didn't know he was employed
until I was told by Colonel Carroll, who pays his compensation, whatever it is.

Senator

CARAWAY.

Did Colonel Carroll return from Cuba with

you?
Mr. LAKIN. Yes, sir.
Senator CARAWAY. Was the question of the tariff as it affects
sugar, discussed with anyone in Cuba while you were there?
Mr. LAKIN. I had a number of people ask me what I thought were
the prospects, that is all.

Senator CARAWAY. Did you have any conferences with anyone in

connection with this question, that is, an officer of the Cuban Govern.
ment?
Mr. LAKIN. I had a conference with President Machado, but the
tariff was notSenator CARAWAY. The tariff was not mentioned?
Mr. LAxix. I don't think so.

Senator

CARAWAY.

Well, you would know.

Senator

GARAwAY.

Well, you had promised to do that, Mr. Lakin,

Senator

CARAWAY.

Senator

CARAWAY.

Mr. LAKIN. Well, he might have said, "How is it going? "or some.
thing of that kind.
Senator CARAWAY. Did you make any report to anyone down there?
Mr. LAKIN. No, sir.
had you not?
Mr. LAKIX. I don't know what you mean.

Had you written any letters that you would re-

port to any person?

Mr. LAIN. Oh, yes.

And you went there for that purpose ?

Mr. LAmit. No; I went there on the Barlow case.

Senator CARAWAY. Then, when did you purpose to report to the
Cuban Government your activities wit h reference to the tariff?
Mr. LARIN. Whenever there was anything developed of importance
to report. I don't want to be misunderstood that -i didn't say anything at all about the tariff, but there wasn't any report to make.

Senator CAwAwaY. In reading your correspondence I change my

mind about some of the testimony you gave, and this is preliminary
to that. You will be able to reconcile that, I presume, when you
come to it. You had promised the Cuban Government you would
make a report in personI
Mr. LAwpr. Yes, sir.
Senator CA iawAY. Then there were matters you wer doing here

that you could not write about?

Mr. LAKIN. Yes.

Senator CAAWAY. And you went to CubaI
Mr. LARN. Yes.

.7

LOBBY IVBTATIOI

50
1501

Senator CARAWAY. Did y4ou keep your promise and report to them

what you were doingI

Mr. LAKIN. No, sir. I didn't say anything about the tariff that

was of a specific nature. I only ha about 16 minutes with President

Machado.
Senator CARAwAy. What were you doing here that was of so great
delicacy that you could not report by letter f
Mr. LAmN, Well, it isn't allvisabile to put too much into correspondence anyhow.
Senator CARAwAY. Yes; I presume you will find that out. AU
right t Senator Walsh. You iave the correspondence, and wish to
question the witness.
Senator WhAsK of Montana. Some of the correspondence here Mr
Lakin, with respect to which you can furnish us some enligXenment-here is a copy of a letter from you to Mr. Hugo Hartenstein,
president American Chamber of Commerce of Cuba, of date December 28, 1928. Mr. Hartenstein resides in Habana, doesn't he.
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. How did you come to be writing in
the nature of a report to the president of the American Chamber
of Commerce in CubaI
Mr. LAKIN. Because they were the first people who asked me to
represent the Cuban interests in this tariff fight.
Senator WALSH of Montana. In this letteer you say that authorization was also given to employ Edwin P. Shattuck as a lawyer to
prepare a brief. That is the Mr. Shattuck who appeared as a
witness hereI
Mr. LAKIN. Yes, sir.
Senator WALi of Montana. Now, does that refer to the first communication or contact that you hact with Mr. Shattuck?
Mr. LAKIN. I think so.
Senator WASH of Montana. You had had no relations with 36.
Shattuck prior to that time?
Mr. Lares. I don't know whether I had any years before when he
was connected with the Sugar Finance Conimission, I think they
called it, of 1921 or not. We were in the sugar businessSenator WALSH of Montana. The Sugar Equalization Board,
wasn't it
Mr. LAKIN. No; I think it was 1921. Mr. Shattuck represented,
if I correctly remember, in the United States, what was called the
Sugar Finance Commission, which was a commission organized under the auspices of the Cuban Government to handle the crop of
that year.
Senator WArH of Montana. Well, he was, as a matter of fact,
counsel for the Sugar Equalization Board?
Mr. LAIN. Oh, ye.
Senator WAwen of Montana. Organized as a part of the Food
Administration during the wart

Mr. LAKIN. Yes, sir.

Senator WALSn of Montana. Headed at that time by the now

President of the United States, Herbert Hoover?
Mr. LAKIN. I suppose so; yes, sir.
Senator Wiuim of Montana. So that at that time Mr. Shattuck
was an official of the Government, subordinate to Mr. Hoover?

1502-

1602
LO1~

V~STIGA~I0N

Mr. LAKzIN Well, I suppose that is so.

Senator WAmSH of Montana. Then, Mr. Shattuck was employed

immediately after the act of 192 wentinto effect to secure a raise
in duty on sugar, under the flexible provisions of that act?
.
Mr. LAKN. A lowering of the duty.
Senator WALSH of Montana. Excuse me d lowerng of the duty.
And that employment he told us continued until 1926, at least.
Mr. LAKN. Well, I don't know about that.
Senator WALsi of Montana. You sustained no relations with him
in connection with either of those employments I
Mr. LAwUN. No, air.
Senator WVALSH of Montana. What kind of a relationship, if any,
did you have with him prior to th time you employed him I
r. LAKIN. I think it was nothing more than an acquaintanceship.
I have known him for a number of years.
Senator WAmSH of Montana. You were the man who employed
him however, in this particular work?
fir. LA=N. Yes. I have to explain that a little bit.
Senator WALSH of Montana. Very well.
Mr. LArw. Because he was suggested to me by the President
of the Umted States Sugar Association.
Senator WALSh of Montana. That was whom?
Mr. LAKIN. Mr. George A. Zabriskie. A resolution was passed at
a meeting to which they invited me. I am not a member of the
association. I was invited to attend the meeting, and there they
asked me, knowing that the Cubans had asked me to appear here, to
also appear for the sugar association, and authorization was given
to Mr. Zabriskie and myself to employ a lawyer and Mr. Zabriskie
suggested Mr. Shattuck to me, iqnd knowing him and having conce in him, I readily agreed.
fl
Senator WiLSH of Montana. What were the grounds of Mr. Zab.
riskie's recommendation to you of Mr. Shattuck for this important
post?
Mr. LAKI. I think Mr. Zabriskie was the president of the Sugar
Equalization Board and had come in contact with Mr. Shattuck at
that time and had been very close to him since.
Senator WALSH of Montana. But you say in the letter " H e is a
personal friend of President Hoover and also Senator Smoot."
Mr. LAKIN. I think that is correct.
Senator WALSH of Montana. How did you know he was a personal
friend of President Hoover?
Mr. LAJns. I think Mr. Zabriskie told me.
Senator WtuiH of Montana. Anyway, you thought it of sufficient
importance to report that fact to Mr. Hartenstein of the American
Chamber of Commerce?
Mr. LArKN. Yes, sir.
Senator WALsH of Montana. How did you think that would be
of interest to him?
Mr. LAmiu. To Mr. Hartenstein I
Senator WA Sn of Montana. Yes; that Mr. Shattuck was a per.
sonal friend of President Hoover and Senator Smoot?
Mr. Limpr. Because the hope and expectation at that time was that
the legislation which should ensue In regard to the sugar schedule
would be one which would protect domestic interests and-at the same

C
T
W

tl
m
b
a,
h
A
ta

LUBBY INVESTIGATION

1508

time not hurt Cuba, and it.was deemed very important in viiw of the
fact that the President-elect had taken an especial interest in this
from 1917 on, and the fact that Senator Smooth had also taken a
personal interest in this from time immemorial-it seemed very
important to employ a man who was on friendly terms with both of
them.
Senator WALsH of Montana. You also say in this letter:
I accepted the Cuban appointment because it, In effect, came from the Cuban

Government, and I have always taken the attitude that I would do whatever
I might be called upon to do by the Government inbehalf of the Cuban interests.
Will you explain how this appointment of yours came, in effect,
from the Cuban Government?
Mr. LAHiN. Yes. Mr. Heartenstein came to my office in Habana,
I think it was on the 15th of December, and stated to me that he
had been asked by the Cuban Government whether the United
States Chamber of Commerce-I mean the American Chamber of
Commerce in Habana-proposed to interest itself in the tariff.
They had stated that they had, but that they had made no plans.
He also said to me that the representative of the Cuban Government
was very anxious that the Chamber of Comnerce should take this
interest and appoint somebody to represent the sugar interests in
order to make sure that the Cuban side should not be neglected in
the hearings that were to take place in Washington. He stated to
me that he had inquired among the board of directors of the Chamber of Commerce, of which I am not a member, as to who would be
suitable, and that they had suggested me, and asked if I would
accept it. I said only if this is a direct request from the Cuban
Government, and he asked me what assurance I wanted and I told
him that I would have to have the assurance of the 'resident or
some member of his Cabinet, and later in the day his Secretary of
Ariculture specifically and directly asked me if I would undertake it.
Senator WALSH of Montana. Who was the representative for the
Cuban Government for whom Hartenstein presumed to speak?
Mr. LAKI.N. I think it was the secretary of communications, whose

son is a son-in-law of the President.

Senator WALSH of Montana. So that in these matters you have
regarded yourself as the representative of the Cuban Government?
Mr. LAICiN. Among others; yes, sir.
Senator VALSH of-Montana. When did General Crowder get into
the picture?
Mr. LA~r. Almost immediate.
Senator WALSH of Montana. With respect to time?
Mr. LAniiN. I should say the latter part of December.
Senator WALsH of Montana. And just how did he get into it?
Mr. LAnI. Because--I think, I am not sure, but I think he did
so at the direct request of President Machado. I was told by-7no,
I think I am wrong. I think that came in January. I went to
Cuba the first part of January.
Senator WALSH of Montana. For the purpose of refreshing your
recollection, I have here a letter of date December 22 1928 from
General Crowder to yourself, so it would seem that 1he relations
subsisted as early as December 22, 1928.
Mr. LAwN. Yes.

1504

LoBY NVEITIGATON

Senator WALsu of Montani Well, I interrupted you.

Mr. LAWN. What I know is this, that General Crowder and Presi.

dent Machado were very strong personal friends and that President
Machada considered that Genera Crowder was a proper man to help
the Cuban Government in this important matter, and I would sus.
pect, but I am not absolutely sure, that President Machado asked
him.
Senator WT&Ln of Montana. So that your understanding is that
General Crowder, as well as yourself, in this matter represented the
Cuban Government ?
Mr.Lam. Yes. I think that General Crowder felt that at any
rate.
Senator WAxSH of Montana.But by whom has General Crowder
been paid
Mri. LAwz. I think by a group of mill owners in Cuba
Senator WAlst of Montana. Outside of your organization, you
mean
Mr. LAKm. Yes; Cuban mill owners. I mean Cubans.
Senator WAlsH of Montana. Well, you represent Cuban mill
%
owners don't 0ou
Mr. LtA N. 3 represent them all in a sense; yes.

men

who
S
M
and
the
teeha

Ifni
porter

owners of mills in Cuba?

Mr. LA.zn. Well, I don't know what you mean by organization,
sir.
Senator WAlSH of Montana. Don't you represent the Cuba Co.,
so called

rin
5
plS
plan
mr
S
int
S
be a
M
adv"
S
pl
V
we
ap
a ph

pany. That is a New Jersey corporation.

wou

American ownership, 'and I don't think that General Crowder is

paid by any American ownership.
Senator WALSH of Montana. 0h,I see. This letter from General
Crowder to yourself says:

St
visal
M
thin
form

Senator WALsH of Montana. And your organization consists of

Mr. LA=N. The Cuba Co.; yes, sir; but that is not a Cuban com.

posi:

Senator WALSH of Montana. But it operates in Cuba?

Mr. LAwN. Oh, yes; but I was trying to distinguish Cuban from

In my subordinate way I should like to assist you In any way I can, but the
assistance I can render will, I think, bo confined to conference with those who
are to present the case, as my prior relation as ambassador to Cuba would
scarcely permit me to go before the committee.

What is the significance of the word "subordinate" there? To

whom"was General Crowder subordinate?
Mr.LAKIN. He had learned, undoubtedly, that I had been asked
to assume the responsibility.

jUSt
j
1fr
a we

Sl
give
Mc
Mr

Senator Wafi8 of Moitana. And he felt himself, in a way, in

schev

LAmr. They are the largest sugar producers,. think, in

didn'

this work subordinate to you?

Mr. LAxi. I think so. I think that is all he meant,
Senator WALSH of Montana. Now, who is Mr. Rionda, and who
Is the Czarnikow.Rionda Co. of New York?
Ar.

the world and they.also own, I think four or five nrlls in Mba,
sugar mills. They have offices in New ork.
senator WAws of Montana. I have before me a letter written
to them on this general subject. How did you come to be writing
a letter to the manager of that brokerage house ?

Se
to be
itI t
]r
Se
Mr
see hc
Sen
Shatt

"LOBBY-INVESTIGATION

1505

Mr. LAWN. They were contributors to our fund and prominent

members of the United States Sugar Association and people on

whom I relied a great deal for my statistics.

Senator W~zsu of Montana.

ou say in the letter as follows:

My notion is that we could secretly put some such plan up to Smoot, Petriken,
and Carlton, and get them to thinking In terms of protection against not only
the Philippines, but also Hawaii and Porto Rico. Meantime, of course, ouT
technical defense before the Ways and Meaus Committee would proceed, as
if no such plan were in contemplation. It seems to me that secrecy is important, If the plan has any merit.

What plan was that?

Mr. LaiUN. That was a plan I worked out for an excise tax on

refining sugar.

Senator WALSH of Montana. What was the trouble with that

plant
Mr. LAWN. We couldn't find an way to protect the Louisiana
interests. I submitted a copy of the plan to Senator Smoot.
Senator WALSH of Montana. What was the particular value to
be attached to secrecy in the matter?
Mr. LAKN. Well, until the thing could be put in shape it was not
advisable to talk it around everywhere.
Senator WALsH of Montana. Well, why not, if it was a good
plant
Mr. LAWN. Well, I still think it was not advisable until after

we got the thing in shape.

Senator WALHI of Montana. Yes, I understand so, but you have
a plan for solving the sugar difficulties, and that is a plan for imposing a duty upon the refiners of sugar. That on the face of it
would seem to have the possibilities or a solution in it.
Mr. LAKes. Yes, I thought it had.

Senator WALSH of Montana. Then, why did you think it was advisable to be secret about it?
Mr. LAmIN. I think it is advisable to be secret about important
things until you get them in such shape that they really have some
form.
Senator WALsH of Montana. Well, it is a very simple matter to
just impose an excise tax on refining sugar.
fr. LAKIN. Vell, it was not very simple in my mind. It took me
a week to iyork the plan out.
Senator WALsH of Montana. I would think you would want to
give the greatest possible publicity to it if you thought it was a good
scheme.
Mr. LAxi.. The probability is it was not thought to be a good
scheme.
Senator WALSH of Montana. How do you know it was not thought
to be a good scheme? I have never heard of it. When you proposed
it I thought it was a very excellent scheme.
Mr. LA IN. I say I gave a copy of it to Senator Smoot and he
didn't think it would work.
Senator WALsH of Montana. Yes. That settled the matter?
Mr. LArT. As the chairman of the Finance Committee I didn't
see how I could go beyond him.
Senator WALSH of Montana. Did you recollect about what time
Shattuck was employed?

1506

LOBBY INVESTIGATION

Mr. LAKIN. It was about the 20th of December, I should say.

Senator WALSH of Montana. I find in your files a cablegram from
you to Shattuck of date January 10, 1929. Do you remember where
Shattuck was at that time?
Mr. LAKIN. I think probably I was in Cuba and that Shattuck
was here.
Senator WALSH of Montana. You mean in New Yorkf
Mr. LAKIN. Yes, sir; New York.
Senator WALSH of Montana. I think that is correct. It reads as
follows:
Arriving New York Monday morning 10.19. Will bring various statistics and
am arranging for Lute Marino Perez to arrive Tuesday or Wednesday prepared
to remain north as long as needed. Your engagement to prepare a brief and
iecord of testimony for the hearing entirely approved here by all parties
Including president.

You had theretofore engaged him to prepare a brief?

Mr. LARIN. Yes, sir. Well, the Sugar Association had engaged
him; yes, sir.
Senator WALSH of Montana. And that you reported to the parties
in Cuba ?
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. And who were the parties to whom
you reported that?
Mr. LAKiN. The chamber of commerce and the government.
Senator WALSH of Montana. What officer of the government did
you report to?
Mr. LAKIN. I think I reported directly to President Machado.
Senator WALSH of Montana. And President Machado apparently
approved the charge?

Mr. LAKIN. Yes.

M
giver
repre

rere
of a:
othe
lb
eats

St
Mac
X

Se

ticull
M

nt

not
M

Se

M
Se
M
knolSe
M
office

the (

Senator WALSH of Montana. What information did you give the

President concerning who Mr. Shattuck is?
Mr. LAKIN. Well, I think I told him just what I have stated hero
about him, his connection with the Sugar Equalization Board, the
fact that he had been a lawyer who conducted the case before the
Tariff Commission which resulted in the recommendation of the commission to reduce the duty. Those two factors alone, it seemed to
me were sufficient.
Senator WALSH of Montana. And I suppose the fact also that he
was a personal friend of Senator Smoot and the President?
Mr. LARI. I haven't any doubt I said that.
Senator WALSH of Montana. What is the Asocicacion Nacional De
Hacendados De Cuba?
Mr. LAKxr. That is the National Mill Owners Association of Cuba
to which all the mills, whether American or Cuban, belong.
Senator WALSH of Montana. You seem to have been the representative of them as well.
Mr. LAKIN. Well, iot in a technical sense.
Senator WALSH of Montana. Well, they gave you a power of at.
torney did they not?

his
Se

Senator WALsH of Montana. As well as the American Chamber of

Commerce?

Lov
M
CaUSI

Mr. JKaAIN. Y es.

I bi

ests
W
M
Se

I
Assoc
W
that
M
Smo
injui
tork
post
the
there

sE

LOBBY INVESTIGATION

1507

Mr. LAKIN. Yes. I didn't ask them for it, but I found they had
given me One. They passed a resolution I think, authorizing me to
represent them, authorizing the committee, of which I was one, to
represent them.
Senator WALSH of Montana. Now, I have here a letter in the nature
of a report of January 26, 1929, from which I read as follows, among
other things:
I beg to report that the firmt stage (of the defense of the Cuban sugar Interests * * * has been passed.

Apparently you were reporting directly to General Machado then?

Mr. LARM. Is the letter addressed to him?
Senator WALSH of Montana. Yes. It has" Hon. General Georardo,
Machado, President .Relpublico De Cuba," written in Spanish.
Mr. LAKIW. That is right.Senator WALSH of Montana. I notice that it also has labeled "Particular and confidential."
Mr. LARix. Yes, sir.
Senator WALSH of Montana. It was about public business, was it
not?
Mr. LAKN. No.

Senator WALSH of Montana. Well, what was it about?

LAKim. Well, it was about this sugar business.
Senator WASH of Montana. That was not public business.
Mr. LARIN. It was not Cuban governmental business; no. I don't
know whether I can make myself clear.
Senator WAsie of Montana. I wish you would try.
Mr. LAI N. But ordinary public correspondence that goes into the
office of the President is opened by the secretaries and passed out to
the different departments. I wanted to make sure that this came to
his personal attention.
Senator WALSH of Montana. I continue:
AMr.

I beg to report that the first stage of the defense of the Cuban sugar Intereats * * * has been passed.

What did that refer tot

Mr. LAKiN. The hearing before the Ways and Means Committee.
Senator WALSH of Montana (reading):
I further followed your Instructions and had an Interview with Senator
Smoot and Stephen H. Love, the president of the American Beet Growers

Association.

What instructions did you receive from President Machado in

that matter
Mr. LAUMN. He asked me to see Senator Smoot, to say to Senator
Smoot that the Cubans did not wish apything to be done that would
injure the domestic sugar interests, and he asked me to say to Senator Smoot that he hoped the matter would be handled with that purpose in view, hoped that some plan could be worked out by which
the domestic interests could bo protected, and also the Cuban in.
terests not damaged. He was very emphatic in requesting me to
say that to Senator Smoot.
Senator WALSH of Montana. You included also Mr. Stephen H.
Love.
Mr. LAmRI. Yes, Mr. Love was present at this interview, be.
.
cause he represented the beet-sugar interests.

1508

LOBBY INVESTIGATION

Senator WALSH of Montana. What interview do you refer to

now?
Mr. LAWN. The interview at which Senator Smoot, Mr. Love,
and myself were present.

Senator

WALSH of Montana. Where?

Mr. LAKW. In Senator Smoot's office.
Senator WALSH of Montana. Yes, but

Machado a letter, in which you say:

look[

You are writing

I further followed your instructions and had an interview with Senator

Smoot and Stephen H. Love.

Had President Machado directed you to have an interview with

Smoot and Love?
Mr. LAWN. Yes, sir.

Senator WALSH Of Montana. What did President Machado know

about
Love?
. Mr. Mr.
LAKIN.
He knew a great deal about Mr. Love. He knew that
Mr. Love was a representative of the domestic beet-sugar interests.
He knew, from a prominent Cuban, Colonel Tarafa, that there had
been voluminous correspondence between Colonel Tarafa, Senator
Smoot, and various representatives of the beet-sugar interests. I
think that Tarafa's correspondence has probably not been directly
with Mr. Love, but I am sure that Love kiew all about it.
Senator WASH of Montana. And that President Machado, of
course, knew about Mr. Love?
Mr. LAWN. Oh, yes.

Senator WALSH of Montana. I continue:

The next stage will divide itself into two or three parts:

(1) Diplomacy. * 0 * An opportunity for President Machado to confer

Intimately with President Hoover.
How was this intimate conference between President Machado
and President Hoover to be carried on?
Mr. LAWN. It was expected by the Cubans at that time that
President Hoover would visit Cuba.
Senator WASH of Montana. This was, of course, before President
Hoover was inaugurated?
.
Mr. LAWIN. Yes. It was known he was going to Miami, and there
was talk in the newspapers that he probably would go to Cuba at
that time.
Senator WALSH of Montana. And next:
Negotiations and conversations with the remolacheros.

That contemplated arranging some such-Mr. LAKr (interposing)., Yes, sir.

Senator WALSH of Montanct (continuing). Adjustment as you had
in mind?
Mr. LAxI. Trying to reach an agreement.
Senator WALSH of Montana (reading):
Frequent contact with Members of the United States Congress.
Who was to have this contact?
Mr. LArnN. I suppose anybody who could. I suppose I likely
referred to myself.

Renak
Many t
sugar and

Congress.
bers of 0new tariff

Do yo,
suer
Mr. di
Lj
and whe
Sena
Inm
the proa
is finally
That
At the
designate
members

Cuban pr

that it c
all possib
Then,
I belief
very pow
made by
directly
that in a
men who
and the
Did
Mr. I
Senat
Mr. 1
Senat
I supp
complete
Remolat,
such con
Did
Mr.
cation
Sena
This I
mand mi
meet yo
Althol
stated,
larger pi
be inter
meets w
to be in
be of so
Did
Mr.

LOBBY INVESTIGATIQN

1509

Senator WALsH of Montana. I continue:I

Many United States citizens who are interested in the production of Cuban
sugar and perhaps some Cubans are personally acquainted with Members of
congress. Such persons can and will exert all possible influence on the Mem.
bers of Congress between the present time and the ultimate enactment of the
new tariff law.

Do you know to what extent those people interested in the Cuban

sugar did exert their influence on Members of Congress?
Mr. LAmN. Yes; I think they did all they could, writing letters,
and when they knew them personally, I think they saw them.
Senator WAlsH of Montana (reading):

In my opinion no new law will be enacted before the month of June, and
the probabilities all are that it will be as late as September before the law
is finally enacted.

That prediction .apparently was fulfilled.

At the present time it does not seem to me that a single commission officially
designated as a Cuban commission would be successful in negotiating with
members of Congress. The matter is of such vital Interest, not only to the
Cuban producers, but to the American producer of Cuban sugar, but I think
that it can be assumed that these interests acting independently will bring
all possible purchase to bear on Members of Congress.

Then, further:
I believe, as Messrs. Rodriquez and Manas believe, that these arguments are

very powerful, but I feel that they will have more effect if they seem to be
made by people of the United States In favor of Cuba Instead of by Cuba
directly to the Congress of the United States.
* * * the Interests of the producers of Cuban sugar are so vitally affected
that in a very short time there will arise among them some men or group of
men who will Institute strong measures to influence the American Congress
and the new President of the United States.

Did that prediction come to fulfillment?

Mr. LARiN. No; I am afraid not.

Senator WALSH of Montana. Was it tried?
Mr. LAxRi. I don't think so; no.
a of Montana (reading):
Senator W suz
I suppose that the work which you specifically assigned to me has now been
completed, except that I also suppose that if Senator Smoot or any of the
Remolatheros should wish to confer with me you would desire that I hold
such conferences and that I report the results to you.

Did you make'further report to the President?

Mr. LAIN. I made further reports. I had no further communication with Senator Smoot.
Senator WALSH of Montana (reading):
This I shall be very glad to do If It Is your wish. In addition, please commend me at any time in regard to any matter. I shall be only too glad to
meet your wishes In all things.
Although I do consider that my official duties are at an end, except as above
stated, I shall not lose my interest In this matter. Already several of the
larger producers who have offices in New York have asked me to continue to
be interested and to do what I can. I shall comply with their wishes unless It
meets with your disapproval. In this way I shall, perhaps, be able to continue
to be informed of the progress of the matter In Washington and, perhaps, can
be of some assistance to your ambassador.

Did you have conferences with the ambassador at that time?

Mr. LAmN. Yes, sir.

1510

LOBBY INVESTIGATION.

Senator WAsIK of Montana. I find from your files likewise, Mr.

Lakin, that General Crowder was reporting to the President of the
Cuban Republic. I read a letter addressed to you:

Wh
Mr.
Sen

Com-

is the
and t

This is dated January 20, 1929.

Then, in this letter of General Crowder to General Machado I

Mr.
remen

Ferara (Cuban am.

At the conclusion of the said (House) hearing, Doctor
bassador) called a meeting at the embassy of your representatives and thie
results were canvassed with a view to determining what the next sttZpb

emlJt

I inclose herewith copy of letter which I sent to General Machado.

mand me freely on any part of the work assigned to me.

find this:
should be.

Just who were these representatives who met at Doctor Ferara'st

Mr. LAKI. Those representatives were two Cubans, I think, who
cane up here to be present at the hearing before the Ways and
Means Committee.
Senator WALsH of Montana. Did General Crowder appear before

the House Ways and Means Committee?

Mr. LAxIN. No, sir.
Senator VALii of Montana. I find in General Crowder's letter

the following language:

All your representatives were Impressed with the Idea that the majority
of the Individual members of the said Ways and Means Committee had, by
their questions to the witnesses, Indicated that they would ultimately favor
two propositions.

And so on.

No, he said, "Your representatives." That could scarcely refer

'
to two.
Mr. LAKa. Well, it very likely included General Crowder, my.

SOT

Sen

Zabri
of his
Ar

about
I Ot
ten
r.
ltet

tSen
a litt
I th!
eonvini

Congre
ut

just t
Mr.

self, and Mr. Shattuck.

Senator WALsiH of Montana. There was some correspondence be.
tween you and. General Crowder also, apparently, Mr. Lakin.

est in
all ri
Sen

Senator WALSH of Montana. I read from your letter of January

29, 1929, to the general as follows:

would
well
Wash

Mr. LAuN. Yes, sir.

report
I wish to thank you for your letter, of January 26 Inclosing your to
the
report
my
dictated
I
coincidence
happy
a
By
Machado.
to President

Mr.

Wrsi

president on Saturday which is the date of your report. I inclose a copy.

You will see that my recommendations are almost identically the same as
yours.
Your remarks to General Machado about my presentation of the case before
the committee are very kind indeed, and I assure you that under the present
circumstances, which you understand, they are gratefully appreciated.
I am already making some progress toward further efforts in Washington.
By great good fortune I find that Shattuck, who wrote the brief with me,
is perhaps Hoover's closest legal friend. He 1S the personal attorney for Hoover
and all his family. I think that I have persuaded him to undertake a confidential mission first to convince Hoover, and secondly to work on the committees and members of Congress, on behalf of Cuba, and I believe that I can
induce several of the larger producers here to undertatke to bear the expense.
When I have made a little more progress in this connection I will communicate
with you again. I am sure that I shall need your advice and cooperation.

Presil

I refer to your expression, "by great good fortune I find that

Shattuck, who wrote the brief with me, is perhaps Hoover's closest
legal friend."

a feel
were

his, a
im o

ien

Mr
Sen

fet hi
riei

Mr
Sen
missii
Mr
ha s

LOBBY INVESTIGATION

1511

When did you learn thatI

Mr. LAsUi. I think I learned that some time within that month.
Senator WALSH of Montana.. You mean to have us understand that
is the first you knew of the cordial relations between Mr. Shattuck
and the President?
Mr. LAIUK. Yes, sir. I think I told you a while ago that, if I
remembered correctly, _my information came from Mr. Zabriskie.
Senator WALsH of Montana. Yes; at the time that Shattuck was
employed?
Mr. L&MN. Yes.
Senator WAzsH of Montana. You learned from Mr. Shattuck that
Zabriskie was the personal attorney for President Hoover and all
of his family?
Mr. LAKIN. Well, I don't know about the family. I am not sure
about that. I don't want to be misleading, but that Is the impression
I got from whatever it was that Mr. Zabriskie said to me.
Senator WALSH of Montana. That is, that may have expanded
slightly the information you got from Mr. Zabriskie?
Mr. LAmxu. Well, I don't say that either. I couldn't be absolutely sure exactly what he said to me, but I know, of course, I had
that impression.
Senator WALSH of Montana. Well, the following might require
a little explanation:
I think I have persuaded him to undertake a confidently mission, first, to
convince Hoover, and, secondly, to work on the committees and members of
Congress.

Will you explain that. You weren't quite sure about it. You
just thought that might be what you persuaded him.
Mr. LAHIN. I thought I had persuaded him to take personal interest in this, as a friend of Hoover, in order that everything would be
all right, if you know what I mean by that.
Senator WALSH of Montana. Well, I doubt, very well.
Mr. LAxmr. I thought that it was important that everybody who
would have to pass on this question of the sugar tariff should be
well informed,eand that if possible, they should cooperate. Now, it
seemed to me-perhaps k was ignorant of the way they do things in
Washington-but it seemed to me that in view of the faet that the
President is the ultimate arbitrator, because of his veto powers, and
his, at least, nominal headship of the dominating party, it was very
important to have him-what shall I say.
Senator WALsy of Montana. Sympathetic?
Mr. LAKIN. Yes; sympathetic. I will accept that word.
Senator WALSH of Montana. And the way that you expected to
gIet his sympathetic attention was through an appeal from a personal
friend?
Mr. L uz,. And a man in whom I had confidence; yes, sii,
Senator WALsH of Montana. But you refer here to a confidential
mission which you were endeavoring to persuade him to undertake.
Mr. LAmN. You have gotten me or I have gotten myself, perhaps, into an awkward position, but i said confidential because I have
a feeling that everything with the President must be treated as if it
were confidential.
78214-30-n? 4-2

1512
Senator

LOBBY INVESTIGATION

of Montana. Yes; but you include in this confi.

Sena
more ii

to certain expressions. I can't explain what I meant, probably.

Senator WALSH' of Montana. You know we all have the idea-.
it may be all wrong, that public business should be transacted in
public, and if you had any facts in relation to sugar to present to
me, to enlighten my mind, or influence my judgment, there is no
reason why you should not ust walk in and present your facts: If a
newspaperman might meet you at the door, you would tell him, "I
am going in to talk to Senator Walsh and give him this inforina.
tion."
Mr. LAIN. Yes, sir.
confidential matter
of Montana. Where does the Iprofess
Senator
come
in? WASen comein

Sena
yunw
that P
M.
the su
Sena
away2
Mr.'
at Sena
the'
na

WALSH

dence Members of Congrs.

Mr. LAKI. Yes. Well, a man never knows why he gives vent

Mr. LAKIN. I think it comes in from the fact that the plan was-was

there
Senator WALSH of Montana. Don't it really mean that the
public
that
unwise
was
it
youthought
something to convey that
means?
"confidential"
what
that
t
Isn
should know about?
Mr. LAKIN. Well, I won't dispute you.
Senator WALSH of Montana. Well, at least it suggests that, doesn't
it, Mr. LakinI
Mr. LAKIN. Well, it could suggest that, but that is not what
I meant.
of date January
Senator WALSH of Montana. Here is a telegram
York. You
New
at
7, 1929, from Shattuck, at Miami, to yourself
time?
that
at
recall Mr. Shattuck being at Miami
Mr. LAIN. Yes, sir.
Senator WALSH of Montana. What was he doing down at Miami?
Mr. LAKIN. He has a house down there.

Senator WALSH of Montana. President Hoover happened to be in

Miami just about that time, didn't he?
Mr. LAKIN. Yes.
Senator
WALSr
of Montana. Was that a mere coincidence or was
it Mr.t
designalN.
-I,I think
Shattuck's going there was a part of his

regular
winter
program,
but I donit think he was sorry that Mr.
Hoover
was
to be
there.
Senator
.WAb
of Montana. He state, "What action taken by
sugar association Wednesdayn" What does that mean t
bMr.
Mr. LAIa. They had or were to have some sort of meeting. I
don't know whether they had it or not.
.
Senator Whehr of Montana. Your answer will perhaps disclose.
Your reply of the same date is as follows:
Meeting of sugar association postponed until to-morrow, Friday, but al-

ready have assurance of at least 50,000 and hope for 50,000 more within next
few days, so you can assume you will be authorized to proceed according to

plan.

What does that 50,000 mean?

Mr. LAIN. It was a contribution to pay him and pay the other
expenses of the work.
Senator WrTs of Montana. So you had a pledge of $50,000 that
dar LAiN. Yes.

t owed

Mr.
Sen
00 fo
Mr."
Sena
else wa
Mr.
Sena
Mr.
Sena
the wa
Mr.

rSe

matter
Mr.:
Sena
it; is t
Mr.
Sena
through
tr.ug
Sena
Mr
Sena

Sena
raise tt
it may
Mr.
Sena

erence

Mr. k
*don't
Seon
of $1 (
Mr.
Sena
have r
Mr.

LOBBY INVESTIGATION

1513

Senator WALSH of Montana. And you expected to get $50,000

more in a few days ?

Mr. LAKIN. Yes.

Senator WALSH of Montana. So you say to him, "You can assume
you will be authorized to proceed according to plan." What was
that plan I
Mr. LAKIN. The plan was that he should be retained to represent
the sugar interests as their lawyer until the tariff bill was passed.
Senator WALSH of Montana. I understood you to say he was hired
away back the 20th of December.
Mr. LAKIN. He was hired then only for the purpose of appearing
at the hearings before the Ways and Means Committee.
Senator WALSH of Montana. That is to say, in the language of the
profession, that was a special employment, and. then that was followed by a general retainer?
Mr. L.AKiN. Yes. This first one was by the Sugar Association.
Senator WALSH of Montana. But he wasn't going to get any $100,000 for representing them?
Mr. LAKuI. Oh, no. There were to be other expenses.
Senator WALSH of Montana. That is what I want to know. What
else was included in ths plan calling for at least $100,000?
Mr. LAKIN. Publicity, traveling expenses.
Senator WALSH of Montana. He was to handle the publicity then
Mr. LAixN. At the bbeginning he did, yes.
Senator RoBiNsoN of indians. Didn't he handle the publicity all
the way through?
Mr. LAwN. He had his end of it.
Senator RoBiNsoN of Indiana. Well, didn't he control it, as a
matter of fact?
Mr. LAKIN. I don't want to throw all the responsibility on him.
Senator RoBiNsoN of Indiana. You and he together controlled
it; is that it?
Mr. LAKIN. Yes; I think that is a fair statement.
Senator RonnsoN of Indiana. You got together right along
through these months?
Mr. LAKIN . Yes.
Senator RoBiNsoN of Indiana. You were together in Cuba?
Mr. LAKIN. Yes.

Senator RoBiNsoN of Indiana. You raised money together?

Mr. LAKIN. No, I raised the money.
Senator RoBiNsoN of Indiana. You raised the money? Did you
raise the $150,000 that had been raised down there for any purpose
it may be needed for?
Mr. LAKIN. There wasn't any set sum that I know of.
Senator RonNsoN of Indiana. Then the correspondence with reference to that is wrong, isn't it?
Mr. LAKIN. I don't know. I don't know what you refer to. I
-don't know of any $150,000.
Senator RoioNSON of Indina. Did you hear of a fund down there
of $150 000 to be used in any manner necessary?
Mr. AxIN. I don't remember any such thing.
Senator RoBiSox of Indiana. Do you now recall it, now that I
have refreshedyour memory?
Mr. LAKNr. No.

1514

LOBBY INVESTIGATION

Senator RonrnoN of Indiana. Excuse me, Senator.

Senator WALsH of Montana. That is all right.
I find a letter from you bearing the same date, February 7, 1929,
to Mr. Shattuck, as follows:
Mr. N. P. SnATrIMC,

3547 St. (iaudens Road, focounut Urove, AtMaiai, 1la.

M DzAn SHA VWcK. I am told that tiordell Hull, on retiring March 4, will
take up law In either Washington or New York. Would le be useful to us?

That was a letter from you, was it not?

Mr. LAxKi.

Yes.

Senator WALst of Montana. What was your idea in employing

Cordell Hull? Wasn't Mr. Shattuck equal to the legal problems
involved in your controversy?
Mr. LAKiz. Well, I was very much in earnest about this. I
thought I was representing the nation of Cuba, and I wanted to
give it ever assistance I could.
Senator WALsH of Montana. What assistance did you think Mr.
Hull could give you?1
Mr.
LAmek.
Well,ofwhat
could You
any lawyer
give
Senator
WALaH
Montana,
felt that
theyou?
legal problem
were so profound that Mr. Shattuck, able lawyer that he is, would
need some further assistance in soling those? Really, you thought
of employing Mr. Hull because he hal been a Member of Congress
and you thought he could exercise some influence for you?
Mr. LAmN. Yes; that he would be received where I would not.
Senator WAlsi of Montana. On the same day you likewise sent
a cable message to Rafael Sanches Aballi, Secretary of Communica.
tons, Habana, Cuba. That was in the nature of an official cont.
munication, I assumed
Mr. LAKIN. No. It was addressed to him in the best way to reach
him, because he is Secretary of Communications.
Senator WALSH of Montana. It reads as follows:
Last Saturday I dictated letter to you but find that it will not be mailed

until to-morrow because the printer hits not completed some of the Inclosures.

-That doubtless was your report?

Mr. 'LAICN. I can't remember at this time.
Senator W lsh of Montana. It continues:

Last week I mwaled u long report to President Machado and perhaps lie
would be willing for you to uie it or at least some part of it. If not please
cable and I will send you a report for your use. I believe I have succeeded

in raising about $100,000 for propaganda and agency work in Washington but
will not know definitely until next week.

Will gladly tell you my present

plan by telephone but would think it not advisable to make it publicly known
because you can realize its eotildential character. Will mail to-morrow to
each mill owner copy of our brief and my testimony in Washington together
with explanatory statements. Imagine you would not wish to have meeting
until they have received those documents. Am working all day every day
and many evenings on this matter and fear will have to do so for several
months. Best wlshe&

Just what was that plan that it was not advisable to talk about
over the telephone?
Mr. LAKm. I am sure I don't remember.
Senator WAsn of Montana. Any way, it was of such a confidential nature that he would realize the Importance of not talking about
it over the telephone?

Mr.
Sena

Will
iadvisab
character

Mr.

thinkSen:
Mr.
think

writte-

know
in Cut
which

send a

That"
Sens
mind

plan %N

Mr.
Sen

to you
Hlace
vall me
mittee.

Did
Mr.
Seni
yOU.

Mr.
Sen

satisfy.
as lot
MIST

Mr.
Sen
111V 11st

endear
receive
sidere
tee me
date 4,
-exceedll
wishles

He
Mr..
pose
view

think
Sen
hibite
plan,

LOBBY INVESTIGATION

1515

Mr. LAIxN. No; I told him I would telephone him.

Senator WALsHm of Montana. Oh, yes. I beg pardon.
Will gladly tell you my present plan by telephone, but would think It not

advisable to make It publicly known. b(wiuse you can realize its confidential
character.

Mr. LAKIN. I can only volunteer a guess at this date, but I

thinkSenator WAtqH of Montana. It is less than a year ace, you know.
Mr. LAxrI. Yes, sir; but a good many things have appened. I
think It was due to a little mix-up in the situation in Cuba. If I had
written him he would have been pledged to let everybody in Cuba
know the contents of the letter, and there was some disagreement
in Cuba at that time, which I didn't want to stir up, a disagreement
which related to the question whether the Cubans themselves should
send a delegation to Washington to appear directly in this matter.
That is all that I can think of at the present time in that connection.
Senator WAiSH of Montana. Anyway, you didn't change your
mind about it and send a written statement to him about what your
plan was?
Mr. LAIKM. That I don't know.
Senator WALSH of Montana. I find here a telegram from Aballi
to you, of date February 7, the same date, reading:
Hicendados noxiouts to leart netivitlei it results of our Witshington committee. When can we expect i report from you. Please cable reply lit order
call meeting Hacendados Immediately. Regards.

Did you send the report in answer to that?

Mr. tAICIN. I don't know. Wasn't the other one in reply to that.
Senator VAiSH of Montana. The cable letter I have just read

yOU.
Mr. LAINK. Yes; wasn't it?

Senator WAsLi of Montana. Your letter did not seem to quite

satisfy him, because on the next day, February 8, he telegraphed you
as follows:
'111,1

Iackle-

That is your cable address, your code address?

Mr. L.As IN. Yes, sir.
Senator WALSH of Montana. As follows:
Jmany tlhlnks cable. Would highly ppire.iute you' sentlitg tnio report for
my use. Wnrme4t eoligrittillnllong wit ess radsuilg fulllll. Will make every
endetuvor to obtiln Stabstanthtl monetary vooperittion here. Have tried unsUetrssfully getting telephone collneelont wIih you, though would much prefer
receive details your present plat by mail with untlorstmdlng stinio to be considered coltflidentthl antd Iot to he published. Aswoclttlon's executive conmuittep meets lFrIday in to cinswhler trgenut need ctiloti and reconimenls Immediate, clling special meetings In each provincial
oiteation. We all appreciate
exceelingl your efforts aind work inl twsure you of hearliest cooperation und
wishes for suece.".

He seems rather insistent about this report.

3Mr. LAIN. Yes. He was president of this amociation, and I suppose the members were pressing him for some report, especially In
view of their desire to send a delegation up here, which I did not
think was advisable.
Senator VALsI of Montana. Anyway, you seemed to have ex.
hibited some considerable reluctance about putting on paper your
plan, Mr. Lakin. Isn't that correct?

1516

LOBBY INVESTIGATION

Mr. LaKes. I imagine so; yes, sir.

Senator WAwiSK of Montana. I find here in the files a telegram

from you to Aballi, under date of February 9, the next day, which
reads:
Mr. Shattuck, who, with me, wrote the brief will arrive Havana ftont
Miami Tueeday or Wednesday. It is he who will represent the contributors
to the $100.000 fund. I have asked him to see you. lie will be introduced
by either Chadbourne or Lombard or Stuntz. I believe at talk with him better
than a written report from me, but If you still feel you want my report please
cable.
Naturally, that excites a great deal of curiosity In this committee,
Mr. Lakin, as to just exactly what it was that you so disliked to
put on paper with respect to what your plans were, that you actually
sent Mr. Shattuck from Miami over to Habana to tell them about
it rather than put it in writitng.
Mr. LAKi. Well, as a matter of fact, I didn't send him. He and
his wife went over there. They were at Miami, and they went over
there for the trip.
_
Senator WALSU of Montana. Just a pleasure trip I
Mr. LAKUJ. I think that was their real purpose.
Senator WALsin of Montana. And that was another case that was
simply coincidental, fortunately so, that he happened to take a trip
to Hibana just as the time you wanted him to take the trip to
Habana?

Mr. LAxiN. I don' think I knew that he was going until he wired
me from Miami he could be reached in Habana.
Senator WA.3u of Montana. And you found that a convenient
way, then, to avoid putting yourself in writing with respect to your
plan?Ita
Mr. LIKmc.
Well, I didn't want to write, because I did not want
to get into any controversy in Cuba on this subject. I thoulit it
would be a very unfortunate thing if he had any of the excited talk
tllat goes on in any Latin country about anything of this sort. I
don't think that I had anything else in my mlnd.
Senator WALH Of. Montana. But you did have some plan which
you did not care to disclose V
Mr.'LAKIN. I did not want it discussed by the Cubans.
Senator WATeX of Montana. *But it was not a question as to.
whether a commission should come up here from Cuba or should
not come tip heie front Cuba, which of course you wanted to keep
entirely free. I can understand that perfectly well. But that was
not the trouble. It was some plan you had.
Mr. LAKI. No.
Senator VArbH of Montana. Anyway, you succeeded in the niatter, because under date of February 11 we have a telegram from
Mr. Abafli reading as follows:
Delighted Mr Shattuck's visit. Will Invite him attenl executive counittee
meeting Friday and mike full explanation. No naeed sending written report.

You will observe, Mr. Lakin, that what these people down there
wanted of you was the report from you, about what you were doing,
not about what that meeting did down there, whether they might or
might not send a delegation up here. What they wanted was a,
report from you about what you were doing. Now, they say there

is no
was,
to rel
Mr

state
son
reasol
Mr

report
quarr
S
what
andMr
amo
Se
of w.

do in
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Mr
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fact
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P
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indu
plant
to b

LOBBY INVESTIGATION

1517

is no need of your sending that report. Let us understand why it

was, or what it was you were doing that you thought it inadvisable
to report by letter.
Mr. SnA~rJucK. I was not doing anything that I haven't already
stated here.
Senator WALSH of Montana. Well, then why decline the very
reasonable request that their agent make a report

Mr. LAKN. As a matter of fact, they had no right to request any

report from me, but that is not the point. I wanted to report any
quarrels among the Cuban sugar producers.
Senator WAii. of Montana. Yes; but they were asking about
what you were doing, not about any recommendation.
Mr. LAKiN. No; they were asking me about what I intended to do

and that would have resulted in a debate that would have lasted
a month in Cuba.
Senator WALSH of Montana. That is not what my understanding
of what a report means. It may be yours. What I am going to
do in the future is not in the nature of a report at all. That is a
plan.
Mr. Lacix. It is the report of a plan.

Senator WALSH of Montana. Perhaps this will help throw a little

light on the situation, unless indeed it tends more densely to obscure
it. Here is a telegram. to you from Shattuck to his partner, Mr.
Francis. That is Mr. Shattuck's partner, is it not?
Mr. LAxiN. Yes, sir.
Senator WALSH of Montana. The telegram from Mr. Shattuck to
his partner reads as follows; and it is dated February 14, 1929:
Telephone Lakin very satiactory and confidential conference producers
and government, and can expect full cooperation. Leave for Miami to-night.

I suppose Mr. Francis communicated to you this information

Mr. LAKim. I have no doubt he did.

Senator WALSH of Montana. Now, Mr. Shattuck had a very satisfactory confidential conference between the producers and the Government. When he came back did he report to you what this confidential conference was?
Mr. LAKIN. Oh, I am sure he did.
Senator WALS of Montana. Can you tell us what that was?
Mr. LAnit. No; I don't remember, at that stage of the game. I
think that probably, first of all, he would make sure that the selection of him as a lawyer was approved by the Cubans themselves.
I had tried to make it plain to him that without the approval of the
Cuban Government I would do nothing, because I felt that I was
representing the Cuban nation. I was not in this for the purpose
of doing anything on behalf of my own company. I was representing, is I felt, the entire Cuban interests. Now, at that time there
were two or three plans that were being considered for the solution
of this question.
(At this point Senator Walsh left the committee room.)
Senator Ronixsox of Indiana. The solution of which question?
Mr. LAim. The question of adequately protecting the domestic
industries, without hurting the Cuban industry. Now, one of these
plans was a proposal to allow a certain amount of Cuban sugar
to be Imported into the United States at lower than the present

1518

LOBBY INVESTIGATION

rate, and then to impose-I think that amount was. 2,500,000

pounds-and then to impose a higher rate on any other Cuban sugar

that might be imported into the United States, and the other plan
.ena
was a sliding scale.
Senator ROBINsoN of Indiana. Well, we have gone all over that,
Mr. Lakin. I don't see that there is any occasion to rehearse your
plans at this time; The whole question we are trying to get into
is the activities of yourself and others associated with yourself to
influence Congress to do or not to do a certain thing.
Mfr. LAKIN. Yes, sir.
Senator ROmiNsoN of Indiana. Of course, your activities were di.

reacted against a tariff on sugar?

Mr. LAKIN. Yes, sir.
Senator RoBINsoN of Indiana. Now, what were the confidential
plans? What Senator Walsh is getting at, and of course, I think
you understand that, is what you were doing to influence Congress
at that time, or anyone connected with Congress that you could not
put onpaperI
Mr. LAxN. There wasn't anythingSenator RoBiNsoN. of Indiana. That Mr. Shattuck evidently was
to report for you in person, to tell of your activities back here.
What were those activities?
Mr. LAKIN. There wasn't a single activity I am not willing to
tell all about,
Senator RoBIaso- of Indiana. Then why-and I think this is
what Senator Walsh had in mind-were you so fearful of putting
it on paper at that time? You suggested a moment ago you were
fearful it would stir up the Cubans. How would any activity of
,yours up here in their interest, or a mere report of what you'had
done in their interest, stir up the Cubans to your advantage
Mr. LAKM. There was a direct opposition to the manner in which
I was doing it, and that grew out of the desire of the Cubans to
come here and represent themselves.
Senator RoBnxsoN of Indiana. How much money had you collected
from the Cubans?
Mr. IAEI.. I collected $5,000 from one man who insisted on
contributing, and no more.
Senator RoBiNsoN of Indiana. Didn't you collect any more money
in Cuba?
Mr. LAKIN. No, sir.
Senator RoBiasox of Indiana. If there was tny fund raised in
Cuba, you know nothing about it?
Mr. LAIN. No, sir.
Senator RoBnixio of Indiana. Now, Mr. Lakin, you understood
back in February at this time Mr. Shattuck was going over to Cuba
on a pleasure trip. That is what you understood his5 purpose to
be-the pursuit of pleasure. Is that right?
.a
Mr. LAxIN. Yes; I think so.
Senator RoBNSsON of Indiana. It had nothing t6 do with your
seSen
Mr.LArw. Well, I am very sure that I did not know he was going,
or sugg eted that he go there. When he decided to go lie notified me
from Miami.

Sena

talked
tAr.I

Cubea tl

Mr. I
Senai
Mr.
Sena
there ti
Mr.
Senal

connect
Mr.
Mr.
Sena
Mr.

Sena

Mr.
Sena
Mr. "
Sena
for this
Mr.'
Sela
Carrol

lla'
Mr.
Se.
invest
Sena
was en
Mr.
Sema
week i
Mr.

Senl

$4,00
I
Ser
Senv
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ni
IIr.
pretty
Sen
that
to a r

LOBBY INVESTIoATION

1519

Senator Ronxsox of Indiana. When he waR over there he just

talked about sugar incidentally?
Mr. LARY.N. Well, you will have to ask him.
Senator Roun.sox of Indiana. When did you come back from
Cub- the last time?
Mr. LAKIN. I got here on Friday.

Senator ROBNsO of Indiana. This last Friday?

Mr. LA N. I got to New York on Friday.
Senator RoBiNsoN of Indiana. Was Mr. Shattuck with you down
there this time?
Mr. L.AuuN. Yes, sir.
Senator RoBINSoN of Indiana. Do you know Mr. Yates, who was.

connected with this committee for a while?

Mr. LAIu N. Yes, sir. I met him for the first timeSenator RoBiNso. of Indiana. Here?
Mr. LAKINx. The day I left for Cuba.
Senator RoinsoN of Indiana. Is that when you employed him?,
Mr. LAlU.x. I did not employ him.
Senator RoBINsoN of Indiana. Who did employ him?
Mr. L.%ix. Colonel Carroll.
Senator RoINsoN of Indiana. Colonel Carroll?
Air. LARIN. Yes.

Senator RoNxsoN of Indiana. Mr. Yates who was investigating

for this committee, was employed by Colonel Carroll?
Mr. LAmqx. Yes, sir.
Senator RoINmsoN of Indiana. And went with you and Colonel
Carroll and Mr. Shattuck to Cuba?
Mr. LAKIN. Yes, sir.
Senator RoniNsox of Indiana. How did that come about?
Mr. Lmciux. I don't know. Colonel Carroll employed him.
Senator Ronixsox of Indiana. What did he do down them?
.Mr. L.umnx. He spent a very busy week working with me on an
investigation of the Barlow claim.
Senator RoBiNxsox of Indiana. But you did not employ him? He
was employed by Colonel Carroll?
AMr. LAi N. Y es, sir.
Senator Roinxsox of Indiana. But he worked very busily for a
week with you?
Mr. LA K-. Yes, sire and Colonel Carroll.
Senator ROBINsOX ol Indiana. ir.Lakin you testified that you
Paid,
is in the record somewhere, that Colonel Carroll received
$4,500ora it
nionth.
Mr. LAUN. Yes, sir.
Senator Ronixsox of Indiana. Beginning last June or earlier?
Mr. L.%tix. Yes, sir.
Senator RoBIxsoNx of Indiana. What did he do to earn that $4,500
a nionth?
Mr. LAKIX. I think he did a great deal.
Senator RoBiNsoN of Indiana. Even for sugar that would be a
pretty good sized retainer, would it not?
Mi.LARTIN. For what?
Senator Romxsox o* Indiana. I say, even for the sugar interests.
that would be a considerable sum of money to pay out each month.
to a representative in Washington, would it notV

1520

LOBBY INVESTIGATION

Mr. LAKIN. Yes; it would be too much for sugar.

Senator RoBiNsoN of Indiana. Now, Mr. Lakin, what did Colonel

Carroll do to earn that $4,500 a month? He is still drawing it,
isn't he I
Mr. LAKmN. Yes.
Senator ROBINSON of Indiana. How long do you expect him to
continue to draw that, or how long do you expect to continue to pay
him $4,600 a month I
Mr. LAKIN. I am going to pay him as long as I think I can get a
reasonable return for it.
Senator ROBINSON of Indiana. How long do you think that will
require?
lfr. LAKIN. It might take a year or two I
Senator ROBINSON of Indiana. Yet?
Mr. LAKIN. Yes.
Senator ROBINSON of Indiana. Is that $4,500 coming out of your
own pocket?
Mr. LAKIN. Out of the Cuba Co.'s pocket.
Senator ROBINSON of Indiana. The Cuba Co.?
Mr. LAKIN. Yes.

Senator

ROBINSON

Of Indiana. Nobody else is paying anything?

Mr. LAWN'. No, sir.

Senator ROBiNSON of Indiana. The United States sugar has

nothing to do with it?
Mr. jAwN. Nothing whatever.
Senator ROBINSON of Indiana. You have been paying that money
since last June?
Mr. LAIN. Yes, sir.
Senator ROBINSON of Indiana. $4,500 a month?
Mr. LAKIN. Yes, sir.
Senator ROBINSON of Indiana. And you think you have had value
received ?
Mr. LAKIN. I think so.
Senator ROBINSON of Indiana. In what form I
Mr. LAKIN. The mere fact that the Barlow claim, which is sym.
bolie of the attacks that have been made on Cuba recently, has now
come t6 the front and will be honestly and sincerely investigated is
reward enough.
Senator ROBINSON of Indiana. But what has Colonel Carroll got
to do with that?
Mr. LAKIN. because he is the man who could bring this to the
attention of the public in such a way that some attention would be
paid to it.
Senator ROBUnsoN of Indiana. How did lie bring it before the
public?
Mr. LAKIN. How did he bring it before the public?
Senator ROBINSON of Indiana. Yes.
Mr. LAIN. By talking about it.
Senator ROBINSON of Indiana. Except through this lobby investi.
gation.
Mr. LAKIN. Why, he has been talking about it to everybody.
Senator RoBINSON of Indiana. I know but we asked Co1onel
(Carrollwhat he did to earn this money, and as I remember his test.
mony, he said nothing.

Mr. LA
Senato
earned $
Mr. Li

Senat(

of what:
Mr. L
matter t
Senatx
point.
Mr. L
Senate
Mr. Lj
Senab
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Mr. Lj
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Senat
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month.
advanta
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Mr. L
does not
Senat
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Mr. L,
Senat
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Mr. L
Senat
Colonel
if all he
Mr. I
of the r
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Mr. I
Senat
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Mr. I
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Senat
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Mr.
Senat
CarrollMr. I
and the.
Senate

LOBBY INVESTIGATION

1521

Mr. LAKN. Well, I think he earns it.

Senator Ronxsox of Indiana. You say that since last June he has
earned $4,500 a month, and the sugar interests are satisfied?
Mr. LArnN. I think so.
Senator RoBINSON of Indiana. I will ask you what your version is
of what he has done?
Mr. LAKIN. My version is that lie has succeeded in bringing this
matter to public attention.
Senator ROBINSON of Indiana. Where and how?

That is the

point.
Mr. LAKIN. Well, by talking about it.
Senator RoBiNsoN of Indiana. To whom?
Mr. LAKIN. To everybody.
Senator RoBINSON of Indiana. Well, that is no answer. That is

no answer.
Mr. LAKIN. Well, I don't know anybody who knows as many people as he does.
Senator RoBiSON of Indiana. But just a moment. You pay him
$4,500 a month. Now, he talks to everybody to earn that $4,500 a
month. That is not an answer. To whom did he talk that would
advantage you to the extent of $4,500 a month, each, month, one after
the other?
Mr. LAKIN. Why, I suppose every man admires qualities that he
does not possess. I admire Colonel Carroll's personality.

Senator RoBINsoN of Indiana. Please, Mr. Lakin, let us not fence

about that.
Mr. LAKIN. I am not fencing.
Senator RoBINsoN of Indiana. You can easily admire him. To
whom did he talk to earn 4,500 a month I That is what I am trying
to get at. I remember his testimony as being to the effect that he
did nothing to earn $4,500. I understand from your testimony that
he talked to everybody to earn $4,600 a month.
Mr. LAKIN. Yes.

Senator

RoBINSON

of Indiana. I have found nothing else yet that

Colonel Carroll has done to earn $45600 from his testimony or yours,
if all he did was talk to earn it. To whom did he talk?
Mr. LAKIN. Well, lie talked certainly to a great many members
of the press and I think he stated-----.
Senator RoBiN.sox of Indiana. Well, is he in the publicity business?
Mr. LAKIN. NO.
Senator RoBINsoN of Indiana. Does he conduct a press agency
of any kind?
Mr. LAKIN. No, but he certainly knows a great many newspaper
men.
Senator RORINSON of Indiana. If you wanted it told to the press,
would ou not naturally go to people engaged in that line?
Mr.

AKIN.

NO.

Senator RoBINsON of Indiana. You would still go to Colonel

Carroll?
Mr. LAKIN. Yes, air, because he knows them on a personal basis,
and they have confidence in him.
Senator RonINson. of Indiana. The newspapers?

1522

LOBBY INVESTIGATION

Mr. LARiN. This is not work that can be done by any publicity
bureau,
Senator RoBINSON of Indiana. Perhaps not. To whom else did
he talk?
Mr. LAKIN. Well, I am sure-I think he testified that he talked
to Senator Moses and Senator Moses is a member of the Foreign
Relations Comnittee.
Senator ROBINSON of Indiana. Was not the testimony rather
to the effect that Senator Moses talked to him?
Mr. LAKIN. Well, what is the difference?
Senator RoBNsoN of Indiana. As I remember the testimony now,
Senator Moses is alleged to have called hin up and told him some.
thing about this claim.

Mr. LAKICI.

But if Moses had not known him he would not have

called him up. Moses would not have called me up.

Senator RoBNso of Indiana. All right. Let us say he talked to
Senator Moses. To whom else? You do not mean that these two
conversations, one with the press and one with Senator Moses,
justified you in paying Colonel Carroll $4,600 a month and con.
tinuing it for a year or so, do you?
Mr. LAKIN. xes, I do.
Senator RoBixsoN of Indiana. And that is all he does to earn
$4 500, that you know of-talk to Senator Moses and to the press
r. LAKIN. Well, for example-Senator ROBINsoN of Indiana. No. Is that all that he did, that

you know ofI

Mr. LAKIN. NO.

Senator RoBisoN of Indiana. What else?
Mr. LAKIN. We are going to take some people to Cuba to prove
to them that Cuba is not in the desperate state that some people
would have believed.
Senator RionItsox of Indiana. You represented President Machado? You were his representative, as I understand it, from your
own correspondence ?
Mr. LAKIN. In this tariff niatter; yes.
Senator ROBINSON of Indiana. In the tariff matter. Now let us
see th picture. As representing President Mahado you were the
representative of the Cuban Government in this matter? Well, you
either were or you were not. Did you represent President
Machado's private interest or his public interest, as President of
the Republic?
Mr. LAKIN. Well, what is the different? I don't see what you
mean.
Senator
RoBiksox
Indiana. Well there ig a good deal of difference,
but answer
the of
question.
Mr. LAKIN. I don't see what you mean, sir.
Senator ROBINSON of Indiana. You will in a moment.

You
represented the Cuan Governnient in this tariff matter?
Mr. LAKIN. Why. yes; I think you can say that all right.
Senator RoBINso.N of Indiana. I think you can, from the correspondence. Now, let us see the pictures. Here is the Republic of
Cuba and the American Republic. Each have their own foreign
establishments in operation, the Secretary of State handling the
foreign affairs in this country, and the same down there, buti the

Cuban
entire,
to 1oo/
Mr.
Senl

ment.
Mr.
Sent
presun
Mr.
Sen
are re
interest
callre
betwe
Mr.
Sent
transai
throu
thr

SerE

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Mr.
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Mr.
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Seng

-Mr.
te
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Mr.

entire

Sen
Mr.
Senm

LOBBY IN VESTIGATION

1523

Cuban Embassy in Washington, instead of handling their affairs

entirely throu the Secretary of State, employed Colonel Carroll
to look after their matters at ie rate of $4,800 a month?
Mr. LAHiN. The embassy; yes.
Senator ROBINSON of Indiana. Well, that is the Cuban Government.
Mr. LAWIN. Yes.

Senator ROBINSON of Indiana. Now you are a private citizen,

presumably, heavily interested in Cuban affairs.
Mr. LAres. My con pany is; yes.
Senator ROBINSON of Indiana. In economic affairs in Cuba. You
are representing however in a dual capacity, not only your own
interests there, tut the government of Cuba. You can say this,
can you not, that the diplomatic machinery is there, the same as
between any other two countries?
Mr. LAmN. Yes, sir.

Senator ROBInsoN of Indiana. And business could be handled and

transacted between the two Governments in regular channels and
through regular channels?
Mr. LAwy. Yes; but,Senator ROBINSON of Indiana. Why would you need to be employed by the Cuban Government on the one hand and Colonel
Carroll on the other by the embassy, and then in the next place you
employ Colonel Carroll at $4,600 a month to represent you and the
Cuban sugar interests Isn't that a remarkable arrangement? Now
do you see what I mean?
Mr. LAmN. No; I do not yet.
Senator RonsoN of Indiana. Well, isn't that a remarkable situation for you to be in?
Mr. LAKIN. I don't think so.
Senator ROJINIm)

ernment-

of Indiana. To- represent a foreign gov-

Mr. LAKIN (interposing). I am not representing a foreign government in that sense--not in any diplomatic matter.
Senator RonINsON of Indiana. Why should you represent a for-

eign government in any sense? You are an American citizen.

Mr. LAKIN. Well, I don't see why I should not do something for

the country where all my business interests are.

Senator RonIxsoN of Indiana. Your loyalty chiefly is to your own

country, isn't it?

Mr. tAres. Why, certainly.
Senator ROBINSON of Indiana. Then why should you fear the invasion of your own country into another country's affairs, and why
should you work.
Mr. LAKIN. Because it would damage us in respect to South
American relations, and also irreparable damage to Cuba.
Senator RoBI. soN of Indiana. Why should you be in the employ
of another country against your own countryTs intervening in that
country?
Mr. LAxiz. I am not employed by any country. I am doing this
entirely for the sake of my company.
Senator RoBINsoN of Indiana. But you )nako reports regularly?
Mr. LAKIN. Why, certainly. I told President MachadoSenator RonisoN of Indiana. Why, you report to him?

1524

LOBBY INVESTIGATION

Mr. LAKiv. Certainly.

of Indiana. And he expects your report?
Senator Roiso.N
Mr. LAiN. What do you mean by "expects"t He knows that
I will.
Senator ROBINSON of Indiana. In other words, it is wheels within
wheels, all of you working together, and Colonel Carroll getting paid
by all of you. Isn't that about it?
Mr. LAKIN. No.
Senator ROBINsoN of Indiana. Mr. Lakin, who is the Secretary of
Communications of Cuba?
Mr. LArIN. Rafael Sanchez Aballie.
Senator ROBINsON of Indiana. Is that a department in the Cuban
Government there?
Mr. LAKIN. Yes, sir.
Senator RoBINSoN of Indiana. What does the Secretary of Com.
munications do, chiefly?
Mr. LAKIN. Why, he is the head of the railroad commission and
the head of the telegraph and post office,
Senator RoBINse of Indiana. You wired him on February 15:
Hope you had satisfactory conference with Shattuck.

(Signed)

Mr.
I
Sena
pect tc
Mr.
Sena
Mr.
Sena
thing
Mr.
Sena
it.

$50,00(

Mr. I
Sena
you?
Mr.
Sena
the sta
work..
cover

LAmx.

there?
Mr. Shattuck was representing the sugar interests down
to have?
them Shattuck
What kind of a satisfactory conference did you expect
that
Mr. LAKIN. I expected Shattuck to convince him on
the tariff.
was a good man to conduct the rest of our work here
Senator RomNsox- of Indiana. Mr. Shattuck was to convince him
that he was to conduct your work here on the tariff?
Mr. LAKIN. Yes $vell
charge, and
Senator RoBNso. of Indiana. He was to be in full
that included publicity and everything else?
Mr. LAKIN. Yes.
of his
Senator RoBnsoN of Indiana. That is your understanding
.
employment?
MAr. LAKiN. Including these very important negotiations to obtain
a plan which would be for the mutual benefit of both the domestic
producers and the Cubans.
Senator ROBINSON. Well, I know Air. LAKIN. Well, that is the most important part of his work.
Senator RoBINsoN of Indiana. But he was handling your whole
program here, wasn't he?
Mr. LAKIN. Yes; but the most important part of it was this at.
tempt to obtain this formula,
Senator RomNsoN of Indiana. But you remember Mr. Shattuck's
testmony to the effect that he was only a casual lawyer, not doing an
attorney s work, and I gather that he was managing the whole busi.
ness. That is true, isn't it? Did he not confer with you here :ay
after day ?
Mr. LARIN. Oh, yes.
Senator ROBINSON of Indiana. And with Gladys Moon Jones and
everybody else?
Mr. LAKIN. Oh, yes.
Senator RaoNsoN of Indiana. Practically managing it, isn't that
true?

this at

miglbt
e
m! ir.a
riht
sp

Mr. I
get him

Sent
dicates

it was
States.
Air. I
Senat
in your
Mr. I
Senat
of the I
Mr. I
Senat
Shattuc
one wao
President
Mr. L
Sonab-

portant
Mr. L

Senate
orably,
Mr, L,
to him.

LOBBY INVESTIGATION

1525

Mr. LAKIN. Yen; I think that is true. I expected him to manage

it. I did not expect to have to be here so much.
Senator RomNsoN of Indiana. Of course. How much do you expect to pay Shattuck for what he has done?
Mr. LiAKzN. I don't know. I haven't reached any conclusion.
Senator RomNsoN of Thdiana. Haven't you any idea?
Mr. LAmz;. Well, I think it is worth $50 000
4ave you paid him anySenator ROBINSON of Indiana. $50,000.
thing yetI
Mr. LAKIN. No.
Senator RoBINsoN of Indiana. Do you expect to get off for

$50,00o

Mr. LAKI.

Well, I hope so.

Senator RomNsoz

you?

of Indiana. You heard what he said, didn't

Mr. LAKIN. No. I did not read his testimony.

Senator RomNson of Indiana. He was apparently talking from

the standpoint of an attorney handling a case; not all of this extra
work.... I did not understand from him that he expected this to
cover anything of that kind. He was just an attorney and was doing
this attorney's work and expected at least $50,000, and thought it
might run considerably more, and he expected money even for hav.
ig been down here.
11r. LAKiN. Well, I may have to pay him more.
RoBrnsoN of Indiana. It may be $100,0001 Is that
r! Senator
htf
r.

LAKIN. I hope not.

Senator ROBINSON of Indiana. Would you think It was money

wvell spent if you did have to pay it?

Mr. LAKIN. Well, I got the best man I could get, and when you

get him you have to pay him,

Senator RoBINsoN of Indiana. Yes. Your correspondence indicates that one of the chief reasons you hired Shattuck was because
it was alleged he was friendly to the President of the United
States.
Mr. LAKiN. Yes, sir.
Senator ROBINSON of Indiana. How did you expect that to count
in your interest?
Mr. LAKIN. Why, I think it is very important.

Senator RomNsoN of Indiana. To get a lawyer who is a friend

of the President of the United States
Mr. LAKIN. Yes, sir.
Senator RoBiNsoN of Indiana. Then the only purpose in hiring
Shattuck from the beginning was to have him influence legislation
one way or the other, but chiefly through his friendship for the
President, Is that it?
Mr. LAKIN. No.
Sonator RomNsoN of Indiana. You say you think it is very important to get such a man.
Mr. LAmN. I do.
Senator RoBiNsoN of Indiana. Why? What could he do, hon.
orably, that any other lawyer of his capacity could not do?
Mr. LAIuN. He would be believed by the President if he talked

to him. You and I both know that if somebody comes to us whom

1526

LOBBY INVESTIGATION

we know and in whom we have confidence, we can do better business

with them,
Senator RomusoN of Indiana. This is not a question of belief,
is it? This is rather a question, is it not, of merit? If you are en.

titled to your position and the position you advocate in legislation

and the proposition that you adVOat,

the are right and just,

could not anyone of equal ability with Mr. Shattuck urge that just
the same as Mr. Shattuck could? It is not a question of making
some one believe something that is not true, is itf
Mr. LAKIN. Oh, no.
Senator ROBINSON of Indiana. It is a matter of argument, isn't it?
Mr. LAKIN. Yes.
Senator RoINsoN of Indiana. And it is persuasion with reference

to the merit of your contention, isn't it?

Mr. LAKIN. Yes.

Senator RoBINsoN of Indiana. How did you learn that Mr. Shat.
tuck was a friend of the President?
Mr. LAKIN. I was told by Mr. Zabriskie.
Senator RoBI so" of Indiana. Mr. Zabriskie is the president of
the United States Sugar Co.?
Mr. LAKIN. Yes.
Senator RoBiNsoN of Indiana. And he is in some entirely different
form of business, isn't he?
Mr. LAKIN. Yes.
Senator RoBINsoN of Indiana. What?

Mr. LA iN. I think the flour business, but Mr. Zabriskie was the
president of the Sugar Equalization Board and has maintained his
interest in the sugar business ever since.
Senator RoBiNsoN of Indiana. He recommended Mr. Shattuck
to you?
Mr. LAKIN. Yes, sir.
Senator RoBIasoN of Indiana. Did .le tell you that Mr. Shattuck
was friendly to the President of the United States?
Mr. LAKIN. Yes, sir.
Senator ROBINSON of Indiana. And had been his attorney?
Mr. LAKIN. Yes, sir.
Senator RoBINsoN of Indiana. And because of that fact you em.
ployed him?
Mr. LAKIN. That is only one of the reasons.
Senator RoBINsoN of Indiana. But that was one strong reason,
wasn't itt
Mr. LAKIN. Yes, sir.
Senator RomiNsoN of Indiana. What did you expect him to do
after you had employed him in connection with his friendship for
the President In your interest? Did you think he could sway the
President of he United StatesMr. LAKIN. NO.
htISe' ROBINSON of Indiana. To do something that was not
ri Senator
9r.

LAKIN. No.

Senator RoBIso, of Indiana. Did you think that that would

make him stronger in his lobbying activities up here with Congress?

M
So
not?
Mr
Sel

updr
Se
own
you
Mr
Se-

fact,

Mr
Ser

the c
muni
folio,
Hig1

It

cable

Mr
Se
hopes
mean
Cor

Cb
Cuba
State

Mr
Cuba:
was t
Se
sent
SMr
deSo

Mr
S
to hi

presi
Mr
so,
Mr
way.
there
So

1ge

Inllv'

muni

LOBBY INVESTIGATION

1527

Mr. LARIN. NO. He did not do much lobbying, either.

Senator Ronxsox of Indiana. Well, he managed it all, did he
not I Do you mean to say that you did any lobbying?
LAKIN. I did; yes.
Senator RoniNsoN of Indiana. Well, this whole machine you set

Mr.

up did no lobbying, you meant

Mr. LAKIN. Oh, certainly they did.

Senator RomNsoN of Indiana. He managed the machine, by your

own statement and that is what you hired him for, and you said
you hoped he did it. You meant that, didn't you?

Mr. LiatizN. Certainly.

Senator RonINsoN of Indiana. Well, then, he was lobbying. In

fact, he was directing it allt

LAKIN. Well, ie and I together.

Senator RoINsoN of Indiana. Well, all right. Now, evidently

Mr.

the conference which Mr. Shattuck had with the Secretary of Com.
munications in Habana was very satisfactory, because he wired as
follows to you on February 18:
Highly satisfactory conference Shattuck and with great hopes success.

It is signed "Sanchez Aballie." You remember receiving that

cablegram from this cabinet officer of Cuba, do you?
Mr. LAKIN. Why, I undoubtedly received it if it is there.
Senator RonINsoN of Indiana. Aii right. Then, what does "Groat
hopes of success; highly satisfactory conference with Shattuck"
mean? *That had to do with hopes of success of your plans in the
Congress of the United States?
Mr. LtuiI. Yes, sir.
Senator RoBI.ssoN of Indiana. The officials of both countries both
Cuba and the United States-did he mean in this instance the United
States?
Mr.

LAIN.

Well, this Sanchez Aballie was the president of the

Cuban Mill Owners Association, and it was in that capacity that I

was telegraphing.
Senator RoBINsoN of Indiana. I understood your cablegram was
sent to him as Secretary of Communications.
Mr. LAKIN. Because tht was his address. That is all.
Senator RonmxsoN of Indiana. )o you mean to say you had to
designate him, as prominent as he is?
Mr. LAKIN. That is the quickest way to get a telegram to him.
Senator CAIRAWAY. That is interesting. Can you get a telegram
to him quicker as Secretarv of Communicatitons than you can as
president of the Mill Owners' establishment?
Mr. LAKIN. Yes.
Senator CARAWAY. How much quicker?

Mr. LAAKIN. Well, I don't know how long it would take either

way. It would stay in the office waiting f6r him to come around
there, probably.
Senator CAIIAWAY. That isn't .quite satisfactory. How much
lotiger in your experience, does it take to communicate with an
indivi'kdal itCuba. who i.*
a private business man, than to com.
municate with the officials of Cuba as such
78214-30--Tn 4--

1528

LOBBY INVESTIGATIONS

Mr. LAWN. Well it will always go quicker to a man if you desig.

nate him on his official capacity, as the head of the telegraph and
everything else there.
Senator CARAWAY. Well, how much quicker?
Mr. LAKIN. Ohl it might make an hour or two difference.
.
Senator CARAWAY. Was this so important?
Mr. LAKIN. I wanted to be sure he would get it personally, with.
out it going to the office of the association, which was a different
office.
Senator CARAWAY. Now, do you want to shift your ground. That
isn't the reason you gave a while ago.
Mr. LAWN. No; I am not shifting.
Senator CARAWAY. Well, did an hour or two in communicating
make much difference in your lobbying on this tariff bill?

af
Ih
th

mo1

Mr. LAKIN. No.

Senator CARAWAY. Then, was your answer entirely the reason?

Mr. LAKIN. I don't see why not.
Senator CARAWAY. Oh, I don't see why not, but I don't think it
is, and that is the reason I was asking it. Go ahead, Senator
Robinson.
Senator RoBINsoN of Indiana. Now, Mr. Lakin, ever and anon
they come back for that report. They wired you then, after all this
happened, professing themselves as satisfied with the interview with
Mr. Shattuck and then again cabled you for a report. You remember that, do you?
Mr. LAKIN. No. I don't remember it. It may be there.
Senator ROBINsoN of Indiana. On February 10:
LAKINt
National AseoOlGtIon, of Mill Ownere' of Cuba:

Have requested written report from commission appointed by them in con.

nection sugar tariff. Please let us know it you, as chairman commsiion, will
prepare report to be sent here to be sIgned by us. Pleasq rush answer,
ofoslave Hubana.1

(Sgned)

RooIu, ECHADIOURNE, MANAS.

Who is that outfit?

Mr. LAIN. That was a committee that was appointed along with

me, to come to Washington for the Ways and Means Committee

hearings, and they came to Washington. They disagreed with meI think you were out of the room when I explained that they disagreed with me In this; that they thought an official committee of
this Mill Owners' Association should appear here and open an active
office on behalf of Cuba, and I thought that they should not.
Senator CARAWAY. Why?
Mr; LAKI. I thought that the Americans should do it as
Americans.
Senator CARAWAY. Whyl
Mr. LAI.X. Because the Ways and Means Committee very clearly
indicated that they did not want any foreigners whatsoever to appear
before them.
Senator CARAWAY. Where does that appear In the hearings?
Mr. LAK x. That was stated, I think, on the first day of the
hearings.

Senator CARAWAY. And why?

the
g0,
grc

un
g
Ma

ha
but
to
op,
me
a
dil
N
C

Mr. LAIN. Well, I suppose it was the policy that tariff is a local

matter,

abi

LOBBY INVESTIGATION

1529

Senator CARAwAY. Well If it was then, why were you representing

a foreign government in is making?
Mr. LAjN. I was trying to do something for a foreign nation and
I had a right to do it as an American citizen.
Senator CARAWAY. Let us leave that out. You have asserted that
so often that we will accept it, but, why were you trying to conceal
the fact that you were doing It for a foreign nationI
Mr. LAxi. I was not. I never did.
Senator CARAWAY. You said that you avoided these foreigners
coming here. Why?
Mr. JARN. Well, why do you suppose?
Senator CARAWAY. I know why,-but I want to see if you won't
tell it. You wanted to make it appear that it was an American
movement when it was a foreign movement.
Mr. LAIC.

No.

Senator CARAWAY. You wanted to keep from the American people

that you were trying to write the tariff in the interest of a foreign
government.
Mr. LAKIN. Never for one moment did I conceal that I felt that I
was representing the entire Cuban nation.

Senator CARAWAY. Then why did you object to their being on the

ground
Mr.

LAKxi.

Because I did not think that they ought to be here.

Mr.

LARIN.

I didn't think they were the right kind of people.

Senator CARAWAY. WhyI

Senator CARAWAY. Why?

Mr. LARIs. Because they are Cubans and did not understand

things here.

Senator CARAWAY. Did not understand?

understand?

What did they fail to

Mr. LAKiN. They did not understand the methods by which Congress passes a tariff bill.
Senator CARAWAY. What is that method?

Mr. LAKIN. I was afraid that they might approach people in a

manner that was not proper.

Senator CARAWAY. In what manner?

Mr. LAKIN. Well, It is allSenator CARAWAY. Well, tell it. You can not get a wave of the

hand in the record. That is a habit acquired doubtless in Cuba,

but you can not interpret it here. What method were tley likely
to use that was not proper?
Mr.

LAKIN.

Well, I think they had the idea that they ought to

open a sort of an office as if they wore an adjunct of the embasy.

Senator CARAWAY. That is not responsive to the question. What

method were they likely to use that you thought was not proper?
Mr. LAKIN. Well, that is it, open this office and conduct things as
a sort of an adjunct of the embassy and I felt that this was not t
diplomatic matter at all. The embassy has no connection with
Congress.
Senator CARAWAY. YOU were afraid they would open a second
Cuban embassy were you?
was afraid they would do something of that sort.
- .Mr. LAKN.
Senator CARAWAY. What Impropriety would there have been
about that? You hired tile Pretiddent s private attorney so you

1530

LOBBY INVESTIOATION

could be in communication with the President, and a personal friend

of Mr. Smoot. Now why should they not open an embassy hereI
Mr. LAuiz. Well, di isn't think they should.
Senator CARAWAY. Why?
Mr. LAiuN. I don't know what answer you want.

Senator CARAWAY. I want the truth.

Mr. LAKIN. It is just a matter of feeling. I had the feeling that

they ought not to be here.
Senator CARAWAY. Do you mean feeling?
Mr. LARIx. What is that?
Senator CARAwAY. Do you mean feeling, actually? You say you
had a feeling.
Mr. LAKIN. Yes. I felt that they ought not to be here.
Senator CARAWAY. You mean you thought. Now, what made you
feel or think that way? I hope you are going to maintain the first
impression I had of you, of your frankness, and go ahead and tell
you started to say.
us. You know you are trying to conceal what want
me to be.
you
as
frank
as
Mr. LAKIN. I want to be jutM
that impresyou
gave
Senator CARAWAY. Well, go ahead. What
sion?
Mr. LAKIN. Well, I did not think that tley knew enough. I was
afraid they might make sonie mistake that I had no control over.
Senator CARAWAY. Well, what mistake were they going to make?
Mr. LAxiN. I was afraid that they would go directly to Members
of Congress and talk to them and attempt to make their arguments.
Senator CARAWAY. Now, that isn't what you started to say. They
have got a right to make argumentsif you have got a right to make
them for them. Now, what is itt We6r you afraid they would go
there anl try to offer to buy one of them?

Mr. LA.NIN Oh, no.

Senator CARAWAY. Then why 4id you hedge around so long?

What objection is there to their making an argument if you have

pot a right to make it for them? If you have got the right to make
it for them, they have got a right to make it themselves, haven't
they?
Mr. LAKIN. It was impressed upon me at the very beginningSenator CARAwAY. Who impressed it on you?
Mr. LAIftb. Mr. Hawley, chairman of the committee.
CARAWAY. What did lie say to you?.,
LAKIN. He stated publicly that foreigners

Senator

Mr.

must not appear in

this matter.
Senator CARAWAY. Why?
Because it is purely a local matter of the United
Mr.
States, LAKIN.
Senator OA AwAY. Well, you were not local f
Mr. LAKIN. I was local.

Senator CAIAWAY. You were representing a foreign government

and General Crowder was representing a foreign government and

Colonel Carroll was rattling the money of a foreign government in
his pocket; Mr. Shattuck was partly paid by foreigners. Now, why
shouldn't they be permitted to make their talkt
Mr. LAICTI. We were also representing American interest which
we had a right to do.

S1
ha
do i
your
pear

M
S
Af
S

cam

M
S
later
S
wir
Ito
Sane
end

N
to t,
M
S
grain
rer_
th

the
A
S

cabl
Hat
Re
ques

N
to"
io

while

8
Min
Con

As

1nt4

1531

LOBBY INVESTIGATION

Senator OARAWAY. That is not what I have asked you. You

have got to be as expert a dodger as some of the others. Don't

do it, because you don t fool anybody but yourself. Now, what was
your
objection and what was Mr. Hawley's objection to them appearmin
Mr. TA~i.

t
That they were foreigners.

Senator CAuAWAY. Is that allI

Mr. LAKm. I think so.

Senator OARAWAY. How came that question to come up?

How

came Mr. Hawley to say that foreigners must not be admitted?

Mr. LAKIN. I don't know how it arose.
Senator CARAWAY. Go ahead, Senator. I will take this up again

later.

Senator RoINsoN of Indiana. Mr. Lakin, on that same day you

wired this committee:

ltODRIOGIM, ,MANAS, (CHAI)HOUHNI: Because of cable received last week from

Sanchez Aballie am surprised tit request for written report, but will gladly
send it and appreciate your suggestion. Will attend to mutter Immediately.

Now, that was to Rodriguez, Manas, and Chadbourne. was it not,

to this Roslave Co.? That was to this committee.

Mr. LAKIN. Yes, sir.

Senator RoBiSNoN of Indiana. You remember sending that cable.

gram that you would comply with their request and send your
report?
Mr. LAKIN. Yes.

Senator ROBINSON of Indiana. But you were not quite sure of it

the next day, were you?

Mr. LAKIN. I don't know.
Senator RomBNsoN of Indiana. Well, the next day you sent a
cablegram to Sanchez Aballi, Secretary of Communications, at
Habana. It read:
Rodriguez, Chadbourne,
quest written report fro

(ame as a surprise a( , I
It If you will instruq,

Now I am

to know why
in Habana

tV, t )lacendados Assoclatlon ite to prepare It. This

bt
s.
Would appreciate

'
al

which hadi
i,
Senator:.
Minister 0
unlc
Mr. LA";1i.' 4v
a quarrel
.-p
fienator p urse
t
Conunla ~
American Ch
ensteln's report--"

Hartenstein w
Mr. LAI N. Not 4
Senator Rolixso- 7
Interests down there?
Mr. LA IN. No, sir.

Sjed

Lmcvv.

inki
e
tMee is curious
nt * b m
unications
yo~oi~
~Ajtodo?
)E dent*
jassociation
tinued
00

seeister
8s

11him as
t

sre
having
of

1532

LOBBY INVESTIGATION

Senator RtinouROX of Indiana. Did he collect all contributions?

Mr. LAKIN. NO. I think that the chamber of commerce, which is
not a sugar organization at allSenator RonINsoN of Indiana. But interested in keeping the
tariff (town on sugar?
Mr. LAI IN. Oh, yes.
Senator RonnosoN. of Indiana. Had they employed Hartensteint
Mr. LAKN. He was the president.
Senator RoI -soN of Indiana. Did he in their name collect
money for this purpose?
Mr. LAKIN. I don't think so. I think that the association ap.
propriated five or ten thousand dollars.

Senator Rom.msov of Indiana. I read:

Auieleahu

t
(.'hailtr of ( oin,'te
of ( utlla'
execui'e

innmlltteo heard Ifart.

eiistehi's reptirt at finst nitlug after his return. Shattuek was unable to
attend our executive comIittee imseting which tasked for report of our mer.

bere' (cIunmIon. Personally would highly olpl)reclate your preparing short

report of wlhhh your letter soit with copy of brief can form principal part and
endling with your r'oijlunenhlilolw as chfrnan of commission for future and
lnmiedlite action. Pleaso coble ale If agreeable antd how sooii we may expect
report. Many thanks alld best wIies.
(Siglned)
IHAVAR SANciiiw. AInAmi.

I note from this telegram, notwithstanding what you said a while

ago, that they wanted a report,
not of anyplan you might have for
the future, but a report of what you had done up until then and a
short note as to what you expected to do. That was not a report.
Senator CAHAWAY. And nothing about a quarrel.
Senator Rouixsox of Indiaha. Did you send a report?
Mr. LAKIN. I think so.
Senator RoniNsom of Indiana. How many did you make?
Mr,LAIN. I think I made two, probably.
Senator Ronixsox of Indiana. Why did you make two?
Mr. LAKEN. One was for-Senator Rornqsox of Indiana. For public consumption?
Mr. LAKI. In the open meeting. The other one was for the
president personally; the president of the associattion-not the
President of Cuba.
Senator RoBIson of Indiana. Now, in the latter you went munch
more into detail?
Mr. LAKIC.
Yes.
Senator RoBnusoN of Indiana. Would this refresh your memory
as to whetherr it was the first or second report of the two that you
have just mentioned, dated February 27, to Sanchez Abalhi, reading
therefrom:
DeAn Mit: I hope tlit the inlosed report is all that will be filed In the
official amrchmlves of the nK-4oclatlon; but I feel that the members are Justly

entitled to retlve unofficiaily some news of what Is being #one and propose

as a sequel to the public appearance before the Ways and Means Conmmiltiee.

That was the Ways and Means Committee of the House?

M[r. LAKIN. Yes.

Senator RonIsoN of Indiana. This first report you mentioned was

to go in the official archive.?
81r. LAKiN. Yes.
Senator RoBINSoN. And where anybody could see it?
Mr.LAKIN. Yes.

1538

LOBBY INVBTIGATION
Senator RoBiNsoN. But this report was not to go there?
Mr. LAKIN. No.

Senator RoBINsoN. Why?

Mr. IAKIN. I did not want to air the quarrel that I was having
with the other members of the comtnittee.
Senator ROiNSON of Indiana. But, would not this have done more
to pacify then! than a shorter report?
4r. LAim. Well, I did not think so.
Senator RoBINsoN of Indiana. You say in this report:
There are still at least four lines of nativity which ought to be followed:
(1) Keeping the Cuban argument in the minds of the members of the Was
and Means Committee and impressing the argument on other Members of
congress; (2) a certain amount of publicity; (8) probably some diplomatic
representations to be made by the Cuban Government to the State Department
or even the President of the United Htates.

You said a moment ago that was not a question of the diplomacy
at all, did you not I
Mr. LAxiN. As far as my work was concerned, it was not, and
as far as this Barlow case was concerned, it was not. That is what
I was referring to.
* Senator ROBINSON of Indiana. It war not, you say? I have not
seen a word here thus far about the Barlow case.
Mr. LAKm. No. The diplomatic conversations could go on irre.
spective of our work.
Senator RomNsoN of Indiana. Well, let us proceed.
(4) Attempt to make a plan which will meet the approval of the beet and
Louisiana cane producers.

Now, let us skip a, little of this. You speak here of the citizens
and residents of the United States, and then I quote from your report
again:
They almost unanimously agreed to contribute to a fund which shall be
used in defense of all Cuban sugar Intere,
matter. Already the
amount of their contributions ex
appointed Mr.
George A. Zabriskie, Mr. Shattu
handle the
matter. As appears from the st
tll
report
of your committee, Mr. Shat
c. Z ebrskle Is equally a friend otAs
Mr.
ticing
lawyer and Is not direeti
only appropriate but n
eb
e co.n
Is.
Mr. Zabriskie will act
0an

peusatlon. I am ftcticog
sd for imubllelty. T
decided
upon.
Some data and
arguments

And so forth.

compe'

(.

i~V(

It Is planned to ha%-#

ty of

What were those oa

Senator ROBINSON - I
Mr. LAWN. Yes.
Senator RoBiNas bee
of
a
stalis

be
nl
,yuring

have&

.t0n~e

Reading further.

Sucheonactswilbe

te

and extet

.-.. " ." ,(

,-]Ie

rs 0on
of

o. ti

nal inme.WI

,,.

i,"

..

,
t

hatuck

1534

LOBBY INVESTIGATION

Senator CARAWAY. Is that the lawyer who said he was not lob.

bying?
Senator ROBINSON of Indiana. That is right. It develops now he
manages the commission.
Senator CARAwAY. Oh, it developed then but, in the face of his
oft-repeated denial, I just wanted to know if I was mistaken.

Let

Senator ROBisoN of Indiana (reading):

Such contacts will be established under the direction of Mr. Shattuck who

will frequently consult the other two members of the committee.

That is yourself and Mr. Zabriskie?

Iftr. LAKIN. Yes.

Senator RoBNsoN of Indiana. But, this only confirms what you

Sho

said a moment ago, that Mr. Shattuck was the head man.

bill

Senator RoBNsoN of Indiana. Go ahead, Senator.

Senator CARAWAY. You said that Mr. Zabriskie suggested that you
employ Mr. Shattuck and he gave as a reason that he was a personal

thI

Senator CARAWAY. May I ask a question right there?

friend of the President.

Mr. LAKIN. Yes, sir.

Senator CAnAwutY. And also of Senator Smoot?
Mr.

LAKIN. Yes.

Senator CARAwAy. That did not make him any better lawyer,
did it?
Mr. LAKIN. No.
Senator CARAWAY. You do not hire a lawyer because he happens
yes
to know somebody, do you t
Mr. LAKIN. Oh, ver frequently, es
Senator CARAWAY. Do you hire a lawyer because he is acquainted
with the judge?
Mr. LAKIN.

Certainly.

Senator OARAWAY. Is that sot That is your conception of the

way the courts are run, that the lawyer who knows the judge is a
better lawyer than the man who does not know him?
Mr. LAKIN. Often it is better; yes.
Senator CARAwAY. And for the same reason, it makes him more
valuable if he knows the President?
Mr. LAuII. If a judge knows a lawyer, he has more confidence in
him than he does another lawyer.
Senator CARAWAY. He may know him and not have any.
.
Mr. LAxIN. He might; yes.
Senator CARAWAY. But what earthly use did you think that his

knowing the President would be to you in this tariff fight?

Mr. LAKUS. I thought it was very important in view of the fact
that we were trying to work out a plan which would be satisfactory
to everybody.
Senator CARAWAY. You thought the President would be influenced
by an attorney that knew him I
Mr. LAKIN. "Influenced" isn't the right word.
Senator CARAWAY. Well, what is the right word
Mr. LAKIN. Would be sympathetic with him.
Senator CARAWAY. What?

Mr. LAKIN. Would be sympathetic with him.

tic

call

her

gel

LOBBY INVESTIGATION

1535

Senator CARAWAY. The President would be more sympathetic?

et us. ust get it right. The President would be more sympathetic
with S attack because he knew him.
Mr. LARIN. Yes, sir.
Senator CARAWAY. And therefore he would do more for him than
somebody he did not know?
Mr. LAIN. I don't know about doing more for him.
Senator CARAWAY. That'is what you hoped to get, wasn't it? It
was results you were working for?
Mr. LAIIN. I hoped to get closer relations and more sympathetic
consideration of the plan that was being considered, not only by Mr.
Shattuck but by Senator Smoot.
Senator CARAwAY. And therefore get better results on the tariff
bill?
'Mi.

LAKIN. Yes.

Senator OiARAWAY. The President ought to be obliged to you for

thinking you could change his opinion by hiring his attorney

.He

certainly ought to feel grateful to you. Go head1 Senator Robinson.

Senator RoBiNsoN of Indiana. Now, further in this report, Mr.

Lakin, referring to Mr. Shattuck, I read:
Naturally, his first concern will bo in respect to contacts with Congressmen,
either personally or through chosen agents.

Who were the agents?

Mr. LArN. Nobody in particular. Anybody whom he could find
who knew a Congressman personally and was interested in the
subject.

Senator ROBINsON of Indiana. Did lie find some such?

Mr. LARIN. I think he found a good many.

Senator Ronuisox of Indiana. Will you name some of them?

Mr. LAKIN. I don't know whether I can name anybody in particular or not.
Senator CAitAWAY. Well, guess at one or two of them so that we
can get started, and then perhaps your memory will get to work.
Mr. LAKIM. Well, among others that I remember is Mr. John B.
Snyder, of the Hershey Corporation.
Senator CAPRAWAY. Oh, he didn't need any urging. They were
here for the same reason you were here, were they not?
Mr. LAktI. We were all working in cooperation.
Senator CARAWAY. You did not have to have a lawyer to get
Snyder busy, did you? "%
Mr. LAmN. Oh, no; not to get him busy, but it was to keep tne
general common program, without any conflict with one another.

Senator CARAWAY. Is there any other you can recollect?

Mr. LARmi. Yes. Mr. H. H. Pike.
Senator CARAWAY. Who is he?

Mr. LAKIN.. He is a sugar broker.

Senator CARAWAY. Shattuck got both of those to get busy?
Mr. LAKiN. He did not get them both to get busy, but he had conferences with them and they said, "We can see So.and.so."

Senator CARAwAY. Who did they agree they would see?

Mr. LAIN. I don't know. I suppose Mr. Snyder saw probably

a dozen Conkressmen.

1536

LOBBY INVESTIGATION

Senator CARAWAY. Do you know any of them?

Mr. LAKiN. Yes.

Senator

Congressman Cordell Hull,

Timberlake,
died.
afterwards
Judge Martin, who
information? Did
Senator CARAWAY. Now, how did you get that
lie come back and report to you that he had seen those people?
Mr. LAKIN. Vell, they tell me these things, yes.
Senator CARAWAY. That is what I wantedto know. You all
parceled out Congress and each fellow goes out and reports how
many he saw. Now, who else did he see?
.1r. LAKIN. Did I mention Congressman Frear?
Senator CARAWAY. No.
Mr. LAKIN. I think several others, but I don't happen to remem.
ber them now.
Senator CARAWAY. Did he tell you they had luck with them or
not?
Mr. LAKIN. Why yes, some of them would sit down and talk
the thing over with them.
Senator CARAWAY. I asked you if they had luck. That is, per.
suaded them to your iewpoint. Did they tell you each Congress.
man they got a promise out of?
Mr. LAKIN. No. I do not think anybody persuaded any Con.
gressman.
.
Senator CARAWAY. Did they report that their conferences were
having effect and producing good results?
Mr. LAKIN. Only in this way, that a Congressman might not
care anything about the subject at all.
Senator CARAWAY. Whom 4id they say did not care anything
about it at allI
Mr.

GU
g

CARAWAY. Who?
LAKIN. Congressman

Mr. LAKIN. Well, I don't know.

Senator CARAWAY. They reported on these Congressment They

said "We saw Hull, Frear and Martin of Louisiana and Timber.
lake of Colorado." Now, Aid they say what those men said?
Mr. LAmR. Yes. They would say what they said.
-Senator CARAWAY. What did they say they said?
Mr. LARKIN. Well, they said, for example, that Congressman
Frear was extremely interested in the Cuban cause. Of course
they reported that Congressman Timberlake was interested on the
other side of the question.
Senator CARAWAY. In beet sugar? Is that what they reported?
Mr. LAKIN. Yes.
Senator CARAWAY. He was tied up with beet sugar and you could
not et himI You could get Frear. Now, who else did they get?
Mr . LAKIN. Well, I did not say they got him. I know we did
not.

Senator

CARAWAY.

You did not get Frear?

Mr. LAKIN. No. He was for it from the start.

Senator CARAWAY. Well any way, lie was all right?
Mr. LAKIN. But he helped us; yes, sir.
Senator CARAWAY. Now, in what way did he help you I
Mr. LAKIN. He made speeches.

Senator

CARAWAY.

Did they get results?

to

bill

rup
the
g0i
siw
M

Pos
go
sit

sal
COT
PA

aw
the
Oi
hei
thi

we

if
yo
cui

PI

.OBBY INVESTIGATION

1537

Mr. LAKIX. No; they did not, but he helped present the cause of
Cuba and thie consumers, winch happened to be coincident.

Senator CARAWAY. Did Timberlake make any speeches for you or

against you?
Mir. XLAKIN. I don't know whether he did or not. He did not have
to make speeches. Ile was chairnnan of the subcommnittee.
Senator CARAWAY. He could write thie legislation? Is that what
you wanted to say?
Mr. LAKix. Yes.
Senator CARAWAY. And did it?
Mr. AKIN. Yes.
Senator CARAWAY. dn the interest of beet sugar?
Mr. LAKIN. I think so.

Senator

CARAWAY.

Did lie say lie had a personal interest in it?

Mr. LAKIN. Yes, sir.

Senator CARAWAY. And you think that is the reason lie wrote the
bill as it is?
Mr. LAKIW,-. Well, I don't think it is right for a man who has a
pesoual interest in a bill to be chairman of the committee that
runs itSenator RomjNsox of Indiana. Now, still on that report, that is
the secret one that was for the archives, dated February 27, I read
again:
thereforee Mr. Slmttuek and I will lie Ileused to rmceive and atct on any sug-

gestlons from your tswoelationi or fromt amy other (!ubau ctlens. It will not
always be Iposiblo to exllahi our eitivitles hi wrill"If, but we will Contrive II
iBjlo wity to keep you alal your ussochites fully Informed.

Now, Mr. Lukin, I am curious to kn~ow why it will not always be

possible to explain your activities in writing.
Mr. LAKiK. Oh, I would not have time to write ill the things that
go on. Here we were, working 10 or 12 hours a day. I could not
sit down and write a report every day.
Senator RoBNsoN of Indiana. You do not say every detail. You
said "It will not always be possible to explain our activities." That
could be done probably with a word, but you did not want to explain then.
Senator CARAWAY. And before you caine in Senator, lie made answer that it was not wise to put that in a letter. That was aniong
the first statements that he niade. I would like to have you find
out why.
Senator Ro. %soBofrindiana. Well, were you doing something
here in influencing Congress that you could not put down in writing?
Mr. LArIN, No.
Senator RonqNsox of Indiana. Just what did you mean then h'y
this statement that in this campaign that you were conducting "It
will not always be possible to explain our activities in writing?"
If you read that with reference to the activities of somebody else
you would be curious to know, if you were investigating the matter,
what they meant by that, would you not? Well, the conunittee is
curious to know what you meant by it and what the nature of those
activities was.
Mr. LABKI. I am willing to tell you every activity that I had for
plan.

1538

LOBBY INVESTIGATION

Senator RoBINsoN of Indiana. But, the ones you could not explain

inWriting, what were they?

Mr. LAKIN. Only from a matter of inconvenience, that is all.

Senator RoBiansoN; of Indiana. But you say they could not be ex.
pIn ed in writing. What, for instance, could you not explain in
writing? I mean of a legitimate activity.
Mr. LAKIN. I was not willing to announce in advance the sort
of publicity that we were going to resort to.
Senator RoBiNsoN of Indiana. How much did that publicity cost
you?
Mfr. LAKIN. About $25,000.
Senator RoniNsox%of Indiana. How much did it cost you a week,

approximately?

we tried to keep it to $2,700 a month.

Senator Ronissox of Indiana. It averaged around $700 a week
or more, did it not

we
Wi
will
it
thu

AMr. LAKIN. Well,

ter
the

Mr. LAKIN. Yes.

Senator Romxsov of Indiana. And it is still going on?

Mr. LAKIN. Yes.
Senator RowNsox of Indiana. Still averaging $700 a week"
Air. LAKIN. I don't know. I only get a bill once a month.
Senator Roiansox of Indiana. But Mr. Shattuck gets a report
every (lay, doesn't he?
Mr. LAKIN. I don't think so.
Senator RomNsoN of Indiana. When was that discontinued?
Mr LAKIN. I don't think that was conducted for any length of
time.
Senator Romnisox. of Indiana. Well, if it was, you did not know,
is that it?
M'.L.u. . No. I did not pay any attention to it.
Senator CItAWAY. Mr. Lakin, your answer that you did not want
to announce your publicity; what was the objection to telling the
yol were going ? It was their money you were
bWhat
peoph,
spending.
Mr. IAIUN.. No. it was not; not a cent of their money.
Senator CARAWAY. Did not any of the Cuban peopCle put up any
money?
AMr. LAKInx. .%ota cent.
Senator CARAWAY. Didn't it come from the Cuban interests, in
which they owned stock ?
Mr. LAlN. No. Only this one individual of whom I told you.
Senator CARAWAY. Well, what was it you could not put in writing.
.he answ r you made to me wias that it was best not to put it in a
letter. Now why?
Mr. TAK.X WVell. I don't think that'if we had announced and
published everywhere the sort of publicity that we are going to
indulge in. the'publicity problem would not have been of any value.
Senator CARAWAY. Now, is that what you mean? You know anybody reading that would have inferred at once and particularly if
he was writing to foreigners, that you were financially influencing
legislation. It could not have conveyed any other meaning. You
have shown yourself to be a master of English. Now, wat was
it back of that that you could not report in writing?
Mr. LAKIN. Nothing of that kind.

thc
to

aS
tht
N

tin

it

fu
Y

se
dii
le

th

LOBBY INVESTIOATION

1539

Senator CARAWAY. Well, I know it, but what was it?

Mr. LAKIN. I don't know what you mean.

Senator CARAWAY. Oh,yes, you do. You are not answering. You
were doing something. There was some activity that you did not
want to put down on paper.
Mr. IAKIN. Well, the activity related to this publicity.
Senator CARAWAY. Well, you can not conceal publicity. That is
what you were doing. Now, you know, Mr. Lakin, just tell us what
it was that you wanted to conceal and are concealing.
Mr. LAKIN. I am not concealing anything.

Senator CARAWAY. Well, what was it you wanted to conceal?

think you are concealing something. Now what was it?

Mr. LANIN. I am not concealing anything.

Senator CARAWAY. What did you mean when you wrote that let-

ter? What did you mean when you answered to me saying that
there were thing that you had better not put in a letter.
Mr. LAKIN. Well, for example

Senator CARAWAY. We are waiting.

Mr. LAKIN. SupposeSenator OARAWAY. No. Don't suppose. Just tell us what it was.
Mr. LAKIN. Vell, I wanted to get a letter from the president of

the American Federation of Labor, for example. I was not going

to tell anybody in advance that I was going to try to get that letter.
I suppose there were many other cases of that kind.
Senator CAnAWAY. I did not ask you for your suppositions. I was
asking you what you were doing that you could not tell. Now, that
was something you expected to do. You said there wais something
that you could not put in your lettetv-some of your activities.
Now, what were they?
Mr. LAiu. I cant think of anything.
Senator CARAWAY. All right, Senator Robinson, go ahead.

Senator RoBiNsox of Indiana. Well, we will not spend any more

time on this. Right there you say, however, that you could not put
it in writing; some things you could not put in writing, but you
said, ".We will contrive in some way to keep you and your associates
fully informed." So that it was not a question of time, was it?
You could inform them?
Mr. LARIN. Oh, yes.
Senator RoBINsox of Indiana. It was not a question of the time
involved, that you coul, not put it in writing, because in the next
sentence you say you would find a way to keep them informed.
Mr. L]im. Certainly.
Senator RoBiNsoN of Indiana. So that it was something that you
did not want to reduce to writing? That was it, was it not?
Mr. LAKIN. No.

Senator RoINSON of Indiana. W ell I will read again from your

letter dated the 19th of February, this year, from you to V. B.
Adams, 25 roadway, New York. Who is F. R. Adams?
Mr. LAIcN. He is the head of the Cuban Dominican Sugar Co.
Senator RoBnmsoN of Indiana. Do you know anything about the
Pike brokerage firm-the Messrs. Pike?
Mr. LAKIN. Only that they are an old sugar brokerage firm.

Senator RoBINsON of Indiana. They collected a lot of money, did

they nott Oh, you know whether they did or not.

1540

LOBBY INVESTIGATION

Mr. LAKIN. They were working with the American Bottlers

Association.
Senator RoniNso. of Indiana. Exactly. That is what -I am try.
ing to find out.
Mr. LAKIN. I don't know whether they collected a lot of money
or not. I think that Hershey contributed some through them to
the bottlers but I am not sure.
Senator R/mrNsow of Indis'na. Well, we always come back to
this same statement of yours, ini which you seem to lay so much
stress for some reason or other in this letter where you state:

We hav'e decided to em)loy 14hattuck to hear the hithoring o', partly .

cause lie will be Imhl for his work, but chiefly because of his relations with
Hoover und Snioot.
Mr. LAKICX. Correct. "ela

Senator RoBiNsoN of Indiana. Then what you paid him for his
work did not amount to much? You say that is correct?
Mr. LAKIUN. Well, one does not follow from the other.

said
S
days

Kel
S
Ado

lie

with
Weel

Senator RoniNsox of Indiana. Wait a minute.

We have decided to employ 8hattuck to bear the laboring oar, partly be.
cause lie will he paid for his work hut chlelly because of his relations with

tial
wer

l1oover and Smoot.

Mr. LAKEN. Yes.

Senator RoBiNsoN of Indiana. Then it was not as a lawyer at all

that you hired him?
Mr. LACIN. Oh, yes.
Senator RoluNsox of Indiana. To any extent?
Mr. LARIK.. Oh, yes.
Senator Romnuso. of Indiana. Partly, but not chiefly.

Mr. LAKIN. Very much as a lawyer.

Senator RoBINsoN of Indiana. Don't you mean what you say

HOE

Pre
8
aly

tie
stat

here?

Mr. LAKIN. Yes.

Senator RoBIasoN of Indiana. I understood you to say this was

a
correct a minute ago.
Mr. LAKIN. But it was important, because he and Smoot were
working on this plan of a sliding scale.
Senator RoniysoN of Indiana. That is not what you say. You
say because of his relations.
1Mr.

LAKIN. Certainly, relations mean a great deal in the way

gr
wit
Pr

of confidence.
Senator ROBisoN of Indiana. Well just a minute. I read further
from that letter:

in
Pr

An exact plan of compalgn has not been mnatpped out nid can not ie on.
bounced In detail ik aniy event, because of tie confidential relattioships that
Shnttuek lis with the matter.

of

Now, we are getting at some of the things you *can not put on
paper.
-Mr.LARIN. I don't know what you are referring to.
Senator RoBimoS of Indiana. What are some of these confS.
dential relations?
Mr. LAICE. These confidential relations were intimate relations
that Shattuck had with Senator Smoot.

by

LOBBY IXVESTTGATION

1541

Senator CARAWAY. 0h, no. Just go back to that, because you

said chiefly because of the relations with Hoover and Smoot.

Mr. L.RA.N. Yes.

Senator CARAWAY. "H e has not seen Hoover within the last 10

days."
Mr. LAKIN. Yes.

Senator CARAWAY. "And has also been in Cuba within that time."

Mr. LAKI. And he frequently was in the White House, conferring with Mr. Newton.
Senator CARAWAY. No, no. You said with Hoover; not with
Newton.
Senator Ronv.vsox of Indiana. Let us see what you wrote to
Adams. I will skill that, because I want to get to these confidential
relations first. I quote again from your letter:
Ilo himm seenl Hoover withhi ftit Ist 10 dit'pt luld hia- ONio been In Cuba
within thut tile.l1e
week uId go to work

Is now In i|llitll.
i elnest.

but wIll he buck htere tile first of the

Now, you could not announce it in detail because of the confidential relationships that Shattuck had with the matter. Now, what
were some of those confidential relationships
Mr. LAacx. These confidential relationships were with Mr.
Hoover, and I have always supposed that his relations with the
President were confidential.
Senator CAAWAY. Even though a man goes out and sells his in-

"fluence.

&;enatorROINtiso.N of Indiana. I)o you think that Mr. Shattuck or

aniy other lawyer could, because of his personal friendship, influence
the President of the U united States to (1o what is not right?
Mr. LAIx. Why, certainly not, nor could he under any circumstances.

Senator RomNsox- of Indiana. Were you not relying on the merits

of your case?
Mr. LAKEN. Certainly.
Senator Ronixsox of Indiana. In attempting to influence ConMr. LAcix. Certainly.

Senator lRonmxsox of mdliana. Then what has that all got to do

with the question of hiring a lawyer who was friendly with the
President?
Mr. L.ARnN. Because tle plan that would be worked out, mind you,
in connection with the btet people, would have to go eventually to
President Hoover.
Senator RoBinxsoN of Indiana. But, why could not any lawyer
of equal ability present that to the President of the United States
as well as Mr. Shattuck, who happened to be his friend?
Mr. LAKIN. He could make the actual presentation as well, but he
might not be received.
Senator RonMsox of Indiana. Oh, might not 33e received?
Senator CAuAWAY. His visiting card was worth this.
Senator Roniso of Indiana. Do you mean that anyone would
not be received by any public official on legitimate business, especially
by the President?

1542

LOBBY INVESTIGATIONf

Mr. LAKIN. Why, the President would not have time for an or.
dinary man. I could not go to the President, for example.
Senator RornNsoN of Indiana. Did you ever try to?
Mr. LAxii. No; I never did. I have always assumed that I could
not.
Senator RonInsoN of Indiana. I am curious to know why it was
necessary to hire a man especially for that. Did Mr. Shattuck tell
you that he had special relations with the President?
Mr. LAm. Why, he never made the direct statement. He did
not have any occasion to make it, to me, because Mr. Zabriskie had
made it.
Senator RoBiNsoN of Indiana. Zabriskie, that is the way you
happened to hire Shattuck, Shattuck and Zabrskie are friends, and
Shattuck was looking for the business of handlig all of this propo.
sition. Is that true?
Mr. LAmN. No. He had to be persuaded to do it.
Senator RoBiNSON of Indiana. He had to be persuaded to do it?
Mr. LAKJN. Yes, sir. And I think he was foolish.
Senator RoBINsON of Indiana. I might ask you how niuch it eos
to persuade him. Let us see something about that. You don't need
to answer that question if you don't want to. Here is "Sugar tariff
.defense fund subscription agreement," "We, the undersigned, hereby
subscribe the amounts of money," and they are all contingent on
obtaining total subscriptions of not less than $75,000. That, you
testified, went to $100,000 and more?
* Mr. LAICIN. Well, $95,000.
Senator RoBINSoN of Indiana. I read from this agreement:
SUGAR TAIFF DEFENSE FUND SUBSCRIPTION AGREEMENT

We, the undersigned, hereby subscribe the amounts set opposite our respee.
of Cuban raw sugar in the matter of the current consideration by the Congress
of the United States of the tariff on sugar Imported Into the United States.
Our subscriptions are contingent upon the obtaining of total subscriptions of
not less than $75,000, and are made upon the condition that the expenditure of
the funds and the amount and nature of the work undertaken for such protection of our Interests must be approved by a committee consisting of Messr
Georg, A. Zabriskie, Edwin P. Shattuck, and Herbert 0. Lakin, but upon the
approval of said Messrs.. Zabriskie and Lakin any part of said funds may be
paid to said Shattuck in compensation for his services. At the proper time.
and from time to time, said committee shall report to us on its work and
account for expenditure of the funds. We agree to pay the amounts of ourt
respective subscriptions (in whole at any one time or front time to time as determined by said committee) upon 10 days' written notice signed by any two of

$
s1l

the
A
it at
S
time
YOU
ovet
did
A.
S
did
just
N
S
S
am
ant
wai
I

to

:tive names to be used for the purpose of protecting our interests as producers

said committee. This subscription may be signed in tiny number of counter.

duff

parts.

Then it is signed by various interests. That was an agreement

you made in collecting the $95,000?
.o
Mr. LAXIU. Yes, sir.
Now, Mr. Lakin, have you made
Indiana.
of
Senator Ronm-son.
your report to those contributors to this fund?
Mr. LAxKt,. No.
Senator RounmsoN of Indiana. When do you expect to do that?
Mr. LAKIN. After the tariff bill has been passed.
Senator Roiumo of Indiana. Then you expect to render a report
to each one?
Mr. LAKIN. Yes.

11c

LOBBY INVESTIGATION

1543

Senator ROBINSON of Indiana. Is that what you meant when you

said "At the proper time and from time to time said committee
shall report to us on its work and account for the expenditure of

the funds"

Mr. LANIM. They have not asked for any report. They can get
it any time they want it.
Senator RoniNsox of Indiana. "At the proper time and from
time to time." Now yotr have changed your statement somewhatyou say after it is all over.
Mr. LAKIN. Yes. They will not want any until after it is all
over. They can have it any time they want it.
Senator RonmIsoN of Indiana. They said something here that they
did not want?
Mr. LAKIN. NO. I drew that for them to sign.
Senator ROBINSON of Indiana. That was a selling argument?
Mr. LAKIN. It was not a selling argument at all.
Senator RoBInIsox of Indiana. What did you put it in for if it
did not mean anything? Are you in the habit of writing things
just for fun?
Mr. LAKIN. I don't know what you are driving at.
Senator RoiNsoN of Indiana. Oh, yes you do.

Mr. LAKIN. No, I don't.

Senator RoBiNsoN of Indiana. I am talking about the report. I

am wondering if you reported to these people that put up $95,000
and told them what you did with their $95,000. That is what
want to know.
Mr. LAKIN. No; I haven't yet.
Senator ROBINSON of Indiana. Then when you said "From time
to time" you would give them reports, you did not mean it?
Mr. LAKIN. Oh, yes; I meant it.
Senator ROBINsoN of Indiana. That is what I understood you to
air. LAKIN. No, sir.

Senator ROBINSON of Indiana. You wrote the report?

Mr. LAKIN. They have not asked me for a report. They can have
it any time they want. That, is what "from time to time" means.
Senator ROBINSON of Indiana. You said you would give them a
report from time to time.
Mr. LAKIN. Well, they can have it any time they want. What is
the difference?
Senator Ronixsox. of rTdiana. Well, I don't know as there is any
difference.
Mr. LAKIN, No; there isn't any.
Senator RoBINsoN of Indiana. I am asking you.
Mr. LAKIN. There isn't any difference. 1 report to them, or to
you, or anybody else any time they want it.
Senator RoBiNsoN of Indiana. At the. proper time.
Senator CAUAWAY. Senator, it is now I o clock, and there is much
more that you will want to ask Mr. Lakin, and he will be here at 10
o'clock in the morning, so we will adjourn until that time.
(Whereupon, at I o'clock, p. n., the committee adjourned to meet
tomorrow, December 11, 1929, at 10 o'clock a. ni.)
78214_30--P 1-

1
8.

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LOBBY INVESTIGATION
WEDNESDAY, DECEMBER 11, 1929
UNITED STATEs SENATE,
SUBCOMMITTEE OF THE COMIAIrrrEE ON TH1E JUDICIARY,

lVashldgton, D. C'.
The subcommittee met, pursuant to adjournment, at 10.80 o'clock
a. I.,

in room 212, Senate Office Building, Senator Thaddeus H.

Caraway, chairman, presiding.

Present: Senators Caraway (chairman) and Blaine.
Present also: John G. Holland, Esq., counsel to the committee.
Senator CARAWAY. Mr. Lakin, will you please come around?
TESTIMONY OP H. 0. LAKIN-Resumed

(The witness was previously duly sworn by Senator Caraway.)

Senator CAnAWAY. Mr. Lakin, when we quit yesterday we were
asking you about your letter of February 19 to F. B. Adams. You
told us who F. B. Adams is, but I do not now recall.
Mr. LAVIN. I think he is the resident or the chairman of the
board of the Cuban Dominican Sugar Co.
Senator AIIAWAY. Is that an all-Cuban company?
Mr. LA.Ki. No; American.

Senator

CAnAWAY.

Mr. LAKUi. No.

No Cuban stockholders?

Senator CARAWAY. It is affiliated with you?

Mr. LAxin. No.
Senator CARAWAY. Why were you reporting to him, then, if you

had no affiliation with him?

Mr. LAIN. lie was one of the subscribers to this fund.
Senator CAvAWAY. Then he was affiliated with you in your movement.
Mr. LAIN. Oh, I thotdght you, meant with our company.
Senator CARAWAY. NO, no; in your movement for a lower tariff;
he was one of those that was associated with you?
Mi LARIN. Yes, sir.
Senator CARAWAY. Yott were asked about the reasons you gave for
the employment of Mr. Shattuck. You said thatWe have decided to employ Shattuck to bear the laboring oar, partly weause
he will be paid for his work, but chiefly because of his relations with Hoover

and Smoot. He has seen Hoover within the last 10 days.

They were working on the sliding scale?

Mr. LAmiN. Yes.

Senator CARAWAY. You told us in your first appearance that the

suggestion of the sliding scale came from Mr. Hoover.

1645

1546

LOBBY INVESTIGATION

fr. LAKIN. Well, I said that I understood it did.

Senator CARAWAY.

From whom did you get that information?

Mr. LAKIN. I think I first got it from the newspapers.

Senator CARAWAY. From whom else did you get it?
Mr. LAxiX. From Mr. Shattuck.
Senator CARAWAY. Shattuck, when he was testifying before this
committee, said that he and others, including a gentleman who is
in the Department of Commerce, Perdan, worked on this, but lie
told you that the idea came from the President.
Mr. I,AKiz. Yes. He told me that the President suggested-I
think lie put it this way, that he suggested to Senator Smoot that a
sliding scale might work out the problem of protecting both sides of
the matter.
Senator CARAWAY. Did he tell you that after you employed him or
before you employed him?
Mr. IJAKIN. Oh, that must have been after.
Senator CARAWAY.

Afterwards?

Mr. LAKIN. Yes, sir.

Senator CARAWAY. Did he ever report to you the progress lie was
making with Mr. Smoot and the President?

Mr. L&iKI. Yes, sir.

Senator CARAWAY. What did he say to you about it?
Mr. LAKIN. These negotiations lasted for nearly six months.
Senator CARAWAY. Was the President actually engaged in trying
to solve the problem?
Mr. LAKIN. I don't think so personally. I think that Mr.Shat.
tuck's contacts were mostlyIWith. his secretaries.
Senator CARAWAY. With his secretaries?
Mr. LAKIN. Yes.
Senator CARAWAY. Do you know which one?
Mr. LAIN. I have assumed that it was Mr. Newton.
Senator CARAWAY. That is an assumption on your part? You
don't know?
Mr. LAKIN. I do not know definitely; no. The way their work
is divided up, I assume that is right.
Senator CARAWAY. Well, I don't know either, but did you get that
from Shattuck that his contacts were principally with Mr.Newtont
Mr. LAKIN. Yes.

Senator CARAWAY. But you say here in your letter that he had
seen Mr. Hoover within 10 days. That was with reference to the
sliding scale?
Mr. LAKIN. I think it must have been; yes. That was in Miami.
Senator CARAWAY. Otherwise it would have had no place. in this
a
letter.
Mr. LAKIN. NO.

Senator CARAWAY. Will you be kind enough to tell us, Mr. Lakin,
what you meant by the statement that "Mr. Shattuck was to have
the laboring oar"?
Mr.LAKIN. Well, I expected to have to attend to the business of,
my own company, and I wanted somebody to carry this work on.
Senator UARAWAY. In other words, he was to do the principal
part of the work?
Mr. LAKIN. Yes.

LOBDY MVSTIGATIOIT

1547

Senator CARAWAY. He was to make the contacts?

Well, the chief thing was his law work.
Mr. LAKI.
DO you expect anybody to take that state.
OARAWAY.
Senator

th
is

he
-I

of

or

ment seriously, Mr. Lakin, in view of what you say he was doing?
Did it ever occur to you that seeing the President and seeing the
members of Congress was not practicing law?
Mr. LAKIN. I know, but that was a small part of the work he

had to do.

Senator CARAWAY. What else did he have to do?

Mr. LACIN. I have a long list of thingsSenator CARAWAY. No. Don't read a statement that somebody

else has prepared.

Mr. LAriN. I will not read a statement, but I would like to re.
fresh my recollection.
Senator CARAWAY. Who prepared it for you?

Mr. LA.iu. He did, at my request.

Senator CARAWAY. All right. I will let him talk about it, be-

aM

ing
at-

cause you are not going to give us a second hand statement prepared
by somebody else, if I lnow it. Mr. Shattuck has evidently got
to come back in view of his testimony and these letters, because
the cross each other at right angles.
You had no lawsuits pending down heie since January of this
year?
Mr. LAKIN. No lawsuits no.
Senator CARAWAY. Mr. Shattuck stayed down here half his time
Mr. LAKIN. Pretty much, I should say.

Senator CARAWAY. And he was working on the tariff?

Mr. LAKIN. Yes.
Senator CARAWAY. While the tariff was pending in congress ?
Mr. LAKIN. Yes.

ou

rk
iat
,ad
he
is

in,
ve
Of,
al

Senator CARAWAY. And he was seeing the President about it?

Mr. LAICIN. Yes, sir or the Presidents office.
Senator CARAWAY. Qell, I guess you have been told to qualify

that, but anyway, you hired him because lie was a friend of the
President?
Mr. LAKIN. That is one of the reasons; yes, sir.
Senator CARAWAY. WVell, you said that was the chief reason. You
told the truth in your letter?
Mr. LAKIN. The President and Senator Smoot; yes.
You had seen Senator Smoot yourself.
Senator CARAWAY. Ye.
You said you hired him'because you could not see the President,
but you could see Senator Smoot, could you not?
Mr. LAICIN. Oh, I did not'put it that way, no.
Senator CARAWAY. Well, you did put it exactly that way yester-

day, that you did not kiow you could see the President, and you
hau to hire somebody that had entree to the White House. That
was your statement yesterday.
Mr. LA N. Yes.

Senator C AWAY. And that is true?

Mr. LAKIN. Well, I did not say that I 1usd to hire somebody.
Senator CA AWAY. No; but you did it because he did have
Mr. LAxiO. I did it because among other things lie had access to
the White House.

1548

LOBBY INVESTIGATION.

Senator CAnAWAY. In other words, just putting it baldly, then,

Mr. Lakin, you were hiring influence? That is rigt, isn't itN
'
Mr. LAKIN. Well, that is a matter of inference.
Senator CARAWAY, Well, that is the truth, isn't it?
Mr. LAKIN. Well, I don-t know whether I want to put it that way
or not.
Senator CAIAWAY. I am not asking you to put it that way. I am
askingyou what the truth about it is. I say that is true, isn't itt
Mr. L.Kirx. Well, I don't know that I have to say "1yes'to that.
Senator CAnAWAY. Well, you have to answer trutlifully if yoU
want to keep your self respect.
Mr. LAKIN. Certainly.
Senator CARAWY. Which of course you may not care much for.
Now, is that what you were doing?
Mr. LAxj
K.
Well, I do not nterpret it that way; no.
Senator CARAWAY. How do you Interpret it then?

Mr. LAKIN. Why, I was- hiring him for all of his qualifications.
Senator CARAWAY. But you said differently. You told the truth
when you wrote this letter?
Mr. LAKIN. Yes, chiefly.
Senator CARAWAY. Because he knew the President and knew Sen.

ator Smoot. Then .you were hiring him chiefly because you thought

he had influence with those two people?

Mr. LAKIN. "Influence "is not the right word.
Senator CARAWAY. What is the right word?
Mr. LAKUN. He had their confidence.
Senator CARAWAY. Well, that is better still. You were hiring him
because he had the confidence of the President and the confidence
of Senator Smnooth
Mr. LAKIN. That is certainly one of the reasons.
Senator CARAWAY. Then, lie would have more influence with them
because lie had their confidence?
Mr. LA IN. What do you mean by "influence "?.
Senator CARAWAY. .W61, what do you mean by it?
Mr. LAKIN. Well, it seems to me that the tenor of your questionn
implies something improper, and I do not mean-I am wilhng to

admit "influence."
Senator CAnAw.Y. If it does'not hurt you.
Mr. LAKIN. If you do not want to imply something improper.
Senator CARAWAY. If it don't hurt you, you will adimut it. Well,

you said yesterday, you know, that a lawyer "who knew the Court
was more influential with him than one that (lid not.

Mr. LAKIN. He had a better standing; ye&, sir.

Senator CAmAwAY. You hired Mr. Shattuck because he had the

confidence of the President and the confidence of Senator Snmoota

Mr. LAKIN. Yes, sir.
Senator CARAWAY. And therefore you thought lie would be more

influential than somebody else?

Mr. LARit.. Well, it all comes down to a definition of "influence."

Senator CARAWAY. Oh, Mr. Lakin, for the Lord's sake, let us not

haggle about terms. One would think you were a New Englander
and were testifying in the Eyanson case. We found out we didn't
know anything about the English language when we were fooling

fr
no

A
th

I&

on

tim
I
li

LOBBY INVESTIGATION

1549

with that case. You thought this man would be influential-that

is, he would have the confidence and the ear of the President?
Mr. LAKIN. Yes, sir.
Senator CA IAWAY. And for that reason you hired him?
Mr. LAKIN. That was certainly one of tile reasons; yes, sir.

Senator CABAWAY. Well, you sjaid that was your chief reason.

Mr. LAKIN. Well, I Won t even deny that.

Senator CAR.WAY. All i'ight. I didn't think you would, inasmuch
as you put it on paper one time. I want to ask you a question, and
I want to preface it by the statement that, as I have stated over and
over again, you made the most favorable impression upon me of any
witness we had when you were testifying the first time. Your
frankness charmed me. I wish I could fee the same way about it
now. But what I aim coming to is this, as a business man and an
American citizen, do you think it is proper to hire people because
thepy have got the Presidents confidence, in order to influence legislation? Do you recommend that to your friends as a principle on
which this Government ought to be conducted?
Mr. LAKIN. I do not think it ought to be done at all by anybody.
Senator CARAWAY. No; and therefore you do not approve your
employment of Mr. Shattuck?
Mr. LAKIN. Yes I do.
Senator CARAWAY. Do you

You said it ought not to be done by

anybody, and then you say you approve yourself having done it.

Mr. JAKIN. Well, the circumstances are very difficult.

Senator CARAWAY. You think otherwise, that somebody was put-

ting up a job on you? Now, this question is not a criticism, Mr.

Lakin. I am just trying to get your viewpoints. You think it
has come to this point, that even with the President you have got to
hire somebody that is in his confidence, to keep an injustice being
done to your business?
Mr. LAKIN. I would not put it that way. If we had not had this

question of trying to work out a plan, I think it would have been

very bad, indeed.
Senator OARAWAY. Does it make it any better because you had a
plan?
lr. LAIUN. I think so.
Senator CARAWAY. It would be bad to approach the President-

Mr. LAKIN (interposing). Because it was a plan that all parties

were trying to work out
Senator CARAWAY. Mr.Mfead said it was a plan that you folks were
trying to work out to destroy his industry, that. he represented.
Mr. LAxN. Well, I don't think so.
Senator CARAWAY. No, But I am just coming down to this. I
am trying to get your viewpoint. It is interesting to me, and I think
it will be interesting to the American public, that you, a representative of a large industry, feel that it is not only permissible but neces.
sary to hire somebody that has the confidence of the President, in
order to protect your industry.
Mr. LAKIN. If there had been no plan I certainly would not have
done it.

Senator CARAwAY. Well, the plan does not change the principle,

you know.

1550

LOBBY INVESTIGATION

LAKN. Well, I think it does.

Senator CAIRAWAY. Does it? Well, that is rather a novel doctrine

Mr.

that morals depend upon a plan; that the principle has nothing to
do with it. Of course, if you want to stand that way I shall not
quarrel with you about it, but to show you a little inconmsistencv
about putting it on the question of a plan, when you hired Shattuk
von (lid not have any plan.
Mr. LA IN. He was first hired to write a brief and appear before
the Ways and Means Committee.
Senator CARAWAY. But, when you wrote this letter and said the
reason you hired him, you had no plant
Mr. LA

Ni.

tita

I
NO
mil

I had not actually hired him at that lime for that

the

purpose.

Senator CARAWAY. Oh, yes, "We have decided to employ Shattuck

to bear the laboring oar, partly because he will be paid for his
work "--how much was lie to be paid?
Mr. LAKIN, No agreement was made.
Senator'CAIIAwAY. Well, how much was in contemplation?
Mr. LAKP . Well, at that time we thought the whole thing would
be over by July, and I thought that $25,000 would be right.

b
yo,
of
det
has
th

Senator CARAWAY. How much?

Mr. LAKIN. $25,000.
Senator CAIRAWAY. How much do you think it ought to be now?
Mr. LAxiN. Well, I said yesterday it ought to be about 50 at any

Sb

rate.
Senator CARAWAY. I did not hear that testiniony or I should not
have asked you. You said "Partly because lie will be paid for his
work, but chtiefly because of his relation with Hoover and Smoot.
He has seen Hoover within the last 10 days and has also been to
Cuba within that time."
What was his purpose in going to Cuba?
Mr. LAKIN. His purpose in going to Cuba was to let the Cubans
see the type of nian lie was and also discuss with theni this plan
that had been suggested.
Senator CAiAWAY. By the President?
Mr.

LAKIN.

tho
ti
de
the

th

Well, lie was in Miami, and that is the reason he went.

qui

Senator.CAIAWAY. But to show you that your employing him was

prior to his plan, because you had hired him and he had gone to see
tihe President and gone to Cuba and lie got the plan from the Presi.
dent. Therefore, you hired him before lie had a plan?
Mr. LAKiU. No. He had not decided when lie went to Miami
whether he would take the employment or not. I wanted to employ
him; yes. .
Senator CAIRAWAY. Now, to show you how absolutely wrong you
are about that, Mr. Lakin, I will read to you your letter. I want
to read the whole paragraph:

ae
an,

We have decided to employ Shaltuck to bear the Ilamrhig our, partly be.

shl
th
fe

cause he will be paid for his work, but chielly because of his relations with
Hoover and Simoot. Ile has seen Hoover within the last 10 days, nnd has

also been li Cuba within thut time. He Is now in Miami but will he back

here the first of the week and go to work In earnest.

Therefore, you want to qualify your answer that you had not
hired him before he went to Miami, don't youI
Mr. LAKIN. No I don't think so.

th

LOBBY INVESTIGATION

1551

Senator CARAWAY. How did you know, if you had not hired him,

that he was going to come back and go to work in earnestly

Mr. LAKIN. le had been in Miami then, when I wrote this letter.
Senator CARAWAY. No. He was in Miami at this time.
Mr. LAMIN. Yes; when I wrote the letter.
Senator ('AnAWAY. But you said you had- not hired him at that
time.
Mr. LAKIN. No. I said I had not hired him when he went to
Miami.
Senator CARAWAY. But that shows you are wrong. He is now in
Miami.
Mr. LAKIN. That was the second time in Miami. He had been
there before. He had been in Miami and gone to Habana from
Miami, and had returned to Miami.
Senator CARAWAY. Oh, pshaw. "He is now in Miami, but will
be back here the first of the week and go to work in earnest." Now,
you say you did not have a plan then. You say "Tie exact plan
of campaign has not been mapped out and can not be announced in
detail in any event; because of the confidential relation that Shattuck
has in the matter.I Of course. that shows you were wrong about
that. Now, what was his confidential relationI
Mr. LAKIN. With Mr. Hoover.
Senator CAUAWAY. What was this confidential relationship of

Shattuck with the matter? Was that with Hoover and Smoot?

Mr. AKIN. Yes.

Senator CARAWAY. He had told you he had some things with then

that were so confidential that you could not tell anybody about itl
Mr. LAKIn. Well, I have always considered that you should not
tell anything about the President--your relations with the President. I thought that was one of the thing.Senator CAUAWAY. It was simply influences that you were hiring,
that the public was never to know? That is your idea?
Mr. LAKIN. No.
Senator CARAWAY.

Vell, you stid you understood that the thing

that happened with the President---Mr. LAKI.N. I always thought that the President should not be
quoted.
Senator CARAWAY. IS it your theory that you have a right to hire
a confidential agent of the President and he shall go to the President
and get favors for you, btpt thit it must not be known?
Mi. LAKIN. I was not After ftvors.

Senator

CARAWAY.

Oh, well.

You are after quibbling and I

frankly do not accept that.

Senator BLAINE. Now, you used this language "Because of his "that is, Shattuck's--" relations with Hoover and Smoot." Then in
your final paragraph in this letter to Mr. Adams you say "that
because of the confidential relationships:" The confidential elation.
ships to which you refer ini the last paragraph are the same relations
that Mr. Shattuek had with Hoover and Smoot, to which you referred in your first paragraph. Is that correct?
Mr. LAKIN. I think so.
Senator BLAIN. Then your language "that Shattuck has with
the matter" refers to this relationship?
Mr. LAKIN. I should think so.

1552

LOBBY INVESTIOATION

Senator BLAINE. With the President and with Mr. SmootI

Mr. LAKIN. I should think so.
Senator BLAINE. Now, just what was that confidential relation.
ship? What was the confidential part of it?
Mr. Lxix. Merely the fact that the President must not be
quoted. I think that is all that I had in mind.
Senator BLAINE. That is, Shattuck had such a close relationship
with the President that the President told hin certain things regard.
ing sugar
Mr. LAKIN. Well, I am not sure he did that.
Senator BLAINXE. Well, you said that the confidential relation.
ship was something that the President said and should not be
quoted. Now, lie must have said something if lie should not be
quoted.
Mr. LAKIN. Of course I thought he might say something.
Senator BLAINE. But fie had ilreadv said it; not that he might
say it; something had already been said.
Mr. LAxix. Yes.
Senator BLAIINE. And you say that confidential relationship
would not permit Mr. Shattuck to quote the President.
Mr. LAKIN. I see what you mean.
Senator BLAINE. Now, what had the President said to Mr. Shat.

tuck?
Mr. LARIN. Well Mr. Shattuck saw the President-lhe was then
President-elect-in Miami.
Senator BLAINE. That is when the President came back from Is
South American trip, after election?
Mr. LARIN. I think it was after that.
Senator BLAINE. Or his second trip to MiamiI Did he make two
trips to Miami
Mr. LAKIN. NO. He made only one, I think. He came here to
Washington and then went to Miami, if I remember correctly.
Senator CARAWAY. You say he made only one? You told ine a
minute ago that he made two.
Mr. LAKIN. Mr. Shattuck made two trips.
.Senator BLAINE. It was one the occasion of the President-elect's
presence in Miami when Mr. Shattuck talked to him?
Mr. LAKIN. Yes.
Senator BLAINE. Mr. Shattuck told you what the President told
him?
Mr. LAKIU. Well, he pretty nearly did it, yes.
ye
Senator BLAINE. What did he tell yoi
Mr. LAKIN. That Mr. Hoover had had first a conference with
Senator Sihoot in Miami and that a question between those two
had arisen whether it was possible to protect the domestic sugar
interests without doing any damage to the Cuban interests.
Senator BLAINE. I understand Senator Smoot had gone to Miami.
Mr. LAKIN. To see Mr. Hoover.
Senator BLAINE. That was last winter, was it?
Mr. LAKIN. Last February.
Senator BLAINE. And it was on that occasion when the President
discussed with Mr. Smoot this proposition
Mr. LArN. That is what I understand, yes.

tell
to
dor
bee
ac
rec
ha
on(
Wi
se
yo
8,
thi

ab

cell

S
tel

at
tio

Ia
as
th

LOBBY INVESTIGATION

1553

Senator BLAINE4 . Now go on and tell what the President was

telling Mr. Shattuck.
Mr. LAxiW, And that after seeing Senator Smoot, Mr. Hoover
saw Mr. Shattuck and told Mr. Shattuck that he thought it ought
to be possible to work out some plan which would protect the
domestic interests and at the same time not be damaging to Cuba
because of a desire to maintain friendly relations with Centrai
and South America and especially with Cuba, and I think I am correct in stating that he told Mr. Shattuck that he and Senator Smoot
had discussed the question of a sliding scale as a possible way out,
and that he was very anxious for Mr. Shattuck to confer at length
with Senator Smoot, in an endeavor to work out such a plan and
see whether it would be practicable or not.
Sentitor BI.AI*F. Now, did you go to Mr. Shattuck when he told
you what you have just recited, did you make advancements to Mr.
Shattuck or did Mr. Shattuck come to you and tell you about these
things?
Mr. LAicm-. No. I made them to him.
Seiiator BLAIxF:. You went to Shattuck?
Mr. L.AicN,. Yes.
Senator BIAIN E. Where did you see him when you talked to him
about this matter?
MI. LmcxI. Oh, I saw himi continuously from the middle of December until he went to Miami.
Senator BLAINE. In Washington?
Mr. LAINX. Yes; and in Now York.
Senator BLAINP.. And had frequent conferences with him?
Mr. LaAn.
Oh, very.
Senator BAUIXE. An'd during one of those conferences is when Mr.
Shattuck divulged what the President had told him?
Mr. LARln. No, no. I think probably, but I am not sure, that Mr.
Shattuck telephoned me from Miami about this. I know that he
telephoned me on one occasion.
Senator BJIAIXV.. It must have been after the President had been
at Miami? Do you think that Mr. Shattuck conveyed this information to you by telephone?
Mr. LAKIX. He night have. I rather think he (lid.
Senator BxAup.i. Did he not talk to you about it in person?
Mr. LAnm-. Not before that.
Senator B,
R. Well after that.
Mir. LcxcuI. Oh, yes; Inny times afterwards.
Senator Bimviy. When 'did you employ Mr. Shattuck?
Mr. LAICEX. I was trying to get Shattuckl before lie went to Miami.
Senator BI.AIN. But when did you employ hini?
Mr. LA,m. I acutally--he agreed after he had been to Miami.
Senator B 1 l.%INE. That is you employed 'Mr. Shattuck after he
had been to Miami and had talked with the President?.
Mr. LAIuK. Yes, sit.
Senator Bz.mx:. And had advised you respecting these matters,
as you have testified?
Mr. LAKIN. Well, I can not be sure that he told me this particular
thing before or after.
Senator BruxE. But the employment of Mr. Shattuck came after
you were advised of the conversation that Mr. Shattuck had with
the President elect?

1554

L.OBBIY J4WESTIOATION

Mr. L,%A Ki.

Yes; because Shattuck would not consent to accept

employment unless it was agreeable to Mr. Hoover.

Senator BLAIN&:. And so Mr. Shattuck, having this confidential

mitt

information from the President elect--you regarded that as highly

important in the employment of Mr. Shattuckv

Sfr. LAKIN. Yes.

Senator BLAINE. I think you are perfectly frank about that.
Senator CARAWAY. In effect, then you had offered to hire him and
the President if it would bk satisfactory for hin to accept
he
employment?
the asked
hr. AKeIN. Yes; if it would be embarrasing to him.

Senator CARAWAY. And he said "No "?

Mr. LAKIN. That is what I understood. At any rate, Mr. Shat.

tuck agreed to be employed after that.
Senator CARAWAY. We asked you yesterday considerably about
your objections to the Cubans coming to this country, and you said
they wanted to open a second embassy. Have you gone over that
matter and do you have any other answer you want to return to
that question?
Mr. LAKIN. Well, I haven't thought of it since.
Senator CARAWAY. You wrote the Cuban people that there was
something that you could not tell them in a letter?

do

put
wit

Mr. LAKIN. Yes, sir.

Senator CARAWAY. Have you ever reported to them personally

what you could not tell them in a letter?
Mr. LAKIN. Yes.
Senator CARAWAY. What was it?
expre-s.
Mr. LAKIN. Well such things as-I don't know how to
it-this Shattuck relation.
Senator CARAWAY. With the President?
M r.LAKIN. Yes.
Senator CARAwAY. That was the thing you could not tell them?
Mr. LAKIN. Yes.

Senator

CARAWAY.
LAKIN. Well,

CARAWAY.

Why? There was nothing improper about it,

was there?
Mr. LA IN. Not at all.
Senator CARAWAY. Then why should it be denied, this informa.
tion t
Mr. LAKIN. Well, just this general impression that you ought not
to publish -anything that might embarrass the President.

Senator

CARAiy*Y.

Inh

$411

Why?

I did not think it was a good thing to put in

Mr.
public.
it
made
have
wr-iting and

Senator

Do you know Mr. Mead-.

D. Mead?

Mr. LAKIN. You mean, of the Hawaiian Sugar Co.?

Senator CARAWAY. Yes.
Mr. LArIN. Yes, sir.
Senator CARAWAY. He.reported to his people, and among other
things he said:
The Cuban Interests-i
That is the one you represented, I presume, isn't it?
Mr. LAKIN. Well, I supple so.

Pe
thi
hi

Wh

en
do

wr

LOBBY INVESTIGATION

1555

Senator CARAWAY (continuing) :

The Cuball Interests are apparently very crestfallen over the Finance Corm.

mittee's action.

bS that true, that they were crestfallen over the action of the
Senate Finance Committee?

Mr. L.AKIN. Well, they would have been much better satisfied with

$1.70 than $2.20.

Senator CAHAWAY (continuing) :

and claim anid OpeWly state iI the iewspmpers that they have been
crossed.

tuble-

Did you see their statement in the newspapers that they had been
double-crossed?

,%r. LAIctx. No. Never heard of it.

Senator CAnAWAY. Well, Mr. Mead said that there was such a

publication.
The fact is-

I ain quoting Mr. Mfead, who is engaged in this work of love, along
with you, to meddle with the tarjffThe fact is that they were called upon for large contributions to carry out
the ( align against an Increase In the duty.

Is that true?
Mr. LAKIN. The only contributions that I know f were those I

have stated here, and those were not from Cubans.

Senator CAnAwAY. Well, he said "Cuban interests."

The fact Is they were called upon for large contributions to carry out the
campaign against an increase in the duty, and they have only one Idea as to
the application of such contributions. Their whole theory Is one of direct
action, and their contributions, according to their idea, must have gone directly

into the pockets of the members of the Finance Committee. Therefore their

squawk regarding the double-crossing.

Is that so?
Mr. LAKIN. No.
Senator CAUAWsAY. Sir?
ir. L.%IKi. No, sir.
Senator C.,'.
WA. Well, that is what Mr. Mead reported to his
people in the Hawaiian Islands. When you wrote thein that you
were having conferences that you could not put on paper, don't you
think you justified them in that belief, that you were doing something
highly improper, and they at once interpreted that you had gotten
this money and given it tM the Finance Committee?
Mr. LAKIN. I certainly never thought of anything of the kind.
Senator OARAWAY. Well, don't it impress you I Suppose you were
engaged in an enterprise'with somebody and he told you that he was
doing something that he must not put on paper, what conclusion
would you reacli
Mr. LAKIN. I would not necessarily' conclude there was anything
wrong about it.
Senator CAIRAWAY. Not necessarily?
Mr. LAKIN. For example, why should I put on paper a plan. showing a certain type of publicity I was going to carry on I hat would
be serving notice to the people on the other side.

1556

LOBBY INVESTIGATION

Senator CARAWAY. Oh you know, Mr. Lakin, I would not try to

perpetrate that joke on tie committee, that it was the publicity'
were concealing, because nobody takes that seriously. Well, that
is what Mr. Mead said that your interests thought, and I was lust
curious to know if you did not think your letter lent some justilea.
tion to that belief.
Mr. LAKIN. As I say, I don't think so.

that
to

Senator CARAWAY. Mr. Mead, further talking about the people

you represent, said:

Weli. from the way the Cuinas haVo treated u- mllah wlnit tiey have Sa14
and done, I would not hesitate to say talytling abolit then.

justify Mr. Mead's

Have your interests done anything to
conclusion
Mr. LAKIN. I don't think so.
Senator CARAWAY. So that there is not perfect harmony at least

between your interests?

Mr. LAKIN. There certainly is not now; no.
Senator CARAWAY. No. Not now. You wrote another letter on
February 19-I don't like to stumble over these Spanish narnes, be.
cause they may take exception to my pronunciation, but this is to the

floo
it

beth
a

Whit

the'

Secretary of Communications in Habana. That is a cabinet officer,

isn't it?

Mr. LAKiN. Yes.

Senator CAIAWAY. "I ine'lose two clippings from Camaguayno."
That is a newspaper?
Mr. LAKIN. Yes, sir,.
Senator CAUAWAY. Was that a didly newspaper published in
Habana?
Mr. LAKIN. No. In Camaguay.
Senator CAIAWAY (reading) :

Wh
the

&

Which, s you know, Is published by Wnlfledo Itodrieuez.

he?
Who is

Mr. LAKI. He is the editor of this paper.

Senator
? CARAWAY. Well, is he a man of considerable prominence
in Cuba
Yes.
Mr. LAKIN.
to the President in some way?
he related
Senator CAAWY. Isthink
so.
Mr. LAKIN. I don't
Senator CARAWAY. Has not married into the family?
Mr. LAKIN. I don't think so.
Senator CARAWAY. Everybody else I found out was related to the

c
T

President in some way.

One of them refers to a Prols)stl for it delegation of Masons to tone to

Wnshingto'.

Now was there such a scheme down there, to bring some Masons
up here to influence legislation?
Mr. LAWN. All I ever knew about it was that newspaper clipping.
Senator CARAWAY. Let us see if that is all you knew about it:
One of them refers to a proposal for a delegation of Masons to come to
Washington and Importune Members of Congress who are also Masons.

not

LOBBY INVESTIGATION

1557

I just want to see how far your scheme of lobbying goes. Was
that one of the schemes, to bring a delegation of Masons here to go
to Members of Congress who are MasonsI
Mr. LAKIN. Yes; that was.

That was broached?

Senator CARAWAY (reading):

Here, in New York, Masons do not have much Influence In evonomle matters-

That is your statement.. Is that true?

Mr. LAKIN. Yes, sir; I think so.
Senator CARAWAY. That is what Toin Heflin was saying on the
floor, you know, and I was curious to know if you folks would agree

with him.

being Iurely a fraternal organlzatlon. I have been told, however, that In

other parts of the United States Mftisons ure iellied to assist one another in
matters of an economle nature. Therefore It might really lie a good thing if
a committee of Culian MIsons should go quietly and witlmut any publicity
whatever to Members of Congress who are Mtlsons.

Now, you said you never heard of it, except in that paper. It
Seems*now that you wore actually counseling that they do it. Did
they do that, Mr. Lakin?
Mr. LAKIN. No.
Senator CARAWAY. What went wrong with the scheme?
Mr. LAKIN. Well, we decided that it was foolish and not right.
Senator CARAWAY. Well I think that is one sound idea you had.
Who was the one that decided that?
Mr. LAKIN. Well, I think I had better take responsibility for it.
Senator CARAWAY. Oh, no, no. You could not, because you were
the one who was urging it.
Mr. LAKIN. Well, I changed my mind.
Senator CARAWAY. When did you change it?
Mr. LAKIN. Very soon after that.
Senator CARAWAY. Is there anything in your correspondence to
show that you ever changed it?
Mr. LAKIN. Not that I know of.
Senator CARAWAY. Did you ever communicate that idea that you
ever changed your opinion to anybody?
Mr. LAKIN. I am not sure.

Senator CARAWAY. I think we will find out that you did not
change it.
If such committee Is formed and desires aniy help front me, please tell them

to comnmnl me.

What was the help they were going to command from you?
Mr. LAKIN. Why, suggestions.

Senator

CARAWAY.

Mr. LAKIN. What?

Or was it money?

Senator

CARAWAY.

Was it money to pay expenses?

Senator

CARAWAY.

Well, what help could you hand them? Are

Mr. LAKIN. No, sir.

you a Mason?
Mr. LAKI.

Senator

No, sir.

CARAWAY.

What help could you hand them if you were

not able to pay their expenses and something else to come up here?

1558

LOBBY INVESTIGATION

Mr. LAKIN. I could advise them.

Senator CARAWVAY. What advice could you give them ?
Mr. LAKIN.

I would advise them what to say.

Senator CARAIVAY. What would you have told then to say?

Mr. LAKIN. I would have told them to try to show the Senators

or

whom they approached what a desperate condition Cuba would be

in if the tariff against sugar should be increased.
Senator CARAWAY. They knew that, did they not, without Your

telling them Why did you want them to conie quietly and without
publicity? If it was an honorable thing to do, what was the neces.
.ity of quietly and without publicity?

Mr. LAKIN. WellSenator CARAWAY. I say, what was the necessity and what was the
reason for going quietly and without publicity?
Mr. LAKIN. Wel1, I think it. might be embarrassing.
Senator CARAWAY. The whole thing was stealth, was it not ?
Mr. LAKIN. Was what?
Senator CAA,,AY. The whole thing was stealth, quiet, secretdon't let anybody know what you are doing. Hasn't that been the

how
e
Mas
nee
r

I di

whole campaign Mr. Lakin ?

Mr. LAKIN. O.h

Senator CARAWAY. Well, what is it you were willing for the com.
mittee to know you were doing and did not want them to know
that you were running a publicity bureau ?
Mr. LARIx. Well, yes, 1 did- "
Senator CARAWAY. I thought that was the reason you did not
want to put that on paper; it would not do any good if they knew it.
Mr. LAKE . I would not tell the details of our plan. We put out
no publicity that does not disclose who we are.
Senator CARAWAY. What on earth was the necessity of saying toa
the Cubans, "We are doing something that we can not tell you in
letter," if you were telling everybody else about it?
Mr. LARIX. Well, I have to come back again to this Hoover
situation.
did not have
Senator CARAWAY. To the Hoover situation? That
this scheme
know
You
situation.
Hoover
anything to do with the
did not stop here. You were using Rotary Clubs. Was that your
plan or their plan?
Mr. LAKIN. I don't know.
Senator CARAWAY. You wait until I read the letter, until you
find out whose plan it was?
Mr. LArN. I don't know whether I originated it or not.
Senator CAiiAWAY. Well, you indorsed it.
Mr. LAAIN. I think I did.
Senator CARAWAY. And advised how to proceed in it, I will read:
The other clipping relates to n letter which Itotarhn.4 have sent to Rotarian
clubs itthe Utnlted States. ThI letter Is likely to have more influence than
the undertaking of the Masons, heauge Rotary club-.i are formed on the
bbs; of economies Instead of fraternal relittions. I should think that the
letter ought to be followed up by a request to the various Rotary clubs In the
United states that their members communicate either itwriting or persoally
with their Congressmen.

Was that plan carried out?

Mr. LAKIN. I don't know.

InC
T

Imp

the
for-

LOBBY INVESTIGATION

1559

Senator CARAWAY. You don't know?

Mr. LAHIN. I did not follow it up.

Senator CARAWAY. You have no idea now whether it was done

or not?

I don't remember.
Senator C( wWAY. Here is an interesting paragraph. "I inclose
a document "--what was the document?
Mr. LAniN. I haven't ay idea.
Senator CARAWAY. Well, I knew you would not know.
Mr. LAKIN. NO.

I inclose a document which I prepared in the form of an address to the

householders Of the United States in which I have undertaken to express In
brief form practically ill the Cuban arguments. It might be that either the
Masons or Rotarlans could get from this document some suggestions in connection with their propaganda.

There evidently was propaganda going out from those organizations. Is that so?

Mr. LAKIN. That does not imply it.

Senator CARAWAY. Don't it? Of course, it is just what you said.

I don't know whether it implies the truth or not.

In the case of both Masons and Rotarians, I hope that they will not cease in
their efforts.

So evidently they were doing something. "Cease" means to quit,

don't it?
Mr. LAKiN. Yes; it does.
Senator CARAWAY. So, they were doing something then, were they

not?

Mr. LARIN. Well, I am not sure.

Senator CARAWAY. You are not sure?

Mr. LARxN. That must have reference to the first part of the

letter.

Senator CARAWAY. I am not sure.

You said it, and that is all I

have.
The mere writing of a letter without following it up probably will not

accomplish much, but I do see considerable advantage and benefit in the

Rotarian movement if it is proceeded with and not dropped at the present
stage.

I say, you do not know what was ever done with that movement?
Mr. LAKIN. No. I don't remember what happened to that.
Senator CARAWAY. Here is another idea here that seems to have

been yours.
Arnold.

You know you got to be as fertile of ideas as Mr.

There is a matter in which I believe you could be of the greatest benefit

In connection with the sugar tariff.

You are writing now too one of the members of the cabinet of the
Cuban Government.
There is a matter lit which I believe you could be of the greatest benefit
la connection with the sugar tariff. According to my views, one of our most
Important arguments is that other Latin-American countries will claim that
If Cuba's close relations with the United States result in damage to Cuba,
they had better fight shy of having a similar thing hapln to them. Theia.
fore, it seems to me that it would be a good thing to call the situation
to the attention of the appropriate persons in other Latin-American countries.
78214-30-- r4

1560

LOBBY INVESTIGATION

Was that done?

Mr. LAIC.N. I don't think so; no, sir.
Senator CARAWAY. You do not think the member of the cabinet

Fref

for the Cuban Government followed your advice?

Mr. LAKIN. I don't think so; no.

countries to bring pressure on the' United States to make them

#
change their economic position? That is it?
Mr. LAKIN. Well, I wanted to wake them up; yes, sir.
Senator CARAWAY. You are appealing to a foreign nation to get
other nations to bring pressure to bear upon your own country to
change its own domestic policies?
Mr. ' LAKIN. I wanted to show the feeling of the South American.
Senator CARAWAY. Oh, no; not feeling. You wanted to stimulate
feeling.
Mr. LAiN. Well, it was there, but inarticulate.
Senator CARAWAY'. You wanted to heat up enemies there.

Senator CARAWAY. At any rate, you weretrying to get other

Of course, that could not be done officially by the Cuban Government, but I

do not at the moment see any reason why it should not appear to come from
the Hacendados Association.
That is a South American association?
Mr. LA=N. No. That is the Association of Mill Owners.
Senator CARAWAY. You wanted the Cuban Government to do some.
thing and let it appear that it came from somebody else I He was
president of this association?
Mr. LAKN. Yes.
Senator CARAWAY. And you wanted him to do officially a thing,
and let it appear to be done unofficially?
No; I did not want the Government to have anything
Mr. LARIc.
to do with it.
Senator CAHA1AY. Oh, no. That is not what you said. You
wanted the Government to do it.
Mr. LAIUN. I will admit that the position was unfortunate, because
he occupied both positions.
Senator CARAWAY. Oh, no. That was very fortunate. You wanted
the Government. to do it. Of course, you asked them to do it. You
said:
Of course, that could not be done offllally by the Cuban Government, but
I do not at the moment see any reason why It should not appear to come from
the Hacendados Association.
You realized that you wanted him to act officially and appear not
to do it officially?
Mr. LAxKY. Vell, I can not deny that. There is the language.
Senator CAnAWAY. You have a very high regard for him, evi.
dently, if you think he would do a thing like that.
You say further:
My suggestion would be for you to have our brief and supplemental brief

translated into Spanish and printed, and that copies be sent by the association
to all Congresmen, governors, and mayors of ('nbi, and to the leading economic
associations and the newspapers. Suggestions could bi, made to the newspapt
editors to circulate the brief among their newspaper correspondents In other
Littin Anierican countries. I suppose there must be many persons In llabanA
who are correspondents for other LAtin-Aanerlean newspapers. There are 91:4

V'ubans who have been In the diplomatic served who are acquainted with

81
fli

Ne
tou
bow

N
M
he
You

No
b
with
start
opini
we

bid
6ro
M
also

M
that
$

Mel,
but
one c
tells
that

m
your
compf
forel

bett4

LOBBY INVESTIGATION

1561

men in other countries to whom they could send copies%of Ihe

rminent
rlfs, with suggestions that theiF friends circulate these copies and obtain. it

possible, comments of the foreign members.

So, you were wanting to bring pressure to bear?

Mi. LAKIN. I am frank to .Ay I am very much ashamed of that.
Senator OARAWAY. You qre very much ashamed of that?
Mr. LAKIN. I am very much ashamed of that.
Senator CARAWAY. At least that is one thing I commend you for
feeing.
You say in this letter further:
Necessarily two or three reliable friends would have to be selected by you
to undertake the work in a confidential and competent manner. I do not see
bow I could do anything of that kind here in New York.

Now did the member of the Cuban Cabinet resent this letter?
Mr. LAKIN. Well he did not say so, but I think by his actions
he did. He rebuked me.
Senator CARAWAY. And that is the reason you were ashamedI
You were ashamed because you got a rebuke. You say further:
How does the idea strike you? If It is to accomplish any good it ought to
be done immediately. The crucial time will be during the next six weeks.
Within a few days the subcommittee of the Ways and Means Committee will
start to work on the sugar and molasses schedule and the pressure of public
opinion ought to begin to be exerted before their work is finished.

Well, a man must have a very great regard for his country, when
we had just had 4,500,000 boys in uniform and 100,000 of them had
laid down their lives to try to protect American rights, and you sit
up here and urge on other countries to bring pressure on us to con.
tiol our domestic affairs,
Mr, LAKIN. Well$ I believed I was doing a service for Cuba and
also for the consumers in the United States.
Senator CARAWAY.

Well, you justify it then?

Vell, that was my reason. I do not pretend to justify

that suggestion. I think it was wrong.
Senator CARAWAY (reading) :
Mr. LAKIN.

We have now firm subscriptions for $85,000 for our fund and probably will
receive some additional money. It has all been subscribed by nine companies,
but they represent at least a majority of Cuban production. Thus - far only
one company which I have approached has failed to contribute. Mr. Shattuok
tells me that you were anxious to have some Cuban contributions, but I think
that for the present it is better to leave the responsibility to the American
companies, es1Clally as the tqembers of Co'ngress are very sensitive about
any foreign interference with what they regard ts a purely national matter.

You say "anxious to have some Cuban contributions." That was

from the Cuban Government?
Mr. LAwU. No; Cuban mills.
Senator CAPAWAY. I think you will find that out when you read
your letter. [Continuing reading:]
I think for the present it is better to leave the responsibility to the American
companies, especially as the Members of Congress are very sensitive about any
foreign interference with what they regard as a purely national matter.

"For the present it is

What did you mean by "the present"
better not to do it." Have they contributed since?
Mr. LAKIN. No.

-V

1561

LOBBY INVESTIOATION

Senator CAAWAY. Are they to contribute?

Mr. LAWN. I don't think so'; no.
Senator CAmAwAY. I don't think they will now, but were they
to.
intended
think the
LAKIN. No; I don't riht;
Mr.
" at
did you mean by putting in
CAAWAY. All
Senator

the word "present "

What did y6h mean by that?

Mr. LAKIN. Well, he had made the suggestion and I did not want

to hurt his feelings. I just put the thing off.

Senator CARAWAY. Here is another interesting paragraph:

Mr. Rbattuek was in Washington for the inauguration and did some work 0n
this matter while there.

What work did he do during the inauguration.

Mr. LAKIN. I think he was there-well, I don't know what he did.
Senator CARAWAY. Well, how do you know lie did anything if you
don't know what he did

Mr. LAKIN. I don't remember.

Senator CARAWAY. Oh, yes. You say:

Our present plans are that he and I shall each spend from one or two or

three days each week in Washington. I find the work very exacting. If it were
not for having a good organization, my regular business would be entirely neg.

al

lected, but If we can accomplish anything at all In Washington the time wi

have been well spent on behalf of Cuba.

There are some other members that are interested in this matter,
and they are called away by legislation. I do not feel at liberty to
go on. As much as I regret 11 I think we will have to postpone the
meeting until to-morrow morning at 10 o'clock.
(Thereupon, at 11:05 o'clock a. m., the hearing was adjourned until
to-morrow, Decembmer 12, 1929, at 10 o'clock a. m.)

mu
Fe'

wis

we]
call

wal
yo,
wo,
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whbin
to

he
wit
Ti(-

LOBBY INVESTIGATION
THURSDAY, DECEMBER 12, 1929

UNITED STATES SENATE,

SUBCo3fMI"1IEE OF THE COMMIMTEB ON THE JUDICIARY,

Waehington, D. 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock
a. In., in room 212, Senate Office Building, Senator Thaddeus H.
Oaraway, chairman, presiding.
Present: Senators Caraway (chairman), Borah, Robinson of Indiana, Blaine, and Walsh of Montana.
Present also: John G. Holland, Esq., counsel to the committee.
SENATOR CARAWAY. Mr. Lakin, will you come around?
TESTIMONY OF H. 0. LAKIN-Resumed
(The witness was previously duly sworn by Senator Caraway.)

Senator CARAWAy. We had just read into the record your letter,

I believe, of February 19, Mr. Lakin, to the Commissioner of Communications.

Mr. LAKIN. I do not remember the date. It was some time in
February.
Senator CARAWAY. Senator Walsh, you were not here. Do you
wish to ask something with reference to that letter?

Senator WALSH of Montana. I fear, Mr. Chairman, that, since I

went over these letters some time ago, I should be repeating.

Senator CARAWAY. Well, I shall givo it to you when I have merely
called attention to the reply to that letter. Under date of March 8,
1929, there is a letter from the Secretary of Communications. I
want to call attention to the fact that you said yesterday that, while
you addressed him in his official capacity simply because a telegram
if it was addressed
sooner officially, you
would getthere an hour
were really communicating) with him as chairnman of the board of
mill owners. I believe you said that. You said, you remember, that,
while you addressed him officially, you were communicating with
him in his business capacity as chairman of the Association of Mill
Owners, or whatever they call them in Cuba.
Air. LAKIN. Yes; that was his reason for being in this matter.
Senntor CARAWAY. Anl that you merely addressed him officially
to expedite it?
Ur. LARIN. To make sure he got it personally.
Senator CARAWAY. I want to call your attention to the fact that
he answered you on his official stationery, and he is communicatingwith you officially, and not on the stationery of any private mdividunl, replying to your letter in which you ask iim to form a
1568

1564

LOBBY"N

ESTIGATION

combination of South American countries to bring pressure to bear

upon this country. He says to you in that letter:
I am in receipt of your favor of the Gth instant, contents of whIch I hae
noted with great interest, and must say I ind excellent your suggestio n o1

Uk

That was a reply'to your letter in which you suggested lie get btqv
and form a combination of South American countries. Here is hfs

P
let

having your brief translated Into Spanish and printed for distribution by the
association.
I think the fund Is doing fine. and have carefully ited all other particular$
of your letter, and await with great Interest your further news.
With best regards, I am. as ever.
Very sincerely yours.

foi

letter. I wish you would look at it. You see he writes on his
official stationery, and as an official of the Government, and not as
the president. of a private corporation.
Mr. LARI . Yes; but lie wrote that from his office as secretary of
communicationsan official of
Senator CARAWAY. Of course he did, and wrote it as
the.country of Cuba and not as a private individual. Have you got
a single letter from him in your files addressed to you on the sta.
tionery of this mill organization?
Mr. LAxIN. I don't know.
Senator CARAWAY. I would be interested to see it if you have.
Mr. LARi. You have the files.
Senator CAnAWAY. Senator Walsh, you wish to inquire.
Senator W ALSh of Montana. Mr. Lakin, was your suggestion
carried out?
1Arr. LAKIN. No; it was not.
Senator WALSan of Montana. What is that?
Mr. LAKIN. It was not.
Senator WALSH of Montana. It was not?

thl
I

thi

me

as

Mr. LAKiN. I don't think so.

Senator WALsi! of Montana. What makes you think so?

Mr. LIUN. Well, I don't think they liked it.
Senator WAVsnr of Montana. Evidently the secretary liked it very
.well. He said so.
Mr..LAKIN. What he says is he likes my suggestion to translate
my brief and papers into Spanish. That. I think, was done.
Senator WALsIT of Montana. For circulation in the South Anteri.

out
per

can countries?
Mr. LAR I . No; I think that was for circulation in Cuba.

me
"I

Senttor WALsn of Montana. Let me refresh your recollection.

You say :.

du

'Tlherefore there is a matter in which vou could he of the greatest benefit

According to ny views one of the, mod
With sugar trlf.
important iarguinents is tnat otlier LatilAniercau couiltries will, clani that
If Cuba's close rolathis to the 'ilted States result in dalmge to CVba, thel
had hitter light shy of having a slmilair thing hmapipen to then.

SU

in coinecithl'a

thl
Of
alp

In other words, to excite their fears.

'Therefore, it seems to ine that It would be at good thing to call the situation
to tlne attention of the approplrite persons In other Latln-Anterlcan countries
Of course, that could not be done offieilly by the Cuban Government, but I do

not at te moment see any reason why It should not appear to conie from

the Ilaoesndilos Asoe hifloni.

Now, I want to know front you whether that was done or nOt.

Mr. Lmlux. I don't believe' it was done.

LOBBY INVESTIGATION

1565

Senator WALSH of Montana. Do you know anything about it?

Mr. LAKIN. I don't remember anything about it now.

Senator WALSH of Montana. You will observe that the secretary

liked your suggestion.

Mr. LAKxN. Well I think he was kind of letting me down easy.

That is the impression I have of it.

Senator WALSH of Montana. When he said, "I find excellent your
suggestion of having our brief translated into Spanish and printed
for distribution by the association," you think lie was just giving
you a stand-oft?
Mr. LAKIx. I think that refers to an earlier paragraph in the
letter, probably.
Senator WAuii of Montana. Anyway, your proposal was that
the Government of Cuba should do this, but do it in a way that the
Government would not be directly chargeable with it?
Mr. LAKIN. Yes, it was, and I stated yesterday I became very
much ashamed of that suggestion. I don't want to conceal my
feelings about that at all. I don't think that was good judgment.
Idont think it was a good thing to do.
Senator WALSH of ontana. Don't you agree it was not a good
thing to do in both ways; in the first place, it was a very unpatriotic
thing to excite antagojism in South America against our Government, and in the second place, wasn't it a very improper thing to do
to suggest that it be done covertly by the Cuban Government, instead of openly?
Mr. LAKIN. Well, I can't say any more than I am very much
ashamed of it.
Senator WALSH of Montana. Has your attention ever been called
to the so-called Logan Act, Mr. Lakin u
sir.
Senator WALSH of Montana. Let me read it to you:
-The Code of Laws of the United States, title 18, Criminal Code and Criminal
Mr. LAKIN. No,

Procedure.

Part 1, Crime

0HAPTI'
1, SECTION 5. CRIMINAL CORR.SPONDSNC 4 WITH FOREIGN GOVERN.
MEXTS; mt.*Dl$S OF PitivAT. Iv.IvIES ExcEIrED.-Every citizen of the United

States, whether actually resident or abiding within the same, or in any place
subject to the jurisdiction thereof, or in any foreign country, who without the
permission or authority of the Government, directly or indirectly, commences
or carriess oni_ any verbal or Written rrep6ndenc or intercourse Witlt any
foreign Government, or any officer or agent thereof,
With an intent to influencthe measures or conduct of any foreign govern.ment or of any officer or agent thereof, in relation to any disputes or control
Tersies with the United States, or to defeat the measures of the Government
of the United States; and every person being a citizen of or resident within
the United States or in any place subject to the jurisdiction thereof, and not
duly authorized, counsels, advises, or assists in any such correspondence, with
such intent, shall be fined not more than $5,000 and imprisoned not more than
three years; but nothing In this section shall be construed to abridge the right
of a citizen to apply, himself or his agent, to any foreign government or the
agents thereof for redress of any injury which lie may have sustained from
such government or any of its agents or subjects.
Mr. LAKIN. No, sir; I never heard of it.

Senator WALSH of Montana. Well, out of kindness to you I call

your attention to it now. I find another letter to Mi Aballi, of

date February 1, 1929, in which you say:

I wish to thank you personally for your support and assistance and encouragement. I intend to continue to do what I can in Washington, but I do not

1566

LOBBY INVESTIGATION

know how much I can accomplish. I have the feeling that at the last it wil

take the energy and ability of President Machado to get any real benefits for
Cuba in this matter.

Just what did you have in mind when you wrote that, that it
would take the energy and abilityy of President Machado to get any
results in respect to tariff legislation here?
Mr. LAKIN. That he would have to take it up diplomatically.
Senator WALSH of Montana. Do you know whether he ever did
or not?
Mr. LAuuN. I don't think he did.
Senator WALSH of Montana. There has been some diplomatic cor.
respondence about the tariff, hasn't there, according to the news.
papers?
.i
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. Have you discovered up to the press.
effective?
ent time that it has been very
no, sir.
haven't,
I
LAxiN.
Mr.
Senator WALSH of Montana. Another letter of date February 1,
1929, to Colonel Tarafa:
I really have some hope that it may be possible to persuade President Hoover
to insist that the duty on sugar be not raised. My hope is based on making
use of his desire to foster good will with Latin Atperica. A close friend of
mine will be with him in Miami for the next three weeks and I hope that on hb
return he will have something hopeful to report in regard to Hoover's attitude,

P
4

ID

fa

Who was that "close friend "Ii

Mr. LARIN. Mr. Shattuck.
Senator WALSH of Montana. How did you know he was to be with
him in Miami for the next three weeks?
Mr. LARIN. Because Mr. Shattuck told me he was going to Miami.
Senator BLAINE. Let me suggest, Mr. Witness, that yesterday there
was a letter, which I assume was offered in evidence. At least it was
read into the record, dated February 19, that Mr. Shattuck had seen
the President-elect in Miami had been with him within the last
10 days, and that your plan o campaign could not be worked out be.
cause, of the confidential relationships that Shattuck had with the
President-elect. That was a letter that you wrote to Mr. Adams,
and, of course, carries out the plan that is indicated in the letter
to which Senator Walsh has called your attention. That is, the plan
you suggest in that letter was consummated by the 19th of Febru.
arDr. LAKIN Yes, I think that is so.
Senator BLAINE. You expected Mr. Shattuck to stay with the
President elect I
Mr. LAKIN. NOt .tO stay with him, no.
Senator BLAINE. SO that he might impress upon the President
elect the importance of this matter, and because of the President.

elect's desire for friendly relations with the Latin countries, in that
way you could bring influence to bear upon the American Congres

not to increase the tariff duty.

Mr. LAnIx. Oh, I didn't go as far as that.
Senator BLAINE. Well, tfat would be my construction of your
letter.

LOBBY INVESTIGATION

1567

Mr. IAKIN. Well, I don't want to quarrel about construction.

Senator WALSH of Montana. Another letter in the files of date

February 1,1929, from you to Dr. Viriato Gutierrez, Secretary of the
presidency, Havana, Cubia Presidential Palace. I expect that means
secretary to the President .
Mr. LAKIN. NO; it is a little different office, because he is a member of the Cabinet.
Senator WAxSH of Montana. Ini which you say:
1 made t separate report to President Machlado which I have asked Doctor
Lombard to Ilass tlhrougl your haitds to the President and which doubtless
Iou have already seen. Of course, it is important to c 0ntinue to deAl unoffThis
dailly with members of the committee and other members of Congress.
by
done
be
to
have
may
but
Coba,
of
behalf
on
officially
doni
be
can not
individual citizens of the United States. Naturally, anything official would
bave to be done through the usual diplomatic chantiels. I have an intimate
friend who has been summoned by Hoover to be with hlnil for the next month
He has promised that if he gets an oppirtunity-and lie hopes to
In miaml.
do so-he will attempt to Impress Hoover with the importance of having some
direct communication on this subject with President Machado. Although I am
of the opinion that the presentation of our case to Congress was absolutely
necessary, I nevertheless feel that the task of rescuing Cuba may ultimately
fall on the broad and capable shoulders of Presidenit Machado.

Your attention was called sometime ago to the report which you
made to President Machado. Does this letter of February 1 refer
to that report, or was there a subsequent report?
Mr. LAKN. I don't know. I think that was the only one, but I am
not sure.
Senator WALSH of Montana. How many reports did you make to
Machado?
Mr. LAKpI. I suppose two or three.
Senator WALSH of Montana. Who was this intimate friend who
had been summoned by Hoover to be with himl
Mr. LAKIN. That was Mr. Shattuck, btit he had not been summoned by him. That was a mistake.
Senator WALSH of Monitana. Why do you say so, then?
Mr. LAKIN. I thought he had.
Senator WALSH of Montana. But Mr. Shattuck had told you before he went to Florida that he was going down there
Mr. LAKIN. Yes, but I was in error in thinking that he was .ilmmoned. He was not.
Senator wLH- of Montana. You told us the other day- that Mr.
Shattuck went down there in accordance with his usual custom.
"
Mr. LAKIN. Yes.
Senator WALSH of Montana. So that if it was his usual custom to

go down there, how did you get the notion that he was summoned
by Hoover?
Mr. LARIN. Vell, I know more about it now than I (id last
February.
Senator WALSht of Montana. What more have you learned about
it?
Mr. LmuuN. Well, I talked it over with Mr. Shattuck many times.
I didn't know him so well at that time, and I assumed since he was
going down there that he had gone there, as I say, because he was
summoned, but I must admit that was wrong.

1568

LOBBY INVESTIGATION

Senator WALsn of Montana. The letter says:

He has promised that Iflie gets ant opprtitlty-and he hopes to do so-be
will attempt to Iipre&s Hoover with the Imporhnce of having some direct
communication on this subject with President Machildo.

Apparently the matter of his talking with the President-elect was

the subject of some conversation before he left?
Mr. LAKI. You mean the matter of Mr. Shattuck talking with
the President-elect?
Senator WALSH ofme.
Montana. Yes.
Mr. LAKIN. With
Senator WALSI. of Montana. Yes. That is, you and Shattuck
before he left talked with each other about his endeavor to see Presi.
dent Hoover and impress upon him the necessity or advisability of
getting into communication with Machado?
Mr.-LAKIN. Yes.

Senator WALSH of Montana. And notwithstanding you had this

apparently somewhat protracted conversation with him he left you
with the idea that he had been called down there by President
Hoover?
Mr.

LAKIN.

Senator

Well, I must have inferred that if I wrote it.

WALSH of Montana (continuing):

Although I am of the opinion that the presentation of our case to Congre
was absolutely necessary, I nevertheless feel that the task of rescuing Cuba may
ultimately fall upon the broad and capable shoulders of President Machado.

That was, of course, again referring to diplomatic exchanges?

us

Mr. LAKIN. Yes, sir.

Senator WALSH of Montana. And nothing else?
Mr. LAKnzr. No, sir.

Senator WALSH of Montana. So you thought President Machado

would just simply write a letter to President Hoover and then that
would take care of the situation?
Mr. LAKIN. Well, I thought it was necessary for him ersonally to
indicate his alarm and concern. The only way to So that was

through diplomatic channels.

vif
hit
thi

Senator WALSH of Montana. Well, you told him it was important

to continue to deal unofficially with members of the committee and
other members of Congress. To what extent had you bein dealing
unofficially with members of Congress prior to that time?
Mr. LAKIN. I had been going to see Congressmen who would

he

receive me.

Senator WALSH of Montana. And you continued to do so?

Mr. LARIN. Yes, sir.
Senator.WALqJK of Montana. Next is a letter of February 8 1929,
addressed byyou to Charles Hayden of New York. That is iayden
of Hayden, Stone & Co.?
Mr. LAKiIN. Yes, sir.
Senator WALSH of Montana. They are brokers?
Mr. LAKIN. Yes. I think they call themselves investment
bankers.
Senator WALSH of Montana. How did you come to be writing to
Hayden?
Mr. LAKIx. He was chairman of the board of the Cuba Cane
Sugar Corporation.

ret
an

to

of

th

LOBBY INVESTIGATION

1569

Senator WALsH of Montana. What was the Cuba Cane Sugar

Co oration I
Yr. LAKIN. That is the largest producer of sugar in the world, an
American corporation doing business in Cuba.
Senator WALsH of Montana. You say in this letter:
The next step is to work on the committees and Members of Congress.

Just what does that meanI

Mr. LARxN. That means to go and see them, for anybody who
could, and to write them, talk to them.
Senator WALSH of Montana. Work on them. Do you know of
any Members of Congress who were thus worked on t
Mr. LAKIN. I gave a list of those whom I saw.
Senator WALSH of Montana (continuing):
31y plait for that Ws to employ Shattuek ofi acmiuut of his intimacy with
HRNiver and because he Is welcomed in the offices of many of the Senators
and Congressmen, including Senator Smoot, and is known by them to be
intimate with Hoover.

Did -ou carry out that purpose?

Mr. AKIN. Yes.
Senator WALSu of Montana. To employ Mr. Shattuck?
Mr. LAKIN. Yes.

Senator WALSH of Montana.. To work on the committees and

Members of Congress, because of his intimacy with Hoover, and because he is welcomed because of that fact. Well, Mr. Shattuck told
us that his employment and his work was exclusively that of a
lawyer. Do you regard this as legal work?
Mr. LAKIN. That is only a a part of it. As a matter of fact, he
did practically none of that. I was the person who went and interviewed the Congressmen and Senators.
Senator WALSH of Montana. Yes; but you told us you employed
him for that purpose.
Mr. LAKIN. I said in that letter I thought he would do some of
that work.
Senator CARAWAY. Will you pardon met Yesterday you told us
he did go about and get a man who made the contacts. Do you
retract that statement to-day?
Mr. LAKIN. I don't think Iput it in that way.
Senator CARAWAY. You dili. You gave the name of the peple
and what Members offro*
Congress
it. saw, and what they toldyu
doing they
when they came back
Mr. LAKIN. I said that they conferred with him. I don't want
to uibble about this.
Senator CARAWAY. Well, that is all you are doing.
Senator WALsu of Montana. Let me refresh your recollection by a
further sentence of the letter:
omu, Members of (ongrss who can
Shattuck proposes, It Iosible, to tin
be In(hlCed to inake n tight either in the committee or in Ongress on behalf
of Cuba.

That was Shattuck's proposal?

Mr. LAKIN. Yes; he and I were both anxious to do that. There
is no question about that.
Senator WATsH of Montana. Let me inquire of you if you regard
that as legal service?

1570

LOBBY INVESTIGATION

Mr. LAKIN. These services are frequently performed by lawyers;

yes sir.

Sen
it im

form a lot of thing, we know. They play golf, too. I suppose

sometimes they dig ditches. They sometimes act as surveyors. That
is not the question. It is not a question of whether lawyers do those

Whmb
Mr.
town

It will necessitate his being in Washington much of 11 th ie ltvwee, sow

and tile passage of the finial tariff bill. It may also Involve a certain amount
of publicity in oider to give courage and background to any Indelendient

things

Senator WALsH of Montana. Oh, yes. Lawyers frequently per.

things or not. The question is, Is it legal work?

Mr. LAKIN. Well, I considered it part of the work of a lawyer; yes.
Senator WrALSH of Montana (continuing):

Stem.

be's oft C'ingress. For this purpose I have suggested a contribution by our
friends of about $100,000. If your recommendation to your executive com.
from
mittee is accepted, I can claim now eOntributions amounting to $75,000;Cuban
Rlonda, United Fruit, Punta Alegre, Itoyal Bank of Canada, Cuba Co.,
American, and Cuba Cane each $10,000; and Hershey at least $5,000. I believe
that I shall also be able to get $10,000 each from General Sugar aud Cuban
Dominican. My Idea is to pretty much leave the matter In Shattuek's hands
The very nature of his job makes it important for him not to have to eongult
with any considerable number of persons, whether they form a committee or
otherwise. I consider him absolutely trustworthy. His work also %vill surely
Include conferences with the beet people, or at least with Senator Smoot, who
Is their spokesman In Congress.

also involve a
Will you explain that to us, Mr. Lalin: " It may
and back.
courage
give
to
order
in
certain amount of publicity
Congress."
of
Members
ground to any independent
Mr. LAKIN. Well, I wanted to have publicity in reference to the
proposition that we were advocating.
Senator WALse of Montana. And what was the purpose of this
publicity?

Mr. LAKIN. In order to show the Cuban side. I say the Cuban
side; I mean the side of those who were interested In the sugar
business.
Senator WALsn of Montana. Well, why did you want to do that?
Mr. LAKIN. For the same reason anybody wants publicit'
Senator WALSH of Montana. What lo you mean by this, IIn order
to give courage and background to any independent Members of
Congress "?1
fr. LAKIN. If they could poiht out that the matter is important
enough to be-taken notice of in the press, that gives them courage
.
to make their fight.
Senator WALSH of Montana. That is, not having stamina- enough
to contend for what they recognize and believe to be right and just,
you wanted to stiffen up their backbone a little bit by support from
home?
Mr. AKIN. I wanted to get them support from home.
Senator WALs of Montana. The reference in here to $100,000 is
the same to which reference has been made heretofore I
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. So, apparently, this was all legal

work. The whole thing was turned over to Shattuck, and everything
was legal work?
That was my intention at that time to have him do it.
Mr. LA10.I.

I didn't expect to be down here very much.

numbi
Sen
Mr.
have

much

Sen

I coI

confer
their

Mr.
wrote

of the
Our
spend
exactil

An
Ap
fllg

hone
hen
of dal
I ha

AF
sfse
tons,
erenti

"T .

hit (
Result

Son
sent t
Mr
Se
Mr
inH
Sen

stand
Mr

shatt
was i
Sel
dent
Ame
also

LOBBY INVESTIGATION'

1571

Senator WALSH of Montana. "The very nature of his job makes

it important for him not to have to consult with any considerable
number of persons, whether they form a committee or otherwise."
What does that mean?
Mr. LAKIN. Well, you can't carry on any business by having a
town meeting.
Senator WALsH of Montana. Well?
Mr. LAKIN. I wanted to make it unnecessary for Mr. Shattuck to
have to appeal to a large group of people frequently. It takes too
much time. You don't get anywhere. It is better to leave those
things to a small committee.
Senator WALSH of Montana. You continue:
I consider him absolutely trustworthy.

His work also will surely Include

conferences with the beet people, or at least with Senator Smoot, who Is
their spokesman In Congress.
Mr. Lakin, the chairman calls my attention to a letter which you
wrote concerning which you were interrogated at an earlier meeting
of the committee, in which you said:
Our present plans are that he and I (referring to Shattuck) shall each

spend one or two to three days each week In Washington. I find the .work very
exacting.

And so on.
Apparently, that indicates that you contemplated from the beginn iging down here with Shattuck all the time.
Mr.LAKIN. No; I had to change my mind. At the beginning I
hoped I would not have to.
Senator WAH of Montana. Another letter to Hayden from you,
of date February 9, 1929, as follows:
I have Just received the following telegram from Shattuck:
"Wish you would consider following modification of your last plan:
"First. Change tariff to 3 cents full duty.
"Second. Amend treaty giving Cuba 50 IK'r cent preferential on 2,400,000
tons, with proviso that beginning 1030 Cuba may increase amount bearing preferential proportionately with other domestic regions on increased consumption.
"Third. Limit Philippine free sugar to 500,000, balance full duty.
"My pln, based on theoretical consumption, 0,000.000. thus leaving surplus

full duty to be brought, also on orderly markethig by Cuba atd Porto Rico.
Result should be sir and a quarter refined price.

Senator WAIsn of Montana. Where was Mr. Shattuck when he

sent that telegram?
Mr. LAKIN. I think probaly in Habana.
Senator WALSH of Montani.

In Habana?

Mr. LAKIN. He may have been in Miami, but I think probably

in Habana.
Senator WLsJi of Montana. From what source did you understand Shattuclkot those Ideas?
Mr. LAUIx. r think those ideas came front a conference that
Shattuck had with a Mr. Chadbourne, who was also in Miami, who
was interested In the sugar business with MUr. Hayden.
Senator WALSIt of Montana. Who is Chadbourne?
Mr. L.tIu. Chadbourne is a young man who is, I think, president of a small sugar company in Cuba. I am not sure it is an
American cornpany, but he is an American, and Mr. Hayden is
also interested in the same company.

1572

LOBBY INVESTIGATION

the same date, with

Senator WA iLsof Montana. Your letter ofthe
matter. You say
on
,our reply by cable, will shed some light
litl
that leter: r
not

M
si

requires renegotiating the

only Involves reduced duty oi Cubais sugar lt
reciprocity tre:ty Stop. Clearly nobody but you with your special c
tions could hope for success and the chances are that your plan would
undergo changes before final adoption. * * *
At Sugar Association meeting yvAtordav your employment ratified and
75,000 definitely pledged with probability of 2b more. * * *
Sanchez Aballi has cabled his Intention to ask pecuniary aid from Cubans-

by
whel

That is a part of the full telegram which may be inserted in the

record at this point without reading:
FEBRUARY' 0, 1928.

M
M
side

more
1
Your p)1l11ihlius

th

lare attempt because it

I would sn

FnURYsd
B. P. SHATTUOIX,
Miami, Fla.:
modification Is good though
My first itopresslon Is that your suggested
to see whether It has any
here
I must consult some of the sugar Interests
the obstacle to the
overcomes
It
standpoint.
Cuban
the
frout
serious flaws
ahn wihhh wits that Congress would surely reject
original Chadbourno
the proposal to forego $100,000,0 of easily collected revenue. My personal
view is thqt Cuba would be lucky at this time If ultimate outcome Is to limit
Pliiiippl.es and leave duty where It is and If you can accomplish anything
nore It will le- at great victory. Your plan Is more ambitious that) I would
dare attempt because it not only involves reduced duty on Cuban sugar but
requires renegotiating the reciprocity treaty. Clearly nobody but you with
your specilI connections could hope of success and the chances are that your
plan would undergo numerous changes before final adoption. I suggest you
go to 'uba Tuiesday ni stay In my apartment. Wire Alfredo Lombard, 86
is
Havana Street, Havana. ad he will meet you. I have wired him. Ithim.
Important for you to see Sanelez Abalil and explain everything fully to
Ohadbourile or Lombard or Stuntz or Lynch will ltroduce you. Will consult
your
Francis about publicity. At Sugar Association meeting yesterday$25,0
employment ratified and $75.000 definitely pledged with probability of Sanchez
more. Ve ail agree with your opinion regarding Washington Post.
Aballi has cabled his intention to ask pecuniary aid from Cubans.
LAKIN.

Senator WALSH of Montana. "Clearly," you say, "nobody but you

with your special connections could hope of success, and the chances
are that our plan would undergo numerous changes before final
adoption.".
What does that special connection refer tot
Mr. LAreN. I think his connection with Senator Smoot and I have
no doubt I had in mind the confidence that Mr. Hoover had in him.
Senator WALSH of Montana. I have here a letter of February 18
from S. R. Noble, assistant general manager, the Royal Bank of
Canada, Montreal. How does that gentleman come to be writing
to you
Mr. LAKIN. Because he had charge of the interests-of the Royal
Bank in sugar in Cuba.
Senator WALSH of Montana. To what extent are they interested
in Cuban sugar?
Mr. LAKIN. They control mills which I think make about 800,000
tons of sugar.
Senator WAxSH of Montana. Where does that sugar go I
Mr. LAKIN. That sugar comes here.
Senator WALSH of Montana. To the United Staiest
Mr. LAxIN. Yes.
Senator WALSH of Montana. Any of it go to Canadat

S
thai
IM

Cut
(ant
the
don(
dial
MC

oW
that

Cit

1
ad'
thi
the

I
for

the
res

LOBBY INVESTIGATION

1578

Mr. LAIN. I don't think so.

Senator WALSH of Montana. Where is the stock of that company

owned?
Mr. LAKN. Well, those are companies which are operated, I think
by a company called the Sugar Plantations Co., and I don't know
where the stock of that is held.
Senator WALSH of Montana. Anyway, it is controlled in MontrealI
Mr. LAMHN. The Royal Bank is contro11ed in Montreal; yes, sir.

Senator WALSH of Montana. Did they contribute to your ftnd

Mr. Ixq.

Ye.

Senator WALSH of Montono. How much did they give?

Mr. LAiN. $10,000.

Senator WAsH of Montana. And is that the only contribution outside of the United States that you got, except what came from Cubal
Mr. LAxn. That one from Colonel Tarafa of $5,000.
Senator WMHVI of Montana. He is a Cuban, is he not?
Mr. LAXN. Yes.

Senator WALSH of Montana. I asked about contributions other

than those that came from Cuba.
Mr. LAmiN. None others, no.
Senator WALSH of Montana. In this

letter Mr. Noble says:

I understand from Colonel Deeds that he has some assurance from Virlato
Outlerres that if the principal producers will not cooperate for shipment abroad
(and they are not cooperating) a decree will be passed taking a proportion of
the crop of eact producer to be sold through the export corporation as was
done last year. This would be constructive as compared with the present
chaotic situation but would probably not get us any of the benefits of the preference in the United States. I have no idea whether 'Colonel Deeds will be
successful, but he is going to take the matter up as soon as he gets to Cuba In
about a week's time. We should certainly endeavor to do something before
that time if we have any hope of reopening the question of a single seller.

Who is Colonel Deeds?

Mr.

LAWN.

Senator

He is president of the General Sugar Co.

WALSH

of Montana. That is the National City Bank Co.?

Mr. LAmN. Yes.

Senator WALSH of Montana. He then represents the National

City Bank interests?

Mr. LAWN. Yes.

Senator WALSH of

Montana. What became of this proposal thus

advanced by Mr. Noble?
Mr.-LARIN. There was no decree made.

Senator WALSH of Montana. Has your attention been called to

this press dispatch from Habana of date November 28, saying that
there had been such a decree? I will read it to you:
iNew York Times, November 29, 19291
SUOAR ODINDING TO BEGIN--CUBA WILL INAUGURATE SrEAsON DECEMBER 1
WITH 4,700,000 Loo ToNs
HABANA, November 28 (A. P.) .-- Cubit q sugar-grinding season will open on
December 15 with an estimated total of 4,700,000 long tons, according to a
report by (en. Eugenlo Molinet, Secretary of Agriculture.
Secretary Molinet sild that a presidential decee designating December 15
for the official inauguration of sugar grinding would be issued to-morrow.
The crop output, both crude and refined, will be marketed this year under
the supervision of the recently created cooperative export agency, which will
restrict all sales in an effort to stabilize prices.

1574

LOBBY INVESTIGATION

That is such a decree as is proposed by Mr. Noble, is it not?

Mr. LAKIN. No.

Senator WALSit of Montana. No? Vell, a decree was issued that

all sales should be made and exports made through one single agency?
Mr. LAWN. That is for next year's crop.
Senator WALsH of Montana. Yes.
Mr. LARIN. Mr. Noble is referring to last year.
Senator WALSH of Montana. Well, Mr. Nobles letter is of date
February 18.
Yes.
Mr. LAIK.
Senator WALSH of Montana. That would seem to be a little be.
lated, wouldn't it?
Mr. LAKmI. No; right in the midst of the crop, before very much
had been shipped.
Senator WALsh of Montana. Well, apparently the grinding season
begins about December 15, so it is two months late, at least.
Mr. LAWN. Well, that date is wrong. I think it is January 1

at which the grinding is to be begun. I don't think it is Decem.

ber 15.
Senator WALSn of Montana. Well, it would seem strange that
such an error as that should occur?
Mr. LAKIN. I think it is an error, nevertheless.
Senator WALSH of Montana. Anyway, the situation is that for
next year's cropMr. L mN. There is a single selling ageno:!y; yes, .cir.
Senator WALSH of Montana. So there isn t any competition at

all for next year, at least as between Cuban producers shipping to

the United States?
Mr. LAKIN. No. It is all sold through one agency.
Senator WALSh of Montana. And they fix the price?
Mr. LAKIN. Yes.
Senator WALsH of Montana. And every producer is pledged to
accept that price?
Mr. LAWeN. Yes.
Senator ROBINSON of Indiana. Who is the agency?
Mr. LAKIN. It is a corporation.
Senator RoBMNSON of Indiana. What is the corporation?
Mr. LAKIN. In Cuba.
Senator ROBINSON of Indiana. What is the name of it? Translate
it, if you can.
Mr. LAWN. The Cooperative Agency.
Senator RoBiNsoN of Indiana. Who was instrumental chiefly in
bringing that into existence?
Mr. LAKIN. I think Colonel Tarafa.
Senator ROBxNSON of Indiana. It didn't originate with the
National City Bank?
Mr. LAKIN. What is that?
Senator ROBINSON of Indiana. It didn't originaate with the
National City Bank?
Mr. LAKIN. No, no. Colonel Tarafa has had this idea in mind
for years.
Senator WALSH of Montana. Another letter under date of February 16 from you to Victor Heintz, Cincinnati, Ohio. Who is
Heintzi

LOBBY INVESTIGATION

1575

Mr. LAKIN. He is a lawyer who represents the Fleischmann Yeast

Co.

Senator WALsH of Montana. How did you happen to be writing

" Mr. LAKIN. He was interested in the molasses feature of the sugar

schedule.

Senator WALSH of Montana. Interested in what direction?

Mr. LAKIN. The yeast people use a great deal of molasses, and
he was interested in not having the duty on molasses increased.
Senator WAUH of Montana. Did the Fleischmann Yeast Co. contribute to your fund?
Mr. LAKIN. No.
Senator WALSH of Montana. How did they escape? Didn't you
solicit them?
Mr. LAKIN. No; I did not.
Senator WALSH Of Montana. They had the same purpose as you
had, to get the tai'iff lowered upon these products?
Not to have it increased.
Mr. L;Ami.
Senator WALSH of Montana. Not to have it increased, and you
were going and doing this workr and carrying all the burden of
expense and getting this reduction for the benefit of the Fleischmann
Yeast Co.Mr. LAxir.
No. I aid no attention to the molasses part of it.
Senator WALSH of Montana. You say to Mr. Heintz [reading]:
I have succeeded lit raising about $85,000 to continue the work with Congress. We are employing a friend of Hoover and really have some hope.
Of course, that friend was Mr. Shattuck?
Mr. LAKiN. Yes.
Senator WALSH of Montana. Another letter to Mr. Heintz, of date
February 23, in which you say [reading]:
Our eight-five thousand fund has been raised and I am beginning now to
expet some additions to It.

Now, that was not in the nature of a general hint to Mr. Heintz to
come through
Mr. LAKIN. Not at all.
Senator WALSH of Montana (continuing):
Shattuck, who is Hoover's friend, returns to New York the first of next
week, and he and I expect to work out a definite program then.
That of course, was the return of Shattuck from Miami?
Mr. LAiN. Yes, sir.

Senator WALSH of Montana. What was the object and purpose of

this correspondence with HeintzI
Mr. LAKIN. He wanted.to keep in touch with me, simply to see
what I was doing.
Senator WALSH of Montana. You seemed to be quite willing to
unfold to him all your plans, even your financial hopes and expectations.
Mr. LAKIN. Yes.
Senator WALSH of Montana. How did it come about that you were
so communicative to him?
Mr. LAKIN. Because he was looking after the molasses end of
what we call the sugar schedule.
T8214-30--PT 4---

1576

LOBBY INVESTIOATION

Senator WALsH of Montana. What did he do?

Mr. LAKIN. ,1 think he filed a brief. I am not sure whether he

appeared personally before the Ways and Means Committee or not.

That is all I know he did.
Senator WALsH of Montana. Who else, if anyone, to your knowil.

represented the molasses people? That is the blackstrap,

edge,
isn't itt

*5
t

Mr. LAKIN. Yes. I think he is the only one I came in contact

with.Senator WALsit of Montana. Another letter to rarasa. of

date

February 28 Lreading]:

I have raised a fund of over $85,000 to conduct tho light. Some of the
money will be used for publicity and some for employing people who have a
certain amount of Influence in Washington. Our chief reliance will be on
Mr. Shattuck, who Is a very intimate friend of Hoover and has already talked
with Mr. Hoover about this subject.

Who were these other people?

Mr. LAKIN. Well, I hoped I would find somebody, but I didn't
use any money to pay anybody except Mr. Shattuck, and I haven't
paid him yet.
Senator CARAWAY. You paid Carroll, didn't you? Didn't you
pay Carroll something?

thi
(0

Mr. LAKIN. Oh, yes. I forgot that.

Senator CARiwAy. I thought you ought not overlook your chief

lobbyist. He was so proud of the fact he got the money, you ought
not humiliate him now by forgetting him.
Mr. LAKIN. I had in mind- anybody who had not been named
already.
Senator NVAIsH of Montana. You didn't name Colonel Carroll.
You hadn't employed him at that timeI
Mr. LAKIN. I didn't employ him until June. I hadn't even
thought of him.
Senator WA.sn of Montana. You then did, as a matter of fact,
carry out your purpose and plan, thus outlined to Mr. Tarasa, did
you not? You say that "a part of this money will be used for
employing people with a certain amount of influence in Wash.
ington."

Mr. LAKIN. Well if you meah by that that I employed Colonel

Carroll, yes; but I didn't employ him for that purpose. As a matter
of fact, I had given up any idea of employing anybody with in.
fluence when I came to Colonel Carroll.
Senator CARAWAY. You say you had given up tll idea of getting
anybody with, influence when you employed him
Mr. LAKIN. Yes.

Senator CARAWAY. Then, why did you hire hiim?

Mr. LxIN. I hired him so far as the tariff was. concerned for
the purpose of advising me. I thought I needed it.
Senator OARAWAY. I thought Mr. Shattuck was your leading

adviser.
Mr.

LAKIN.

I also needed Colonel Carroll, as I found.

Senator CARAWAY. Yes; I think so.

Senator WALsu of Montana. You continue in this letter [reading]:

LOBBY INVESTIGATION

1577

He (Smoot) was very emphatic In stating that the Philippines are the most
dangerous competitors of the United States producers. He had many facts
and figures which he supplied to me and urged we to advertise as widely
as possIble the demirability of limiting the Phillippines to 500,000 tons. He
stated very speclfically that he proposed t6 make a big fight on that point,
Of course at that time it was not thought that Stimson was to be Secretary
of Stgie. It i not as yet absolutely certain that StImson will be Secretary
of State. He may be Attorney General. In any event, I shall be able to
have at personal talk with Stimson. I have know him very intimately for
25 years and his wife is a cousin of my wife.
The contents of this letter had better be treated by both of us as strictly
confidential.

Did you have that talk with Stimson?

Mr. LAKI.

No.

Senator WALSh of Montana. What was there in the letter that you
thought it advisable to treat as strictly confidentialI
Mr. LAKIN. Well, I didn't want to embarrass Stimson if I talked
to him.
Senator WALSH of Montana. No, noMr. LAKIN. But I didn't talk to him.
Senator WALSH of Montana. But what was there in the letter, I
asked you I
Mr. LAKIN. Oh, I don't think there is anything in the letter.
Senator W.%Lsu of Montana. Why did you enoin strict confidence
upon him with respect to the contents of this arlicular letter? What
was there in the letter that you thought ougIt to be regarded as extremely confidential, strictly confidential?
Mr. LAwzN. Well, would you read the letter again, so that I could
see?
Senator WAsH of Montana. You say [reading]:
I have raised i fund of over $85,000 to conduct the fight. Some of the money
will be used for publicity and some for employing people who have a certain
amount of Influence in Washington. Our chief rellahtee will be on Mr. Shattuck,
who Is a very intimate friend of Hoover and has already talked with Hoover
about this subject.

Perhaps that ought to be treated strictly confidential?

Mr. LAMIN. Yes; I think so.
Senator WALsiz of Montana. That better not be noised abroad, and
I suppose, of course, your personal relationship with Secretary Stimson. You didn't want that to get out either
Mr. LARIN. Well, I didn't care about that.
Senator BLAINE. Evidently the wives were not on good terms.
Mr. LARIN. Yes; they ae.
Senator BLAINE. Well, Secretary Stimson, as I understand, went
before the committee quite contrary to your letter?
Mr. LAIUN. Yes.
Senator BLAINE. Well, then, he was not reached through the wives,
was he?
Mr. LAIuN. I didn't even try to see him.
Senator BLAINE. But it was important that the two wives were
cousins?
Mr. LARIN. Well that was one
Senator BLAINE. 'fhe relationship was important?
Mr. LARIN. Part of the relationship; yes, air.

1578

LOBBY INVESTIOATIOX

Senator WALSH of Montana. I have here a letter from President

Machado to you, which reads as follows:
REPUBuo OF CUBA PBSIDENOY,
Habana, March 1, 1,9i.

Mr. Enmnia 0. LmciINt

441 Lexlngton Atenue New York.
My DSirsuouisHf
FRMrD: I acknowledge receipt of your letter of January
26 and of the documents sept me therewith.

aI
and
A
cult

After reading them over carefully, I am now well aware of the steps taken

by you and Mr. Shattuck, and of the work done by you In conjunction with
other members of the committee representing the Cuban Industry, in regard to
which information had already reached we in a letter from the ambassador
and in the reports of other members of the committee.
Although Virlato Gutierrez conveyed to Mr. Shattuck (whom I regretted to
be unable to see personally on aeeount of illness at the time) my cordial con.
gratulation, and requested him to make the same extensive to you, for the mag.
nificent work performed by both of you, I Wish now to reiterate to you expressly and please convey also to Mr. Shattuck my most heartfelt congratulation
for the good service which you have rendered in positive manner to the Republic
of Cuba.
The problem of the tariff immediately affects the sugar Industry and other
Industries and cultivations on whose products the duties may be raised, but the
one most definitely and fatally affected is really the Cuban nation.
And to any impartial observer, It is actually painful to see that for the sake
of the private economic interests of certain farmers who, as a matter of fact,
are not In need of such action, of the efforts made by Americans and Cubans in
the past to bring about the greatness and the progress of the young Republic
of Cuba are destroyed and rendered uselen. Unquestionably, La Immoderate
increase in the tariff duties, especially as applied to the main and almost sole
product of Cuban, namely, sugar, will bring as a consequence the destruction of
the present economic power of the nation and Its sudden drop from the level
which it now occupies to one far inferior, representing tho loss of all these years
of work, of efforts, and of progress, placing it almost in the same condition in
which it was when the Amtrlean Nation helped us to obtain freedom.
The damage that we would suffer is so unfounded and so enormous that jusfi.
fication for it could be found only In very grave purposes of international scope
obliging a powerful Republic to annihilate its small neighbor, and this could be
explained only after there had been any disloyalty or offense of some conse.
quenee, but not so long as there exists real affection, sincere adhesion, full
cooperation and the desire to show at all times and in all cases the extreme
and profound gratefulness which the Cuban people feel toward the American
Nation.
I note the details of your conversation with Senator Smoot and Mr. Love,
and I believe that any subsequent interviews that you may have with them are
sure to bring about good anad positive, results. I do agree that It is necessary
to present some plans for study and discussion with said gentlemen and other
leaders of the Interests which they represents but I believe also, as you do, that
it Is better to wait until they themselves Initiate steps in that direction.
I also wish to say that the Ideas expressed by Mr. Shattuck at the interview
which he held with Viriato Gutierrez seem to be well worth considering, espe.
cially in view of the diplomatic action being taken by my Government.
AU the suggestions contained in paragraphs marked numbers 1, 2, and 8 of
your letter appear to me as being worth while, and I believe that they should
be put into practice.
I favor: The appointment of the committee which you suggest and that there
be no limitation of private activities on the part of any persons who are Inter.
ested in the Industry and agriculture of Cuban. I believe that the more work
that is done the better It will be and that It would not be to our advantage to
break the enthusiasm of those who wish to help us.
Of course I believe that you as well as Mr. Shattuck should continue to act
along tho ame lines as up to the present and, in that connection, I wish to

state that yore action In the past has deserved my. full approval. You contact

with the ambassador will be of great help and, therefore, you should not
spare rany opportunities to be In contact with him. I hope to be informed as
soon as the opportunity.presents Itself regarding the new brief which you will

go
un

LOBBY INVESTIGATION

1579

present to-the Committee on Ways and Means, and regarding any exchanges
of deas In conversations held with beet-sugar Interests.
I aoppreclate the Information you gave me regarding the action of Mr. Pollack
and of Mr. Hutchinson.
And I do not wish to put an end to these lines without stating to you that I
feel very much satisfied With the manner in which you have responded to the
trust placed by us In you and other representatives of the Industrial and agricultural interests of Cuba.
It Is with pleasure that I again remain your attentive friend,
OxaARDO MACHADO.

Senator CAkAWAY. Much as I regret it, Mr. Lakin, we have got to

go on the floor now, and you will be here to-morrow at 10 o'clock.
(Thereupon, at 11.05 o'clock a. in., the hearing was adjourned
until to-morrow, December 13, 1029, at 10 o'clock a. m.)

Car
P
WaL
P.

stan,

hay
Mao
M
SI
Ur,

I
mysI
task.
You
A'
)'OU

svlc
Macit
your
Th
Infor.
la th
Tb
repr
perec
with,
and
expel
ever

LOBBY INVESTIGATION
PIDAY, DEOEMBER 18, 1929

UNITD STATES SENAT,

Su

0coMMr1IT

OF THE CoMMrr

ON THE JUDICIARY

WOaeiflJto*, . 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock
a. In., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway chairman, presiding.
Present: Senators Caraway (chairman), Robinson of Indiana, and
Walsh of Montana.
Present also: John G. Holland Esq., counsel to the committee.
Senator CaAwAY. Come around please, Mr. Lakin.
TEBTIXONY OF H. 0. LAKIN--Resumed
(The witness was previously duly sworn by Senator Caraway.)
Senator WALSh of Montana. Mr. Lakin, when you were on the
stand yesterday I had called your attention to a letter from the
President of Cuba to yourself, of date March 1, 1929, and I now
have a copy of a letter from the private secretary of President
Machado, Gutierrez Viriato.
Mr. LAKIN. Yes; they always attach their mother's name.
Senator WALSH of Montana (reading):
HABANA,

farVh 4, IM9.

Mr. HERBERT 0. LAxIN,

4.f1 Lexington Avenue, New York.
My DEAR MR. LAM. I reply to your kind letter of February 1 with which I
received copies of your brief and testimony before the Ways and Means
Committee.
I have made a careful study of your oral and written report and I consider
myself Justified In congratulating you very emphatically for your brilliant
task. You did the most and the best that could be done for Cuba at the time.
You should feel quite satisfied with your work.
As you rightly suppose, I read the important special report submitted by
you directly to the President. You are already aware of the pleasure with
which it was received and the favorable impression it made on President
Machado, by tie reply which he sent you.
It Is evident that you have made a very complete study of our problem and
your Judgment and observations deserve the greatest credit.
The final opinion of President Machado and my own, in view of all of the
Information on hand and of your sound recommendations, may be summarized
In the following words:
That the sugar Interests of Cuba-both American and native-should be
represented In Washington tid in New York by a commission of two or three
persons having full powers to carry on any kind of negotiations and to discuss
with the beet-sugar interest. territorial and Insular sugar people, refiners
and any other interested parties, any form of compromise that they deem
expedlent. This commission might consist of you and Mr. Shattuck (in whatever capacity he may have), is the representatives of the Association of
1581

1582

LOBBY INVESTIGATION

In whose representation, I am
(,Vai,
IsllsbeIl
American Sugar Interests
Informed, you are now acting mid, if you dOen it expedielnt, o01e otlher person
might be designated by the Amochilion of MilI Owners, consisting of a genuine
representative of Its Interests, who would Join yOU two geltienlell tnd form
with you itsingle body In order to act without dlisrepaices or differelnces of
opinion.
This commission would, therefore, be Independent of the Government of Cubs,
a0 in Wash.
but would maluttilhi dirtit lnd froeltnt contact with thinmlwsailr
ilgton an(1, at the lioniet It becile Iecessairy, reqtuest the oilthtl atillon of
President ,Maclimdo tobltai such legislation or measures of atgelleral char.
acter as iay lie eliIed oxpedlent.
Ilowover, the addlt!on to the commission of A delegate front the Assoclation
of Mi Owniers of Cilbti Is a matter oi which I wish to hear your private and
frank opinion, with the assurance that whatever you may say will be treated
as strictly confldebtial.
We believe that you and Mr. Shattuck are proceeding so well that mally of
us among the mill owners of Juba ire not inclined to recommend the mesigna.
the manner above stated, If youlr opinionco
tion of another commissioner, even lit
Is not altogether favorable thereto.
Of course, that does not mean that the Government will not continueathamnelsN-to act In tie hest way possible under tile
through diplomatic
circumstances,
obstacle for tie American Chamber of Commerce of Ha.
Nor should It lie till
banlt as well as other Americans Interested In Cuba to adopt such measures
and take sush action as they consider beneflchul i defense of Cuba.
Front another point of view, It affons me pleasure to inform YOU that I
spoke to Mr. Edward (?) 11. Slmttuck during his stay in Habana und that his
Ideas on itpossible settlement of the sugar situation of Cuba, seemtql to me
worthy of the greatest consideration.
His ideas as expressed im-ay beunufmrized as follows:
To increase the tariff duty of tile Upilted States to 3 cents per pound. To
amend tile reciprocity treaty increasing the differential to 50 per cent, which
would mean a duty of 1.5O cents per pouod of sugar.
To limit the amount of sugar that Cuba should ship (to the United States)
under these conditions to 2,500,000 tous.
To stipulate a proportionate annual increase according to the consumption
and the proportion in which the American market Is supplied by the five
sources--namely, United States, Philippines. Hawaii, Porto Itico, and Cuba.
To limit the imports from the Philippines to 00,000 tons.
To prevent cane from Santo Domingo entering Porto Rico its under present
conditions.
In tills way, the United Slates having to acquire itcertain amount of sugar
paying full duty in order to comlielote its norml requirements (since the
quantity available under the above conditions from privileged sources would
not cover the requirements of the market), the differential would actusIly
redound to fhe benetlt of the Cutban producer who, as a matter of fact, would
be In the same situation as Cuba wias when it did not produce sufficient to
supply the rpquirements of the American consumers.
This plan, naturally, would require tariff legislation by the American
Congress and diplomatic action between tile United States mind Cuba in order
the present reciprocity treaty under which, as you
to accomplish the change iln
know, Cuban sugar enjoys only a 20 per cent iarlff preferential.
Those Ideais seem to me as a whole to be founded oil good logic and Justice
and to lie easy to carry into practice, provided, of course, that they meet
with the approvIA of the MArelean beet sugar anid oflinling iterests.
I believe that the" deserve much credit and that we should encouralgo them
by every possible mnis. Their accomplishment would lie a lite lilece of work
for you and for Mr. Shattuck.
In this collection, it may lie well for ne to remhid you that the COuban
Government has already taken diplomatic steps to formally propose itinodi.
location of the present reciprocity treaty, for the purpose, especially, of
favoring a certain amtoulnt of Cuban sugar on enterilg into Amercanti territory.
Tho pmn could he comphtted-from tile Cuban standpolint-h. tile enactment by- Cuba of an Internal law regulating siinteiits of silgar from uba
which may enter the United Statem unler the differential, it proporlolate
amounts (among Cuban producers). 'rit-s wold ho very easy to accomplish.
There wo i -leverlie any fear of mill of ti1e Cuban .sugar 1Filliig upon the
American market within tie short period of four or five illontlis while the
crop lasts, producing a consequent demoralization of the market.

the
wiu.
it
these
probt
meat
i
it he

of t

M
B

I
Of
Mt
just
repo!
Its c
and
then
it col
shat
Instr

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M
As
What
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and
G
he P
His
aill

Chi
S
her

LOBBY INVESTIGATION

1583

I have really extended myself In this letter more than I should have, but
the points which I touch upon have obliged me to do so, although against my
It will please me very much to continue corresponding with you on all
these matters it order to keel) myself posted on all of the now phases of the
problem and, ott my part, I slall continue to write you on any new developnents or Information that may bo of Interest or useful to you.
I shall be obliged if you will also kcp Mr. Shattuck informed of all this
if he is tO continue his present relationship with you working for Cuba.
I now close, remaining,
Cordially your friend,
VaxUA~O OUTaIZz.

It would appear from this letter that Mr. Gutierrez is himself one
of the mill owners of Cuba.
Mr. LARIN. He was the son-in-law of a large mill owner, and, of
course, he is in that way interested.
Senator WALsi of Montana. I have now before me your reply to
a letter of President Machado, of date March 1, in the nature of a
report, dated March 15, 1929, in which you say:
I can not express my gratitude for your letter of March 1. Your approval
of my activities on behalf of Cuba Is the greatest reward that I could
receive.
Much has been done since last I wrote you. Some of it has been made
known to you by Viriato as a result of his conference with Shattuck. I have
Just now written In lEnglIsh a long letter to Viriato. It contains a complete
report of our activities to this date, and I have asked him to communicate
its contents to you because I find it difficult to express myself in Spanish.
I have communicated your expressions of satisfaction to Mr. Shattuck. He
and I hope to go to Cuba within the next two or three weeks and will both
then avail ourselves of the opportunity of thanking you In person if you find
it convenient to receive us.
I have not yet had a second Interview with Senator Smoot. Both he and
Shattuck have had conferences on this subject with President Hoover who ha.
Instructed them to confer together. Mr. Shattuck does not think that it is
yet the right time for the conference. Probably .1 will be admitted to the
conference that takes place.

What conference was that?

Mr LAIM;I. That was, I think, after the scheme for the sliding
scale had been thought of.
Senator IV-%,six of Montana. Who were to be the conferees?
Mr. LAIUN. Smoot and Shattuck.
Senator WALsH of Montana (reading):
I have obeyed your instructions to work in cooperation with your ambassador.
As he Is already on his way to Cuba he will be able to Inform you fully of
what we are doing. I desire to take this opportunity to express my apprecia.
lon and gratitude to hin for his courtesy to Shattuck and myself at all times
and my congratulation for his effective work on behalf of Cuba In this matter.
General Crowder has also beet of special value to Cuba, and tt my suggestion
he plans to go to Washington on MAtrli 18 and remain there for several weeks.
His position itt all branches 'of the Government Is so high and his zeal and
ability so great that lie will be able to accomplish much.

Did General Crowder come here?

Mr. LAKU-. He Can11to hert'; yes.
Senator V,Lsit of Montana. And remained for several weeks?
M[r. LARIN. No. He cante off and on for several weeks. lie would
be here two or three days or perhaps a week and then go back to
Chicago to attend his law busine..

Senator WALSH of Montan.

here?

Then he would return here.

What w1.S Ile doing while he was

1584

LOBBY INVESTIGATION

Mr. LAKWN. Well, he was, of course, first of all, conferring with

us. He was a very intimate friend of some of the more important
beet-sugar people and he talked with them frequently, and being
friends of theirs it was easier for him--well, easier for negotiations
to go on.
AenatOri WALSH of Montana (reading):
Three months ago when I began this labor I had little hope of accomplishing
anything. I now have some coosidorable hope that the outcome will not be
disad tantageous to Cuba. Whether any benefits that may come will be due
to tay effort is not Important, but I do feel that I was able to accomplish the
important feat of obtaining the undivided services of Mr. Shattuck. I.con.
nection with President Hoover is our strongest weapon, except your efforts and
those of your ambassador.
Your letter has inspired me with further zeal to continue the work for this
cause until the legislative battle in Washington is finished.

Aug

M
m

M
S

work
Th
need

You speak here of getting the undivided services of Mr. Shat.

tuck. This is dated March 18. Mr. Shattuck has devoted himself
exclusively to this since then?

self

think he has spent about two days a week-three days here and
the rest of the time in New York, but much of his time in New York
was also taken up with the matter.
Senator WALsH of Montana. Then I have your letter in answer
to a rather lengthy letter of Mr. Gutierrez, of date March 15, 1929,

S8
ban
M
hay

Mr. LAKIN. Almost exclusively; yes, sir.

Senator WALsH of Montana. Just quit his law business?
Mr. LAKIN. Well, his partners have carried on his business. I

from which I quote as follows:

Things are moving in Washington with considerable speed. I have organized

a provisional committee of three, consisting of George A. Zubriskle, Shattuck,

and myself. Zabriskie and Shattuck are, of course, as near to President Hoover
as you are to President Machado.

How did Zabriskie come to be so close to President Hoovert

Mr. LAKIN. I think he was in the Food Administration, some way

or other.
Senator WALsn of Montana. He was President of the Sugar
Equalization Board, too, was he not?
Mr. LARIN. Oh, yes; that was it. Yes, sir. I think I ought to
saSenator WAT.si of Montana. You thought that that made them
as close to President Hoover as a member of the Cuban cabinet would
be to the President of Cuba!
Mr. LciuN. Well, I think I ought to say in justice to them that
that is an assumption of mine. I want to take full responsibility
for that, because they never told me that. I do not want to put
anything on anybody except myself.
Senator CAIRAWAY. You( doubtle. read Mr. Shattuck's interview
yesterday, where he is parting with you?
Mr. LAKIN. A release was shown to me last night. I have not
seen it in the papers.
Senator CARAVAY. lirell, it is in there.

Senator WAtsh of Montana (reading) :

Zabriskie will do no actual work, mut his
Hoover imo most valuable.

vice andIhis association with

Apparently, ho was simply to lend his name-be decorative, in

a way?

mor
to C
t1
was

ban
in
the

tern

8
WO

to 1
S
busi
her
T

and
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wr

thin

LOBBY INVESTIGATION

'1585

Mr. LAKIN. No. He was made president of this United States

Sugar Association a number of years ago because of his knowledge
of the business, and everybody liked him.
Senator WALSir of Montana. What did he get out of thisI
Mr. LAKIN. Nothing.
Senator WALsH of Montana. Justprobono publico?
Mr. LAKIN. Yes; and that is literally true.
Senator WAmls of Montana (reading):
Shattuck is i lawyer by profession, and, of course, he can not afford to
work without compensation. * * *
This will not be it sufficient amount of money. I anticipate that we shall
ned altogether about $150,000.

How did it come about that your original budget did not cover the
case?
Mr. LAKIN. Well, after I persuaded Mr. Shattuck to divote him.
self almot exclusively to this.I felt that I might have to pay him
more; then I expected the puicity to cost more than it turned out
to cost.

Senator CARAWAY. Let me ask you a question right there. What

was the bank in Montreal that contributed?
Mr. LAKIN. The Royal Bank.
Senator CARAWAY. Is that a Dominion bank or is it a commercial
bank?
Mr. LAKIN. Well, it is not a Government bank. I think they
have a banking law just as we have in this country, and this is a
bank organized under the banking law.
Senator WALsH of Montana. On March 15 you anticipated that
in view of the fact that Shattuck was to devote his whole time to
the business, you would need at least $150,000 to cover your work?
Mr. LAKIN. Yes; that was one of the reasons.
Senator WAsit of Montana. At that time' how long did you con.
template Shattuck was to devote himself to this work
Mr. LAKIN. Until the matter was over.
Senator WALSH of Montana. And when did you anticipate it
would be over?
Mr. LAKIN. Well, by that time I had begun to think it was going
to be done September. I did not expect it to last this long.
Senator WALsi of Montana. So that by the first of March you
figured that Shattuck would be devoting Mimself exclusively to fhis
business until perhaps the first of September or the last of Septem-

ber?

Mr. LAKIN. Yes; somewhere along there.

Senator VALsH of Montana. You continue:

The chief item of expense Arill be compensation to Shattuck's law firm. He

and his partner, Mr. Francis, a former Member of Congress, are devoting at
least 00 per cent of their time to this subject, and they have already been

working three months and will probably devote three months more before this
work Is finished. In view of Shattuck's prominence and his intimacy with
President Hoover, I expect that we shall pay Shattuck and his partner something like $759,000.

hear Mr. Shattuck's testimony that he expects to get

Did you
$26)0001
Mr. LAKIN. I heard that.
Senator WALSH of Montana. And possibly more?
Mr. LARI. Yes.

1586

LOBBY INVESTIGATION

Senator WALSH of Montana. You found his intimacy with Presi.

dent Hoover an element which ought to enter into the compensation
that he was to get
an element in my mind on that.
Senator WmsH of Montana. That is what you say-

ar
Incre
can
T
wha
stm4

In view of Shattuck's prominence and his intimacy with President Hoover, I

Ieco

Mr.

LAKIN.

No; I don't think so. I do not think that is really

expect-

Mr. LAKIN. I have got to allow that letter to stand for whatever
anybody wants to construe it as. I must admit that.
Senator WALSH of Montana. You were paying for Shattuck's

intimacy with President Hooverl You expected to pay for it?

Mr. LAWN. Well, I did not look at it that way at al.
Senator WALSH of Montana. Well, you have said so, haven't
you?
Mr. LAKN. Well, it is there.
Senator WALsm of Montana. Mr, Francis at that time was devote.
ing90 per cent of his time to this business also?
Mr. LAWN. Yes, sir.
Senator WALSH of Montana. He was a former Member of Con.

that

MAE

Ace
bilh

r. LAKIN. Yes.

Senator WALSH of Montana. From what State

Mr. LAKN. From New York.

Senator WALsH of Montana. Was he down here in Washington

the

the

also

No

Senator WALsH of Montana. Do you remember what he came fort

What was the occasion of his coming?
Mr. LAiN. I think he came down in connection with the tariff
hearings. He was the person who spent most of his time writing the
brief for the Ways and Means Committee.
Senator WALsH of Montana. Well, what was Shattuck doing dur.

cou
sub,
sho

Mr. LAKIN. I think he came down once or twice only.

did

ing this time?

Mr. L.ucix. Well, he was working on the brief also, but Francis,
I think, devoted all of his time to that brief, and also when Shat.
tuck went to Miami and Cuba,- Francis prepared a supplemental
brief which the Ways and Means Committee allowed to be filed.

Senator WAI.sn of Montana. }Put you can not give us any more

definite information about what lie was doing here in Washington?

Mr. LAnik. No. I saw him here only twice.
Senator WALSH of Montana. I would think there must have been
some special occasion for his being here, and that you would recall
it, because it was not a very frequent occurrence.
Mr. LAIN. He came down for the hearings.
Senator W%,Ts of Montan. Did lie appear before the Ways and
Means Committee?
Mr. LAWN. No; but he was there with me. They allowed only one
person to appear for all the Cuban interests, and I was the person
who appeared.
Senator WIALS of Montana (reading):
With Members of the House of Representatives we are not suggesting any
formal plan whatsoever. We are attempting to create an atmosphere of doubt
in the minds of Congressmen in order that their recommendation shall be either

gm

ya
whi

T
Into

LOBBY INVESTIGATION

1587

a reduction In the duty or leaving the duty at Its present rate or making any

increase as small as possible. There are political reasons for this plan which I

can not appropriately put Into a letter.

That is, you were not going to tell the House of Representatives
what the plan. is, but, you say, "We are attempting to create an
atmosphere of doubt in the minds of Congressmen in order that their
recommendation shall be," and so on. I wish you would explain
that to us, Mr. Lakin. I am not sure that I have a clear understanding of what that means.
Mr. LARIN. Well, I do not know where to begin exactly.
Senator WALSH of Montana. What is that
Mr. LAWIN. I do not know where to begin. I do not want to be
too long in my explanation.
Senator WAwH of Montana. Well, make it as brief as you can.
Mr. LARIN. We were confronted with the situation that the chairman of the subcommittee on sugar was directly interested in sugar.
According to my understanding the custom in connection with tariff
bills in the Ways and Means domittee is that, after the hearings
are over, the Republican majority divides up the different schedules
in the bill among themselves, into subcommittees. One of these subcotnm,,a tees was on sugar, and the chairman of that committee was
Corieressman Timberlake, who is himself a beet producer. Now,
according to what I supposed was the custom, the chairman is given
the Tesponsibility of framing the schedule that relates to that, and, in
the absence of any opposition from any source, the chairman's recommendation, when no reported to the full committee, is accepted.
Now it seemed to me nece .ry and important and my duty, if I
could, that other members of the committee who were not on the
subcommittee, should be given arguments which, in their minds,
should raise a doubt as to who'her it was advisable that the tariff
should be increased.
Senator WALSH of Montana. Yes; but your letter is quite to the
contrary of what you now say because your letter says that you
did not propose to disclose to the Members of Congress what your
plans were.
Mr. LAKIN. No; I do not say that at all.
Senator WALsH of Montana (reading):

With Members of the House of Representatives we are not suggesting any

formal plan whatsoever.

Mr. LAIXU. That is right.

Senator WALSH of Montana (reading):

We are attempting to create an atmosphere of doubt in the minds of Con.

gresmen.

Mr. LAMN. Exactly.

Senator WALSH of Montana. You were not proposing any plan, but
you were simply creating doubt in their minds with respect to any
recommendation that Timberlake might make?
Mr. LARKIN. Yes; so that they would have some doubts as to
whether there ought to be any increase in the duty.
Senator WALsH of Montana. But you say:

There are political reasons for this plan which I can not appropriately put

into a letter.

1588

LOBBY INVESTIGATION

Now, you had a plan that you would forget all about Timberlake
as far as arguments were concerned but you were to present your
arguments to the other members of Congress and other members of

the committee, and you do not elaborate, but you say "1There are
political reasons for this plan." That is, the plan of nW putting any
formal plan before the -Members of Congress. What were those

political reasons.
Mr. LARJN. Well, I do not think that is what I meant by "the
flan." I meant-well, I guess I do, too. If you will repeat thatgot a little confused there.
enator WALSH of Montana. Xou are speaking about a plan
formal
put any
going
and you say in the first place you are notyou
to content
aretogoimg
plan before the Members of the House;
yourself with arousing doubt in their minds touching any recom.
mendation which Timberlake might made, and then you say:

thu

ha
thr

There are political reasons for this plan which I can not appropriately put

into a letter.

Mr. LARIN. I am afraid I do not remember what that is about.

Senator WALSH of Montana. You do not know what it means
yourselfI
Mr. LAWN. I am afraid not.
Senator WALsH of Montana. Well, it suggests something sinister,
doesn't it?
Mr. LAKIN. I don't think so; no, sir.
Senator WALSH of Montana. You are writing to a man down in
Cuba who is deeply interested in your work here, a member of the
cabinet, one of the men responsible for your employment as agent,
and there are political reasons why you should not tell him some.
thing about what you are doing or going to doI
Mr. LAKIN. Well, I can't remember wat it was about.
Senator WALSH of Montana. Can you now think of any reason
why you should not tell this man down in Cuba, who was really
your supporter, your employerMr. LAKmi (interposing). No; he was not my employer.
Senator WALSH o Montana. You were employed bj the Govern.
mert of Cuba, were you not?
Mr. LAKIN. No, sir.I was asked by the Government of Cuba to
make sure that they were well represented here, while I was repre.
senting the American interests.
Senator WALSH of Montana. Well, you were reporting to the
President of Cuba?
Mr. LAxiN. Yes, sir.
Senator WALSH of Montana. And getting communications from
the Governor of Cuba about this matter?
Mr. LAKXN. Yes, sir.

Senator WAsH of Montana. And from his secretary and a mem.

ber of his cabinet?
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. I thought we had it perfectly clear
a few days ago that you were really a representative of the Cuban
Government?
Mr. LAKIN. Oh, no; not in any official sense whatsoever.

the
tat
5th

him

ON

in.

toll
at

or

hit
do,
tio

19
lat
con

on,

LOBBY INVESTIGATION

1589

Senator W ALSH of Montana, Well, I will have to unlearn everything I have learned about it then.
Senator CARAWAY. Didn't you make that declaration, that you
were in effect representing the Cuban Government?
Mr. LAKiN. In effect; yes.

Senator CARAWAY. Well, in the direct words you said it?

Mr. LAiiN. But not as an employee.

Senator WALSH of Montana. In effect, you were representing the

Cuban Goyernment?
Mr. LAVN. I think that is true; yes.
Senator WALwh of Montana. Now, there is some reason why you

should not tell the Cuban Government about.some plan that you
have, and there are political reasons for it.
Mr. LAxiN. Well, I might be able to think of it before I get
through. I shall try to.
Senator WALSH of Montana (reading):

It Is by no menns certain that he (Timberlake) will succeed even in limiting

the Philippines. He and Senator Smoot know the opposition of the new Secretary of State, Mr. Stimson, to this matter. I have known StImson intimately
for nearly 80 rears. I have worked with him In organizations where our con.
tact was very close. Furthermore, his wife and my wife are cousins, so I know
atimson socially. Naturally, I expect to do what I can in arguing with

him. * * 0
(8) General Crowder, at my request, has agreed to remain in Washington for
two or three months. Of course, you know that his position In Washington Is
one of the highest. He Is received everywhere.

Now, what could General Crowder possibly be doing here in Washington two or three months?
Mr. LAKIN. Why, he could see Congressmen.
Senator CARAWAY. May I ask you a question? You know you
told us when Crowder's name first came in that Crowder was here

at the request of the Cuban Government and not yours.

Mr. LAKIN. That is correct.
Senator CARAWAY. Now, you say here:

General Crowder, at my request, has agreed to remain in Washington for two

or three months.

Mr. LARiN. Yes.

Senator CARAWAY. Now, what is the explanation of the two?

Mr. LAWN. Because President Machado asked me to make use of

his services, and I consented and asked General Crowder to come
down here and help me.
Senator WALsH of Montana. In view of the doubt you threw out
by the statement you made just a little while ago, concerning relations between yourself and the Cuban Government, X recall Your
attention to your letter t6 President Machado, of date January 26,
1929, in which you say:
I suppose that the work which Is specifically assigned to me has now been
completed, except I also suppose that If Senator Smoot or any of the Remo.
latheros should wish to confer with me you would desire that I hold such
conferences, and that I report the results to you. This I shal be glad to do
If it Is your wish.

Mr. LAmN. Yes; and that work has simply to convey a message to
Senator Smoot, which I testified to as having with Senator Smoot
and Mr. Love.

1590

LOBBY INVESTfOATION

(At this point Senator Robinson of Indiana entered the hearing

room.)

Seantor WAsH of Montana. In the same letter, you continue:

He has prepared a strong argument on the Philippines matter, He had a

translation made which the ambassador has sent to President Machado. I
hope you will see that memorandum and discuss it with President Machado,
and as a .tpeclal favor to me, I wish you would ask President Machado to
write a personal letter to General Crowder, congratulating him In the memo.
randum.
Of course you know Crowder, and a little praise of this sort will do a lot of
good and make him enthusiastic.

about this plan

You were not willing to tell the secretary in a letterthe
ambassador.
to
orally
it
conveyed
of yours, but apparently you
Is that correctI
Mr. LAmN. I don't know whether I did or not.
Senator WALsil of Montana. You were keeping him fully informed
to assume
seems reasonable
so, itunwilling
to
of what you were doing, and ifquite
a letterthat
to put into
you told him what you were
.
.
the secretary.
probably
Mr. LAmu. I think now, that I think this thing over,
..
plan.
scale
sliding
this
was
to
referred
I
what
political reasons
Senator WALSa of Montana. Well, what were the
in Cuba?
down
scale,
sliding
the
why you could not tell all about
it did
because
paper,
on
it
put
to
want
not
Mr. LARIN. Well, I did
not seem advisable at that time that the sliding scale should be
projected into any controversy until it had been studied sufficiently
that it could be warmly supported if occasion should arise. I do not
think there was anything about that.
Senator WALsH of Montana. But, what were the political reasons
why you should not tell about it?
Mr. LA=N. Well, the political reasons were that we did not want
to g t this thing discussed until it was in such shape that it could be
specifically announced. It was a provisional and incomplete plan at
that time.
Senator WALSH of Montana (reading):
Shattuck and I are both in constant touch with the ambassador and keep

him. fully Informed of what we are doing, but naturally he is not always at
liberty to tell us what he is doing.

will

felt
ioe

wer
8'
you
M
ie
te'
toey

91

Se
Se
the
tell
mat
that
info
M

yu
M
log

toge
for

Why not?
Mr. LAww. Well, 1 had no official connection with the Cuban
Government. He could not tell me what he was doing at the State
Department. I would have considered that very improper if he had.
I knew that at that time he was having some com-miications with
the State Department but what they were, I did not know.
of !ontana. Although you were working for the
Senator W uAw
same end, you thought naturally he would not be quite willing to
tell you what he was doing?
Mr. LAxrn. I don't thin he ought to, and I suppose he did not.
Senator WALsH of Montana (reading):

M
S
time

I do not expect hint to do so, because his work Is confidential, for th'e benefit
of his government. Nevertheless, as it Is, he does inform us of everything that
it is proper for him to tell. The plan is an attempt to put in particular form

A
This

some general principles with which we know President Hoover Is in s. 'mpathY

Our knowledge of the desire of President Hoover Is accurate, but naturally the
sources of our knowledge should not be stated in writing.

Ho,
Lak

whii
yout

for

LOBBY INVESTIOATIO9

1591

Now, that is a significant kind of a statement to make in a letter.

will you explain that? In the first place:
Our knowledge of the desire of President Hoover is accurate.

What was the desire of the President in the matter, with respect
to which you had accurate information?
Mr. LARIN. I think that was probably an overstatement, but I
felt that the sliding scale -plan on which Mr. Shattuck and Mr.
Saroot were working was one which if it could be worked out, would
meet with the President's approval, and I knew of course that they
were working on that.
Senator W.%Lstr of Montana. You told this Cuban official that
you have accurate information about the President's desire, and
what I wanteA to get was the source of your information.
Mr. LAIN. The source of the information was merely that they
were working together and that one or the other frequently went
to the White House. Of course, I haven't the slightest idea whether
they saw the President or saw his secretary.
Senator WALSH of Montana. But, Mr. Lakin, you have some kind
of regard for your word, haven't you?
31r. LAKiN. Yes.

Senator WALSn of MWntana. However feeble it aight be. You

told this man down there that you had accurate information about
the desire of the President with respect to this. Now, all you "can
tell us about it is that Shattuck and Smoot were working on this
matter, and occasionally they went to the White House, and upon
that basis you told this man down in Cuba that you have accurate
information about the desire of the President.
Mr. LAKIM. I think that was accurate enough.
Senator WALSH of Montana. The sources of the knowledge that
you had of the desire of the President you thought ought not to be
put in writing. What was the source of your information?
Mr. LARIN. The source of the information was the fact that these
people were working together.
Senator WALsH of Montana. Well, what is the objection to writlog down to a.Cuban official that Shattuck and Smoot are working
together on this matter and they frequently go to the White House
for conferences with the President about the matter?
Mr. LAKiN. There might not have been any objection.
Senator WALSH of Montana. But you had some objection at the
time.
Mr. LAKIN. Well, I thought that was enough, because the White

House was involved in it.

Senator WVALS1 of Montana. Of course. It suggests to us, Mr.
Lakin, that this is not correct-either that you state there a fact
which was not the fact at all, or else that you are not candid in
your testimony.
Mr. LAKiW. Well, I am perfectly candid.
Senator WALSH of Montana (reading) :
Naturally the sources of our knowledge should not be stated fitwriting.
This particular matter of itplan for helping hithl the Iweta ntud Cuba is
tflretly one which we must leave to Mr. Hhattlckg dlIeretlo. T0he reason

for that you, of course, understand.

7'8214.-0-PT 4---7

1592

LOBBY INVESTIGATION

That is another thing that troubles us, Mr. Lakin. You have got
to leave it to Mr. Shattuck's discretion, and the reason for that you
of course understand.
Mr. LAKIN. Yes. I had no connection with Senator Smoot of
any close nature. I never went to see Senator Smoot again after
my one interview with him.
Senator WALsh of Montana (reading):

Sa

I can only say that in my opinion the best thing that I have done for Cubs

in this matter was to obtain the undivided services and attention of Mr.
Shattuck and I know that syou will agree with me arid hope that all other
Cubans will be satisfied to accept your opinion that we must not attempt to
dictate to Mr. Shattuck how he shall operate.

Now that seems a rather remarkable kind of a statement to make.

You employ Mr. Shattuck as your agent and representative, and
not to
then you ate not to consult with him, not to advise him,
thing.
the
handle
him
let
but
all,
at
him
to
make any suggestions
to
come
wise
the
was
that
Just explain to us why you felt that
take.
Mr. LAKIN. Why, I don't see why it is not. I don't see what ex.
planation is necessary.
Senator WALsH of Montana. Why not leave it to your discretion
Mr. LAWN. Well, why to mine?
Senator WALSH of Montana. No reason that I can see why you
should trust everything to Mr. Shattuck and not oven criticize or
he does, you sanction.
approve or anything else but whatever
when it came
Mr. LAKIN. Yes. Well, I knew perfectly well that
to a definite schedule which might be worked out between these two
gentlemen, it would be submitted to me. I didn't see any reason
why I should not have absolute faith in him.
Senator CmAwAy. Is there any reason why ho should not tell you
what he was doing?
Mr. LAKN. None at all.
Senator CAmAWAY. Was there any reason why you should not tell
Cuba what he was doingI
these people inNo.
Mr. LAJON.
Senator CARAWAy. Then why this telling them they will just have
to keep their hands in their .pockets and their eyes shut and let
Shattuck run it?
your mind.
Mr. LAWN. I do not see what is in
Senator CARAWAY. No. The trouble is we can not find out what is
in yours by what you say.
Senator WALSH of Montana. Why could yot not say to Mr.
Gutierrez: ."Mr. Shattuck is handling this thing; he is a man of good
judgment and wisdom, but if you have any suggestions to make.with
respect to the matter I will be glad to communeate them to Mr Shat.
tuck, but I think we had better trust to his judgment"? But you
did not do that. You wrote him not to say anything at all about
this; leave the whole thing to Shattuck; do not make any suggestions
at all.
Senator RoBINs0 of Indiana. You say further in the same com.
We must not attempt to dictate to Afr. Shattuck."
munication: 1.
Who would dictate to him if his employers could not?
Mr. LAKrx. Why, it is n't necessary to.

re

US
l

P1

LOBBY INVESTIGATION

1593

Senator CARAWAY. I wonder if the beginning of the next paragraph doesn't explain a lot?
Senator WALSH of Montana. Your letter of March 15 says:
I have obeyed your instructions to work In cooperation with your ambassador.

Excuse me. Your letter to the President says:

I have obeyed your instructions to work it cooperation with your am.
bassador.

That would seem you were representing the Cuban Government,

would it not?
Mr. LAxIN. Why, I don't think so, necessarily.
Senator VALSH of Montana. Your letter to Gutierrez continues:
5,00 wb'ch I have secured. I do not know how
We shall need more than
much more money I can get in Now York. I think that we will nieed $150.000
in all. Shattuck tells me that you in Cuba have been anxious to participate
in lte supplying of funds. That is a matter which I should like to discuss
with you when I see you,
I have recelved a wonderful letter from President Machado to which I am
replying briefly because it is difficult for me to put a letter into Spanish and I
H.Vv~iiie that you will communicate with him the entire contents of this letter.

Senator CARAWAY. I think that will supply his reticence.

Just before you pa. that: The significance of your statement that

lie must leave everything to Shattuck, and then in the next paragaph you say you are going to need more than $85,000 and you don't
Know how much you are going to need-is there any relation between
those two ideas?
Mr. LAKIx. No, sir.
Senator CARAWAY. Well, anyway, they stand that way, and every-

body will be permitted of course to draw their own intferenmee?

Mr. LAKIN. Yes.

Senator WAuii of Montana. I continue the letter to Gutierrez:

I have some doubt about the effectiveness of the American Chamber of
Commerce. This matter is not one which can be handled as a "lobbying"
proposition. It is the custom of the beet interests to maintain a lobby in
Washington.

You say this matter is not one which can be handled as a lobbying
proposition. Well, were you not handling it as such?

Mr. LAnI.v. I did not consider that it was a lobbying proposition

the way I was handling it, no, sir.

Senator WI.%Lsi of Montana. Then you continue:

It i.e the custom of the beet interests to minlntain a lobby In Washington.

Well, what was the difference between what you were doing and

what the beet-si, ar people were doing?

Mr. LAnIx. INe had ho permanent organization here. All that
we did was to goSenator WIALS1 of Montana (interposing). You had a perma-

nent organization in New York. did you not?

Mr. LAKIX. Yes.

Senator WAI.Sl of Montana. So that lobbying you would consider would be work that is done at headquarters in Washington
instead of Now York?
Mr.

LAXK..

Well, the headquarters of the United States Sugar

Association in New York was a statistical organization, as far as

1594

LOBBY INVESTIGATION

I know. I had no connection with it and don't know anything

about it.
Senator RonmisoN of Indiana. What did you call this organiza.
tion down here whioh was conducted by Gladys Moon Jones-f
Mr. LAKXIN. That is a publicity organization.
Senator RomNsoN of Indiana. Sending people up on the hill to
interview members of Congress?

me

Mr. LAKIN. Yes. *

Senator RomNsoN of Indiana. Reports made of that kind back

and forth to you?
Mr. LAKIN. Yes.

Senator Rotuxsox of Indiana. "We saw so and so up on the

hillMr.
yesterday" and interviewed Members of Congress.
LAKIN. Yes.

Senator RoBi.NsoN of Indiana. Do you call that publicity?

Mr. LAKIN. That is publicity.
Senator RoBINsoN of Indiana. Vell, where was the pubhicivl
It was private, wasn't it? Was not that private information sup.
plied to you or Mr. Shattuck?
Mr. LAKix. No. They published what they got.
Senator RoBINsox of Indiana. No. They did not publish that
they had people up on the hill interviewing prominent Members of
Congress, did they?
Mr. LAKIN. Well, it must follow, when they gave out interviews,
that they had been to them..
Senator RoBINsox of Indiana. They did not give out interviews.
They sent that to you or Mr. Shattuck privately.
Mr. LAKIN. No. They gave out interviews.
Senator ROBINSON of Inliana. That they were working on certain
Members of Congress?
Mr. LAIIN. Why, certainly.
Senator RoBINSOx of Indiana. Why, that was never published.
That is in your private correspondence.
Mr. LAKIN. The Members of Congress even sent for them and
offered them interviews.
Senator ROBINSON of Indiana. That is the last thing in the world
you' would want to put in a letter. You don't call that lobbying
at all I
Mr.

LAKIN:

Well, I do not call it lobbying.

LArIN.

fi

an

I do not see why an

American citizen hasn't a right to go and speak to any Congressman

he likes.
Senator CARAWAY. Even though he represents a foreign govern.
ment and conceals that fact?
Mr. LAKtIZ. I did not conceal the fact at any time. There is no
person to whom I did not state that I represented the entire Cuban
sugar interests.
Senator OAEAWAY Why you denied iUhere a minute ago, until we
threatened to go back ani get your testimony, and then you com.
menced to admit it.
Mr.

of

Well, I still do not see why an American citizen situ.

ated the way I was has not the right to speak to any Congressman
he likes or to write him.
Senator CAnAwAW. And to appeal to any foreign government to
bring pressure on your own Government-stir up al the enemies

In
lou
do

LOBBY INVESTIGATION

1595

you can for your Government, so that it will put a dollar in your
pocket?
Mr. LAKIN. It is not a dollar in my pocket at all.
Senator CARAWAY. It is not?
Mr. LAKIN. My interest in the tariff was very small.
Senator CARAWAY. How much is it? How much is your investment there?
Mr. LAKIN. How mitch is my investment in the sugar business?
Senator CARAWAY. Yes.
7r. LAKxi. About $14,000,000.
M
Senator CARAWAY. What would the effect of a high tarff be on
that?
Mr. LAKIN. Very small in proportion to the rest of the interest
in our country. The bulk of the income in our country is made out
of the railroad business.
Senator CARAWAY. And the railroads make it out of sugar?
Mr. LARix. The railroad has to run whether the sugar business
is prosperous or not.
Senator CARAWAY. And if it don't make something on the haul
it is not profitable, is it .
Mr. LAKIN. Well, sugar is made just the same.
Senator CARAWAY. WVell, you are not interested in the tariff, then,
from your present statement?
Mr LAKIN. I don't say that.
Senatornothing.
CARAWAY. Why, you said it was not anything to you, or
scarcely
Mr. L
TAin
ell, it was not enough to come down here
and do
any work on it.
Senator CARAWAY. What was it you came down here for?
Mr. LAKIN. Because the Cuban people thought that I might be
able to save them from disaster.
Senator CARAWAY. Just a pure work of love?

r. LAKIN. Yes.
Senator CAnAWAY. Stir up enemies against your own country in
order to favor some foreign country just out of preference for that
country?
I have admitted, sir, that that was very poor judgment
Mr. LA1{i(.
on my part.
it. Senator CARAWAY. You don't have to admit it. Everybody knows
Senator WAl1h of Montana. You continue in this letter:
I think tht eventually the Cuban Interests should have a permanent office

In Wttshnugton but the fact that Cuba Is a foreign country makes the old-

fkAhioned lobbying dangeroils for It to undertake. Moreover, lobbying is no

longer popular It. Washington, and I amn informed that the beet interests
do not now find that their old.ft'hlioned methods of lobbying are successful
and tlt
they would be In disfavor in 1yashington if they d!d not have

8enntior $moot their champion.,

You find a substantial difference then between your operations

and the operations of the beet.sugar people? Is that correct?
Mr. LAKIX. Well, I thought it was different; yes.
Senator WA1DsII of Montana. And the difference was that they
had headquarters or an office in Washington and you (lid not?
Mr. I,.%1lN. Well, they had it perpnanently, and we were here to
defend ourselves against an increase in the tariff.

1596

LOBBY INVESTIGATIONS

Senator WALsi of Montana. And they were here to defend them.

selves against a lowering of the tariff, Were they not?
Mr. LAKIs. They were here to try to get a higher tariff.
Senator WALSH of Montana. To get a higher tariff to. prevent
.themselves being put out of business by you? That is their claim,
isn't it?
1011
Mr. LAM.%. Yes; that is their claim.
to get a
trying
here
were
you
And
Montana.
of
VALSji
Senator
lower tariff or to prevent it from being raised and they were here for
the purpose of getting a higher tariff or to prevent it front being
lowered?Vnot
Mr. LAKIN. Well, I want to make it clear that I do not imply any
improper methods to them. I must come right out with that, becus
that is the fact. I do not inply anything improper.
Senator CARAWAY. In other words, you approve lobbying?
Mr. LAKIN. I think we have to have it under the present s.stem.
Senator CARAWAY. All right. That is. what I ani saying. You
lobbying?
approve
Mr. LAKIN.
No; I don't approve it, because I do not ap)l)rove the
present system of tariff legislation.
Senator CARAWAY. What is the difference in the present system
_ub
and the past system?I
make it an' better.
doesn't
that
but
difference,
No
LAKIN.
Mr.
of
the word "present "?for
use
use
why
the
Then
CARAWAY.
Senator
Mr. LAKIN. Well, the system that exists; put it that way.
Senator WAiLH of Montana. The letter will perhaps (lear up the
point over which the controversy has waged:
On the other hand any individual member of the Americana

'humnber of

Commerce acting unofficially might be able to accomplish some good results

tod tther
In Washington by direct conferences with Members of Congresi

members of the Government. I do not approve: of ungulded entertnlnmenit of

Members of Congress. That form of lobbying Is no longer fashionable in
Washington

The use of the adjective there excites my curiosity.

Mr. LAIN. Well, It does mean-I don't Itnow what it means.
Senator WALaii of Montana. "I do not approve of unguided en.
tertfinment of Members of Congress." You approve of the enter.
tainment of Members of CongresA but you would like to direct about
how it should be done? Just what does that mean ?
Mr. LAKIN. I am afraid that I don't know what it means.
Senator CARAWAY. Well, at least you set yourself up there as the
arbiter of what is good lobbying a'id what is bad lobbying, don't
you? You undertake to be their guide in lobbying. Yoi say this,
Mr. Lakin: ' I do not approve of unguided entertainiment of Mem.
bers of Congress. That form of lobbying is no longer fashionable in
Washington." So, you are an authority upon the fashionable way of
lobbying, are you not?
Mr. LAKtx. I have proved not to be, I think,
Senator CARAWAY. Oh, no. I hope you have not lost your self.
esteem. You at one time thought you were. did you notI
Mr. LAt . Well, I have not lost my self.e.teem, lut I an ashamed
of many things that I have done. yes adI I have been free to con.

less it here.

Se

of
Ur
Sei
self
and
r

Sc

Mr
t
Tht
S
list

yas
A

that
Se'
lobb:
M

SM

P
U
c1
Se
ing
anno
Af

the

Se

on t

Sr

idea
Se
leave
you
AI
S:
to
of/

just
Sha
your
mod4
T
of t
S

be t

LOBBY INVESTIGATION

1597

Senator CARAWAY. Are you ashamed to say you were a connoisseur

of good forms of lobbying?
mr. LAKIN. I do not approve of any form of lobbying.
Senator CARAWAY. That is not what I asked you. You set your.

self up as the last word in lobbying. You knew the old-fashioned

and the modern way and the fashionable way to lobby. You admit
you were an authority on lobbying?
Mr. LAKiN. No; I don't;

Senator CAR-AWAY. Weoll, what do you meant

Mr. LAItN. I was trying to convey the impression that men ought
not to come up here from Cuba and try to entertain Congressmen.
That is what I was really trying to do.
Senator WAmL of Montana. What did you really mean by this
last sentence "That form of lobbying is no longer fashionable In
Washington "?
Mr. LAKiN. Well. there have been many times in the past when
that was the popular form.
Senator OARAWAY. I didn't think you knew anything about
lobbying.
Mr. LAKIN. Well, it is easy enoughSenator CAAWAY. Easy enough to learn?
Mr. LAKIX. To read from the papers. There have been various
publications recently that tell about the old-fashioned lobbies.
Senator OARAWAY. But that has come since you laid down the rule
for lobbying.
Mr. LAxRi?. Well, you are thinking of the tragic era which did
come afterwards.
Senator CARAWAY. Yes; and all the publications I have seen touching professional lobbying in a fashionable way have come after you
announced what is good form and bad form.
Mr. LAKvIN. There have been many publications about lobbying in
the last 10 years.
Senator CARAWAY. And you read them all. You kept informed
on that?
LAKIN. I read some of them; yes.
Ur.
Senator CARAWAY. If you are going to engage in it, that is a good
idea, I guess-read the textbooks.
Senator RornNsox of Indiana. Mr. Witness, do you desire to
leave the impression with the committee that the manner in which
you lobbied is the modern, fashionable way to lobby?
Mr. LAKIN. I don't know about that.
Senator RoNusoX of Indiana. I am coming to the question Senator Walsh asked you, when he quoted from your letter, "This form
of lobbying is no longer fashionable in Washington."
That is the lobbying ybu have just suggested- Now you have
just suggested a different form. judging from the evidence. Mr.
Shattuc k has been looking after it for you. You and ie, from
your own statement, were operating the machine. Is that the
modern fashionable way?
Mr. A IN. Eo, he didnt do it for me. I did the approaching
of the Members o Congress and the Senate.
Senator Romxsox of Indiana. Is that what you understand to
be the modern way of lobbying?

1598

LOBBY INVESTIGATION

Mr. LAKIX. I should say so, going direct to Members of Congrs

and talking to them.
Senator-xsoix of Indiana. And spending money as you have

Mr. lAItuX. Spending itfor what

Senator Roniuisox of -Indiana. Oh,well, as all the correspondene
attests you have spent it. First of all you were to pay Mr. Shattuck
$75,000, weren't you? Didn't you write and tell Cuba you thought
that was a reasonablb fee?
Mr. LAix. That I thought I might have td give him that much.
Senator Ronixsox of Indiana. As he was giving all his attention
to this business?
Mr. LAixu. Yes.
Senator RontxsoX of Indiana. As a matter of fact, he is
lawyers
Mr. LAriei. Yes,
*Senator Rowx.sox of Indiana. And the inference in this is he
is not practicing law, but giving all his attention to this business,
he and Francis both.
3Mr. LAiux. And there is a tremendous amount of law in that
business.
Senator Ronixsox of Indiana. I know, but he was hired chiefly
to put this thing over and receive $75,000 for it. That is for tis
few months work. That is the first thing.
Mr. LAKiN. Yes, although he would get such fees in his business
in New York.
Senator Ronixsox of Indiana. That was the flrst thing you were

the
8
a

r. LAWN. 'Yes, sir. That is what he would get for the same
amount of time spent on his law work in New York..
Senator CAIUAWAY. Yest but you said you hired him chiefly be.
cause he was close to the President.
Senator Romisox of Indiana. Then, you testified you. spent
$7,500 a week for the Gladys Moon Jones agency here, and still are.
Mr. LAKx. Yes.
Senator Rouixsox of Indiana. And $4,500 a month to Colonel
Calrroll?
3Ir. LAKINX. Yes.
Senator Ron.xsox of Indiana. All right. Is that the modern way
of lobbying? That is what I am trying to find out.
Mr. LA KX. How do I know what the modern form is?
Senator Rom.xsox of Indiana. You ought to know, because you
say in here, "That form of lobbying is no longer fashionable in
Wfashington." Therefore, we assume you were following the most
in Washington.
approved
the method
fashionable
way yes,
Mr.LA methods,
X. The best
I knew;
sir.

that

spent it I

t f

spending money for, $75,000 to Mr. IShattuck?IMal

Senator lRouxsox of Indiana. Is that true?

Mr. LAKx. Yes, sir'.
Senator WALSH of Montana. Another letter, of March 15, 1029,
to Aballi, Secretary of Communications, Habana:
As for a phut President Hoover has been taking Intere4 and has suggested
both to Senittor sinoot fial I. .luattek atplan whih lie has awl on whih
both lmont antl Shattuek tire working.

PI

ct
Pre

iP
to
wii

no
1o1

jusi
Ho'

the

di
who

LOBBY INVESTIGATION

1599

Can you furnish us with a copy of that plant

Mr. LAKIN. There is nothing ln writing..

Senator WALSH of Montana. There is nothing in writing?

Mr. LAKm No. And I only knew that by inference. Of course,
the plan was the sliding-scale plan which they were working on.
senator WALSH of Montana. Your statement, however, is as of
a fact:
president Hoover has been taking Interest and has suggested both to Senator
Smoot and Mr. Shattuck a plan which he has.
Mr. LAWIN. I thought my inference was fair enough from what
was going on. That is all.
Senator WALsH of Montana. How did you infer he had communicated his plan to Shattuck and Smoot?
Mr. LAKxi. Only because Shattuck and Smoot were also seeing the
President's secretaries in the White House.
Senator ALS of Montana. I suppose you appreciate Mr. Lakin,
should you have further correspondence with these gentlemen down
in Cuba that they will not pay very much attention to what you
s y, as a fact?
a!r. LAKxi.
Oh, I think they will.
Senator WALSH of Montana. Anyway, although you wrote them,

President Hoover has been taking interest and has suggested both

to Senator Smoot and Mr. Shattuck a pdlan which le has and on

which both Smioot and Shattuck are working"$you now tell us, and

no doubt they will learn all about it, because they will read this testimony of course, that the fact is you had no information about the
matter at all, and itwas a mere inference you drew from the fact

that Shattuck and Smoot were working together, as you knew, and
occasionally they went to the White House.
Mr. LAWIN. Yes, and I knew they were working on the sliding
scale.
Senator WALSH of Montana. And from that you deduced the in.
ference which you communicated to them as a fact that President
Hoover had himself suggested a plan.
Mr. LAwIN.

That was my inference; yes.

Senator WAmiH of Montana. And that based upon what I have

just suggested-namely, that Smoot and Shattuck you knew were
working on a sliding-scale plan, and they had been at the White
House-how could you deduce from that the President had suggested a planI
Mr. Li
. Well, I couldn't see why they should go to the White
House if the President was not in sympathy with it.
Senator WAusH of Montana. Yes, but you don't say the President
was in sympathy with it. You say the President had suggested
the plan.
MNr. LAxiN. Well, that had been in the newspapers.
Senator OAEAWAY. You say that Pr~sident Hoover has taken a

direct hand.
Senator WALS of Montana. Now, you are simply telling them
what they could get from the newspapers.
Mr. LAKIX. Yes.

1600

LOBBY INVESTIGATION

Senator WALSH of Montana (continuing):

Ntturally he made a suggestion and Isrelying on them to work out some.
thing In detail.

You are simply telling them what you read in the newspapers?
Mr. LAKIW. Tliat is my only direct source of information.
Senator WALSH of Montana [reading]:

I think that S1iattuck gave you no Intimntlit of the general Idea that is
iii Hoover's
3ind.

If Shattuck gave to the geitleman down in Cuba that intimation,

he doubtle." conveyed It to you. Did Shattuck give you any infer.
mation of the general idea in Hoover's mind?
Mr. LAim. No. he did not.
Senator WALe of Montana. But yon suspect that he gave it to
the man down in Cuba and didn't give it to you?
Mr. LAKIN. I found out afterwards what he talked about in Cuba
was an entirely different matter, a different plan.
Senator WASH of Montana. Whatever the fact may be, at that
time, although Shattuck had not conveyed to you what he had in
his mind---Mr. LAKIN. Oh, he conveyed the idea of a sliding scale to me, yes;
but he never told me
Senator WALSH of Montana. Oh, well. but wait a minute.
Mr. LAmzx. That Smoot had suggested a plan.
Senator WAuH of Montana. Wait a minute. You say, "I think
that Shattuck gave you an intimation of the general idea that is in
Hoover's mind. '
Now. did Shattuck give you the general idea of what was in
Hoover's mind?
Mr. LAUXI. I said there, "I think that Shattuck gave you an
idea,". and found out afterwards he didn't.
Senator IVALsit of Montana. Yes, but I am asking you-you at
that tame believed that he had given the Cuban official an idea of what
was in Hoover's mind. Had he at that time given you an idea of
what was in Hoover's mind?
Mr. LAxix. I don't think so; no.
Senator WArm! of Montana. So.although you thought at the time
he had told the man down in Cuib'a what was in Hoover's mind. he
had not even communicated to you what was in IHoover's miundf
# Mr. LAKIN. No, lie was very careful not to quote Mr. Hoover to
me.

Senator WALSH of Montana. Nevertheless, you felt lie would quote

him down in CubaI
Mr. KAR11. I thought that lie might; yes.
Senator WALSH of Montana. Not that he might. You sAid, "I
think that Shattuck gave you." Not that he might give him, but
that he had given him.
You continue:
We are now working on it proposal which is quite different In detail, although,
of course, adhering to the general suggestion of President Hoover. I anticipate
flint it will undergo modifications before It becomes satisfactory to any of u&

Just when Shnttuck and I can come will depend upon how things look In

Washington. We certainly are fortunate in having been able to employ his

services.

co

th

d(

LOBBY INVESTIOATION

1601

Another letter of the some date to Mr. Chadbourne, Manas &

Rodriguez:
Messrs. Shttuek and his partner, Francis, who is an ex.ongres.mlmn, and

I are spending approximately all of our time on the matter. Shattuck and I
spend two days a week In Washington. All of us work until midnight.

President Hoover has taken a direct hand. He has already suggested a

po.mlble solution to Senator Smoot and to Mr. Shattuck.

Can you give us that solution proposed by the President?

Mr. tA.x. The sliding scale is what I thought it was.
Senator WALsH of Montana (reading):
The latter has been working about three weeks on the suggestion and Senator
Sinot about a month but nothing definite has yet resulted. Smoot has already
conferred with the beet people, among whom we have some representatives
through whom we keep posted tis to what Is going on.

Would you care to tell us who those areI

Mr. LARIN. NO.

Senator WALSH of Montana. You wouldn't care to tell, or you

don't know?
Mr. LAIUN. No* I don't think that meant any more than that-I
will be darned if I know what that does mean.

Senator CARAWAY. It meant you had a spy in the beet-sugar camp,

and he was telling you what they did. Now, do you want to tell us
who the spy was
Senator WALsit of Montana. I read again, so you will be fully
informed:
Sinoot has already conferred with the beet people among whom we have
some representatives through whom we keep posted as to what Is going on.

I don't care to press it, Mr. Lakin, unless you care to tell us. The
language is perfectly plain, as Senator Caraway suggests. If you
don t care to elaborate on it or acquit yourself of the imputation it
carries, we will let it go.
Mr. LAKIN. Well, I am willing to leave it.
Senator WALSH of Montana. But you continue:
I do not dare to write more.
Why not? You see that follows immediately after the preceding
sentence to which reference has been made.
I shall see some more of you soon either here or in Habana antd will then
sit down and tell you all about it.
Now, Mr. Lakin, you can clear that up if you care to, or leave
it Aust exactly as it is.
Sfr.

LAKIN. I am trying to think what I did mean by that.

Senator WALSH of Montana. Maybe if you had the fa1 letter you
might be able to tell us.,
Senator CARAWAY. I will ask you a question. Is it significant to
you, Mr. Lakin, that your memory always fails you when it comes
to some matter that it would be necessary to explain or leave a bad
imMtationI
Mr. LArf. Shall I see the letter?
Senator WALSH of Montana. Yes; but answer the Senator's
Senator CARAWAY. Just wait one minute. Doe3 it strike you as
remarkable that your memory always fails you when it comes to

1602

LOBBY INVESTIGATION

these matters that you say are so private you can not write about
them?
Mr. LAKIN. I don't know what kind of an answer you want me
to give, sir.
Senator CARAWAY. I would love to get a truthful answer. I say,
isn't it remarkable that your memory always fails on those points
and you can not remember what you had in mind?
Mr. LAKIN. I don't think it has failed very much.
Senator OARAWAY. I don't think it has either, but the information

has failed.
(The witness at this point was shown the entire letter from which
the quotation was taken.)
Mr. LAKIN. My best recollection is that there was some member
of the Association of Beet Producers who came to me once and told
me something about it, but I don't remember what the details viere
orjust what -factit was he communicated to me.
Senator WALSH of Montana. Whatever it was, you dare(I not
write about it, and vou would tell him privately about the matter
when you got down there?
Mr. LAKIN. Yes. I shouldn't have written anything, possibly.
As a matter of fact, I don't believe it was important, because
think I would have remembered it if it was. I will ay this--Senator WALSH of Montana. People ordinarily-Mr. LArIN. I would have remembered more about it if the thing

had ever' happened again.

Senator WALSH of Montana. People ordinarily do not hesitate to
put in writing upon unimportant things. It is the important things
that they dare not write about. So, in view of the fact that you
dared not write about it, the inference is it was not unimportant
but was very important.
Mr. LAKIN. I think all the information I got on that was that

the beet people were insisting that the only thing they would be
satisfied with was a $2.40 duty on sugar.
Senator WALSH of Montana. Well, but why shouldn't you corn.
municate that? Why dared you not write such a proposition as
thatI Of course that could not be 'the case Mr. Lakin.
Mr. LAKIN. Well, that is all I can reinemer about it.

Senator WALsH of Montana. Well, yes; but when you reflect upon
it, you would have put that right into a letter, wouldn't you?
There is nothing about that that would call for any dare-devil
experience, is there?
Mr. LAKI:. No; I don't believe there is.
Senator WALSH of Montana. I should say not.
Senator CdItAwAY. No great state secret.
Senator WALSH of Montana. A letter of Mlarch 21 to Aballi

marked "Personal."
down there?

Let us see. Just what place did Aballi hold

Mr. LAKIN. He was president of the Mill Owners Association

and also a member 6f President Machado's cabinet.
Senator WAIsn of Montana. W1iuy should you be writing him a
personal letter about these matters?
Mr.LAIN. I don't know what the letter was about.

LOBBY INVESTIGATION

1603

It
Senator WALSH of Montana. Excuse me. I have it wrong.
is Aballi's letter to you. However, that is unimportant. Theletter
reads:
Mr. Shattuck gave me an idea of the plans he and you were worlng on
and I have carefully followed his special recommendation to await developwents and news from you, without going ahead independently here on certain
plans which others had or have in mind. I am especially pleased to se from
your letters that in that respect we are entirely agreed, and I am looking forward with the greatest interest to your announced visit with Mr. Shattuck to
Habana.
I translated your letter into Spanish and gave it to President Machado to
read. Needless to say that he is, as I am delighted to know that Mr. Hoover
is taking a personal interest and has suggested a plan to Senator Smoot and
Mr. Shattuck.

Now, Mr. Lakin, the general idea of a sliding scale was in the minds
of a great many people, wasn't it?
Mr. LAxiN. That I don't know.
Senator WALSH of Montana. Well, it was in your mind.

Mr. LAIKIx. After it had been suggested to me; yes.

Senator WAL~sH of Montana. It was in the mind of Senator

SmootI
Mr. LAKIN. Yes.

Senator WAb.SH of Montana. And in the mind of Mr. Shattuck?

Mr. LARIx. Yes.

Senator WALSH of Montana. And in the mind of these people down

in Cuba V
Mr.

LAiIN.

I don't know. At that time I thought it was, but I

think now that what they were working on was an entirely different
plan, which was a single selling plan to operate in Cuba.
Senator WALSH of Montana. Whatever it was they were all talking
about a sliding scale, that method of solving the difficulty.
Mr. LArti. I don't know whether they were at that date or not.
Senator WALsH of Montana. Well, when you said that President
Hoover had suggested a plan, it must have had something more
definite about it than a mere sliding scale.
Mr. LARD;. All I know definitely about that is what appeared
in the newspapers.
Senator CARAWAY. Did it ever appear in the newspapers that the
President had suggested a sliding scale ?
Mr. LARI N. Ye.s, sir; I think so.
Senator CARAWAY. Do you remember when that was published?
Mr. LARTIX. That must have been about February.
Senator CARtAWAY. That lie had suggested to Smoot and Shattuck
a sliding scale?
* Mr. LAJX. I don't think it said lie had suggested it to Shattuck,
and I don't think it was stated that he had suggested it in any
formal way. but there was some conversation.
Senator CARAWAY. Well, anyway, yot have evidently got the clipping in your office.
Mr. LAKIN. I don't believe I have.
Senator CARAWAY. If you have, I would like to see it.
Senator WimLsH of Montana. Another letter of date March 2, 1929,
Laking to Shattuck. Do you remember where Shattuck was then?
Mr. LARX2K. March 2d I 1o.

104

LOBBY INVESTIOATION

Senator VArsH of Montana. What is that?

Mr. LAxiN. No; I don't remember.

Senator WALSH of Montana. Let me help you. In the letter you

wrote to General Crowder of the same date, March 2, 1929, you say,
"Shattuck is in Washington for the inauguration." So that fixes
him in Washington as of that time, here for the iauguration. That
followed quite promptly upon his visit down in Miami when he got
into contact with President-elect Hoover, did it not?
Mr. LAmN. Well, it was not long after that; no.
Senator WALSH of Montana. He seemed to be kind of following

the President up. Anyway, he was here for the inauguration?

Mr. LI;N. He was a great admirer of President Hoover.
Senator WALSH of Montana. Did you have any talk with hinj be.
fore he came down here for the inaugurat ton about his coming?

Mr. LAKJ'. I don't know. He probably told me he was coining.

He must have. I knew lie was het.

Senator WALSH of Montana. Anyway, you say in your letter to
him [reading] :

to
PIC
fe

I Inclose ana editorial from the Washltigtn Post, which was doulbth-.- in.
spired by General Crowder, who tells ine tlat Ira Jieuiett, of the IPost, has
announced that lie will fight for the Pillipliae limitation as hard its lie knows

how.

What was it that General Crowder told you about that?

Mr. LA Kin. He told me lie had had a talk with Ira Bennett. and
that Ira Bennett had expressed himself as being an extremist ol this
matter of the limitation of the Philippines, and that lie had sup.
plied Bennett with some of his ideas on the subject and that Ben.
nett had used them or was to use them in an editorial.
Senator WALSH of Montana. So General Crowder accomplished at
least tha much down here. Did you get information about his con.
nection with any other editors except Mr. Befinett?

Mr. LAKIN. I don't remember any others; no.

.
Senator WAL sH of Montana. You didn't carry any advertising in

the Washington Post?

Mr. LAKIN. No. They wanted some, but I didn't carry it.
Senator WALsH of Mo6ntana. What
.0 were the negotiations in that
regard?
Mr. LAKIN. They sent a man to me in Washington and stated they
were to get out ai inauguration edition and that it would be a good
thing for us to publish a page advertisement or less.
Senator WALSH of Montana. Advertisement of what?

Mr. LAKIN. Of the argument not to have any increase in the duty
against Cuban sugar.

D
on
th
A
la

of

co

Senator WAILSH of Montana. What was that to cost you?

Mr. LAKIN. I think it was $5,000 a page they wanted.

to
W

Mr. LAKI.N. I don't know. I am not familiar with those things.

ne

Senator WALSH of Montana. Is that a fair price for a thing of

that kind?
I have never done any advertising.
Senator W.,riz of Montana. When was that with reference to the
2d of March or thereabouts.
Mr. LAKIN. Oh, that must have been a month before that. It was
a long time before.

as

he

LOBBY INVESTIGATION

1605

Senator WALsH of Alontana. Under date of Malrch 11 you write to

Shattuck and Francis. Do you remember where Shattuck was on
March 11
Mr. LAKIN. No, sir.
Senator WALSH of Montana.

You say [reading]:

You might consider whether' to approach the Federation of Labor. They

might be interested iti the Mexican labor feature of the tariff question.

Just what does that meant

Mr. LAmcN. To ask if they would support us.

Senator W,.RLii of Montana. Why?
Mr. LAKIN. Mexican labor is a very important factor in the beet-

sugar industry.

Senator IVAIii of Montana. Oht, yes. That is, you were going

to attack the beet-sugar interests on the basis that thev were employing Mexican labor?
Mr.-LAIN. Yes, sir; and that is probably the most important
feature of the beet-sugar business, that they are required to use
Mexican labor, which is not assimilable in this country.
Senator CARAWAY. Didn't I understand you to say that no beet

sugar is grown except by Mexican labor? You said they are re.
qu(red to use Mexican labor.
Mr. L.KI.. I think there is verve little labor outside of Mexican
labor used in the handwork in the beet fields. I think there is
some. Before the war there were a great many eastern Europeans.
During the war they had difficulty, and they began to use Mexicans
and I think that latterly they have also been using in some parts oy
the northwest some American lndians. But how miany of the
American Indians they use I do not know. But the bulk of their
labor in the handwork in the fields, especially in the spring and the
fall, is Mexican labor.
Senator WALsH of Montana. A letter of yours under (Iate of
March 14 to Senor Luis Marino Perez, conmnercial attach, Embassy
of the Republic of Cuba, Washington, 1). C. He was then the
League oi Nations delegate at Geneva was he not?
Mr. LAKIN. I don't know whether fie wias a delegate. I think lie
went over with the commission.
Senator AVAsisr of Montana. You say to him [reading]:
It you can find tlue to write me coofidentially anything that transpires,

which

i your Judgment, might lie of Interest to us, your coopittratil,

matter will be greatly appreelated.

In this

What did you expect might transpire in Geneva that might be

conveyed to you confidentially?.
Mr. LAKIN. They were carrying on a conference with reference
to the sugar business, which is just as bad in Europe as it is anywhere else. The conference is the subject. of what is the matter with
the sugar business anl what remedy should be applied for it, and
it is just as important to know what is'going on in Europe in connection with the sugar business as it is to know what is going on
anywhere else in the world.
Senator CARAWAY. I am interested in this feature of it. You
asked him to tell you in confidence. Did you imagine he was goiiig
to betray the secret meetings of the Geneva Conference to you (lownl
here? iras that it?
Mr. LAKIN. Oh, no.

1606

LOBBY INVESTIGATION

Senator CARAWAY. Then, what did the word "confidence"

Mr. Lakinf

mean,

Mr. LAKIN. Well, for my personal information. He was to make

a report, of course, eventually.

Senator

CARAWAY.

You wanted advance information of what it

would beI

lip

Senator. CARAWAY. Well, if that is the way the league operates,

I would like"to know it.
Senator WALSir Of Montana. A letter of March 14 from you to
Henry Walters. Who ic Henry WValtersf

fr

Mr. LAKIN. Yes, sir.

11

Mr. LAKIN. Chairman of the Atlantic Coast Line.

Senator WVdLui of Montana. How did you come to be writing

him?

Mr. LARIN. He is one of our stockholders.

Senator WALsn of Montana. Stockholder of which company

Mr. LA Rm. The Cuban Co.

Senator

WALshr of Montana. You say in the letter [reading]:

I have employed the Fervices of a lawyer, Mr. Edwin P. Shattuck, who for
years irs been Hoover's personal attorney, Slttuck and I spend two or three
days each week In Washington and he has diliy access to the President.

Was that a fact?

Mr. LArN. Well, I thought it was.

Se
bl
lie

he
to

Senator WALSH of Monta na. Well, of course, the White House

doors, I suppose, are open all the time. Is that what you meant by
his having access to the President?
Mr. LArIN. I thought he could go there it he wanted to at any
time, but I know darned well I was mistaken. He could see the
secretaries, but he could not see the President.
Senator

you?
Senator

GARAWAY.

Then, you will cut off his compensation, won't

WALSH of Montana. You continue [reading]:

We now know that in Miami Hoover told Smoot that while he sympathized
with the desire of Sinoot's constituency for better prices for their sugar it was
incumbent on Smoot to find a means without doing any damage to Cuba.

How did you get that information ?

Mr. LArIN. Well, the same way that I got that about the sliding
scale. That was a part of the talk about the sliding scale.
Senator WAISu ofr Montana. Yes; but Mr. Walters reads the newspapers just as well as you do.
Mr. LAKIN. He may not have seen that article. But that Was
not the purpose. I wanted to get Mr. Walters to speak to Senators
or Congressmen.
Senator WALsi of Montana. A letter of March 14, from you to
S. C. Mead, secretary of the Merchants Association of New York.
How did you come to be writing to Mr. Mead about this matter?
Mr. LAKIN. I am a member of the Merchants Association of New

York.

Senator WAsisr of Montano. What did you want of him?

Mr. LAKmI.

I wanted him to do the same thing.

Senator WArqArI of Montana. You say [reading]:

Tho Cubin iinassaidor to the United lSates lix jnit told me that 1,e:retary
if Sttnt Kellogg 111s iirepiared a vi(r" 4,40i1 mugiilirallihlll iI which it-, Call.
1ii- dilt.y (41 lilt, ittlll
Lt lil, I'i,.slthii t oiI I'ill'l'
,
culil
l Sui s.

%
it

LOBBY INVESTIGATION

1607

Have you any more definite information about that?

Mr. LAxiN. No. I thought I was going to get a copy, but I didn't.

I don't know whether tle ambassa dor was misinformed or not. I

never followed that up. I gave it up after a little while.
Senator WALStL of Montana. Under date of March 22 1020, we
have a letter front Crowder to you a follows. First, (1o you remember where Crowder was at that time?
Mr. LARN. I inmogin ihe was in Chicago.
Senator WAIs of Montana. It looks as if he was in Washington,
from the letter. It reads:
I arrived yesterday morning and went to the Matyflower, where I met
mr. 'laltuk.

After a conferentce with him we arranged our rions In rason-

able proxhinly to eawli other and h'nve held prelmlinnary confereliaes. This
morning I called upou the new tepulican Senmior from M.s.ourl, Mr. Patterit, and had i prel i inary talk with him. I endeavored afterward to meet
Senator Moses, with whom I Ive pIartleularly close personal relations. but
he will be out of the city until Tuesday, when I shall again endeavor to seki
him.
passing by the door of Senator Snoot I dropped in to pay my respects out
(if old acquaintance and, even, friendship, lie received me at the door and
invited me into his ofilie. Smoot look., very Ilred. lie spoke of how reluctant
lie walK to take up the task of the forlhcoinhlg special, session of Congress, ind
iarilcularly tariff revision. This introduced the subject of tariff revision and
he contllnued without any effort upon my part to develop the discussion and
beet sugar stocks throughout the
to jrnit out to me the great depreciation
tuntry, saying that )ersonally lie would not pay 5 cents it share. It was
evident that lie (lid not see his way clear to get through the session with any
great success. At this state I reminded him that two years ago he had
spoken of a sliding sugar tariff as furnishing a solution, but that there were
objections upon the part of the accounting olleers of the Treasury, based upon
the complcatious of computing revetnes i that way. lie then suld that Ile
had a sliding tariff under consideration, but lie had not completed his study
,.1 it as yet.
I left him after the conference, with the Impre&slon that his thoughts were
turned toward sliding tariff. I went back to the hotel aid reported the facts
of tho interview with both 1'atterson itud Smoot to Mr. Shattuck. I discussed
wilh Mr. Shattuck the opportune time to see Snoot and contribute what he
rouhl toward perfecting sliding tariff, but always with the Idea of making
intioot father the proposition In the nam, (if beet sugar, as a means of giving
it added strength. Shattuck replied that he thought the time wits approaching
when such an Interview might be very advisohile. In the course of his con.
rersation, Mr. Shattuck said that he knew Hnioot had already communicated
with the House Ways aid Meanis Conmittee, a form (if sllding tariff. That
.qeeni'd to me to he another reason why, If the Iloust, Ways and Means Com.
mittee was considering sucli u tariff, that Shattuck should not delay Ilaking
suggestions.

I will have more to eommunlcate with you In tlhe future. Am hardly located
yet, alld while 8hattuck seems to lie exlrellli'ly husy may work has Imardly
Ikguu. I .hall lake 1i14sleps unless I have tNe
h(eulwirrence of Mr. Shattluk.

This seems to be written on tile statioiiery of the firm of Carroll

&Baker, of which Mr. John H. Carroll is it 1mmber. Do you know

how at that time (ilcetal Crowder happined to be writ ing from
Colonel Carroll's office?
Mr. LAINx. They were great friends.
Senator CARAWAY. Do youll l(oW that, or is that alit llillllptjolt
3r. LAIEX. NO; I kllow that. I Irst mnet Colonel Carroll through
Oenteral Crowder in Cuba m11any1V years1 ago.
Senator WAVLSIF of Montalal.

General Crowder writes yoi:

78214-30--vr4---

Ullc(ler date of Mlarch 22. 12Il.

1608

Loy01

INVESTIGATION

In complilice with your suggestion I notify you that expenses incident to

my two trips east to meet you, over tiid above what they would have been
had I remained In Chicago, aggregated at little more than $:0.

After a

conference with Mr. Shattuck, lie says there will be no objection to ib4 lump

bum estimate of expenses.

My address will continue Mayflower Hotel. room 431.

Under date of Mareh 23, again under the heading of Carroll &
Baker, you write to General Crowder:

an

I take pleasure in Inclosing a ch'c.k to your ortle' for $300 to cover' your
to let nue
expenses ineldent to two previous trisi to lVtishligton. Do tint f'a:"
e.g'en1 e tl4loeys.I
know when you wish to be supilled with eidditioal
I was much Interested in your Iltter (itMa1r.h 22 referring to Pialiter'tou

and Smoot.

I have also talked with Shattuck about the same matter.

t.

expects to be back lit Washingtou on Wednesday. I ay be there Wedl'nesday

or 'Thursday. Meanwhile you are doing somell ine work and It I going ito

co
the

count. Shattuck reports that It Isyour Impresslon lhat It Is about tilnto

show our sliding-scale plan to) Smoot.

I inn Inclined to the saine view, ilut

expect to talk with Shattuck about it on Monday.

I saw ex.Governor Stokes of New Jersey on Thursday and Bacharach in
Atlantic City yesterday. Shattuck ean tell you what took place tt ihe twt,
Interviews.

That was another thing you didn't care to commit to paper,

froi

apparently, Mr. Takin?

Mr. LAKIN. Well. I didn't wantt to take the time to tell that.

That is all.

tl

is suggested that that is a rather large order you gave General

Crowder. You sent him the $300 inaccordance i~:th his bill. 'T'llat
is proper enough. Then you saY. " Don't fail to let me know when
you wish to be supplied with additional expense mnoneys."
Would you care to make any explanation of that?
Mr. LAKIN. Yes. The old man is not well to do. and I wanted
him to feel sure that he could call on me without having to pay it
out of his own pocket. That is all.
Senator WAsL of Montana. He didn't really need any assurance

ask

Senator WALsit of Montant. It was simply a matter of tiime. It

on that subject, (ldihe

Mr. LAKIN. Well. I wanted to make him feel he could get it.

Senator CARIAWAY. I am curious right there. I thought you said

him
e
for
exp

he never was in your employ.

Mr. LAKIN. He isn't, but I agreed that I would take care of his

Ing

Senator CARAWAY. You know yott told us in your first appearance

that you had nothing to do with; Crowder, that he was eniployed by
soite mill owners in Cuba.

to_

-expenses.

Mir. LAKIN. Yes.

Senator CARAWAY. And that you had nothing to do with it. Now,
it transpires you are paying his expenses.
Mr. LAKIN. Yes.
Senator CARAWAY. There is nothing inconsistent,-I presume, in
-those two statements?

dt
car

knc

Mr. LAKIN. No.

Senator Rornxsow of Indiana. Did he have an unlimited expense

account with you?
Mr. LAKr. Oh, no.
Senator CARAWAY. Well. what was the limit?
Mr. LAKIN. So far as he was concerned. anything that he sent me
in the way of.a statement. I would pay without question.

tin
oV

LOBBY INVESTIOATIO0

1609

Senator CARAWAY. Who paid you I

Mr. LAwN. In that way, he had an unlimited--.
Senator RoUiNsoN of Indiana., Well, you oven invited that. You
say that he should not fail to advise you when you could help witli
an expense account, or something to that effect.
Mr. LAKIN. Certainly.
Senator CARAWAY. Who repaid you these expense accounts?

3r. LArwN. I -paid it out of the fund.

Senator CARAWAY. Although he was employed by the other people?
Mr. L.mItn. Certainly. He was cooperating with me. But he
couldn't afford to come down here on what he was receiving from
them.
Senator CARAWAY. How much was lie getting from then?
Mr. LArIN. I don't know.
Senator CARAWAY. Then. how (1o you know he couhl't nftord to
come down here on what he was receiving?
Mr. LAmix. I know the man's general condition.
Senator CAUNWAY.
you? But you don't know how much he was getting
from them, do
Mr. LAKIN. NO; I don't.
Senator RoBiNsoN. of Indiana. Do yon know whether his ot her
employees were paying his expenses or not?
Mr. LAmcI.q. I know they were not. Otherwise he would not have
asked ie to pay them.
Senator RoBIsoNq of Indiana. You do not know what they paid
him?
.Mr. LARI . No.
Senator ROBINSON

of Indiana. You have no idea of what salary he

receives?
3Mr. LAKIN. No.
Senator RoBINsox of Indiana. What compensation was given him
for his work down here?
Mr. LAKIN. No.
Senator Romsox of Indiana. But you felt he ought to have
expense money
Mr. LAXIX. I do not think he was really expected to do any traveling on what he got.
Senator CARAWAY. If you will pardon me before you go, Mr. Lakin.
since we have got to quit, you told us yesterday that your suggestion
to the Cuban Government was never carried out, I believe?
Mr. LAKIN. I did not know that it had been.
Senator CARAWAY. Well, I happen to have here a number of photostatic.copies of Cuban and South American and Mexican newspapers,
carrying out your suggestion. I showed them to you a minute ago.
.r. LAKIN. Yes, sir. I did not compare the dates. I do not
know whether they have anything to do with my suggestion or not.
Senator CARAWAY. They publish your brief absolutely in full as
you suggested they should do.
'r. LAKIn. Well, that is all right, isn't it?
Senator CARAwAY. Well, I am just asking you about your declaration that tiere was nothing came of your suggestion.
Mr. ltr.%I. The hriefs Were published in Habana. Is there any
objection to that?

1610

LOBBY INVESTIGATION

Senator CARAWAY. Well, I am not answering your questions. I

am trying to find out when you are going to be accurate about it.
You said it was not followed out, and here-I find it was followed out,
not only in Cuba, but in South America and In Mexico.
Mr. LAKIN. You had better look up the date and see whether it
had anything to do with imine or not. You showed me an Argentine
paper there. The Argentinians had reason enough without any
suggestion from anybody else.
Senator CARAWAY. Then why try to stir them up if they were
already stirred tp?
Mr. LAKIN'. I did not know they were stfled up.
Senator CARAWAY. When did you find it out?
Mr. LAKIN. When you showed me that. That is the first I ever
heard of it.
Senator CARAwAY. That happens to be with reference to your own
suggestion, There are some more I will have for you later that you
wil [be interested in seeing. There were scurrilous cartoons, even
besmirching American women, following your suggestion of stirring
.
up opposition to America.
That is all for the time being. You will be back on Tuesday
at 10 o'clock.
(Thereupon, at 11:45 o'clock a. m., the hearing was adjourned until
Tuesday, December 17, 1929, at 10 o'clock a. i.)

Cal
Bill

on(

Ii

of

lie

cal

ep
In
Coll:
1.

ell -

LOBBY INVESTIGATION
TUESDAY, DECEMBER 17, 1929

UNITED STATES SENATE.

SuIicoz.%IrTrEE OF THE Co,,%trrrEE ON TIlE JUDICIARY.

'Tse

1l'a(1dnflyton, ). 0.
at 10 o'clock
adjournment,
to
pursuant
subcommittee met,

a. li.. in room 212, Senate Office Building, Senator Thaddeus H.

Caraway. cliairman, presiding.

Pre.ent: Spnatoms Caraway (calrman), Walsh of Montana,
Blane. Nye. and Robiuson.
Present al.o: Johln (. Holland, Esq., counsel to tle committee.
Sentoir CARAWAY. Is Mr. Barnes in the room?

TESTIMONY OF JULIUS H. BARNES, DULUTH, MINN., CHAIRMAN

BOARD OF THE CHAMBER OF COMXEROE OF THE UNITED
STATES
(The witness was duly sworn by Senator Caraway.)
enator CARIAWAY. Will you give to the stenographer your name

and residence and occupation. Mr. Barnes?

Mr. BARNES. Juhius H. Barnes, of 1)uluth. Minn., grain exporter.
(itirman of the board of the Chamber of Commerce of the United

States.

Senator ('AR AWAY. What has beenI your activity since the war.
in 1919 .
Mr. BAR N'ES. For a year after the war, for 18 mouths after the
armistice. I was wheat'direetor of the United States, at the request
of President Wilson, ultil the Congressional guaranty expired.
Senator CARAWAY. That was 1919
Mr. BAuRxEs. 1919.
Senator CARAWAY. After that what occupation. Mr. Barnes?
31r. BAt XEs. Tlen 1 reinstated the grain.export business which I
had s) ended during the war.
Senator CAtRAwAtY. Anv other industry?
.%r. BAnES. Yes; I im interested in t number of investments,
some profitable, some not. Senator.
Senator C.AAWAY. Will you just tell us what they are? I don't
cear for those that are not related to grain and agricultural products.
3r. BAnES. Well, those related to Arain are that I am a Vrin

3. Barnesi, (.onlleneiig. say,

exporter, with reprsentatives in all the countries of Europe. Thien

in agricultural products for 50 years I have been experimenting in
constructing rugs and carpets out of waste straw in the Xorthwest.,
Senator CRAWAY. uIVO You a seat on the Board of 'rade of
Chicagot
1011

1612

LOBBY INVESTIGATION

Mr. BATUES. Yes; I am a member of the Chicago Board of Trade

and the Minneapolis Chamber of Commerce, the Duluth Board of
Trade, the Winnipeg Grain Exchange, and the New York Products
Exchange.
Senator CARAWAY. Those are all boards in which futures are
bought and sold?
Mr. BARNE-.s. Except New York.
Senator CARAWAY. That isn't?
Mr. BAR-NES. No; no futures in New York. That is my heild
office.
Senator CARAWAY. In New York?
Mr.

BAR ES.

OARAWAY.

You were, before you went with the Govern.

ment, a handler of wheat?

Mr. BAE s. During my whole business life.

Senator

CARAWAY.

In

CARAWAY.

a
fir

ol

eh

Do you accept outside orders?

Mr. BARNES. I do not. I want to make clear I have no interest

in grain commission business of any kind, Senator. I may add I
haven't a dollar of interest in a c6untry elevator of any kind:
Senator CARAWAY. You say. you are a member of the Chicago
Board of Trade. That is a board on which deals in wheat, oats. and
such products occur. Your seat, you say, you use merely for your
own business, to hedge your own transactions?
Mr. BAMES. Thatnis so.
outside orders?
You never
CARAWAY.
Senator
orders.accept any
No outside
Mr. BAtrEs.

Senator CARAWAY.
Mr. BARNES. None
Senator CARAWAY.
Mr. BARNES. NO.
Senator CARAWAY.

Pr

How extensive have been your transactions on

these exchanges, Mr. Barnes?

Mr. BARNES. Very extensive in the sense of hedging actual grain,
in the sense that I buyvSenator CARAWAY. YOu (o nothing but hedgei
Mr BARNEs. Nothing in buying and selling except equivalents in
cash grain.
Senator CARAWAY. You have never had a greater outstanding con.
tract, either selling short or long, except your actual purchases of
grain?
Mr. BARNEs. That is not literally true, because you may offer over.
night. and you may be accepted-the policy has been to keep por.
chases equal to sales.

Senator

In New York.

Senator CARAWAY. How long have you been a member of these

boards of exchange where futures in wheat and corn and other fori
products are sold
Mr. BAnIE.s. Thirty or forty yeam,
% Senator.

Senator

it

On none of these boards?

of them.
And never did?

What is the largest day's transactions, if you

recall we will say in the last two years, of yours on the Chicago
Board of Trade?
Mr. BARNES. I should think two or three hundred thousand
bushels, from memory, with many days in which I have no trades
whatever.

LOBBY INVESTIGATION

l
1618

Senator CARAWAY. Let me ask you why you are a member of-is

it tile Toronto Board of Trade.

Mr. BAriEs. Winnipeg.

Senator

CARAWAY.

Winnipeg.

Mr. BARNES. Because we export also Canadian wheat through the

United States in bond.

Senator CARAWAY. Through the United States?

Mr. BAnm.s. And through Canada, natural route.

Senator CARAWAY. I an perfectly willing to admit my ignorance

about the use of the boards of trade. I mean what use you may
make of them when you are handling cash wheat. What was the
purpose of having a seat on the board of trade of so many places,
Mr. Barnes?
Mr. BAHNEs. All exchanges have commission rules which are approved by the Secretary of Agriculture. A member gets a special

rate of commission, lower titan the miscellaneous, casual trader.

Senator CARAWAY. Are your transactions so voluminous that you
find it rofitable to have the investment necessary to purchase seats

on the Coards of trade?

Mr.

BARNES.

Senator

Oh, yes. It justifies itself.

And all the expenses incident to it?

OAnAWAY.

Mr. BARNES.

Yes.
Senator CARAWAY. How much have you invested in your export

business in the grain business, Mr. Barnes, you and your company?
Mr. BARNErs. The company that I now manage and of which I am

chief stockholder has $3,000,000 capital and surplus employed.

Senator CARAWAY. How many other companies have you an inter.

est in, Mfr. Barnes?
Mr. BARNES. I have

Oi

interest in a terminal elevator at Duluth.

Senator CAnAWAY. How much investment?

Mr. BA n.Fs. An investment of three o' four hundred thousand

dollars.

Senator CARAWAY. How much?

Mr. BARNES. Three or four hundred thousand.
Senator CARAWAY. You at one time were interested in tlhe BarnesAmes Co. Are vou yet?
Mr. BARNF.S. that is the export company of which I am speaking.
Senator CARAWAY. And the Barnes-Jrwin Co.?
Mr. BARNES. That is a small commission business at Philadelphia
to handle shipments through that port.
Senator CA1IAWAY. How much is the capital stock of the Barnes.
Ames Co.?
Mr. BARNrs. Tito capital stock and surplus is $8,000,000.
Senator CARAWAY. And how much is the capital stock of the
Barnes-Irwin Co.?
Mr. BARN&S. $150,000, of which I own only part.
Senator CARAWAY. In 1024 you were cited before the Federal
Trade Commission for some deal that you had with the Italian
Government, were you not, or your companies?
Mr. BARNES. I am very glal you brought that out. They never
summoned me, and they quashed the charge.
Senator CAZAWAY. 'They never summoned you?
Mr. BARNES. N'o, sir.

1614

LOBBY INVESTIGATION

Senator CARAWAY. Why did you file an answer?

Mr. B.%R-.ES. Perhaps I am wrong. I never appeared before

them.
Senator cARAWAY. No; you demurred on the ground that one
transaction did not constitute a violation of the act.
Mr. BA,.m. Let tme make it clear, since you brought it up.
Senator CARAWAY. I don't think it has anything to do with this,
but I wanted to ask about it.
Mr. BARNES. I don't want any wrong impression, because the

Federal Trade Commission practically apologized to me for that

action.
Senator CARAWAY. I am curious to know why they did that, in.
view of the kind of answer you filed.

the
the
pet
coi
ac

nes
in

go

Senator WALI8s of Montana. Mr. Barnes, won't you tell about it?
Mr. BAKNEs. They served this on the unsupported1 complaint of an

Italian buyer, complaining against quality, the evidence of quality

being the regularly issued certificate of standards of the Depart.
ment of Agricultui. I maintained then and maintain now that for
them to proceed against atn American citizen on the unsupported
complaint of a foreign buyer is an injustice in publicity, and they
practically admitted it.
Senator CARAWAY. I don't think you denied the truthfulness of the

complaint.. You set up that one transaction did not constitute a

violation of the act. However, the thing that I was interested in
primarily, Mr. Barnes, is the story that came out of Chicago that you
and others engaged in the grain business were bringing pressure to
bear upon the Federal Farm Board to limit the activities of the
corporation it was setting up. You saw that?

Fa

M
Cr
Of
bil
kit

Mr. BR-.iE. Yes; I saw the press, Senator.

Senator CARAIVAY. What truth is in it, Mr. Barnes?
Mr. BARNKS. If you will remember that I haven't a dollar of

an

Senator CAUAWAY. If the grain corporation was to market the

Bc
er
tie

interest in the business myself affected by the Farm Board, and then
conceive-Senator CARAWAY. I thought you had $3,000,000, or the majority
stock of a $3,000,000 concern exporting gram.
i r. BARN ERs. Yes; but not affected by the grain commission or
the country elevator business.
.1
grain it would affect your business?
Mr. BAIRNES. If they marketed the grain abroad; yes.

Senator CARAWAY. And If they handled it here atnd the farmer

got a better price for it, your business would be affected?

Mr. BARNES. I hope so. If the farmer got a better price, I hope
so. But that is not in the picture at all.
Senator CAIRAWAY. That is what we are trying to find out.
Mr. BARNS. All right. There was a growing bitterness in grain

circles evidenced, aroused perhaps in the needless anxiety, and some

measure of, apprelhension about certain utterances of the Farm
Board; and th [A bitterness in the Northwest among my old associates
and friends disturbed me not only personally but as chairman of
the board of the Chamber of Commerce of the United States, which
has in its care the conduct of all American business and justice. It
seemed that some of that bitterness was based on misapprehension,

cw

tio
pr
th

Val

fo
an
na
tit

a
t
M(

co

an

LOBBY INVESTIGATION

1615

overstatement of the possibilities of the Farm Board's possibilities, so

that I did interest myself in bringing together representatives of

the grain men and the chairman of the board, Mr. Legge. It happened that some of the grain men were invited to Dpear at a business
conference here on December 5, so I arranged that they should have
a conference with the chairman on December 4. That'was done with
four or five grain men. Chairman Legge, I think, is an able business man who tries to b fair. That was my part in it, and nothing
in that conference disturbed thnt.
Senator CARAWAY. What do you mean by being fair--that he was
going to protect the grain interests or the farmers; which?
Mr. BARNES. I don't conceive that it is necessary to take either
side, Senator, to be fair.
Senator CARAWAY. Tell us what vou mean by it.
M3r. BAIEXS. Suppose I tell you whAt happened at the conference?Senator CAHAWAY. That would be better.
3r. BAuE-s. The grain men first asked Chairman Legge if the
Farm Board had any deep-seated antagonism-Z-Senator WALS of Montana. Just wait. Will you tell us who you
refer to by the grain men?
Mr. BAWNES. Yes; there were present Mr. Wells. of Minneapolis;
fr. Goodell, of Minneapolis: Mr. MacMillan, of Minneapolis ; Mr.
Crowell. of Minnesota; Mr. Carey, of Minneapolis; Mr. Woodworth,
of Minneapolis-I think that is 4ll the grain men present.
Senator WAiS of Montana. What relation have they to the grain
business"
Mr. BAfNEa. They are all actively in the grain business of various
kinds.
Senator WALSH of Montana. You are in the grain business too
Mr. BAR-xES. These men are interested in the commission business
and country elevator operation in the West.
Senator VALSit of Montana. They are commission merchants and
grain elevator men?
Mr. BARNES. Yes.

The first question was, of Chairman Legge,

whether there wvas a deep-seated antagonism on the part of the F'arm

Board to established grain facilities, and whether it was the deliberate intention of the Farm Board to destroy or injure those facial.
ties. Mr. Legge assured them that any facility which served it useful
purpose would not be needlessly dislocated. 'Then there was a discussion of the unfair competition in country buying, at country stations, between the private elevator and the cooperative elevator, this
preference leading to a discussion of the 8 per cent money, or
thereabouts, which the Government was authorized by law to ad.
vance to cooperative organizations, and Mfr. Lege recognized that
for one buyer at a country station to be buying with 6 per cent money
and a competitor to be buying with, 31/..p per cent money was not it
natural condition or a fair one. He. proposed to meet this by, in
time at least, making advances of the Farm Board to the National
Grain Cooperative, and this in turn supplying the regional cooperative and local elevators, and charging for that the market rate for
money. Of course, in the end the (difference goes to the national
cooperative organization, but it does put the local buyer oht a fair
and equal basis with the private facility.

1616

LOBBY INVESTIGATION

Senator CARAwAY. I don't quite understand that. Mr. Legge

agreed that the corporation they were setting up in Chicago would
finance the local buyers who represented the private-Mr. BARNEs. No; the local buyers who represented the coopera.
tives would get money from a single big national cooperative.
Senator CA.awAY. At what rate?
Mr. BARNES. At the market rate, the open market rate.
Senator BLAINE. What do you mean by local buyers of coopera.
tive companies?
Mr. BARNES. If you willpicture at a country station two or three
buying elevators, one owned by a cooperative association of farmers,
and one by a private facility, a chain elevator, or a privately owned
local elevatorSenator BLAINE. I picture all that. I understand that very well.
But you said a buyer for the cooperative. You mean the man who
operates the elevator for the cooperative organization?

lt
T

Mr. BARNES. Yes.

Senator BLAIN. As a buyer?

Mr. BARNES. Yes.
Senator BLAMNE. But he is just an agent. There is no buyer. The
cooperative is doing the business itself. It doesn't buy. The meit.
bers simply agree to deliver their product to this cooperative ele.
vator, this wheat, and the person in charge of it is simply an agent
to receive, to keep account, and all those details. There would be

nobody to loan him money.

Senator WA.qH of Montana. Perhaps the better expression would

be cooperative buying, rather than cooperative buyer.

Mr. BARNES. Senator, you are wrong about that. A cooperative
does buy at the price on the day-

Senator BLAIN. Buy from those who do not belong to the co.
operative organization?

1
CI

b
ill

to
lII

Mr. BARES. Yes.

Senator BLAiE. Well, that makes it plain. And the money that
was to be loaned at 6 per cent was only that money that was to be
used in buying grain from farmers who did not belong to the local
cooperative?
Mr. BARNES. Yes.

Senator CARAWAY. Then, I whnt to understand this. Mr. Legge

said that the money belonging to this grain cooperative that lie was
setting up-I believe it is a Delaware corporation.
Mr. BARNES. I don't know. I think so.
Senator CARAWAY. With a $50,000,000 capital stock, to be financed
by the Government through loans from the Federal Farm Boardin turn, this -wns going to loan money to cooperative buyers. Now.
what advantage, if they borrow only at the local ratte, what advantage is it to thiem to get it through this associationI
Mr. B.Ritt.:s. To the local buyer? What advantage to the local
bIuyer?
Senator CA.HAAY. Yes.
Mr. B.xtims. Tliey could probably get it more readily. But at
least it did equalize the charges on localIhsine.s in fair competition
at tht, country points.
S,0tor C.A. wAY. Why would it?

would give money at 314"pe' ceit?

Becatise this corporation hei0

co

o
th

T
alth

LOBBY INVESTIGATION

1617

Mr. BAnxEs. Yes.

Senaltor ('CARAWAY. And it requires the other people to pay the

local rate, which you said was 0 per cent?
Mr. BAnUs.. Yes.
Selntor ('.n.%W.%Y. Then, why dil that equalize it?
M,1r. BARx. It does, so flu as the local buyer is concerned, of
co-e, aid does accumulate a working margin in the hands of the
loal cooperative.
Senator CARAWAY. What wa your unler.stanling or Mr. Legge's
wdlerstmndng,that this national cooperative was s#ttin" out to (to?
This corporation that they were setting up in
iicago, this
$50.00o00M0. what were its activities to consist of?
Mr. B.nxss. I think Mr. Legge had better tell you about, that.
Senat 1 (' n.4wA
AY. I want to know what you got from him.
Mr. BAlRxEs. My conception was that was an'effort to put under
single dlirettion and control tile selling policies. of the cooperative
nenllers till over the country.
Senator CARAWAY. In what respect were they to touch the farmer?
Were lluy to get the grain from the farmer or merely sell it on
Coflihissit)

for the farmer?

Mr. BAxi:s. They were to get the grain from the local regional
coojrative from Wehb. farmers.
Selit'0l' ('ARAWAY. 'This local ('JE)jperIativ, a.SSoCiation was not to
buy wheat itself, was it? It was merely to take its members' wheat
arml have it .ol through this corporation they were setting Up in
(Chitiago. sn't that true?
3[l'. IlAIN..A. 'No: I think it 4ontenphtes tile. regional cooperative

to he atgraint dealer.

Senator CAIIAWAY. That would he itgrain dealer?

M1['. 1BnrEs. Fo those farilrsel" that waiieu1 to sell right on tile

ll1ar'ket lily by (lay.

senator ('Au.wY. They are going to buy theou at local elevatorS?
. BAICxi*s. YeS.
Senator ("AAwAY. And ship to this cooperative, and it is to be
their selling agent f
Mr. ARNEs. Yes.
Senator
AWAY. And who was going to carry the loss. the local
cooperative association? Was it to carry the loss, if an-?
Mr. BARnxss. They would get their loans iI the final event fromSenator CARAWAY. I don't care about the loans. When the wheat
is finally sold and there is a loss, who bears it?
Mr. B A)NEs. The local cooperative.
Senator CAIRAWAY. And who would get the profit, if it sold high?
Mr. BARXES. I presume the local cooperative.
Senator CARIAIWAY. And what does the grain corporation get out
of it-the people who put their money in it?
Mr. BARNES. I picture two kinds of handling; one, farmers' grain,
the sale of which is vested in that national cooperative at any tine.
The farmer is all through until lie gets his final report, perhaps
months hence. Tile other is the farmer who wants to sell hmnediately and receive cash for his grain and gives preference in .silintg
the grain in that manner to tile local cooperative elevator, instead
of th1e private facility buying alongside of it.

1618

LOB. Y INVESTIGATION

Senator CARAWAY. You gathered from Mr. Legge that this cor.
poration was going to finance people who stayed out of the coopera.
tive movement anygive them equal opportunity to the advantages of
the market created by this corporation, the same as if they belonged
to the associationI
Mr. BARNES. No, that is hardly a correct statement.
Senator CARAWAY. Then what is thecorrect statement?
Mr. BARNES. It is a rather complicated question. Let me see if I
can make it clear to my own mind as I see it. There will be several
classes of farmers. Some will be members of cooperatives willing to
consign their grain to cooperatives, willing to entrust the matter of
selling and price level to some kind-of national direction. That is
one type. They will get some advance on the wheat and wait for the
final returns for months. There is another type of farmer who may
or may not be a member of the cooperative who wants to sell his
grain immediately and be paid, and be all through with it. o
country elevator can operate, as I see it, merely handling the first
class of grain. That would not be extending the proper facilities
for a country point. The other type of grain they will buy at the
terminal market, less freight and charges, just the same as in a pri.
vate elevator. That grain would be sold and arrive at the terminal
or any other place of selling entirely apart from any other type of
grain which goes into the hands of the national cooperative for sell.
ing tinder their own determination,
Senator CARAWAY. But both to be financed from the same source
Mr. BARNES. I presume so,
Senator CARAWAY. I thought the act itself was to build up a coop.
erative, but if people who are not members are to be financed tinder
Mr. Leggo's plan-that is the one you and he agreed upon-I
Mr
interest.

thl

er
th
e
or
dit
nic
or

N-4. Mind you. thiH was a declaration of policy a.s to

He hits alrls. y )Iblv announced that,

Senator CARIAWVAY. If ie publicly announced it, what was lhe le.

cessity of a conference?
Mr. B.t r.:s. le had not lit (Ilit ttu'lit.

HP I,,. uinoiitwl it .ill'T?

Mr. BA N-Es. It, lihht1litt(.l it was Iot fWi' 1111d Ia Ihlat'h 1hiis oliellipt
t6 e(qulalize it.
ll
Senator CAAWAY. '1'ht%firs filln you knew tlht wa. to 1, tKP
80111110,- ('.ARAW.Y.

poliv was in the conltlIti(iv toi

llhdwith h6 ilthre?

(in with (le StOl" Of (lit' ('olf(ilt't'.ai

Mr.BAN.-mE. May I
. es.p
Senator CAII.
Senator BIAIXm. Before vo do that. Mr. Barles. I think A-l

left something hanging up in the air, and I want to Iing'it uIowa.

You describe tile two classes of fariner. the fariner who behloo.g. to
tle local cooperative, which cooperative sends grain to the national
organization and entrusts it with the selling of the grain at. its op.
tion. Then another class of farmer who may or may not belong
to the lee alcooperative, but who may desire or who may need nmoiny
advanced on the grain.
Mr. Barne,. Or actual sale.
Senator BSAJX'E. All of it or a largo proportion of the toney. or a
straight sale. You inean a straight saleMr. B.%n*:s. I meant priumari ly a straight sale, Senator.

of
or

rv

1619

LOBBY INVESTIOATION6

Senator VALsi of Montna. Excuse me. Senator.

I inderstant

tie first class likewise got advances oil their consignments?

s. Yes, but still retain ownership of their grain.
Mr. BA

Senator BLAINE. But this other class on a .straight sale

Senator WALsu of Montana. They sell.
Mr. BAKREs. They sell.
Senator BLAINE. And the farmer who belongs to the local co.
operativo organization. Your opinion v'as that he in receiving this
advance ougth topay the 0 per cent. Is that correct?
Mr. BARNES. Yes.
Senator BLA~IN:. Aml the farter who 4lid not belong to a cooperative and wanted his nioney advance( had to pay 0 per cent. Is
that correct?
Mr. BANNES. Yes.
Senator BLxI.:. Then. according to your analysis of this. the
farmer who is in distress. the grain grower who is in (listres's and
needs molney to Meet his taxes, to meet his interest (tie on his farm.
or ilstalilleit (1e on1 the mortgage on the far'lm. or other farm ohligations, that that farmer. evten though lie belongs to a cooperative.
and is so (listressedi that it becomes necessary for hill to have imine6 pr
centinldlpendent
as the rate of
interdiateoilcash,
you think he
to tJ,
payi the
ohivator
local
to ought
him. so)
advancellils
(e",t
men or grain dealr wotlhl be pat oil it parity with the eooperativi.
organization. Have I rom that straight now?
1.r. BANEs. Vell. SenlllorSenator B1t.%vxi Hive I got your idea?

Mr. BARNES. Yes; with one modification.

Senator BLAUXi:. State that modification.
Mr. B.1lrNrS. My pri-ar
Iltrpose
i illnS
.iiiij t
airne. of
1
having the local cooperative buyer pay the .;am1e rate of interest
for nonev for the conduct of his us-iness
us itI)i'ivate facility alongof grain.
,ide him imuist (10 was in the Iurehase
Senator Br,AIxNI. Whether thatptIrehase was from a member of
a coopt,rative or a nonmember of it?
Mr. B.uuxms. If it was a purchase.
But if it was a consignment
of grain into cooperative mnmitgenient or handling, either national
or local. I don't see that it. makes much difference what rate is
charged that class of busine. ill the ultimate outcome.
e"imto' C(.UIW.Av. lleeanse the profit or loss is finally divi(ded
aalyway ?
Mr. B.1AHxmFS. Yes. I am merely trying to equalize the buying
price that must be paid by one buyer against another at a country
Station.
Seale,' CAhWAY. That was the lplirpose of the conference with
Mr.eri1x-ViS. That was one pIrlose.
Senator ('At.Rw.Av. You arranged that satisfactorily

M1. I1.AIVxiKs. Yes.

th~at.

I want to say that

between

'Mr.
Legge volunteered

$enauol. IJ.IxE:. Telmil, I unilolostanl that the grower of grain.

lu, f(1iille' who grows the grain, who mulst have all his noilley
itimiediamely ad

iakes an absolute sale of his grain to his own

1620
Cooperivle (irgaiitti1 l.
cent interested

L.OBBY INVESTIGATION

should mnake it uipon tlho basis of o per

Mtr. lmi.xvt4. T1'le market rate,

yes.

t coop~erative organiztola

actili It it
1 turnovers. iiwreliiint Sl46ildl lot' live the aldviantoge of
chleap~er O1overlunent iiioiev foi' til liileit.
of comlpetit ive buliual

SeIntor va.
''hen, how does the (0overum'lent expect to bring
Iti(I to thint Class of farmIler. whio belongs to at 'o)joerative wvlxo ore
ill p.rt'iit (lishtl'tN. 10ho lieCel their Iiioiiey to irny taxes, who uc
their illolt'.%to I Z1 interests, Wio nieeol teir. ixxoiey to P41y% ifistal.
Ilints dule oil t e 1wiI icpa6111 ii1, tile ilEortgagro lifinst. thie farin,
whlo need'( 1iionlev,ji.1erha jis to buiv seeds for. ti f0ollowIlig Neasoll,
and nee
onley a
it
s esilt in for filli operaIitionl. Thley co111t

their' fiii lilO! t they get tlint. ea~ifor their whieat. l)o
yon proposed' to ('stablh~is i it lional j~ohicVOl thilti t j~articuhar type
of farmner sliaill be burdienied wvithi It hdiher rat of interest, 0 e
cenlt, whenxlhe is oJperatilig tlii-otighl hlis. coole)Ofie orgnhatioxl?
(ijHlrie

I'-, tilat thlt proposal Of Ml'. eggQ Or 'If yout f

31r. 1I~tE.I cani not speak foxr. [ieggQe butt for myself, tile
oly sturldy and sucecesqsll cooperlitives ill tims voliitry alre those
who )1 iintirkt rates.
Sentor. BJ.Aimi. W~ell. voll Ile now getting into thle 1bstiact
field. We'IiIivQ got thiis tlluiig out of thec air Iliit flownt liert oil
earthi.
31r. BAII'as. All righlt.
Senator 11t.maxt.. Let us keep it there. I aim retilistie. I dJonlt
air. 'i'ht is till right
eare tituch fr! this stfltat linngs ill lint
fox atcertain kind of mind. butt my mnind don't operitte thint way.
Wve are dlowin onl earthl now. Here is thlis, faini'. Was it r
or youri proposal that this farmer inl oistiv,;
)OS11l
14ea0(%SIwro
Ihiger into of interest?
y tie
shoul0d
Mr 3 ".nN Ti at is a good deal like asking if yon hiave stopped
beating y-om' wife, Senator. '1'hat is not a fair question.
Senator Iv IE No, no. It is it fatir question andl it can be
antsweredo. Whose Inropositioni was it?
Senator CAHAWAY
4~. Puit it this way. Whio suggested it?
Senator Br 1 .mxn Yes, whlo sliggestedSenaftor' C,%IutWx%'. That titat policy sitild be pursued?
Senator' BTA.Vim. '1'at thsi farmer I linve deseribedl should beC
charged at higher interest rate?
1Mr%11mmxs. I said "Mr.Legge voliniteered thant inl order to make
Competitive prices fair- ait the counltry3 station.
Senaitor lhEA1NI. It. is imich simpler ini thle record if you will just
answver ther qulestionl. 'My qulestionl is jplaili, isn't it?
MAir. 11t.m.. I doot inkld it is iai u' oestionl, seiliator.

Tlhe reso'siosibi lit y is witlh me1 as to whether or

Senaltor IX.
not it is it fli'. jilestioli, anld thlt 1rospoiisibihity is withl You to
ainswei' it.
.Mir. R.\cg*s. Yes, buit y-oit sev(-

Selnatorl lli..mxi.. Yon ture not here its it judige. Your' duty, your

oibligatioin tinder 10111' oath is tj answer. I wilh answe-r t'oi- al'ly

lInsxfi'e.'~ ht it" Is yotil oibligationl to answer it question that 16s

andolfi nite.
11i1,
direct, spmled
'Mr., lI.%;. "''he questionsl is not direct, spfeilke or dehlite, 31r.

LOBBY INVESTIGATION

1621

Senator CARAWAY. Mr. Barnes, let us not go to hedging, because

your time is worth something, and we want to get through our.

selves.

Mr. BARNS. All right.

Senator CARAWAY. You know what the question is and what the
facts are. Jtist answer tile question.
Mr. BARxNEs. Senator, I can not answer it in the form it is given.
Senator CARAWAY. Well, tell What the facts are.
Mr. BAnNxt. s. ihe facts are that Chairman Legge volunteered
that money furnished for cooperative buyers to compete at country
stations with private facilities should pay the same interest that
these private facilities (to for the opportunity of doing the competitive business.
Senator CARAWAY. In other words, his suggestion was that a man,
whether he belonged to a cooperative or not, and had to sell, no
matter to whom he sold, the buyer would have to pay the same rate
of interest and the farmer would have to bear that.
Mr. BAnRxs. There is no interest charge involved in a purchase
daily at country stations.
Senator CARAWAY. Mr. Barnes, if you have a million dollars
invested and you are buying grain, dlo't you take into consideration
what this money is worth'.
Mr. B.ntxvs. Perhaps my answer was a little too broad in that
respect. I mean it is bought to today and it is delivered to the
terminal in five days.
Senator CARAWAY. Yes, but it lay not be sold in five days.
Mr. BAHNES. It is sold in five days when the farmer sells it.
Senator CARAWAY. Then, if it makes no difference, why were you
concerned, and wvhy were you holding a conference so that the
lrivte buyer would not be discriminated against?
Mr. BARNE. So that he would conform his business to that and
for the conduct of that private commercial business lie is paying
the full rate.
Senator BAIn..I:. The farmer who sells his grain to a local cooperative elevator, in turn to be sold by the national cooperative
organization, is selling his grain on th basis of investment at the
rate of 31/2 per cent. Now, the farmer who belongs to the same
cooperative, who desires and needs the money immediately, the cash
in hand-I have described him-his grain is sold on the basis of 6
per cent as the caIryng charge on that grain from the time it leaves
the elevator until it finds its final- resting place in the market. Now,
coming right hack to my question. It is that type of farmer whom
you claim ought to pay the higher rate of interest, the 0 per cent.
Is that correct?
Mr. BA(N-I5t. Setor, I doWt think it is fair to limit it to the
farther ill distress.
SenLator ]IAI.%:, I see. You don't lil(, to be frank about this. You
like to put this ii tnll abstrllact way. so that the ordinmiry I1111n on the
street )night not und1e1rstand it. I want to pul . it in a realistic way SO
it eh.arly. so that
thlt the fellow out on the street will t1tihern;.uln
1'o would lil(, to have an answer
there will be no cotroverys.
long involved tlIo(nfil (lisct.Vtat permits of a controversy 1n a11
sion that ,onfi.es. Now, lt. us. nmake this .sinlph,. 1n1I you answer
my qu,.stionl. please. Mr. hBanries.

1622

LOBBY INVESTIOATION

Mr. BARNES. I think I have answered, Senator. That competitive

in

Senator BLFAIE. Let us apply it to this one farmer. We will just

take one farmer who Is in d stress.
Mr. fARNms. All right. Will you permit me to put alongside him
a farmer who is not iii distress and wants to sell'?
Senator B.AINiE. We will do that afterwards. We will take him up

is

price-

afterwards.
Mr. BARXS. He is selling his grainSenator BLAINE. It Is your opinion, when he is selling his grain
for cash in hand, that tie price should be based on the higher rate, 0
per cent I
Mr. BmulEs. The commercial rate. like any commercial buyer
would have to figure. That is right.
Senator BriAXN.. How do you expect to relieve the man. the farrier.
who is in distress, and I a.mume that a very large number, if not the
majority, of wheat growers are in the cla.s of farmers who would be
compelled to bear the 0 per cent interest rate. Do you expect to iv.
iievo him under that System?
Mr. B.%R,.E. You have asked a pretty broad question, which I

could take some time in answering.

Senator Cmi.w, m. Well, just answer. You can do that quicker
than you can explain why it would take so long to answer.
Mr. B.ntNm. How I would expect to? I would expect to relieve
them by constructing a national cooperative that would consolidate
tinder one single buying directionn a large enough percentage of the
wheat crop to have something to say about the price, problly 40
per cent, in common language would do that. I wouldn't coax farmer
membership by giving them a prInemium interest rate or Ip'ice dvtmi.
tage, because that kind of loyalty would not last during any periit
"
of stress. The (Ciandian pool has tested that.
Senator CAUAWAY. How would you get him in?
Mr. BAxit-s. By the knowledge that he would hell) his plice Ilevtl
by putting 40 per cent of the crop into single-price control.
Senator BAINt.. But the lecessities of tie cISC preVent that.
Mr. BAn.iUs. Well. you are talking about necessities. You might

plead that anywhere.

Senator Bi,.*%*E. No; I couldn't l)lead it anywhere. The vouu.

plaint of the wheat glower iS exactly what I have described. leh
man, the farmer, who has his 160 acres, his 200 acres, or his half see.
tion. I anm not speaking of the farmer that grows wheat by the
thousands of ares. I aii speaking of the farlner who is in distress.
Ant I to understand that Mr. Legge suggested and you concurred ill
the proposition that this farmer Who needed the cash in hand should
i
sell his wheat upon the Isis of a carr.Ving charge of 0 per cit
interest? Y otcanl answer that " yes " or "no."
Mr. BARNES. Yes.
Senator BLAtxv. Thank you.
Mr. B11iuxEs. 1)o you want me to proceed with the conference,

sibimtor?

Selltor CA.AW.Y, All right.

Mit. B.m.I'XS. Thre was fill hr 1disett. sion on the lack of fairness
in attracting deliveries of griaill fromll nleilers of cooperatives or

to

1i
fi'

fa

k
t!

0
0

01

C
e

LOBBY INVESTIOATION

1623

independent farmers by providing through cooperative elevators cer-

taji'l facilities or advantages which were not offered by the private

facilities and could not be offered. I speak particularly of the process
promulgated by the Farm Board October 28, in which the farmer
Is allowed to get practically the market price advance and still retain the ownership in any subsequent appreciation of value.
Senator WALSlt of Montana. Because the advances were too high?
Mr. BARNPs. I object to the principle of it, Senator.
Senator WAL,sH of Montana. But that was the principle. The
policy, you thought, of the Farm Board was one of making too high
advances to t~l, farmer on.his grain?
3Mr. BlAn-1i.. I didn't like it quite that way, Senator. I would
like to see the farmer get a dollar and a half or a dollar seventyfive or two dollars.
Senator WA, s
1 of Montana. Oh, yes; but the market price is a
dollar we will say, and the Farm Board were willing to .dvance
ap)roximately that amount on the grain.
UP. BARN08. Yes.
Senator W,%Lsn of MNontana. And you wore objecting to that
policy.
Mr'. B.3nxE . Yes; as being limited solely to a certain type of
falier.
Senator WALSu of Montana. What was the percentage of the market price which they offered to advance?
Mr. l.utxEs. It was the full 100 per cent of the market at that
time.
Senator WALS1U of Montana. At that time?
Mr. BA RExvs. Yes.
Senator WVusits of Montana. They were at that same time advocating that all of the farmers hold their grain, because they asserted
that the price was too low and it was going to go higher?

Mr.B.txv:s. Yes.

Senator WASIh of Montana. And in connection with that they

offered to loan the amount of the then market price?
MJr. Blmn.ms. Yes.
of Montana. And that was a policy that you were
W11rsir
Senator
to
? Yes.
objecting
If that was open to all farmers it would be in
ec
tx..R.
ojr.
a different class, but to make it a premium to join a cooperative
organization, I say that that kind of loyalty in an organization will
cause it to dissoh'e under any distress. That will not form a cooperative in this country. It will dissolve like water the flrst time
stress starts.
Senator CARAWAY. Your conference with Mr Legge touches that
question?
Mr. BAINE'S. Senator, I an sorry at this time it is necessary to dis.
cues these Farm Board policies at all. The business men are willing
to keep quiet and allow them itpei iod of construttionSenator CARAWAY. That is very kind of the business men, but inas.
much as it did get discussed, and every farmler was made ulleasy
I would like to go inio it.
about it.
Mr. Ruaxv.s. Evidently we have to put the facts in and make
clear what we feel in the Farm Board policies are unsound or unfair.
78214-30-r 4--9

1624

LOtDY INVESTIGATION

Senator CARAWAY. In the conference with you did the Ftrm

Board recognize the unfairness and unsoundness of this proposition
Mr. BARnNE. No; Mr. Legge fell that was a proper athrietion,
byy*roviding facilities for ad- ancing Government moneys.
Senator L.UIAVsY. And lie and you parted with that agreentent?
Mr. BARES. No; Mr. Legge was fair enough to saay that lie
recognized that that policy would be destructive of sound business
facilities under certain conditions; that it was put in as an etner.
gency effort at the time of the panic in the security market, and in
order to stabilize grain prices, and for that reason the business
men generally were willing to temporizo with it. but hereafter that
lie would before promulgating substantial policies of the Form
Board consult experienced members of the trade as to their effect
before putting them in. He did not promise to be influenced by it
but he would give them an opportunity to be heard as to their eftect,
according to their business judgment.
Senator CARAWAY. I am sorry, Mr. Barnes, that Senator Walsh has
to go, but it is true Mr. Legge entered into an agreement with you,
acting for the Farm Board, that before any poltey should be pro.
mulgated, there would be a conference with the grain men, to work
out a policy that would be satisfactory?

ide

Senator CARAWAY. Nobody can ew,n paraphirase your statements

to
fa

Mr. B, NEs. No; that is not a fair statement. Senator.

and make a fair statement, according to you. I ant trying to say

what you said. What did you say?

Mr.

BARN S.

the
the

wr
to

onG

He gave assurane that before promulgating policies

of major effect he would give a chance for a hearing to the grri',n

trade in order that they might express their practical business jtag.
ment over years of operation of the effect that would follow those
policies.
to get
Senator CARAWAY. That is exactly what. I said, and I wantbetween
harmony
it in the record, and with that assurance there was
thegrain men and the Federal Farm Board?
Mi BARNFq. There wasn't harmony. There is a very vital dif.
ference on policies.
(if.
Senator CARAWAY. Is there a vital difference?

I got a very

ferent impression from a conversation I ind with Mr. Legge. and

I ant interested now to know what you differ about?
Mr. BAIX. s. In the first place, the grain men do not accept that
it is fair to extend advances to cooperative farmers and not to the
general run of farmers.

Fi
gr
r
cei
the
q

Senator CARAWAY. In other wqrds, the grain men oppose that

the

1t (is)tiniig that. I all just trying to

Senator CARAWAY. I an n
find out what the facts are. You need not be on the defensive. Mr.

of

principle of farm legislation that sought to bring farmers into co.

operative organizations?
Mr. BA ExS. By these means; yes.
Senator CARAWAY. That is the oilv means they have.
Mr. BAUxES. I think policies are suhject to dise s'ot.
Barnes.
Mr1'. BrARxE'.

1911n11ator. I wanlt tO gest tlits tirlh herIel.

Senator CARAWAY. I would be delighted to do that mveslf.

Mr. BAn.:s. For six years I have IeeII one of the fl' grit men
that favored ('oIpprttive orgalniztionlsc. I blive soitte very strong

far
sue
i

to
are

LOBBY INVESTIGATION

1625

ideas on policies. I have kept quiet about them. I want to give

the Farm Board ever chance. I esteem and respect Alexander
Legg and the Farm Board. I think they will arrive at the point
in the nd, but to say they are not going to make mistake and that
they will not have to retrace under trial and after adventure is
assuming too much.
Senator CARAWAY. That is advice I hope they will heed, but I
amn trying to find out what it is that the Farm Board is doing or
about to do thatyou think is wrong.
Mr. BA RXES. I thought I made it clear. I think personally it is
wrong for them to extend advance facilities at the country stations
to members of the cooperative, which facilities are not open to other
farmers.
Senator CARAWAY. Well, they agreed to modify that.
Mr. BAr-Ns. No; they did not.
Senator CARAWAY. I thought you said the only question was the

interest?

Mr. BARnES. No.

Senator CARAWAY. What other?

Mr. BARNES. It is a question of advancing $1.25 in the Northwest

only to members of the cooperatives.

Senator CARAWAY. Anybody can take advantage of it who wants

to tlr."
*oin:
BAnNES. If they join the cooperatives; yes. sir. Is that it

fair statement of the advantages of cooperation, to buy them into an

organization? That is going to buy a very weak miendiership.
Senator CARAWAY. How would you form a cooperative?
Mr. BAN UR. I would form it something on the plain of the Canadian pool. To-day they advance 85 cents per bushel. Here the
Farm Board is bringing farmers in ait $1.25. The Canadians advance it and maintain their own facilities. They maintain the whole
grain machinery, and they proved the loyalty of their organization
through many times of stress.
Senator CARAWAY. In other words, you want somebody who will
come in realizing lie gets no advantage as against somebody whose
necessities compel him to come into an association where he can get
the very largest advances and up to the market price. You are
quite well acquainted with the conditions of wheat growers in this
country, arent you, Mr. Barnes?
Mr. bARNES. I am not sure I am.
Senator CARAWAY. Mainy wheat growers are distressed.

What is

the percentage?
Mr. BARNF.S. I am not sure I know, Senator.
Senator CARAWAY. I was sure since you had given so many years
of study to it you would have that info'rintion.
Mr. BAMnS. Senator, I can not say, because undoubtedly some

farmers have a high production cost, whdle in the great machine area
of the West they can grow it at 40 cents.
Senator CARAWAY. Can you explain to me why it is they are in
such a depressed condition ?
Mr. BAR.xvs. The large area farmer is not in a depressed condition.
He hus made money this y ear. The difliculty, Senator, is ill trying
to eqtalize the cost of the small-plot wheat producer in the' old
areas against these cheap machine producing areas in the West.

1626

LOBBY INVESTIGATION

Senator CARAWAY. Then, do I understand you want to drive out

of the ranks of producers of wheat those who can not do it economic.
Call ?
Mr. BRns. No; I don't think that is a fair statement.
Senator OARAWAY. Well, I an asking you.
Mr. BARNTxs. I say no, then.
Senator C,M wAY. What was the significance of your statement

Mit

Board is now advancing will be found to stimulate such an acreage

as to produce another [it'rdensom o surplus..
Senator CAIRAWAY. You think they are going to stimulate produce.
tionI

no1

that some of these people could make it at 40 cents and others much
higher, and you couldn't equalize it. What was the significance of
that statement?
Mr. B,1nNF.. The significance is that the price which the Farm

Mr. BANFN E. Yes.

Senator CARAWAY. What is your idea? Is it. to make the price so

low it will not stimulate production?

Mr. BARNES. The act prescribes that.

Senator CARAWAY. I am asking you. What was the theory you

and Mr. Legge went on?

Mr. BARNFA. My personal theory is that as long as there are un.

used areas of land m the West that can be used for nothing els,
that can grow wheat and sell it abroad at a profit, it is foolish to
talk about shrinking the production of wheat in this country to the
domestic market.
Senator CARAWAY. You want some policy adopted so that the

growers of wheat can at least liveI

Mr. BAJN-FIs. I do. I want them to control 40 per cent of the

crop, anl then they will make the price in the end, after the export

surplus is moved.
Senator CARAWAY. That will stimulate overproduction won't it

Mr. BARiNEs. And we will market that surplus in tile foreign

in

lai
yol

es

0':
sr
ev
ev
as
ag
thl
no
ha
en,

markets.

Senator CARAWAY. That would stimulate overproduction just as

.muchas tihe other policy?

Mr. BAHNF.S. Certainly.

Senator CARAWAY. So your policy and the Farm Board would

arrive at the same results

Mr. Bmixiis. Yes; but there is a difference between natural cause
stimulating production, and using money raised by taxes to stimu.

late production. That was unfair.

Senator CARAWAY. That was one of the things you discussed with
Mr. Lef go ?

Mr. lAIM'*S. Yes.

Senator CARAWAY. What was the other, Mr. Barnes?

Mr. BA n-.Es. That was all. The declaration that the Farm

Board did not propose to injure or drive out facilities that served a

useful purpose.

Did the Farm Board itself agree upon-I have

here a letter from the Chamber of Commerce of the United State.
Senator C

AYw,.

You are president of that chamber?

Mr. BARNEs. I am chairman of the board.

ti
or
w

th

LOBBY INVESTIGATION

1627

Senator CARAWAY. You have seen this letter that was sent out?
Mr. BwsEs. I have seen the letter; yes, sir.
Senator CARAWAY. It sets forth your policy?
Mr. BARNES. It is a statement of the agricultural advisory committee.
Senator CARAWAY. You agree with the policy set forth?
Mr. BARNES. In the main; yes.
Senator CARAWAY. Did'Mr. Legge agree with that policy?
Mr. BAKNEs. I haven't had any comment from Mr. Legge, except
what I noticed in the press.
Senator CAIRAWAY. He seemed to have at one time agreed, and
now disagrees.
Mr. BARNES. I don't think there is any conflict there.
Senator CARAWAY. Did he ever agree with the policy set forth
in this letter?
Mr. BAnntEs. No; I don't think so. Those are general principles
laid down in the letter, Senator, the interpretation of which would
be subject to discussion between reasonable men.
Senator CARAWAY. I think so. I think, Mr. Barnes I agree with
you, that the right to expre5 your opinion with reference to the
effect of any Government policy is inherent in the very form of our
Oovernients and it would be a great mistake to try to limit, or re-

strict it. There is nothing sacred about holding an office, and

everybody that is in office ought to be perfectly willing to hear
everybody, because they arc just as much entitled to their opinion
as he is to his. But I am trying to find out what you all finally
agreed on as a policy. You have told us all the agreements-all
the matters upon which there was agreement. Not opinion. I am
not talking about what should be done. You have told us all that,
have you?
Mr. BAICNEHs. I have told you all that happened at that conference; yes.
Senator CARAWAY. Have you been writing some letters, Mr.
Barnes, since that conference, to some western grain dealers?
Mr. BARNES. I think I have; yes.
Senator CARAWAY. Would you mind supplying this committee
with a copy of those letters?
Mr. BARNES. Not at all. I will file them.
Senator CARAWAY. You haven't then with you?
Mr. BiNs. No; I haven't them with me.
Senator CARAWAY. Now, I am in receipt ofStion
Mr. BARN s. Senator, is there any imldication in your qmw,
which ought to be brought out on the record at this time?
Senator CARAWAY. WhIpt is that?
Mr. BARNES. Is there any implication, such as the press mentioned
that I had told anybody that Chairman Legge would be controlled
or influenced or anything like that?
Senator CARAWAY. I never heard that you wrote th.vt. Did you
write such a letter?
Air. BArNEs. No; I never did. The press and the language of
the Senator in the Senate implied that without attaching my name.
If he meant me, I would like to clear the record.
Senator CARAWAY. Your letters will speak for themselves.
Mr. BARm. All right.

1628

LOBBY INVESTIGATION

Senator CARAWAY. Do you know Ben C. McCabe, of the Inter.

national Elevator Co., of Dluth, Minn.?

Mr. BARNEs. Yes; I know him.

Senator CARAWAY. Is he a businewq man of large dealings in grains
Mr. BARNxEs. Yes. He has a line of country elevators.
Senator CARAWAY. Were you and Io ever associated in btsinesit
Mr. B.mnoEs. I think not.
Senator CARAWAY. You ought to know.
Mr. BARN.M.s. I can not recall. We may have had a gold mine
off and on together, years ago, in which the result was as usual.
Senator CARAWAY. You have given up gold mining quite a good
whil' ago. and are staying with the grain business?
Mr. BARxNEs. Yes.
Senator CARAWAY. One is more profitable than the other. I notice
in this letter lie makes a statement that sounds very much like yours:
8o itre not IiI opposition to tim Firm Board, ex(ept ag we might iaeet it

In a comipetitivo way.
That is in accord with your views, isn't it?
Mr. BAn.Es. Senator, it is hardly fair to read another wan's
language and attribute it to me.
Senator CARAWAY. I ain not attributing it to yon. I am trying to
find out whether you agree. That is what I was asking you.
Mr. BA xEs. I have expressed in complete frankness my views on
this subject. They are in the record.
Senator C. w .w. We can answer these questions so mulie quicker

without thege lee;urec; that you deliver every once in a while. That
is in accordance with your view, is it?
Mr. B.%nxv-q. I say you said that. I (lid not say that.
Senator ('.ut.\w.'. I ant asking you.
Mi. BR nxEs. I say again that is not my langnage.

Ser: itor C.tnw.'. T.q that your sentiment?

Mr. ,1f3ANx1. SeIIator-Senator C.An.RwAY. Now. Mr. Barnes, if you do your business like
you have. conducted this examination you never would have sold a
bushel of wheat in your lifetime. You would have haggled with the
man until lie died 'of old age, trying to agree whether 56 potinds
made a btishel or 57 pounds.
Mr. llnxEs. .n selling wheat you are also framing yotur own

offer in your own language.

Senator. C.Atw. y. I at asking you if that is in accord with your

views.f
Mr. B.snxts. Will you read it again?
Senator. CARAWAY (reading)

Wi- are flo

II i1lq1iuellloi to Itt-lti'

1rili Oll'd. (XcI'ltt

W tiight ilt't it in
wex

it coililt itive wily.

r. IAItx:s. No; I never said anything like that.

Seuiatot' CARAWAY. I didn't ask you that. I said is that your
sentiment?
MrI. B.mux4. I again refuse
lt'iiit0t'CARA Y. No, no.
MrI. BAU"xIrs. To have words put in my mouth. I ant sorry if I
appeal. ill position.

LOBBY INVESTIGATION

1629

Senator CARAWAY. I am asking you if you agree with that sentiment. You can say "yes" or "no.'
Mr. BDAnNUs. I do not think I can.

Senator CAnAWAY. Yes you can.

Mr. BAr4 M. It is another man's language.

Senator CARAWAY. Oh, it is his language now. It looks to me if

you are not trying to conceal something that you can just say "I do
agree with that statement or I do not."
Mr. BARNES. Senator I think you force me unfairly on that state.
meant. My position is clear. I am for cooperative organizations and
have been on record for six years.
Senator CARAWAY. If you are, you are the most unwilling witness

that they over had. If you are trying to be candid I am going to be

candid with you, and I never saw an uncandid witness if it is not

you, because you could answer this question without all this talk. I
am asking you if you agree with this sentiment:

We are not in opposition to the Farm Board, except as we might meet it in a

competitive way. At tie presmet tnie the Farm Board Is operating through
certain agencies that haive Inven active through the Northwest during the past
yeas.

Is that a fair statement of the fact?

Mr.BARNEs. That is another man's opinion. Again I persist in
stating that that is not fair to ask me if that is my opinion.
Senator CARAWAY. I did not ask you that. Suppose you just-read
us a lecture and say, "That is my sentiments that everything you do
is unfair," and we will understand that. I am asking you if the
Farm Board's policies are the same as the old cooperative association
was expressed in the Northwest. I want to find out what the facts
are. Is its actions the same? Here is a grain dealer with whom you
are acqutinted, and he says readingg:
At the present time the Farm Board is operating trough certain agencies
that linvo been tictive through .the Northwest during te past- years.
It, is using the same agencies.
-''
Mr. BARNES. I presume that istrue.
Sepnator CARAWAY. Well, that Iiftike.
Mr.BARNES. I can not say of flidthand knowledge. Idonot want
to appear technical.
Senator CAHAWAY. He says further'treading]:

TN, F'111ri Ioara -is not guaranteeing any price, aiii if the gralp is sold at a
losss, that loss will have to be paid back to tbe -Oovernment. We Mao believee
that If there are au, &dvautaj-e to these advancee. they have no xllht to limit
the1 to enlietSrs ofbthelr company ofl.'.r-

'lhat is exactly the sentiment you expressed, and I a 'trying to

find out whether this man was talking with you. RM syA treading]:
The rlute of itt-rest that thety are chrgiig Is lower than what "Wehave been
churgig, and thit' amount of the advance Is larger than what we have been

rnid thue cost of memberships,

adviwhilg, bti there are other financing chuarge6
insurlte. aonI bonlidng-which takeaway in a large part the desirability of
tttkhg

theso nUtanees on atored grain. We belleV'that we can render other

services that will more than overcome these items,

We wllit mu1-iu tt :lviiio you against the sighlig of 'any contracts or-agreeis (line, Its there are a.numbr of -scalled cooperatives fighting
metIs titts
t'rni Board. Tile
ulnion.. thei'ilstIlve? fiver which Is to gain the favor of the
approved the orgmnization
palers- hat1ve just 1mouiuuliell that the board.h
plan of Ih Northwest 01,1111 Co'ouqutruleve. Thli company would bO a consoli-

1630

LOBBY INVESTIGATION

datlon of several different factions now in existence, but they have a long

way to go before this organization will be on a real working basis. It might

be inferred from what you have been reading in the newspapers and. hearing
from various sources tat the established grain business would be wiped out
In a single stroke. We visl to say that any established business, built on
sound principles and hardened by strong, competitive achievement, will endure
long after unsound and unjust schemes iave been forgotten. Economic laws

can be flouted for a time, but within a short while they are bound to assert
themselves. Ask yourself, when confronfed with any new proposition, "Have
I all the right information on the ease?"

We intend to keep In close touch with you from now on, and will send
you what Information we are able to pick up from time to time.
I read that for this purple: Mr. Legge agreed that before
announcing any policy he would consult the grain men. This is a
grain man of some large dealings, is he not?
Mr. BARNYS. Consult the gramn men as to the effects of that
policy; yes.
Senator CARAWAY. Do you agree with him in the tenor of his
letter?
Mr. BARNES. This gentleman?
Senator CARAWAY. Yes.

Mr. BARNES. Oh, I would criticize it in some respects. It cer.

tainly would not be such a letter as I would write.
Senator CARAWAY. It is rather impolitic, isn't itt I will not
ask you to answer that.
Mr. BARNES. No; I will not say it is impolitic. Remember, the
man is fighting for his business li e.
Senator CARAWAY. He has got a right to do it. I concede that.
So it is not necessary to lecture me on that. Does he fairly set
forth the views and the policy that the grain men with whom you
were associated had, when you had your conference with Mir.
Mr. BARNES. I think he does, in respect to calling attention to
unfair competition; yes.
Senator CARAWAY. And in any other wayt I think he rather
predicts failure. Is that the viewpoint that you entertain, that the
policies as they now have been announced are not likely to succeed
Mr.. BARn.ES. Senator, I have already said I believe cooperative
organizations can be made a success.
Senator CARAWAY. I know that.
Mr. BARNES. You asked my opinion, and I have said that. He
predict: failure. I do not.
Senator CARAWAY. You think there will be modifications of the
plan, and then success?
Mr. BAUnVES. I think the unfairness will be taken out of it and
it will succeed in the end; yes.
Senator BLAINE. I want to go back to the farmer out West who
grows wheat. I think you have been definite finally in saying what
oughtto be done to the farmer who belongs to the local cooperative
organization and who wants cash in hand for his wheat. I want
to go to the farmer who is not in the local coperative organization,
and who wants cash in hand for his wheat. The farm rieef bill
so-called, was not enacted for any particular class of farmers, I
understand.
Mr. BARNES. It should not be; no.

LOBBY INVESTIGATION

181

Senator BLAoND. It was not the intent of that legislation to discrlninate between the man who belongs to the cooperative organization, tho farmer, and one who does not beTong to the cooperative
organization. Is that correct?
"Sr.BARNES. I should not think so; no, sir.
Senator B.mrB. That is my interpretation of the act.
Mr. BARNES. Yes.
Senator BLAINE Theht the farmer who is outside of the cooperative organization and finds that he can not sell his wheat to private
interests at the rate paid by the cooperative organization, and he
wants cash in hand-:why should he be burdened with an interest.%
carrying charge of 6 per cent per annum?
Mr. BARNES. He would not be because the only way he could get
the higher advance from the cooperative elevator than the private
merchant could pay him would be by joining the cooperative and
pledging his wheat on advance, in which he retained ownership.
That is attracting membership into the cooperatives, as I said before.
Senator BLAzNE. Not necessarily. If the local cooperative elevator
is acquiring.wheat on a cash basis and must pay 8 per cent interest
on the carrying charge, on the.price that was paid to the farmer outside of the cooperative organization, then, of course, that local co.
operative organization could not carry on the entire functions which
it should carry on. It would be discriminating between the member
and the nonmember.
Mr. BARNES. Necessarily; yes.
Senator BLAiI. But the design of the law was not to dizscriminate
between the member and nonmeimber. That is my understanding.
Mr. BARNES. That is why I say the Farm Board will change some
of its policies so as to eliminate that discrimination.
Senator BLAMNE. You think it ought to change its poliy to eliminate that discrimination?
Mr. BARNES. I certainly do.
Senator BLAI E. You think, then, that when the Farm Board
buys cash wheat from a nonmember he should be paid upon the same
basis as is paid the members tha"-66 Vs' ,ii.
Mr. BARNES. I think t] ,}i ,fVir4i.J
mid is cash on
~
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Bit,jypig*
Senator BLA.
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Mr.
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Senator
local cooperative,

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ong' $M vheat e
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Mr. BARNEItiC_&D; yes.
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follow it, Senator. " ',,
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local organiz
the carrying ,
nonmembersi w .
to hold their

1632

LOBBY INVESTIGATION

Senator BLAINE. No; it is not involved. Let me make it plain.

Mr. BA1m. All right.
Senator BLAINE. Iere is a member or the entire membership of a
local cooperative which sells its wheat through the local cooperative
or through the national organization that will be set up, and I
understand that will be, and receives a part payment-take any
percentage, 25 per cent, 40 per cent, or Z0 per cent-now, that.
cash payment is going to bear a rate of interest-that wheat is
going to be held on the basis of 3 per cent, isn't it?
Mr. BARNES. Yes, I suppose so.
Senator BLAxz;*. And it will be held in order to regulate or
stabilize the marketing of wheat, with reference to price, production
and consumption. Now, the farmer who sells a I of his wheat
through the local cooperative market for cash on hand, whether
member or nonmember of the cooperative organization, you propose
that his wheat shall be held by the national organization, stored
the same as other wheat, on the basis of 6 per cent interest?
Mr. BARNES. When this farmer sells his wheat he is all through,
isn't he?
Senator BLAJ-S. I understand, but this wheat is going to be held
by the national organization. They are not going to sell that on
the market now for cash, because if they did, then of course your
situation is not any different than it is to-day, except they might
thereby eliminate one middleman but they have exactly the .ime
market influences. If they buy .or cash and sell for cash or sell
on futures, they are doing no different than is being done to-day
under private agencies, and therefore there would be no necessity,
clearly, for any farm board or any legislation; but they do not
propose to do that. They propose to take this cash and hold it the
same as they take consigned wheat. I call it consigned wheat,
because the farmer delivers it to them, and lie has his warehouse
receipt or some receipt for it, indicating that he has so many bushels
and it is consigned to them for sale. They hold that consigned
wheat and they hold the cash wheat tinder the program that may
be initiated. Now, why should a farmer who is in the local cooper.
active organization and in distress, and the farmer who is outside
of'the local cooperative organization and in distress, who needs his
money-why should their whedt be disposed of on a reduced price
because of the higher rate of interest carrying charge?
Mr. BARNES. I will show you why.
Senator BLAINE. Now, I understand your reason is this, that if
that is not done, then the independent buyers are placed at a
disadvantage?
Mr. BA Nus. Yes; it is unfair competition.
Senator BLAINe. And you want to preserve the independent
buyer?
Mr. BARNES. Yes.
Senator BLAIN. The whole design, as I understand, of the farm
relief measure, is to completely revolutionize the present unoranized marketing conditions with respect to farm products, and,
in order to revolutionize the present unorganized marketing condi.
tion, does it not become necessary, as a pure and simple conclusion, '
that the private individuals in the buying of wheat must be
eliminated?

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LOBBY INVESTIGATION

Mr. BAWNE.

1633

No; not necessarily.

Senator BLAxNE. If they are not eliminated, then how do you

change the present situation

.
Mr. BARNES. They will be eliminated when the superiority of
service of cooperative marketing is proven, under test, and they
should not be eliminated by the use of Government money unjustly.
Now, let me follow your positionSenator BLAINE. Now, you apply that to wheat. It will apply to
any farm product, but we are applying it especially to wheat.
Mi BARNES. Yes. You are assuming that the farmer who is not
a member of a cooperative bringing his grain to a cooperative elevator, wants to sell it on the market of that day. You are assuning that the cooperative elevator will add that to the 1001 wheat
which goes into the National Cooperative. He has authority to-day
to advance $1.25, Minneapolis basis, being assured b" the Farm
Board that they will supply money to that basis. Suppose tle market in Minneapolis was $1.50. naturally, and it has been that recently-the price for cash wheat, the value at that country station
will be $1.50, less freight less handling charges or, say,, $1.85 at
the station instead of $1.16 under the Farm Board price. A private
facility will pay that farmer $1.35. because they can immediately
sell it in the terminal market and ship it there. What is this cooperative elevator going to do, paying only $1.10 or $1.25? He has
to meet this $1.35 price and sell it in the terminal market in the same
way. All I am trying to do is to preserve that fairness of cominjetition and provide a field of employment for both the cooperative
elevator ans the private facility.
Senator BLAINE. And the cooperative organization ought to have
the right to make these cash sales identically the same as the private
individual?
Mr. BARNES. Right.
Senator BATINz. And the farmer who is in distress-not that it is
his desire-I am assuming that he is in distress; there is a necessitythen, notwithstanding that, you propose to penalize that farmer by
basing the price of wheat on the 6 per cent carrying charge?
Mr. BARNES. That is not a fair statement, "To penalize." I am
proposing to equalize the buying price of both elevators.
Senator BLAINE. But his price will be reduced then. We will not
sy penalizedd" but his price will be reduced because of the higher
interest carrying charge-6 per cent. There is not any question about
that, is thereI
Mr. BANEs. That is a rather unfair way to state it. Senator.
Senator BMITNE. Well, I am sorry I am. unfair.
Mr. BARNES. I do notmean to charge you with unfairness.
Senator BLAINE. I can not change my method of examination. After a training of some thirty-odd-years I can not change that, notwithstanding your opinion, and so your opinion does not have any
influence on my general makeup. I was born that way. I would
not undertake to change it notwithstanding the fact that ?r. Barnes
may think it ought to-be clanged. That is my responsibility. Now,
answer my question correctly. I am not undeitaking to change your
general make-up. I am not a reformer of individuals. I trust that
you will cease to be a reformer of individuals' peculiarities or charaeteristics or environments or whatever they may be.

1634

LOBBY INVESTIGATION

Mr. Ba RNs. Now you have had your say, and it is all right. You
are entitled to express it. You are sitting in a position of authority
here and I am trying frankly here to make clea-Senator BLAiNz. No; you are superior to any member of this com.
mittee. You are a private citizen. You may talk as you may please
We are public servants.
Mr. B
Es. After all, what we want to do is to get at the truth
of this.
Senator ('CRAWAY. That is it. May I just suggest-Mr. BARNES. I want to be just as frank, and you must phrase a
question that I can answer out of 40 years experience.
Senator CARAWAY. Pardon me just a minute, please. Suppose you
answer them in your own way.
Mr. BARNMs. If you will allow me to do that, I would be very
grateful.
Senator CARAWAY. Do that, but answer the question or if you
prefer, you can say ".yes" or "no," and then explain why your
answer needs quai cation.
.
Mr. BAwns. That is very fair..
Senator CARAWAY. Now, let us just get the facts.
Senator RoiNsoN of Indiana. What was the question?
Senator CARAWAY. May I say this to you: We are not interested
at all in anything except the pressure, as we understood-and I
don't mean that unfairly or dishonestly -that was being brought
to bear upon the Farm Board, as wo'atzered, to change its position.
We fully accord you that right to do it. It is your duty to do it.
If you think a governmental agency is not acting wisely and as a
good citizen you ought to point out that fact. So, the whole examin.
ation is not a reflection or criticism. We want to find out, because
we are
all interested in what is being done with tile marketing of
0rain,
and that is the reason we are asking you these questions.
Now, you answer his'questions as fully as you want to.
Mr. B.ti.ais. May I say on that, that I have never discussed the
policy of the Farm Board with Chairman Legge except at this
conference which I have described to you completely. I have never
discussed the policy of the Farm Board with the President, as im
plied in the press. As business men, we are trying to keep quiet,
although some of these things Violate their ideas of sound economics,
to give the Farm Board a chance to put its policies into effect, and
then revise them as error shall demonstrate under actual practice.
That is all. I do resent, and I must defend the grain trade against
the unfair competition by the use of Government money, which
extends proviliges.
Senator CARAWAY. You have a right to do that. I am an mdi.
vidualist myself, and I approve of that, but now your question,
Senator? Let him answer it in his own way so thfLt we can get the

facts.

Senator BLAINE. I will go back and repeat it. I have asked it

several times.
Mr. BAKNES. May I try my hand in answering it
Senator BLAINE. Certainly.
Mr. BARNES. If in buying grain from nonmembers and stilling it
in the terminal market, in the usual merchant way, this cooperative
buyer at tile country station is provided with 81/j per cent money

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LOBBY INVESTIGATION

1635

he can afford to pay a fraction more per bushel than the private
facility which, in the same operation, must pay 6 per cent. He is
doing that by accord of Government favor. I do not think that is
fair.
Senator BLAINE. Now, that is all expression of your opinion. Was
that the opinion of Air. Legge?
Mr. BiNEs. Yes. He admitted that that was not fair.
Senator BLAN E. He agreed with you. He agreed with you on
that proposition W are not debating that proposition here this
morning. Now, I just want to analyze your statement. You do
not believe that the Government should stimulate cooperative undertakings through any type of subsidy that may be devised. You do
not believe that the Government ought to lend money at a lower
rate of interest to cooperatives than they do to private industries or
private enterprises, do you?
Mr. BARNE.

I do not.

Senator BLAIN1. You do not think the Government ought to stimulate the prosperity of the wheat growers by giving them the advantae of 3 per cent per annum interest charge, do you?
Mr. BARNES. That again is putting words in my mouth.
Senator BLAiN. No. I am asking you. Can you answer that?
Senator CARAW.%Y. Answer it in your own way. Just make any
explanation you want.
Mr. BASSES. I think the Government ought to stimulate the prosperity of the wheat growers by every means except the use of Government money raised by general taxation, extended to certain
classes only.
Senator BLAINE. That is an answer.
Mr. BAUNEs. As to education and enlightenment and all the other
knowledge of cooperative organization and its advantages, I think
the Farm Board very properly should do that.
Senator BLAINr. But, when it comes to a proposition of actually
functioning to carry out the educational program, to carry out all
of this theoretical formula, when it comes down to the practical
operation to carry them out then you object to the Government stepp~ing n and doing that which it proposes to do in this instancelending the money to farmers or to cooperatives at 31h per cent per
annum?!
Mr. BARNES. I think it is unfair and unsound.
Senator BLAIN. Then, of course, you are opposed to the farm
relief measure.
Mr. BARNES. No.

Senator BLAIm But that is what it provides.

Mr. BARNEs. The autJiority is there, but the wisdom of it rests
in the judgment of the Farm Board.
Senator BLAmiN. You think when Congress passes a law, then that
law ought to be killed off by administration I
Mr. BARNES. Senator, I think there is a constitutional question
there. Business men have endeavored not to raise that 9uestion.
Senator BLAINE. Can you not test the constitutionality in the
courts? Can't you, Mr. Barnes?
Mr. BARNES. Yes; Senator, and business men-.
Senator BLUMI.
Are you endeavoring to test that constitutionality by going to Mr. Legge?

1636

LOBBY INVESTIGATION

Mr. BARNES. Senator, the constitutionality-

Senator BLMNn.- I am just asking you that question. That goes di.
rectly to the question of lobbying. Did you go to Mr. Legge to di.
cu." this matter with him-propose that the Farm Board should
not administer this law as contemplated by the congressional act?
Mr. BARN&S. Senator, discretion as to policies was vested in the
Farm Board and its judgment of management.
Senator BILAIF 4 . Oh, 11o, no.
Mr. BARNES. Let me aswer in my way.
Senator BLAINE. All right. Go .ahead.
Mr. BARNS. The constitutionality of the act is a proper thing
to question; but business men have abstained from raising any question, even those who feel deeply on it, in order to give the Fanr
Board a fair chance to promulgate its policies antd achieve success.
Senator BLAINE. That is a very beautiful idealistic statement.
Mr. BARxEs. Thank you.
Senator BLAINH. NoW let us get down to earth again.
Mr. BAnRNES. All right.
Senator BLAINE. You recall, don't you, that the farm-relief nen.
ure provides that the rate of interest shall not be greater than the
lowest rate the Government is paying on a specific day, and that
figures out at 3.5 per cent. That is correct, isn't it?
Mr. BARNE. . I imagine so.
Senator BLAINE. Is there any discretion in the Farm Board to
change that law, to make that rate of interest 6 per cent?

Mr. BARNE.s. No.

Senator BLAIN.. And you propose that they shall do it?

M. BARNEs. By retaining the spread between it in the form of a
national cooperative.
Senator BLAINE. Yes. You have a way by which it is done, of
couns, and you state that Mr. Legge so proposed I
Mr. BARNEs. Yes. Suppose you question Mr. Legge on that.
Senator BLAIN. Did you go to Mr. Legge and talk to him about
that proposition?
Mr. BARNES. At this conference which I have described.
Senator BLAiNE. What did you say to Mr. Legge?
Mr. BAR IPS. I said exactly, what I have said a dozen times, that
the effect was to allow the cooperative buyer at the country station
to pay a fraction more per bushel than his private competitor, and
that was not fair competition.
Senator BLAIM.-. And you proposed that they should pay 6 per
cent I-ate
MI'. BAUIXES. The market rate.
Senator BLAITN. The market rate, whatever that is. You told Mr.
Lepge that
Mr. BARNE.S. Yes.
Senator BLAINE. What was the purpose of your going to Mr.
Legge and asking him to find a way by which you could evade the
law that fixed the interest rate at 8V2 per cent?
Mr. BATNES. Mr. Legge volunteered this himself.
Senator BLAiNE. After you discussed it with him?
Mr. BARVFS. No; before I discussed it.
Senator BLAINp. Before you discussed it with him?
Mr. BAnitw . Yes.

LOBBY INVESTIOATION

Senator

BLAINL.

to Mr. Legge?
Air. BARNES.

1637

So, there was never any necessity for you going

Senator, you are again, in spite of my desire not to

lecture you, you are again turning on the unfair.

Senator BLAINE. Why did you go to see Mr. Legge?
Mr. BAR ES. Because I wanted to see if there were misunderstandings which would eliminate the bitterness on both sides throughout
the grain country.
Senator BLAINE. What was that bitterness?
Mr. BAU'xiEs. The bitterness on the part of the grain trade.
Senator BLAINE. What was the bitterness? What was it? Bitterness is something. What was that something?
xfr. BARNES. The bitterness that Government money and the policies of the Farm Board were pronounced by members of the ]Farm
Board to be tending to eliminate entirely these long-established private facilities which had served the grain country, and, in spite of
the opinion of some gentlemen, servedit very well.
Senator BLAINE. We can abbreviate that by using the interest
rate, can we not?
Mr. BAUv.s. No; I insist on my answer standing.
Senator BLAINE. Certainly your answer stands, but it would be

helpful if we could abbreviate some of these involved statements

regarding this interest rate. You had in mind the current rate of
interest, did you not?
Mr. BARNES. As one method of unfair competition.
Mir BLAINE. Yes; as one method of unfair competition. You went
to Mr. Legge and talked to him about that, did you not?
Mr. BARNES. At the conference which I have described.
Senator BLAINE. You went to the Farm Board to talk to the
Farm Board about it, did you not?
Mr. B.INE. Represented by Chairman Legge; yes.

Senator BLAINe. When you wont to the Farm Board you went into
a room, as I understand?
Mr. BARN-.S. We did not stand on the street corner.

Senator BLAIN.. I have to get down to something specific.

Mr. BARNES. Yes.
Senator BLAINE. When was this meeting with the Farm Board?
Mr. BARNES. I have already described it. December 4.
Senator BLAINE. Well, I did not hear that. I was not here.
Mr. BAUMN.
December 4.
Senator BLAINE. December 4 last?

Mr.

BARNES.

December 4 last.

Senator BL UINE. Where?

Mr. BARNEs. In my oftice in the chamber of commerce building in
this city.
Senator BLAINE. I am not familiar with your office in the chamber
of commerce building.
Mr. BARNES. I wish you would come up and visit some time.
Senator BLAINE. Where is it?
Mr. BARNES. In the Chamber of Commerce of the United States
Building, in this city.
Senator BLAINE. In the city of Washington?

Mr. BARNES. Yes.

Senator BLAINE. Who went there?

1638

LOBBY INVESTIGATION

Mr. BARNES. It is in the record, Senator.

Senator BLAINE. I have not heard it.
Senator CARAWAY. It will be quicker just to repeat it.
31'. BARNES. Shall I repeat itV
Senator BLAINE. I was not here when that was stated. I am sorry,
it is necessary
but I could not be here, and
detail. for me to have this re.
peated in order to follow up this in
Mr. BAnxEs. All right.
Senator BLAINE. T6 find out jtist who promoted this lobbying, and
what the lobbying was about..
Mr. BARfNES. Of course, I object to the term "lobbying."
Senator BLAINE. Well, I do%'t.
Mr. BARNEs. That is not fair; but, Mr. Chairman, haven't I de.
scribed fully in the record--I

Senator CARAWAY. You have. Just repeat it. It will be quicker.

Senator BLAINE.Who went to your office?
Mir. BARNES. Mr. Wells of Minneapolis.

Senator BLAINE. Who is Mr. Wells?

Mr.BARNES. He is interested in country elevators.
Senator BViNzI. Privately?
Mr. BARXES. Yes. Mr. MacMillen of Minneapolis.
Senator BLAINE. Who is he?
Mr. BARNES. He is also interested in country elevators.
Senator BLAINE In privately owned elevators?
Mr. BARNES. Yes, sir. Mr. boodell of Minneapolis, who is inter.
ested in the commission business.
Senator BAMINE. The buying of wheat?
Mr. BARNES. The handling for country buyers, on commission.
Senator Bw NE. A private undertaking?
Mr. BARNES. Yes.
Senator BLAN. Not for cooperatives?
Mr. BAis. I think he has cooperative elevators ship to him, too.
He buys from them as well?
Senator BLrA-I.
Mr. BARNES. He sells for them. Please note the difference. Mr.
Carey, who also handles for private and cooperative elevators in the
country, on commission. Mr. Crowell of Kansas City, who operates
a terminal business in Kansas City.
Senator B~iuNz. Grain terminal?
Mr. ]BARNES. Yes; a private business. Also Mr. Ben Woodworth
of the Woodworth Eleveator Co. of Minneapolis, Minn. I think that
is all who were present besides myself and Mr. Legge.
Senator BLAnIE. They went to your office. Now, who else went to
your office on the 4th of December last?
Mr. BA NEaS. I do not recall anyone else.
Senator BLAINE. Wasn't there anybody else there?
Mr. BARNES. There were a flock of reporters outside, if that is
what you mean?
Senator BLANE. Is the Farm Board's office in your office in the
Chamber of Commerce Building?
Senator CARAWAY. He said Mr. Legge was there.
Senator BLAIN& But who else besides Mr. Legge?

Mr. BAnNEs. Nobody.

Senator BLAIND. H6w did Mr. Legge come to go to your office?

Mr. BARNES. I asked him to come.

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to

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LOBBY INVESTIGATION

1639

Senator BL Jm,. Where is the office of the Farm BoardI

ir. BARNES. It is in the city of Washington.
Senator BLAINE. Whereabouts?

Mr. BARNES. In the Southern Railway Building.

You did not go there?
Senator BL Em.
Mr. BARNEs. I would have been glad to if he haid suggested it.
Here were four or five men whoSenator BLAINE. Wait a minute.
Mr. BARNES. Here were four or five men who were coming here as
delegates to a business conference in the chamber.
Senator B AiN,. Oh, I know you can apologize for it.
Mr. BARNES. I am not apologizing.
Senator BmNr. I don't-blame you at all.
Mr. BARNES. I am proclaiming it.
Senator BLAINE. I am just getting at your lobbying activities with
departments.
Mir. BARNES. I again object to the word "lobbying."
Senator BLAINE. NOW, you invited Mr. Legge to come to your
office in the United States Chamber of Commerce Building in the city
of Washington and there you had this discussion. Now, let me
follow up that discussion. After Mr. Legge arrived who was the
Oirst speaker in behalf of your group?
,11r. BARNES. Mr. Chairman, shall I go over this again?

Senator CARAWAY. Yes.

Mr. BARNES. Mr. Wells said:

. Chairman, we have read the recent utterances of the members of the

Farm Board, particularly Mr. Denman, and Mr. McEIvy, In public speeches, in
which they have indicated that it is the deliberate policy of the Farm Board
to destroy the grain machinery which has functioned for 80 years, and we want
to know whether the Farm Board, if you are free to say so, has any settled
antagonistic convictions toward these private facilities.

Mr. Legge protested that they did not have any; that every facility
which served a useful purpose would be preserved. That was the
beginning.

nator Bi.AiNE. That was the beginning.

Mr. BARNES. Then there was a general discussion as to the disability which these private facilities in buying at country stations
suffered by reason of the provision to their cooperative competitors
in buying current grain, by being provided cheaper money.
Senator B~i,*. Now, who raised that question?
Mr. B,.R-Xs. There was a general discussion. Everybody joined
in on that. Mr. Legge said they had already considered that ani
they were going to establish a policy of making Farm Board advances to the national cooperative, expecting that national cooperative to reloan the necessary allotments to the regional cooperatives
at the market rate.
Senator BLAIE. Loan for what purpose?
Mr. BARNEs. For whatever was the legitimate use of such money
by the regional cooperatives.
Senator BLAINE. Loan for the purchase of wheat from a party
.
who might deliver on consignment
Mr. BARNES, No such details were discussed.
78214-,-r 4--10

1640

LOBBY INVESTIGATION

Senator BLAINE. Loan to a party who must have cash in hand for
his wheat?
Mr. BANiKS. No such details were discussed.
Senator BLAINE. That would be the effect of it, a loan to the
national organization at the market rate when that money was to bei
used to buy cash wheat from a member of a local cooperative,
who required money because of his necessitious conditions Is that
analysis correct?
Mr. BARNES. No, that is not a correct statement.
Senator BLAINE. That is not correct?
Mr. BARNES. He said that the money would be loaned to the
national cooperative, at the rate prescribed by the act, that they
would allot that to the regional cooperatives at the mariCet rate, in
order that the competitive buying at country stations should be
fairly conducted.
Senator BLAINE. Then it would be the local cooperative that
would buy cash wheat on the basis of 0 per cent, or whatever the
market rate was, as a carrying charge?
Mr. BARNES. Right.
Senator BLAINE. And that would apply to either members or
nonmembers of the local cooperative marketing association?
Mr. BARNEs. If the grain is bought outright.
Senator BAINE. And that was Mr. Legge's proposition?

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Mr. BARNES. Yes.

Senator BLAINE. So, you accomplished, by calling Mr. Legge to

your office, that which you started out to accomplish I
Mr. BARNES. We eliminated the unfair portion of that po10y, yT
Senator BLAINE. Oh, it is not necessary for you to characters
question,
aatrz
cesr3o1o t
He
Senator OAnAWAy. He is not characterizing your question. He was
characterizing the policy.
Senator BLAINE. But he has been characterizing the questions.
I have no objection to it, but, your regard should be for your oath,
to tell the truth. How you may characterize my questions has
nothing to do with the truth or falsity of your statements. Now
you accomplished then, sir, exactly what you started out to accom.
phih. Is that correct
Mr. BARNES. I started out to accomplish a conference of business
men on the business effects of policies.
Senator BLAINE. I am speaking of the concrete, definite specific
accomplishment. What was it?
Mr. BARNES. Senator, must I repeat again?
Senator BLAINE. Oh, yes. Reduce it to its simplest terms. Keep
down on earth. Just make it plain, for us ordinary plain folks.
Mr. BARNES. Thank you. I will try to Senator. We succeeded
in receiving from Chairman Legge the ?act that he had already
considered the unfairness of furnishing money in competition for
less money out of Government funds, and had already considered
that matter and reached a policy to correct it.
Senator BLAINE. And that is what you started out to accomplish
and you accomplished itA
Mr. BARNEs. That is one of the things; yes.

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LOBBY INVESTIGATION

1641

Senator BLAINE. Now, you were objecting to the Government ad.

vancing money to cooperatives to buy cash wheat to relieve the
farmer who was in distress. You are objecting to the Government
advancing money for that purpose at a rate below the current rate
of interest. That is correct isn't it.I hope I have not been unfair
in reducing your statement to a definite thing.
Mr. BA.INF.S. Senator frankly, I think you were again unfair.
Senator BL,,%ixp.. Well; then, just state it yourself again.
Mr. BABRNES. ! object, in the orderly, everyday, merchant contactSenator BLAIXE. Oh,let us talk about this wheat farmer.
Mr.- B.%nEs. All right. I was just coming to him.
Senator BLAINE. Forget all of your theories; forget your Wall

Street language, and let us get back to the language of the farmer
of the West.
Mr. BARNEs. All right, Senator.
Senator BLAINE. Yes. Go ahead on that basis, please.
Mr.BAnmIs. I ahgai say that in buying grain the cooperative elevator, provided wilth 31/2 per cent money, could afford to pay a fraction more than the private merchant at 6 per cent, and that was providing the Government funds for unfair competition. I can not see
how I can state it any other way.
Senator BLAINE. Now lot ne call your attention to the fact that
the interest provision of the farm relief bill is word for word, letter
for letter, as the interest provision in the merchant marine bill;
exactly the same wording. I want to refresh your memory on that.
The (overmnent advances to private interests 75 per cent of the
value of a ship, including its equipment-45 per cent at the rate of
31/2 per cent. You recal that?

Mr. BAnNES. That is correct.

Senator BLAINE. And in addition to that,grants certain additional

compensation for the carrying of mails.
Mr. BAnNES. That iscorrect.

Senator

BLAINE.

You approve of that?

Mr. BARNES. I do.

Senator BLAINE. You disapprove of the 31/ per cent for the
members and nonmembers of the cooperative organizations who must
have their money in hand to take care of their interest, taxes, the
debt upon his farm, and his living expenses. You object to that?
.Mr. BpnN.. If the Shipping Board said "These facilities of
credit and mail contracts are available to only those proposed ship.
builders who join cooperative associations of shipbifilders," it would
be on all fours and unfair. They are open to anyone.
Senator BLAINE. But, you do not need any cooperative ship.
builders. They do not need any cooperativeiR. They just go out and
broadcast that privilege. There is no analogy between that sort of
thing and the cooperative wheat growers.
Mr. BARNES. I think there is an analogy, Senator.
Senator BLAINE. You will have to draw a very, very close, keen
distinction.
Mr. BARNES. It the Farm Board threw open to all farmers the
availability of 31/, per cent money, for exampleSenator BLAINE. But that is not what the Farm Board is doing.

1642

LOBBY INVESTIGATION

Mr. BAIRNEs. The price advance came to all farmers without stip.
ulating that they must sacrifice any individual convictions they lave
and join a cooperative organization, then we might have less reason
to object.
Senator BI,AIxE. But that is not what the Farm Board is doing.
Do not take an abstract proposition. The Farm Board is loaning
the cooperatives who become agents for all the farmers.
Mr. BAHvs. All farmers ? A good many farmers never will join
the cooperatives.
Senator

B11 .uxHI.I dd not say "join."

I said "agents for all

farmers."
Mr. BARNES. But they are not.
Senator BLAUN. Nonmnembers and members. That, of necessity,
must be the policy, or else you are discriminating between the man
who belongs to the cooperative and the man who does not belong.
Mr. BAnMNs. That is exactly what they are doing and what we
object to.
Senator BLAINE. But it is perfectly all right to loan. money to
shipbuilders at 31/, per cent?
Mr. BARES. To all shipbuilders; yes.
Senator BLAME. To all shipbuilders?
Mr. BAlES. Yes.
Senator BAIE. But it is not all right to loan money, which is
in effect the loaning of money, when you increase the price opgrain
on the basis of the carrying interest from 3Va to 0 per cent-those
farmers who need cash money for their grain-of course that is not
all right?
Mr. BAHN.
Mr. Chairman, we are really threshing old straw over
and over.
Senator CAAWAY. That is all right. There arc no rules of evi.
dence you know. This is an informal matter. Let me again avmyou that you are at perfect liberty to make any pertinent answer,
just so that we can allget the truth.
Senator BLAMIE. As I understand it, your business is that of
exporting grain. Is that correct?
Mr. BARNES. Yes.
Senator BLAmE. You hold some position now in the Government
service?
Mr. BARNES. No.
Senator BAE. Are you not a member of one of the President's
commissions?

Mr. BARNES. That is not in Government service.

Senator BLAINE. Well, just change that.

one of the President's commissions?

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You are a member of

Mr. BAMRNEs. No.

Senator BLAINE. What is it?

Mr. BARNES. Senator, I am chairman of a business conference
committee, selected by the votes of delegates from business organizations, entirely outside of any Government connection.
Senator BLAINE. At the President's suggestion Iu.
Mr. BARNES, I do not recall the President suggesting any coinmittee.
Senator Bi.mnI. Are you not going to give the President credit
for calling this conference and suggesting the organization of coin.

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LOBBY INVESTIGATION

1643

mittees and the selection of some directing head? Do you deny the
President that credit?
Mr. BAtNEs. No. The President's initiative in this movement for
business stability is too well known to discuss in detail, I think.
Senator BLAINE. Yes. Where was your conference held, at which
you became chairman?
Mr. BARNER. In the Chamber of Commerce of the United States.
Senator BLAINE. In Washington?
Mr. BARNEs. Yes.

Senator BLiNx. You had had a conference with the President

prior to that?
Mr. BARNFS. As one member of several groups of business lines
invited; yes.
Senator BLAINE. And out of that grew your organization that you

now have?
Mr. BARNES. It did not. In respect to your attempt to give it a
o v
Government character-t
Senator BML~iN.

Oh, just dismiss that.

Mr. BARNEs. All right. We will call it another lecture, but let us
get the facts clear on the record.
Senator CARAWAY. Just state what the facts are.

Mr. BARINs. This originated in a business delegate organization,

by their own alet and their own motion. Is that clear?
Senator BLAINE. After a conference which the President had held.
That is correct, isn't it?
Mr. BARNEs. After several conferences with the President.
Senator BLAINE. Yes. After several conferences. Well, "several
conferences" embrace one conference, I assume. It is awfully difficult for me to get from you a specific thing. When was that first
conference with the President held?
Mr. BARN-NEs. Late in November, I think, was- the first conference

he called.
Senator BLAINE. I mean of the business organizations, to which
you referred.
Mr. BARNES. Since that was not the President's conference, but
ours own-

Senator BLAINE. Did you attend a conference that the President

called?

Mr. B.umms. I attended several small conferences that the Presi-

dent called in his own office; yes; of business leaders of various types.

Senator BI.&N-E. And your organization, of which you are the

head, is a part of that general plan outlined by the President, I

assume, in a general way, to stimulate business and to have a psychological effect upon business?
Mr. BARNESF,. That is what we hoped to accomplish; yes.
Senator BLAINE. To make men believe that they are employed

when they are out of a job, and all that sort of thing. Now, do you
recall that President Hoover made a statement at the agricultural
conference? You recall that he did make a statement at the agricultural conference which he called?
Mr. BANES. I was not present.
Senator BLAINE. No; but do you recall that lie made a statement?
Did you get the information from the public press?
Mr. BAHNES. I do not recall it, Senator.

164

LOBBY flNVESTIOATION

Senator BLAINE,. Well, he held such a conference. You don't

doubt that?

er
ta

Mr. BARNES. No.

Senator BLAINE. And you do not doubt that he made a statement

at that conference, do you?
Mr. BA nES. Not a particle.
Senator BLAI.N'E. You do not doubt that the President told the"
agricultural conference that the interest charges must be kept down.
Do you recall that?
Mr. BARNES. No.
Senator BLA(INE. Well, that is what lie said, in effect.. Do you
disagree with that pronouncement?
Mr. BAU Es. That interest charges must be kept down?
Senator BLj.%,E. Yes.
Mr. IBARNES. No. That is the very heart of business stability..
Senator BLAINE. That is for agricultural purposes I am speaking

he was
about. He wats speaking to the agricultural conference, andnecessity
speaking for the Natlon, as President, and he indicated the
of keeping interest rates down. I want to. harmonize your accomn.
plishnients through Mr. Legge of boosting the interest rates on these
poor fellows that need it most.

bl

do
th

hai

Mr. BA,N S. I think you have succeeded'front your own stand.

point in tying that lip into the record all right.
81nator BLAIXE. I on are quite satisfied, are you I
Mr. BARN.-F. I should think you would be satisfied.
Senator BLAINE. I will not question you any further on that prop.

osition. There is another proposition, however, that I would like

to get some information upon. I am interested in this question of
lobbying with departments. The Minneapolis Morning Tribune of
August 12, 1920, carried the announcement in headlines:
Julius la irmes to ied glujit market it Mineapolls; $50,000,000
to aid vegetablle and frult growers.

association

Are vou a vegetable grower?

Mr. ,3ARNES. Yes.
Senator BAINE. You have a little backyard?
Mr. BARNES. I have an interest in a 1 200-acre farm in California.
Senator BLAINE. Corporate operations

Be

Mr. BAINES. Cdrporate operation; yes.

Senator BLAlNE. You go out there and dig weeds?

Mr. BARNES. No. I dig up the money to keep it goincv. Senator.

That is the only digging I do.

Senator CARAWY . If you succeed in doing that you beat most of
them.
Mr. BADN"R.

Yes. I am busy at it at times.

Senator BLAINE. You are not a fruit grower, except through the
corporation 1et
-r. BARNES. That is all.
BLAINE. Was there such an organization planned?
Mr. BARNES. Yes.
Senator BLAINE-. Will you tell us when it was planned, where it

Senator

originated, and with whom it originated?

Mr. BARNvs. The organization originated as the outgrowth of the
Federated Growers' Cooperative Organization, which has been op-

thi
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LOBBY INVESTIGATION

1645

erasing for several years in New York, handling fruits and vegetables, in the perishable field.
Senator BLAINE,. With whom did it originate?
Mr. BARNES. I think Doctor Jardine and Arthur Ruel.
Senator BLAINE. Now, let us see. Doctor Jardine-I don't know
him as a doctor. Is he a horse doctor?
Mr. BARNES. No. Maybe you know him as Bill Jardine. He used
to be Secretary of Agriculture.
Senator BLAINE,. No; I do not. The farmers will know him if you
ivill give his name.
Mr. BARNES. Dr. William M. Jardine.
Senator BLAINE. le was formerly Secretary of Agriculture?

Mr. BAUNNE. Right.

Senator BLAINE. We get a lot of high falutin ideas about doctors

and colonels and all that sort of thing.

Senator CARAWAY. I was inclined to think he was something of a
doctor when he was.Secretary of Agriculture. He was the first
aid to the undertaker.
Senator BAIxm. He killed most of his patients. He was one of
the promoters, and you were one of the promoters. Robert W. Bingham-do you know Robert W. Bingharn?
Mr. BANES. Yes. He has a title, too. He is a judge.
Senator BLAINE. He is a publisher, is he not, of the Louisville
Courier-Journal?
Mr. BARNES. He is known as Judge Bingham.
Senator BLAINE. But he is a publisher, however?
Mr. BARNES. Yes.
Senator BLAINE. But he does not sit on the bench, does he?
Mr. BARNES. I don't think so.
Senator BLAINE. Do you know Mr. Arthur H. Ruel?
Mr. BAuNES. Yes.
Senator BLANE. Where does lie live?
Mr. BARNES. In New York.
Senator BLAINE. Doe- he work in the garden, too?
Mr. BARNES. I think lie owns some fruit ranches in Florida,
Senator.

Senator

BLAINE.

What is his main business?

Mr. BARNES. Managing the Federated Growers that I have just

described.
Senator BLAINE. Do you know Mr. Gray Silverf
Mr. BARNES. I know him; yes.
Senator BLAINE. Who is le?
Mr. BARNES. Well I don't know him intimately.
Senator BLAINE. What is his business?
Mr. BAR Es. To tell yoa the truth, I don't know, strange to say.
Senator BLAI E. Vel, have you been in the waiting room of the
Senate wing of the Capitol?
Mr. BARNES. Senator, I have never been there, I am sorry to say.
I do no lobbying, you see.
Senator BLAINE. Then, if you had, you would see Mr. Silver
there. If you had been there you would see him quite often. He
is.popularly known as a lobbyist. You don't know what his business is?
Mr. BARNES. No; I do not, Senator.

1646

LOBBY INVESTIGATION

Senator BLANE. What became of that organization?

Mr. BARNES. It is still alive.

Senator BLAINE. Did you capitalize for 50,000,000?
Mr. BARNES. We provided for a capital stock structure of

pan

Did you take it up with the Federal Farm

bus

50,000,000.
Senator
Board?

BLAINE.

Mr. BARNES. Yes.

Senator BLAINEp. Has this organization received a loan from the

Farm Board?
Mr. BARNES. Not a dollar, nor asked any.
Senator BLAINe. Does not ask for any?
Mr. BARNES. No.

Senator BLAINE. It is an entirely independent organization?

Mr. BARNES. Yes.

Senator BLAINE. It is not made up of cooperatives?

Mr. BARNES. In the end it is supposed to rest on cooperatives.

Senator BLAIF. You hope it will be, but presently it is not?
Mr. BARNES. Presently not..
Senator BLAINE. It is capitalized for $50,000,000?
Mr. BARNES. It provides for a capital stock structure of that
much.
Senator BLAINE. How much of the capital stock has been author.
ized and sold?
Mr. BARNES. Whatever we can persuade the industries to buy.
Senator BLtAInE. Well, it has $50,000 authorized capital struc.
ture. How much capital stock has been issued?

OPt 1

bus

Mr. BARNES. None.

Senator BLAINH. Where do you get the money with which to en.
gage in buying fruit and vegetablesI
Mr. BARNES. We are not yet engaging in it.
Senator BLAiNE. Oh, you are not yet engaging in it?
Mr. BARNES. No.

Senator BLAINP.. Oh, this is just a dream?

Mr. BAnNES. No, no. It is a practical plan.
Senator BLAINE. It is something that may materialize?
Mr. BARNES. Yes. It is just possible that with patience it may
materialize.
Senator BLAI.Xr. Do you expect to borrow money through the
Farm Board?
.
I hope not; not a dollar.
Mr. BARNE..
Senator BLAINE. You do not think you would be entitled to bor.
row money front the Federal Farm Board at 31/ per cent, do you?
Mr. BAUXES. I think so, under the law, but I hope not to.
Senator BLAINE. You think you would be entitled to borrow
money at 3% per cent interest?
Mr. BARNES. Yes.
Senator B,AINE. For this particular organization?
Mr. BARNES. Yes.

Senator BLAINE. That is all.

Mr. BARNES. Mr. Chairman, may I go a little further, since this
question has come up?
Senator CARAWIAY. Yes, sir; I would like to say, of course, inasso
much as that is your private business, you can just make public
whatever you wish, and nothing else.

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LOBBY INVESTIGATION

1647

Mr. BARNES. Thank you, Mr. Chairman. It is my intention, if

we can carry it out, that we shall sell the capital stock of this company to provide the investors; that itbear 7 per cent and 8 per
cent, as alloived under the cooperative organization law; that we
will (to it on money arrived at in the markets in the ordinary
business method, and not by Government subsidy. That is my hope.
Senator OAAWAY.
C
Mr. Darnes, this letter that I hold here, which
I called your attention to, you know it is a letter that you recently
sent out under the regular news service of your chamber of commerce. I believe you say this was authorized by the Committee on
Agriculture?
Mr. BARNFS. It was framed by the Committee on Agriculture.
Senator CARAWAY. What was the purpose of issuing it, Mr.
Barnes?
Mr. BAiRnEs. The purpose was to show to our members that the
Chamber of Commerce of the United States was interested, accordingy to its declaration, in the sound development of cooperative organizations, and would keep in touch with the policies.
Senator CARAWAY. It was for the purpose of arousing public
opinion and getting intelligent discussion of that question?
Mr. BARNES . I think that is a fair statement.
Senator CARAWAY. That you hoped to be reflected in the sound
business administration of the Farm Board?
Mr. BARNES. Right.
Senator CARAWAY. I want to have this included in our record.
(The letter referred to is as follows:)
C't.m

miiIt or CossmF.'W

OF TIE UNITED STAT S,

1Immedilate release.]

WAStNoroN-Dcefl hr ---- lusiness support of the principle of argieultund cooperative marketing and approval of the creation of a Federal farm
board tre reiterated in a statement issued to-day by the agricultural service

depirtnient committee of the Chamber of Cominerce of the United States.

At the satime time attention Is called to the fact that the national chamber
advocates cooperative marketing and measures In support of It only In so far
as they are not discriminatory against other business enterprises.
The statement Issued to-day has been under consideration since the meeting
of the national council of the chamber in Columbus In October when the tentative draft was prepared and the conclusions It presents tare the result of study
over a period of several months. It reiterates the chamber's support of the

principle of cooperative marketing '"along sound economic lines" and the

creation of a Federal Farm Board and stresses the necessity of observing
basic business principles "which are prerequisites In the success of any other
business enterprise." It also expresses the conviction that the Federal Farm
Boan, facing heavy tasks, should have 11the benefit of the most constructive
thought which American business is capable of giving."
The membership of the chamber's committee of which W. L. Cherry. presi.
dent of the Cherry-Burrell Corporation, manufacturer of dairy and creamery
equipment. of Chicago, is chairman, Includes producers and distributors of
agricultural products and representatives of business activities closely associated with agriculture.
The statement In full follows:
"The position of the national chamber with respect to cooperative marketing
has been established by referendum No. 62, through which the chamber Is
committed in support of the principle of cooperative marketing and to the
desirability of asoclation by producers into such cooperative groups along
sound economic lines.
"Upon the principle of cooperative marketing of agricultural products is
predicated the agricultural marketing act, passed at the special session of the

1648

LOBBY INVESTIGATION

Seventy-first Congress, under authority of which tile President of the United

States has created the Federal Farm Board now functioning,
"Prior to the passage of this act the Chamber of Commerce of tile United
States by resolution adopted at its seventeenth annual Meeting .went on record
as recognizing it to be in the national interest that the operation of this act
should have beneficial results of widespread Importance, and that the nationaI
chamber and its membership should contribute In every way withli their
lwwer toward the success of this undertaking.
"Pursuant to this declaration, the national chamber through the same reso.
lution authorized a committee to follow the development of the plans of the
Federal Government, to suggest ways in which the chamber and its members
might lend their assistance and to bring forward tiny question upon which the
chamber should reach further policles in relation to tie effectuation of tis act.
"In line with the authorization conveyed by thlat resolution, the agricultural
service department committee of the national chamber h.is given study to the
plans and policies of the Federal Farm Board as made public, and han Con.
sidered ways and means whereby it could aid In bringing about effectuation
of this act in such manner as to reflect back to agriculture and rehted Indus.
tries the highest possible benefits consistent with sound business principles.
"After careful study the committee is of the opinion that the logical ap.
preach to achieving such ends would be to set forth certain principles which, in
its opinion, should be observed in future administration of the act. Such effort
on the part of this commtltee is but further projection of the principle already
enunciated by the chamber that producers of agricultural commodities should
be encouraged to associate themselves into cooperative groups along sound
economic lines.
"The committee is not able to take a position other than that cooperative
marketing for its success requires the sime high degree of managerial ability
and observance of basic business principles which are prerequisites ina the
ssuse&q of any other business enterl)ris.e. In the committee's opinion, there.
fore, leadership in the field of cooperative marketing must be composed of men
of tried and proven ability in business managerial capacity. As in all other
types of business endeavor, this leadership needs to be imbued with motives
of unquestioned integrity, looking toward the securing of maximum ioneflts
to All lartieA and interests touched by their operations.
"The marketing of agricultural products to-day, as recognized by both
cooperative and noncooperative marketing agencies. is a function which de.
mw dids
operation under minimum costs. Justification for any radical change
in our marketing system based upon Federal aid rests primarily upir.n the o.
sibility of new systems to function at lower costs in the many procef s of
distribution or otherwise to greater benefit of the producer.
"The committee believes that in the prosecution of its task the Federal Form
Board will give due weight to this vital consideration. And the committee further desires to express its belief in the principle that proper safeguarding of
security for loans advanced by the Federal Farm Board to cooperative market.
ing associations requires positive appraisal of the comparative economics in
marketing agricultural products by cooperative associations and established
private agencies.
"Again, it is of vital importance to the preservation of private capital
invstments fitstorage and other physical marketing facilities, that unnecessary duplication of such facilities by theo use of Federal loans be not allowed.
"Indeed, the agricultural marketing act specifically recognizes the necessity
of sn(h a safeguard for vested capital rights, au set forth in subsection (3)
of setlion 5 6t the act:
"'No loan for the construction or purchase or lease of such fiellites shall
be made uIntle tihe ('o-priitive ustsothlioni demonstrates to the satisfaction
of the board that there are not tavahlable for its use tit reasonable rates
existing stitoble storage or other physic, l marketing facllitles.'
Prior to the Ia,"ige of this net the national clmnlber reemphasized its
adherence to the principle that private enterprise should trot be. subjected
to conipetitlon resulting from discriminatory treatment of cooperative assw.
1tions.

"Oil January 25, 1029, the board of director of the national chamber inter.
pietel the chamber's comnniliniet in suplprt of the principle of cooperative
marketing by voting the following statement:

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LOBBY IN'VESTIOATION

1649

i' In view of the claniher's commitnient.m In other directions, this 'commitjuent litfavor of cooperative marketing Is to le iterpreted as meaning that
the chamber advocates cooperative marketing mid measures in support
of it only In so fair us they are not discrininutory agtinst other private enterprises.'
"It Is nli estallshed principle, which has borlte the test of time, that any
business enterprise to enjoy continued xUccess must rest primarily upon a
foundation which hts been built slowly nnd carefully, aid in which the
coumloent parts have heen suJe(.ted to thorough evlolonle test before being
gcipted

for use In tie

general organization structure of that enterprise.

Successful American businesI.qI

built front the grouitd up.

Successful coop-

erative marketing enterprises do !lot offer ai excel)tlIn io tisls rule. Of vital

importiuico to the latter Is tile Iomlilty of it.4 )einlloro.

,Onco again, It is appitrent thit 'li the organi:otion of cooperatives, as lit

that process with respect to private enterprise, tie highest type of husiness
leaideleisllp is ilevewsary. ''IThp voinlttittee feels strongly that this
.orgailli'atioii

prerequisite of success, tllWlys should Ie gliVell

entrusted the heavy responsibility of gutidigh

lue welght to who'll h1tig beeh

he cooperative marketing move-

ment to a io.isition of staiilty.

" IliIts study of the provisions of the agricltural Markeling act the com-

ittee Ihas given much thought to possible 4:Outingetclies li tellio nitoc sltuatilun Involving spclil produts which llght Iivoke the for tit of stbl.
Izatiuli corporatihis. Tils experinent in lirlc stabilization has not yet been
It will call for the most serious study
attempted by the Federal Pairi load.
to deterineio tlie level litwhich lte price tf tiny agricultural commodity
afely might be taken ats a stabilized level.
"iTheoretlcally Ideal In'c siaillilzathm would ring to producers of an
ogricultural oinnodlty itlorhee stilllelitly it e.e5s ,f cost of produellon of
that commodity to assure such producers itfair return upon their thine, labor.
and capital invs!nuntAS. But cost of prwluction is an elusive factor. WhVeat
grown in regions where large acreages permit of economic use of labor, saving
devices, carries a production cost lower than thit of wheat produced on
smaller acrealges and where such radical reductions of lbor charges cani
not so generally he effected.
"There also are to 1)e considered variations III individual etliciency among
producers of any agricultural commodity; the.-se varlatlons litturn produce
variations i costs. These and other faetors renler It extremely dlileIult to
name either arbitrarily or otherwJse sitequitable i4tbilizatlon 10.o.
"Again, it must be remembered that the agrlcultural marketing act Is
designed fundamentally to alleviate distress among pr'oduceis resulting front
low prices which are the direct result of uncontrolhtble surplus productioti f
those commodities. To arrive at a stabilizatlt price whihl would assut,
adequate production of a commodity without the attendant evii of overprodwtion stimulated by price Is an undertaking which e.hallenges the best thought
of all concerned Inthe present and future welfare of American agriculture.
"It is the committee's belief that the Federal Farm Board i approaching
the task of determining an equitable and safe stabilization price will give due
weight to the iany perplexing factors Involved In snch it determination is
well as the possibility of defeating the legitimate object of such on effort by
overstimulating production.
The national chamber stands committed in favor of the principle of cooperative marketing and to the creatloin of a Federal Farm Board. This
committee believes that tilis board provides American agriculture with tite
most powerful and potentially helpful agency yet created for that Indu.stry.
Its tasks are heavy, its responsibilities equally great. It always should have
the benefit of the nost constructive thought 'hich Atc'rican business is
capable of giving. For its problems are the problenla not only of tile producer.
but of the American people as a whole, cleallng as they do wltl% tile very
nemsites of life.
Members of the Agricultural Service Department Committee arp: W. L.
Cherry, chairman, president Cherry-Burrell Corporation. Chicago. Ill.; J. S.
Orutchfield, vice chairman, president American Fruit Growers (Inc.), Pttsburgh, Pa.; M. M. Baker, vice president Caterpillar Tractor Co., Peoria, Ill.:
,.P. Iligelow, president Ogden State Bank, Ogden, Utah: John Brandt, president Land O'Lake Creameries, Minneapolis, Mini.: A. C. lardison. farmer.
Santa Paula. Calif.; Harrison U. Howe, editor Industrial & Engineering Cheni-

1650

LOBBY JYNVISTIGATION

istry, Wfashington, D. 0.; Flward P. Peck, vice president and linager Omaha
Elevator Co., Omaha, Nebr.; Harper Sibley, farm operator, Rochester. N. Y.;
Alfred H. Stone, vice president Staple Cotton Association. Greenwood. Miss.;
D. D. Te*-nnev, president the Tenney Co., Minneapolis, Min.; Hi. K. Thomas.
manager agricultural department, Rhode Island Hospital Trust Co., Providence,
it. I.: James A. Walker, president Blue Valley Creamery Co., Chicago, Ill.;
Mort Woods, Prlmrose Farm, Ardmore, Okla.

Senator Ronissox of Indiana. Mr. Barnes, I understood you to

say you were in favor of cooperative plans?

M3r. BARNES. Yes.
Senator Romx.sox, of Indiana. Just state to the committee how
long you have been in favor of cooperative marketing organizations.
Mr. BARNEs. As long ito as 1923, when I was president of the
Chamber of Commerce of the United States, I made several public
utterances on that, Senator, in favor of cooperative organization.
One of them before the Farm Bureau Federation in December, 1923,
and pledged the cooperation of the United States Chamber of Coin.
inerce in any sound theory for cooperative organization. That has
extended over some years, I believe, of consistent, sound aid to co.
operative sentiment a6d organization, and it has resulted in appre.
ciation. I tliik, fairly on the part of farm organizations that. we
have been frlindv anil helpful, as shown by some public utterances
of farm organization leaders.
Senator ROB.INSON of Indiana. You were an advocate of coopera.
tive organizations then before this legislation was ever passed
Mr. BARxNs. Long before, Senator.
Senator RoniNsON. of Indiana. And that has been your consistent
attitude?
Mr. BARNES. Yes.
Senator Rorniso- of Indiana. Favoring the cooperatives?
Mr. BARINES. Ye.Q.
Senator Rornxsox of Indiana. That is all.
Senator CARAWAY. If you please, here is Senator Nye, who wants
to ask you a question. He is not a member of the committee.
Mr. .mitxFS. Certainly.
Senator NYE. I did not come here this morning to ask question.
I came to listen, as the witness is here not by any invitation or sug.
gestion of mine, but, if I may be permitted, I would like to ask Mr.
Barnes a few questions.
Senator CARAWAY. Yes.
Senator NY. Mr. Barnes, you made reference to those in the West
who are finding it possible to produce wheat at 40 cents a bushel. Is
there any appreciable number of people who are interested in farm.
ing on such a scale?
Mr. BAR1NX. Senator, I think to answer that fairly there should
be a more detailed investigation than I have ever seen, but by common
report, credible report, it is done in somecases; yes. .
Senator NYE. Do you know of any individual who this year produced wheat at such a low cost?
"
Mr. BARNES. I do not, first-hand; no, sir.
Senator Ny. If there was anyone in the West who perhaps could
come in under an inclusion of that sort it would be Mr. Campbell,
would it not?
Mr. BARNES. No; I would not take Mr. Campbell as the cheapest
producer in this country.

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LOBBY INVESTIGATION

1651

Senator NYE. You think there are others producing even more
cheaply than lie is?
Mr. BAINES. Yes, sir.

Senator NYE. Would you say that Mr. Campbell might approach

that mark of production costs?

Mr. BARNES. In a year of normal yield; yes.

Senator Ny.. In arriving at Ins costs, then, how would you determine his overhead? Would you determine that lie had to make a
return upon the capital amount that he had invested in the operation
or the actual amount of money that had been planted at some time or
other in that same operation I
Mr. BARNES. Now ou are going into veryofinvolved
that should
the itemsbookkeeping,

Senator, and there will always be questions

properly be charged in any one year's operation, but roughly, whiltever it would cost to produce a crop in dollars, divided by the bushels raised, would give the approximate cost per bushel.
you do not get my point. Mr. Campbell
NYE. Iofthink
Senator
years ago that some eminent eastern capitalists
a number
stated
were associated with him in his agricultural operations out in Montana, and they had several million dollars involved in that operation.
They were never able to make it up, as I understand, and finally the
others who were interested with Mr. Campbell sold the entire property to him for little or nothing. Is that true
Mr. BAHNES. I do not know it by first-hand knowledge.
Senator NYr,. If it is true, upon what should the production costs
be based? Upon Mr. Campbell's actual investment as an individual
or upon the tota! of the investment that had been brought into play
during uny previous times?
Mr. BARNES. In arriving at production cost per bushel?
Senator NY.. Yes.

Mr.

BARNES.

I think that production cost per bushel should be

actual out of pocket outlay in the production of the crop, divided

by the number of bushels produced.
Senator NYE. In producing the crop by the individual who then
was conducting the operation?
Mr. BARNES. Yes; at any time.
Senator NYE. The fact remains, however, that on the capital money
that was invested in that undertaking they were never able to pay a
reasonable rate of interest. If Mr. Campbell has been successful
since that time it has been largely because he has large holdings of
machinery that were practically given to him in the settlement,
whereby he became the sole owner of that undertaking. But perhaps
that is quite aside from the purpose of this committee.
Mr. BA Nze. May I ask you, does Mr. Campbell state that he car
grow wheat at a profit ofi these prices at present?
Senator NYE. I have not heard Mr. Campbell say that.
Senator C AwaY. He has been making more noise than anybody
I know of about depression. The members have heard more about
0
his farm operations than anybody else.
Mr. BARNEs. The reason I asked that is that not more than a year
or two ago Mr. Campbell told me with considerable exuberance how
much profit he had made out of that year's crop. I just wanted to
bring out the fact that he either does make money or he does not.

1652

LOBBY INVESTIOATION

Senator NYE. I think there have been years when Mr. Campbell
made money under this more recent arrangement.

Mr. BARNES. I think that is fair.

Senator NYE. In answer to a question offered by the Senator from

Indiana, Senator Robinson, you indicated that you had been on
record in support of cooperatives since 1923 or 1924. Were yolt
favorably ichnced toward cooperative agricultural enterprises prior
to that time?
Mr. BARNES. No. I can not recall that I was.
Senator NYE. Is the grain trade-the merchants in Duluth and
Minneapolis-are they for cooperative enterprises among farming
people? Do they approve it in a general way?
Mr. BARNFKS. I think not.
Senator NYE. And never have 1
Mr. BARNES. No.
Senator NYE. The fact of the matter is that the Federal Trade.
Commission has written one record here indicating that immediately
a cooperative became an influence at all in the marketing world, they
would resort to all manner of prograni to wreck that cooperative.
Mr. BARNES. Senator, Mr. Denman of the Farm Board stated not
long ago that 40 per cent of the grain of this country was handled
by local cooperatives. That does not look as if the grain trade had
wrecked them.
Senator Ny. No. I had in mind, and I am sure that your ac.
quaintance with the -,situation in the oi'thiwest makes you hiiVO it in
mind too, the experience of the old Equity Cooperative Exchange.
Do you have in mind the study',that was made and the report that
_e
was finally made by the Federal Trade CommissionI
Mr. BAnm. Without remembering it in detail, I remember there
was a report; yes.
Senator Nm. The Federal Trade Commission found that the
Equity Cooperative Exchange had been wrecked through a program
of boycott and sabotage conducted by the grain trade, did it noti
Mr. BARNES. You say so. I do not recall the findings.
Senator Nm. Well the report is very clear in that respect.
Mr. BARNES. It did go into receivership, did it not?
Senator NYE. They finally went into receivership.
Mr. BARNErs. And still owe some of their farmer members money
on shipments made to them during those years.
Senator NY. Yes, indeed, and, any cooperative undertaking that
was endeavoring to reach out as the equity was at that time, would be
subject to the same identical line of opposition and campaign that
the equity had to submit to.

Mr. BA WN'S. You do not think it was a question of poor manage.

ment?
Senator NYE. I do not, and the Federal Trade Conumission did not
find it was a question of poor management. That being the record
of other days with relation to the attitude of the grain trade, it is
not at all surprising, is it, that at this time when the Federal Farm
Board, administering legislation passed by the Congress, should set
out to encourage the building of more powerful cooperatives among
farm people-it is not surprising, is it, from the standpoint of the
grain trade that there would be opposition to it?

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LOBBY INVESTIGATION

1653&

Mr. BARNES. I think the opposition of the grain trade centers

only on. what they feel is the unfair use of public moneys.
Senator NYE. But the Equity Cooperative Exchange never had anypublic money or Government money to operate with.
Mr.BAR24ES. No. Again, my feeling is, without intimate knowledge of it, that it was wrecked by poor management.
Senator NYE. The Federal Trade Commission did not say that.
The Federal Trade Commission found and reported that the tEquity
had met its fate as a result of a program of boycott and sabotage at
the hands of the grain trade, the Minneapolis Chamber of Commerce, more particularly its secretary, who was then and probably
still is Mr. McHugh.
Mr. BARNES. He is still secretary I think.
Senator NYE. With the aid of the newspapers in the Northwest,
who carried propaganda for that. That, in sum and substance was
the conclusion of the Federal Trade Commission as a result of its
inytestgation of the wrecking of the Equity Cooperative Exchange.
Now that being the attitude of the grain trade toward the Equity
Cooperative Exchange, has there come any change of mind on the
part of the grain operators, commission men, toward cooperative.
.
enterprises I
Mr. BARNm. Yes; I think there has been some change, Senator.
Senator NYE. Just how has that change been shownI
Mr. BARNS.. It is shown by the willingness and readiness of com-.
mission merchants to advance money to local cooperative elevators
throughout the entire grain country, which, as Mr. MeElvy said
today, handled 40 per cent of the graih of the country.
Senator NYm. Has it even been indicated by willingness on the part
of the grain operators to admit cooperative representatives on equal
terms in their grain exchange.T
Mr. BARNES. They opposed that for a long time, but of course,.
that is no longer the fact..
Senator Nii. They opposed it until about a year ago this time?
Mr. BARNEs. That is no longer a fact now.
Senator NYE. One of the cooperatives has finally gained a place on
the Duluth Board of Trade, but that is only within the last year.
Now. then, Mr. Barnes, do you think that any program undertaken or
encouraged by the Government to aid cooperatives, can be fully effective if it does not in some degree--some great.degree or some small
degree-step up on the toes of the grain commission men?
Mr. BARNES. Senator, I think the grain commission men are will.
ing to see evolution in'business which displaces them by superior
service. They are only objecting to the use of Government money
which they themselves contribute, in establishing preferences and
attractions to join cooperatives without any real convication on the.
part of the farmers, which ought to be a fair test of a farmer's con.
vication as to whether he shall join a cooperative or not, such as
exists in Canada to-day.
Senator NrYk:. I have listened to your objection to the Farm Board
program. Do you think that the Farm Board has authority or
power to extend lines of credit to independent operators?
Mr. BADNES. I should not think so.

1654

LOBBY INVESTIGATION

Senator NY. Then you think that the Farm Board goes beyond
its authority and power when it extends these loans of cheaper
money to the cooperatives?
Mr. BARNES. No.
Senator NYE. Then, how can the Farm Board bring its action to a
point that can have your approval and the approval of the grain
men?
Mr. BARN". I will show you. They say, "We will advance $1.25,
Minneapolis basis, for wheat, but only to members of a cooperative
organization. To no other farmer." If they made that $1.25 avail.
able to all comers, like it was in the Grain Corporation during the
war, which I administered, then that would be on all fours, and fair
competition, and the man who joined the cooperative farm organi.
nation would do so from the conviction that he belongs for associa.
tion loyalty and for the benefit of some kind of coordinated control
of enough of the crop to stabilize the price.
Senator NYE. But you have just agreed that the Farm Board has
no authority and no right to extend these avenues of credit to inde.
pendent operators or to other than those who were affiliated with
cooperative enterprises.

Mr.

BARNES.

br
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wit

bite

No. You read too wide a meaning. As I read the

act, there is authority in the act for the Farm Board, through stabili.
zation corporations, to buy grain in the open market. They should
buy it at the terminals from all comers, and not limit it at country
stations only to cooperative organization members. That is dis.
crimination and unfair.
Senator NY. You think, then, that through stabilization corpora.
tions the Farm Board can extend credit to institutions other than
those that are strictly cooperatives?
Mr. BARNES. No. The stabilization corporation must be coopera.
tive, but it can buy on the open market from all comers, members of
cooperatives or not. In the stabilization program, I do not admit
either the fairness or soundness or logic of extending any price
whatever by Government money. .ax
Senator NY. Mr. Barnes, notwithstanding all that opportunity
to the cooperative farmer to borrow on the basis of $1.25 in Minne.
apolis, do you not think it saved a very severe situation in the grain.
marketing field f
Mr. BARNES. I think that is a fair question. I think it did have
some effect on sentiment at the time. The purchases were manifestly
very inconsiderable, but, forming a great sentiment which makes it.
self effective through future trading markets that you and others so
often have condemned, nevertheless did stabilize the price. I think
you do not appreciate the service and protection of farm prien
through these future trading markets, and the services they give.
Senator NYE. Perhaps I do not, and I am ready to concede that
there can be a wide difference of opinion-there, but the action of the
Farm Board in fixing the loan value of wheat at that time, perhaps,
saved the farmers a drop in wheat prices that might have zone to
90 or 80 or 70 cents a bushel. Is not that true, with this Wall Street
scare that was on at the time?
Mr. BARNES. I think all security and commodity values were then
subject to hysteria, and where they might have gone before they
recovered stability no one can say. But no such -fall as you men.

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LOBBY INVESTIGATION

1655

tioned would be probable because a little further fall would have

brought into line the whofe consuming power of Europe, which was
just under the market.
Senator Nym. Very well. You have told of your conference with
Chairman Legge of the Farm Board and you said in effect, as I
gathered it at the time, that Mr. Legge was rather in agreement
with you, that it was a mistake to have established this loan price.
Mr. BAnNES. No. I made clear that he does not admit that.
Senator NY& He agreed with you, though, that it was unfair
competition?
Mr. BARNm. As to establishing the priceI
Senator NYE. Yes.

Mr. BARNS. Oh, no. He maintains that it is perfectly fair.

Senator NYE. I understood you to say that Mr. Legge had agreed
with you that making available to cooperatives thii loan on the
basis of $1.25 at Minnea olis afforded unfair competition.
Mr. BARNES. No. Mr. LgIe does not admit that.
Senator NYE. I was sure that he had not. At least, he has not
backed up from the position he took at that time.
Mr. BARNES. No. I did not intend that any such color should
be carried, and I do not think it is in the record.
Senator NYE. Mr. Chairman, you offered a letter from the chainber of commerce.
Senator CARAWAY. Yes.
Senator NYE. May I have a copy of it?
Senator CmAwAy. Yes. While you are looking at that I wish
to put this letter in the record, from Mr. McCabe, as evidence of
his ropaganda.
(The letter is as follows:)
IUNTNA20WAL ELEVATOR CO.

Duluth, Minn., Deoember 4, 1989.

DAR COufsotms: This letter marks our initial correspondence with all our

customers. First of all we want to thank you for your patronage in the past
years, and assure you we appreciate it. We believe it has been to our mutual
advantage, and that by closer cooperation between this company and you,
our services can be made of much more value to the producer In the future.
There undoubtedly will be some changes In the grain business on account
of the Federal marketing act, but this company will continue to operate as
in the past, improving our service as the opportunity is offered, for our facilties and services are needed by the grain growers of the Northwest.
We are not in opposition to the Farm Board, except, as we might meet it
in a competitive way. At the present time the Farm Board is operating
through certain agencies that have been active through the Northwest during
the past years. The advances which these organizations are making are
simply advances that have to be repaid. The Farm Board is not guaranteeing
any price and if the grain is sold at a loss, that loss will have to be paid

back to the Government. We also believe that if there are any advantages
to these advances, they have no right to limit them to members of their company only. The rate of interest that they are charging Is lower than what
we have been charging, and the amount of advances is larger than what we
have been advancing, but there are other financing charges and the cost of
memberships, insurance and bonding which takes away in a large part the
desirability of taking these advanced on stored grain. We believe that we
can render other services that will more than overcome these Items.
We want also to advise you against the signing of any contracts or agree.
ents at this time, as there are a number of so-called cooperatives fighting
among themselves over which is to gain the favor of the Farm Board. The
papers have Just announced that the board has approved the organization
78214--0-n 4- 11

1656

LOBBY INVESTIGATION

plan of the Northwest Groin Cooperative. This company would be itconisollda.

tion of several different factions now in existence, but they have a long way
to go before this organization will be on at real working basis. It 1ight be
inferred from what you have been reading In the newslPers und hearing
from various !,ourees that the established gralto business would be wilfud out

in a single stroke. We wish to sa. that aiiy established business, built on

sound principles aind hardened by strong competitive achevezet1W,
will endure
lonig aftae unsoulid and unjust schets have b0en forgotten. Ielonollnl IIIlWs
can be flouted for a time, but within at short while th,,y are bound to assert
themselves. Ask yourself, when confronted with any new propositloji, -illtve
I all the right Information on the case."
We Intend to keep in close touch with you from now on, and will sent you
what Information we are able to pick up from time to time.
Respectfully yours,

me

Pi
in

INTERNATIONAL ELEVATOR Co.

By BE

0. MCOAiau.

Senator N r. On last Thursday, this press release from the Chain.

ber of Commerco of the United States--it is not dated, but I think
it was on Thursday ?f last week-were you conversant with its

contents before it was issued?

Mr. BAuXES. Yes.
Senator NYE. I find in that press release this language:

In view of the chamber's commitments In other directions, this commitment

in favor oV cooperative marketing Is to e Interpreted as meaning that the
chamber advocates cooperative marketing and ukeasur's in support 4f It only
in so for as they are not discriminatory against other private enterprise.

You quite approved that commitment?

.
Mr. JJAIIMNs. rhat would be my personal notion; yes, sir.
Senator NYe. Now, wherein, Mr. Barnes, in the present marketing
set-up is there opportunity for the cooperative, under that col.
struction?
Mr. BAitNES. In the first place, you have, as I say, regional co.
operatives handling 40 per cent of the grain crop. It is po.vible
to set up on that, a national organization, under certain policies
which will put in the control of that national association a sufficient
per cent of the grain crop, under its decision as to price and time of
sale, to exercise a stabilizing effect on values, just like the Canadian
pool does, and has for years, but it will not be done by attracting
into the cooperatives memberships by premimns-unsutable uumem.
bership, lacking loyalty of any conviction. . .
Senator NY. Such success, as you indicate, is quite largely depend.
ent upon the ability of these cooperatives who are handling 40 per
cent of the wheat, at some turn of the marketing road, being brotfiht
together in one unit.
Mr. DBAUnIUEs. Yes.
Senator lYK. The chamber of commerce is not opposed to any
such knitting together of the cooperative enterprisesm
Mr. BAUXES. NO.

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Ma

as
tak

I.

Senator NY. And not objecting to their being aided through

channels of credit that the Farm Board has made available?
Mr. BAInES. Discriminatory preferential channels of credit; yes.
Opposed to that.
Senator NY. Eventually, under such a program, assuming that
40 per cent of the grain is cooperatively marketed at some turn in
the road, sooner or later they are going to begin to grow and reach
that growth where there Is going to be more serious competition
than there is at the present time, to private enterprise.

in
Cou

$1.

LOBBY INVESTIGATION

1657

Mr. BAimEs. I think so.

Senator NYE. And might themselves invite increased growth as a
-esult of that firmer unit which they present.

Mr. BARNES. Yes.

Senator Nyp. What will be the attitude of tHie chamber of coinmerce when that time cones?
Mr. BA NtEs. When it is done without unfair preference out of
public moneys, the chamber of commerce will look on it as evolution
in business, such as many industries face.
Senator NYE. How long may that evolution be in producing the
result that, from the farmer's standpoint, is ultimately desired?
Mr. B NES. The Canadian cooperatives has done it in live years.
Senator NE. Well, is the Canadian cooperative handl;lfg more
than 50 per cent of the product of the Canadian farms?
Mr. BARNES. I think 48 or 49 per cent are the figures for last year.
Senator NYE. They are having a hard time of it nevertheless, are
they not?
Mr. BARNES. There is no evidence of it.
Senator NYE. They have had a hard time of it?
Mr. BARN&s. At times; yes.
Senator NYE. They are not altogether out of the woods now, are
they?
Mr. BARNEs. No; they are not.
Senator NYE. They are hard pressed right along?
Mr. BARNES. I don't know how hard pressed, Senator, but they
have shown extraordinary loyalty to their memberships.
Senator NYE. Indeed they have, and I hope that we can have the
same loyalty here in our own country toward the cooperative enterprises as has been demonstrated in Canada.
Mr. BARNES. So do I, Senator, frankly.
Senator NYE. But, do you feel, Mr. Barnes, that the grain trade
has been altogether fair in the method they pursued in seeking to
cause the Farm Board to retrace or retract any of the steps it has
taken?
Mr. BANEs. Entirely fair, open and above board, and in the usual
method of business, exchange of views and experience, perfectly
proper methods.
Senator NmY. You are acquainted with this letter of the H. L.
Hinkleson grain merchants?
Mr. BARNES. I read it in the Congressional Record. Is that the
one?
Senator NY. Yes. Don't you think there were included in that
letter some insinuations and inuendos that were unfairI
Mr. BARNES. One clauAe about Chairman Legge, I have no sympathy with whatever. That is a very unjust imp Iication.
Senator Nm. Really what was the purpose of the Hinkleson Co.
in sending out that letter generally,0o their trade ?
Mi' BARNES. Just Yet the picture that they have customers in the
country shipping grain to them. Those customers can not buy from
the average farmer because they can not pay a price equal to the
$1.25 basils, which the cooperative elevator alongside of them could
Pay by favor of the Farm Board. That is enough to make anyone
biter. Remember these men believe they are in an honest business,
and so do 1. They demonstrated during the war a great deal oi

1658

LOBBY INVESTIGATION

patriotism and efficiency, and it is proper for them to take steps to

defend their business. Individual judgments will always err. There
will be unfair implications like that described in that letter, which
no fair-minded man can defend.
Senator NYE. What was the meaning of Hinkleson & Co., if you
want to pass upon it, when they asked their correspondents this:
Did you ever stop to think what a change in administration might do about
the proposed plans of the farm board auad to those who have Joined with
them?

Mr. BARNES. Heaven only knows what was in their minds. I

(o not attempt to pass upon it. A thousand individuals in business
all with different opinions, some discrete, some indiscrete; some
wise, some unwise.
Senator NYs. I can not agree with you that the farmers are
actually controlling 40 per cent of the wheat handled in the North.
west at this time. At some way in the road, maybe they do get
their fingers upon it, but, is it not true that a large part of these
cooperatively owned elevators-farmers' cooperative elevators are
dependent upon the grain commission houses for their line of credit?

Mr.

BARNES.

Certainly.

Senator NYE. And are forced quite generally through this line
of credit, to do business with that commission house.
Mr. BARNES. Certainly.

Senator Nm. If anything is done to break down the necessity

of their havin to do business with that grain house, do you feel
that the farm board in so encouraging that ls out of step with the
real spirit and purpose of the farm act?
Mr. BARNES. Yes, I do.
Senator NY. You do not think that the cooperative that is now
dependent upon a commission firm should be aided in any way by
the Government?
Mr. BARNES. Not with Government money; no.
Senator NY. Aid to the extent that there could be a closer unit
#
of cooperative enterprise?
Mr. BARNES. Senator, you can do it without Government money,
ust like the Canadian pool. They borrow their money from private
banks and they have for years, You can get extraordinary loyalty
to an organization when you build it on sound principles that way,
and you will not build it up by preference, through Government
money.
Senator Ny. This letter of Ilincleson & Co. calls attention of
their managers and associates to this point, that if the farm board's
program is. to continue these cooperatives are going to be wholly
dependent upon the will of those who sit at the head of the farm
board. Aren't those same managers subject to the will of anybody
at the present time
Mr. BARNES. Senator, I am glad you asked that, because I think
that showed something of a mi-sapprehension of the effective policy
of the farm board, anl I aimed to eliminate that misundei.andng
by asking representative grain men to come here and discuss first
hand business policies to be put into effect by the farm board. That
was the very ]ustification and reason for the conference of Decem.
ber 4. These individuals may have a limited perspective. They

f,
t

LOBBY INVESTIGATION

1659

only heard. of the farm board policies through the public press.
They are inflamed by such men in the Northwest as Thatcher who
spoke for two and one-half hours in vilification of the grain trade,
that has had a Ion record of good service.
Senator NY. Where did he make this address?
Mr. BARNEs. At Grand Forks or Fargo.
Senator NYB. Was that at the State convention of the Farmers'
Union at Bismarck?
Mr. BARNES. Something like six or eight weeks ago. These men
are alarmed at those statements. They do not realize that Mr.
Thatcher may make unbased and unwarranted statements. They
take alarm at once.
. Individuals, after all, have a degree of timidity when it comes to
losing the business in which they. rest for a living; one that they
have developed by long and honorable efforts. I was trying to
eliminate the misunderstandings and misinterpretations and get
down to the real definition of the difference in view on policies,
and then discuss them as business men. That does not mean that
the farm board concedes anything of its right or conviction, but at
least they know of the experience and ability of the grain trade, and
the effect of it.
Senator NY. What could the farm board do, Mr. Barnes, with
this money which has been made available to it if it did not do just
what it has done in making available to cooperatives, this money
at lower rates of interest.
Mr. BARNEs. They could for instance, on October 28, when they put
out their price, they coula have made those funds and those prices
available to all comers, all farmers, whether cooperatives or not.
They should not force the farmer against his conviction to join
the cooperative in order to get some preferred position. That is
where I differ with them. If you admit at all that they have any
right to buy grain or advance money on grain, which I do not admit
then
I do criticize their limiting that only to certain types of
farmers.
Senator. NYE. Well, as a last question, the opposition of the grain
trade goes to this: They feel that if the Farm Board goes through
with its program as initiated here, it means that there is going to
be no room in the marketing field for these grain commission merchants and grain exchanges?
Mr. BDANES. No, not quite as bad as that. Although that statemeit would be made by some grain men, I do not think it is quite
reasonable. If the natural level of wheat is above this basis of
advance by the Farm Board, these men can function pretty well in
competition. It is only when they get to a level in which the cooperative interests can pay a higher price than they can, because they
have a preferred basis on Governmnent money and Government
policies, that the menace to the estabhihed grain trade really comes
into active play.
Senator CARAWAY. All right; thank you.
Senator RomBIsoN of Indiana. Just another question. I ann interested to know, Mr. Barnes-the economic advantage is what influences most men. You spoke of the cooperative pool that is orgnized, and 4 or 5 per cent of the wheat farmers enter that pool and
it to some degree stabilizes the prices. It costs them a good deal

1660

LOBBY INVESTIOATIOX

of money to do it, but, to some degree, they do get an. appreciated

price for wheat, for instance. Ninety-four or nnety-five per cent 6f
the wheat growers remaining out of the pool get the advantage of
that apprecIation along with the 4 or 5 per cent who make it possible.
Do you think you could ever build cooperatives unler those
cicwlltances?
Mr. BHAW'Slq. I do not think 4 or 5 per cent would be effective at
all; 45 per cent I think might be.
Senator Romxsm)- of Indiana. But it starts at 3 or 4 per cent, and
then you probably get up to 5 or 0 and then 7 or 8 or 10 per cent. and
the frmelrs wouhl hope ultimately, I assuine, to have 75 or 80 per
cent or 100 per cent.
Mr. BAIIxwp. IHeaven 1help them if they do! They will break
themselves down.
Senator Romxjsox of Indiana. You know, of course, without go.
ing into the views an1 taking up a lot of time that because of the

number of units involved, six and one lialf millli

they felt that

it was necessary to have some hell) iii getting- their organization

started,from the Governmnet. Now, how could there be loyalty to
an organization that costs then more money to belong to than they
wouh have if it. cost thelln more posibilities of advantage to belong
to than would develop if they would stay out?
Mr. BAICN!-x . I think we are guided by experience in C ada,

where 48 or 49 per cent of the farmers stick to the organization,

which only gives themn 85 cents a bushel advance when they draw
their wheat in, when thoy could sell it across the street at $1.25 or
$1.50. Yet they do it be(Iiause they believe in organization loyalty.
Senator Rom'ixso.x of Indiann. But you do agree with me that
economic advaptago is the greatest influence. Now, suppose that
40 per cent had influenced the price. There is considerable appre.
ciation in the price of wheat because 40 per cent of the growers are

in the cooperatives, and it has cost them a lot of money. The 60

per cent remaining outside get all the advantage of the al;preciation,
tl6 po('ketbook advantage of the appreciation, and it costs them
Ilotihig. What idluceinellt is there for this 60 per cent to join the
cool)eratives?
Mr. BAnNs. Of course, I believe that the average mal

is

thoroughly fair and loyal. Whien lie sees a plan work to his advan.
tage, lie is going to sl)port it.
Senator Roinksox of Indiana. No. That has not been the case
Ihere. That is just tile point exactly.
Mr. B.A t.1-s. Yout have never tested it.10
Senator Romixsox\
of Indiana. I appreciate your position. Mr.
Barnes. I think it is a very fair one, and I think it is true. I
noticed some of the statements that you iave made, that for a num.
be' of years you have been in favor of the cooperatives. and I think
that Positloil does you credit, because I know you were tiel presi.
(leit of the Initetl States C-hlamber of Commerce, but I a111 just
won(lering in that colliectioll, favoring it is I know you did. how,
unless 1ome advantage were giveni, some economic advantage were
given to the cooperatives, how you could ever expect then to develop
am, ultimately get into such an independent position. That is the
aspiration of tie farmer, to get into such an independent position
ultimately that lie can stabilize his own affairs withoutt any help

to
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LOBBY INVESTIGATION

from the Government.

1661

Ie (toes not want Government help, as I

understand it, except as a means to an end. I aim asking tihe question i n rewndly sort of fashion. I am wondering how you expect
to de'lop these cooperatives without giving theii some economic
advantage.
Mr. BARN .s. Well it is I very complex question. We are feeling
our wity into a now Hield. We are guided somewhat by the recorded
exlICrielce of tile Canadian cooperatiVe which has operated for six
yelrs. we know what they did and how human tile response was
Il their organization. It has been very fine, We know that the
local cooperative has advanced by the local loyalty of the members
to 40 per cent of the rain crop. ' he problem is now how to construet soime agency of colitact with this 40 per cent and whatever
basis can be made so that there shall be single direction of the
selling policies in time of enough of a crop in the United States so
that it will not pour on the market in times of depremion. I think
that can be (lone without. any coaxing of membership in by favor or
preferred interest or price advantages limited to certain sections.
'think it call be done.
Senator Nyr:. Just one j
question. Mr. Barnes, not so many
weeks ago, immeldiatoly- following the statements by certain members of the Farm Board, who in effect declared that under the plan
that the Farm Board had in mind there wouldn't be room for th6
grain commi.sion men, there was a great deal of resentment on the
part of the commission men, quite naturally, and therwere whisperings wid rumniors and reports in a general way, that they had taken
thfat action and won that assurance, such assurance as was in effect
this, that from that time on there would need be no more such statements emanating from the Farm Board, and it was indicated at the
time by some that they had this assurance from Mr. Julius Barnes.
Was there any occasion for any such comment or any such contention ?
Mr. BAUNES. No basis whatever, Senator.
Senator CARAWAY. Mr. Barnes, we are very much obliged to you,
because I think it is fair to both the farmer and the grain men to
have had this. I wish you would send us the letters you promised.
Mr. BAUXEs. Yes...
Senator CARAWAY. There will be a meeting of the committee tomorrow morning at 10 o'clock.
(Whereupon, at 12.50 o'clock p. in., the committee adjturned until
wednesday, December 18, 1929.)
10 o'clock a. i., to-morrow,

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LOBBY INVESTIGATION
WEDNESDAY, DEOEMBER 18, 1929

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY

Wlaehington, b. ai.
The subcommittee met, pursuant to adjournment, at 10 o'clock
1. M., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Blaine, and Walsh of
Montana, Senator Robinson of Indiana appearing later, as herein.
after noted.
Present also: John G.Holland, Esq., counsel to the committee.
Senator CAwAY. Mr. Lakin, will you come around, please?
Before this witness commences his testimony I want to include in
the record a letter to me this morning from Mr. Barnes, inclosing
copies of letters which he said he wrote to grain people. Let those
be included in the record also.
(The letters are as follows:)
WASHI.TON, D. 0., Decembe 17, 1929.
Hon. T. H. CARAWAY,

United states senate, Washington, D. 0.

My DeAu SENAToR: In accordance with your request, to-day I inclose you
copies of the only letters which I can find in my files in recent weeks which
refer to Farm Board policies,
If you keep in mind the background which disturbed me,namely, the growing
bitterness on the part of the Northwestern grain interests and bankers then
against the Farm Board policies which I felt were partly on exaggerated mis.
apprehensions of those policies and the clearing the air which would follow a
definite discussion of those policies even though they led to a well-defined disagreement on the policies themselves you will have the background of the
effort I made for this discussion.
Theseoletters at~ch-ed i-rociy of- my letter-of November 23 to Frank L.
Carey of Minneapolis, letter of November 20 to H. J. Atwood, Duluth, and
letter of December 7 to R. F. Gunkelman, of Fargo.
Yours truly,

JULiUS I.
v.IOmDEz

BARINES.

23, 1029.

Mr. FRANic L. CAREY,

Chamber of Oommerce, Mlinneapolis, Min.
My DEAR F
KA
: As I got into organizing this conference and the date fixed
for December'G I found, of course, I would have to break my engagement with
the university, and have wired them explaining the emergency call made by the
President, asking for their consideration.
This means I will not go West at that time. It Is In my mind that grain
organizations are among those Invited to send delegates to Washington. There
will be some grain men there; for example, Charlie Lonsdalo comes naturally
as a director of the chamber. I wonder If we could not get a group of 6 or 8
or 10 grain men who would be In Washington December 5 and 6 and see If I
1603

1664

LOBBY INVESTIGATION

can not arrange an infornal and quiet meeting tit Which we would haveLgge

and perhaps Doctor Jardine, and let all the people talk themselves out and see
whether the Farm Board can convince them they have a reason for son of their
policies. After all Legge is a business man. All Iilcontacts timid his train.
Ing run in the business fields and it should be possible to discuss either to
an agreement or definite difference of opinion certain policies, but at least
the grain men would have a chance to get authoritattve Informationm. Up to
now I have a feeling they have enough real basis to get inflamed, to be sure,
but they exaggerate some of these things perhaps needlessly or onltoo large
a settle. Oil this point I have in mintd talking with Searle last week h niade
the statement to mo that its Canada their elevators had made Just as luch
money since the pool came into play as before. I have a feeling in Amerlea
everyone thinks the contrary. Maybe a frank dseu ssion would ele;ar the air.
Yours truly,
JuLIUs It.BARNES.

Novpimmim 29, 1929.

Mr. H. J.ATWOOD2
Board of Trade Building, Duluth, Mlnm.
My DEAR ATWOo: I have your letter of the 27th.
You have probably learned by tills time that in iaquiet and Informal way a
number of graini men, including Fred Wells and Lonsdale, will have it meeting
All
with the FaIrm Btoad, December 4, at which 1 h4pe also to li'rseat.
the points which you mention In your letter will undoubtedly come to the frot
for discussion at that time.
Don't you think it Is a little bit unreasonablo on the part of the grain
trade to take the utterances of a man like Thatcher at ftce value and get
excited over them, although I am not excusing at all the irm Board for not
exercising some control over what men say who, after all, depend on Farm
Board backing. I return the correspondence which you motion, which I
have read, and all of this is helpfully stored, I hope, In the back of my iind.
It Just seems to me that a crowd that has to listen to Thatcher for two and
one-half hours is pretty well punished to start with.
I hope some good will come out of this greeting.
Yours truly,

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JULIUS H. BARNES.

Sen

DECEMBER 7, 1029.

Mr.

Mr. I. F. GUNmKMArr,
6o., Fargo,N. Dac.
InterstateSeed d Ora
I GUNIELMAN: I have your letter of the 2d.
My DER M.
What you write runs parallel with a good many letters I tim getting out of
the Northwest, and with which I have a go(O deal of symltthy.
You probably know that a few of the Northwest grain nien Ihad an informal
conference with Chairman Legge tills last week ilnWashington, at which I
was present. Tile substan trial gain out of that khid of all attempt of under.
standing was at.. express dlsclaimer by -Chairman Lege that tile hakrnl Board
start with any antagonism and prejudice toward the established grain trade,
ue
tluiose. This was followed by all assuraice
where tI-y ':to-d-iy-useful
from Chairman Legge that before the Farm Board again took aly inaportlint
action, such as the l)rice advance, when such action affected the grail trade,
they would, before reteling a decision, call into conference itrepresenitative
committee of grain nien to tell tlcm from practical experience what wopld
be the effect of such action, so that tley would have considered tht, viewpoint
of the estalilisel grain trade which might be mevnaced by any sutch action.
You know the remedy you propose of controlling production Is one in which
I 'an not get enthusiastic. It seems to me fhe fairest test is whether It is
profitable to raise grain at least for world market. The world narket at the
moment is it least equal to $1.25 for wheat In Chicago. That is profitailile
for the surplus produclion of certain great areas Ini the West, even though it Is
probably 0ot for some of the smaller high cost areas.
It Is a rather, colmlplevx situation, but I have contffildtet, first that world requirenients of wheat will expand as Ituropean IlUhltions rise to use nore
butter, eggs, al poultry products ol their table, and, therefore, want more of
their acres for grazing and feed, and look overseas for larger quantitiess of
wheat. Titen lussia Is engaged In governmental policies which cerahlilly

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3I.

LOBBY INVESTIGATION

1665

tend to discourage production of grain, and even if they improve their conditions the rising living stfindards of their own people ought to take care of
their wheat production for many years.
i tlink som etltlng of the policies of the Farm Board will be affected by con.
tinued experience and study, ald that persistently presenting logical, fair
teras of Am('ricAn business, like grain facilities, will affect this action Into a
position where injustice and unfair influences may be eliminated.
I Inave a feeling thitt the grain trade is altogether too quick to reach certaln
011clu-si4,s which may never come into play at all. Anyway, I hopt, to be
helpful. front time to time.
Yoi may have notiled in the press the unprecedented step, by which the
president of the United States has called upon organized busli.ti
to aihobl~izo
its own foree' in favor of busne-ss stability, and promised the cooperation
of qv I nneft. I think It i gly significant that we have a President that
believes business can act for itself, and the response In the business world
has been very striking. I think this job can be done so that any recemslon In
general business will be limited and moderate.
Yours truly.
Juilus It. BARNES.

Senator CARAWAY. You can proceed with the witness, Senator

Walsh.

TESTIMONY OF H. 0. LAKIN-Resumed
(The witness was previously duly sworn by Senator Caraway.)

Senator WVALsji. Mr. Lakin, did your organization engage the

services of any other attorneys than Mr. Shattuck and Colonel Carroll in connection with the tariffI
Mr. LAKIN. No. I had a young man who helped me in New
Jersey
Senator WAmLSH of Montana. In New Jersey?
Mr. LA iix. Yes.
Senator WALSH of Montana. Who was he?
Mr. LAKIX. James Mitchell.

Senator WALsi of Montana. What was the'work you were doing

i New Jersey that required the services of a lawyer?

3i. LAI'. He was a prot~g6 of ex-Governor Stokes and a lawyer

for one of our directors, and Stokes was very much interested' in
this sugar business and, as I understand it, asked this young man
to get. in touch with me, because he said he wanted to wee tie. So,
this young man got in touch with me through our director, and I
went. dowii to Trenton and Spent the night withI him, and had a conference with Governor Stokes, and Governior Stokes called up on
the long-distance telephone and asked Bacharach to see me. and I
went down to Atlantic City and saw Bacharach. I have not paid
hin. anything and I do not know that he expects to be paid.
Senator WALSH of Montana. How is Governor Stokes interested?
Mr. LAKIX. He thought that Cuba was not being treated rightly,
and he had been making speeches and writing articles about it. so he
told mate.

Senator WALSH of Montana. How does lie come to be interested in

the legislation?
3M.. LAIN. I do not know.
Senator WALSH of Montana. Has he any financial interest in any

Cuiin company?

3h'. LAu-N. I think not. Not that I know of.

1666

LOBBY INVESTIGATION

Senator WmsIti of Montana. What was the nature of the speeches

that he was making? What was the nature of the argument that
he was advancvingr
not see any of them.
Mr. LACN. That I do not know. I
Senator WAMLe of Montana. Who was the director of your cotn.
patty?
Mr. LAR . Mr. Griffin.
Senator IWA,sn of Montana. With what company is he associated?
Mr. L.tIucn. With our company.
Senator W.%vusir of Montana. The Cuba Co.?
Mr. Lx u,,_ Yes. le is an executor of the James M. Brady
estate, and I think that they had an inheritance tax or something of
that sort in New Jersey.
Senator Wirs of Montana. What (lid you go to see Bacharaeh
about?
Mr. L.Mux. About this legislation.
Senator WAT.II of Montana. Incline him to your view about the
matter?
Mr. L-.x-. Argue with him; yes, ir.
Senator W,1tmsu of Montana. Ile is one of the Congre-.mnen from
that State?

Al
he w
but.
pid
Pute
Be
and

what was the consideration that spurred Governor Stokes to take a

particular interest in this matter, any more than the governor of
some other State.
Mfr. LAKIx. Well, he is not governor. He is an ex-governor.
Senator WASIs of Montana. Yes.

paid
Se'
M

Mr. LAtiN. Yes, sir.

Senator W,%.sn of Montana. I am really curious to know just

Mr. LiAKIx. le seemed to be very much wrouglht up about it.

Senator W.sxrm of Montana. What was troubling his mind?

M[r. L Iucv. lie thought that there ought not to be an increase in
the tariff.
Senator WAIS.If of Montana. Upon what consideration?
Mr. LAKIN. Well, what do you mean?
Senator Wusxi of Montana. Some people do not want an in.
crease in the tariff because it would be an additional burden upon
the cowsuiuers of sugar. Some people do not want an increase in
the tariff because it would, as they think, affect injuriously their
in Cuba, and other people do not want a.n increase
interests
financial
inthe thut,
on sugar
because it ight affect our international relay.
tioiL'. I want to know from you what was the consideration that
seenied to be uppermost in the mind of Governor Stokes?
3r. I,Ax. Well, I did not get any idea about that.
Senator WArsII of Montana. Do you meet many men in that way,
who have some very settled convictions about this matter, and you
can not discover what it is that moves them.?
Mr. LMAit.. No. I did not ask hinm. I had this conference late
in the evening. I arrived in Trenton in the evening and had this
one conference.
Senator WAls1H of Montana. I referred to three arguments that

arHmade ill connection with this. Did lie express any of those?
Air. LA.KIN. NO, I don't think so.

Senator WAusu of Montina. WVell, the young mnan's name was

Mitchell?

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LOBBY INVESTIGATION

1667

Mr. LAxI.N. I think-well, I just merely got the impression that

he was thinking of it perhaps from the standpoint of tie consumer,
but I would not be certain about that. It would not be fair to iapute that to him, because really [ do not remember.
Senator WALSU of Montana. Well, anyway, Stokes moved Griffin,
and Griffin moved rou to get into contact witli Mitchell?
Mr. LAm. I think that was it; yes, sir.
Senator WALSH of Montana. Well, when you did get in contact
with Mitchell, what came of it?
Mr. LAKx. Well, there was this-Mitchell went with me and
introduced me to Bachar:.ch.
Senator WALSHa of Montana. Was that the extent of his services
to the cause?
Mr. LAIN. No, sir. He came down here and introduced me to
Senator Edge.
Senator WALSH of Montana. And anything further?
Mr. LAimN. I don't think so.
Senator WALSH of Montana. Almost anybody could do those
things, could they not?
Mr. LAIN. I suppose they could.
Senator WALSH of Montana. No legal service about either of those
transactions?
Mr. LAWN. No; but as I say, he has not suggested that he be
paid for it at all.
Senator IVASui of Montana. Did you pay his expenses?
Mr. LAWIN. No. I haven't even done that.
Senator WALsH of Montana. Now, does that complete the list of
lawyers whom you have employed or who have been associated with
you in this matter?
Mr. LAWN. I think so. There is a young man by the name of
Goodrich in my office, but I do not think he is a lawyer.
Senator OARAWAY. In your office in New York?
Mr. LAIN. Yes.

Senator CARAWAY. Permanently employed?

Mr. LAWN. No. He came there as a volunteer and wanted to help.
Senator 0 AmwAY. Where is his home?
Mr. LAWN. Somewhere on Long Island.
Senator COAAwAY. He came as a volunteer. Do you mean he came
seeking employment?
31r. LA KN. No. He is an American who has been in Cuba for
twenty-odd years and had just disposed of a mill in which lie was
interested, and I think probably he hoped to make a connection.
Senator C AAWAY. Are you paying him?
Mr. LAWIN. I have not paid Iim anything either.
Sentaor CARAwA . Do you contemplate paying him?
Mr. LA kI. If I have any left I think.I ought to give him something.
Senator CARAWAY. If the rest of them do not get it all, you will let
him have something?
Mr. LAWrN. I think he ought to have some; yes.
Senator CAAw&Y. What does he do?
Mr. LAWN. He attended to the sending out of the letters to stockholders and tradespeople for me.

1668

LOBBY INVESTIGATION

Senator WALSH of Montana. Who is Mr. LynchI

that

Senator WALSH
sir.Montana. Does he have an office with you?
Yes, of

thIe n

Mr. LAIN. He is Vice President of our company.

Mr. LAKIN,

Senator WALSu of Montana. I suppose probably this letter, a copy

of which I call to your attention, dated December 21, 1928, was

written by Mr. Lynch. It refers to you. Will you look at it?
-Was
Mr. LAKIN. Yes. I did not employ him.
Senator WALSH of Montana. The entire letter is addressed to (.F.
Snyder, Esq., Otis Building, Washington, D. C., December 1, 1928:

Mr. Lakin is quite in accord with your Ideas about the best time to go to
Washington, and he will go down some time After the turn of the year. I
.hall advise you the actual date as soon as it is known. He is very pleased
Indeed that he Is to have your assistance and advim- In the mission which
brings him to Washington. I have told him that you stand ready to give him
your exclusive time during the few days that he will be in Washington.

Se

thin

shall

indee
bring
T

81
As

Where did Mr. Snyder come from?

Mr. LAxIN. He is here in Washington.
Senator WAiJS of Montana. Oh, yes. Is he a lawyer?

tile .

Senator VALsit of Montana. Mr. Lynch says [reading]:

Mr. Idflkin Is quite in accord with your Ideas about the best time to go to

tere

Mr. LAKiz. Yes, sir.

Washington.

Evidently he had been advancing some idea about that matter.

Mr. LAKIN. Yes. I think Mr. Lynch called him on the telephone
to see whether he would act for us.
Senator WALSh of Montana. He continues [reading]:

He is very pleased Indeed that he is to have your assistance and advice in

actio
duce

probti
pssil
whoa

to w

T
T
M
Se
M

the mission which brings him to Washington.

81

Apparently then it had been arranged that he was to act with

h8
you ?
Mr. LAKIN. NO. I do not think it had. He spoke as if it had,
but that was up to me and I came down here and talked with Mr.
Snyder and we decided that he should not be employed by me.
Senator WALSH of Montana. You had a talk with .whom, you

Msr. LAKIN. Mr. Snyder, later on.

Senator WAsixl of Montana. What was the trouble?
Mr. - LAKIN, Well, he said his work was Interstate Commerce

Commission work and he represents the Canadian Pacific Railroad,

the Soo. Line, and he stated that that was enough to keep him
occupied,
Senator WALSH of Montana. That does not seem to be quite in
accord with this letter.
Mr. LAKIN. I know.

Senator WALSih of Montana. It says [reading]:

Mr. Lakin is quite in accord with your ideas about the best time to go to
Washington, and he will go down some time after the turn of the year. I
shall advise you the actual date as soon as It is known. He Is very pleased
indeed that he is to have your assistance and advice In the mission which brings
him to Washington.

This is Lynch writing to Snyder.

He-

S1
M
pan,
not
M

with
M
sir.
S1
M
mat
tari
S
M
S
M

S1
M

LOBBY INVESTIGATION

1669

that is youyou are very pleased indeed that you are to have his assistance and advice in
the mission which brings you to Washington.
MIr. LAItN. Well, I hoped that I would have it; yes.

Senator WVALsj

of Montana. No. Mr. Lynch does not hope any-

thing. He says [reading] :

Mr. Lakin Is quite in accoril with your ideas about the best time to go to
Washington and lie will go down some time after the turn of the year. I
shall advise you the actual date as soon its it is known. He is very pleased
indeed that he is to have your assistance and advice in the mission which
brings him to Washington.

That clearly discloses that it had been arranged.

Mr. LAKIN. Well, it had not been arranged, sir.

Senator

MAV..Ls
of Montana. I continue the letter [reading]:

As I told you over the telephone, the sugar interests in Cuba and some of
the lirincipal ienbiiiers of tle (lovertiment tire anxious that lie should serve
on it committee to study the proposed sugar tariff increase and to take such
action fit Washington as nmy be advisable it the interest of the Sugar pro.
ducers of Cuba. He has been chosen to head that committee and he will
probably have to visit Washington front time to time. I understand that a
hearing on the sugar tariff is scheduled for the 21st or 22d of January; it is
therefore necessary, Mr. lAtkln feels, that lie go to Washington as soon as
possible after January 1. He has not, as yet, made up his mind as to just
whom lie shall see, but undoubtedly lie will have some Ideas When he goes
to Washington and after he talks with you lie will be in a better position to
formulate his plans. You are therefore being retained by Compania Cubana.

That would seem to settle the matter, would it not, Mr. Lakin?
Mr. LAKINr. Well, lie was not retained.
Senator WALSH of Montana. Mr. Lynch says he was.
Mr. LAKIN. Yes, I know, but he was mistaken.

Senator WALSH of Montana. What is "Compania Cubana"'?

Ar. LAKIN. That is our sugar subsidiary.*
Senator WALSH of Montana. What is that?
Mr. LAKIN. The sugar subsidiary of the Cuba company.
Senator WALSH of Montana. A sugar subsidiary?

Mr. LAKIN. Yes. The Cuba company is chiefly a holding company. It has subsidiary corporations.

Senator WALSH of Montana. We understand then that you did

not actually employ Mr. Snyder?
Mr. LAKIN.

sir; we did not.

so,

Senator WALSH of Montana. Well you did have some negotiations

with other lawyer in Washington, did you not?
Mr. LAKIN. I talked with a lawyer by the name of Williams; yes,

sir.
Senator WALSH of Montana. What about?
Mr. LAIN. As a matter of fact, I was talking to him about tax
matters, but I also asked him if he could help me in regard to the
tariff, and he could not.
Senator WALSH of Montana. Mr. Williams is a lawyer here?
Mr. LAKIN. Yes, sir.
Senator WALSH of Montana. What are his initials?
Mr. LAKIN. William.
Senator WALSH of Montana. William Williams?
Mr. LAKIN. Yes, sir.

1670

LOBBY INVESTIGATION

Senator CARAWAY. Isn't it Nathan B. Williams?

Mr. LAIUN. No, sir. William M. Williams.

Senator WAL1sH of Montana. What consideration induced you
to endeavor to enlist the services of Mr. Williams?

inC

Ur

Sc

Mr. LAKxi. Vell, I thought he might know somebody whom

I did not know, whom he could introduce me to.
Senator VA LS of Montana. Do you remember his firm name?
Mr. LAviiU. Williams, Myers & Qui le and something.
Senator WALsH of Montana. You id not employ them either,
then

Mh.
way
tatior
Se
plant
Mr

Senator WALSH of Montana. Do you remember whether there

were any relations between Shattuck and Snyder?

stant

Mr. LAKIN. No, sir.

Mr.

AKI.. I don't think so.

I don't think Shattuck ever saw

Snyder.

Senator CARAWAY. Well, which Snyder was it that Mr. Shattuck

got to go to see Members of Congress?
Mr. 'fAKiN. Oh, that was John E. Snyder.
Senator CARAWAY. That is another Snyder?
Mr. LAKxN. He was Hershey's lawyer.

Senator WALSH of Montana. We had sonic evidence here of the

interest of the National City Bank of New York in Cuban sugar
matters. You are in a general way familiar with that?
Mr. LAKIN. Yes.

Senator WALSH of Montana. Are there any other New York

bankin interests interested in Cuban sugar?

Mr. AlJix. Yes, the Chase Bank.
Senator WALsH of Montana. What is their interest?
Mr. LAras. They are creditors of a sugar company in Cuba, one
that I know of. That is all that I know oF.
Senator WALsH of Montana. What company is that?
Mr. LAKix. That is a subsidiary of the Punta Alegra Sugar Co.
I think the name of it is the Fidelity Sugar Co., but I am not certain.
Senator WAwe! of Montana. They just sustain the relation of
creditors to them?
Mr. LAKIN I think so, yes.
Senator W.

of Montana. No ownership interest in Cuba that

you know of?I

Mr. LAKIN. No. I think their credit is big enough so that in effect
they own this property."
senator WALSH of Montana. They control it, do they, you think?
Mr. LAKIN. Yes.
Senator WALSir of Montana. Is that a producer of some con.

sequence f

the e

Ser
Mfr

exten
not.

Se.
ment
Mr
Sem

has.,
tarift
Ur
Ser

letter
they
ii

Til
Thi
Ar.
sen
Iw
Wed

prld
about
reliatlo
of gov
C

ahers
but W,
It. M
the or
carbon

Senator WAuLS of Montana. And any other New York banking

Wh
With
busin

Mr. LAxIN. I think that several banks are interested here and
there in a single loan to some mill or other.
Senator WALSH of Montana. Do you recall any of them?

for a
Cuba
about

Acceptance Corporation, I think are creditors of the old Warner

Sugar Refining Co. That is all that I think of now.

ing a

Mr. LAKN. Yes. They produce about 70,000 tons.

interests similarly situated?

Mr. LAwN. Yes. The Corn Exchange Bank; the International

fr.

and I

LOBBY INVESTIGATION

1671

Senator WALSiz of U-intana. Does the Warner Co. own plantations

in Cuba?
Mr. LAKIN. They own a mill in Cuba; yes.
Senator CAIRAWAY. Does that mean the lands, too I
Mr. LAWN. It includes the land yes. But Y think of it the other
wa' around. When you sar "a mill" it generally includes the plantations, but where you say -I
plantation i1.t does not include the mill.
Senator CAwwAY. But when you mention the mill, that means the
plantation and the mill?
Mr. LAIN. As a rule, the mill owns the land with it, especially in

the eastern part of Cuba.

Senator WALSH of Montana. Has not Morgan got some very substantial interests down there as well?
Mr. LAKIN. Not that I know of. I do not think their financing
extends beyond the Cuban Government. As far as I know it does

not.

Senator WALSH of Montana. They do finance the Cuban Government, do they?

Mr. LAKIN. They have in the past; yes sir.
Senator WALSH of Montana. Do you kow.whether that relation
has given them any particular interest in this matter of the sugar

tarlff-

Mr. LAIN. No; I do not.

Senator WALSH of Montana. We find in the files of Mr. Shattuck a

letter from you of date January 28, 1929, which would indicate that
fhey had some special interest. I read:
Inclosed Is a memorandum on Cuba of which Morrow has copies.

That, I suppose, is Mr. Dwight Morrow?

Mr. LAKIN. Yes.. That had nothing to do with the tariff, though.
Senator WALSH of Montana (continuing):
I wrote it in longhand while on my way to Mexico in"
November to visit my
frler,d B. R. Jones. As I have already told you, my visit to Mexico was
prlmntrlly for the purpose of visiting Jones. but he, in order to make sure that I
would come to Mexico, cabled me that Morrow was anxious to talk with me
about Cuba, in which Morrow has had much interest because of the close
relations between J.P. Morgan & Co. and the Cuban Government in the matter
of government loans.
I originally prepared the memorandum in order to clarify my Idfts about
the Cuban situation from a standpoint of personalities influenthll in Cuban
affairs of to-day, and had not intended to show the memorandum to anybody;
but wheflMorrofy It6ad -of th-iuein- fiiduiffr-0m Jones h6- Insited -oii seeing
it. He took the memorandum and had several copies made, returning to me
the original memorandum and a carbon copy. The enclosure herewith is the
carbon copy which was typewritten in the Anerican Embassy in Mexico.

What I aim curious about is why Mr. Morrow should care to talk
with you about Cuban affairs, except that it related to the sugar
business.
Mr. LAKIN. Why, as a matter of fact, I have been nore disturbed
for a long time about what I considered to be a misconception of

Cuba in this country, than anything else. I must be perfectly frank

about this. I thought that .Morrow might be Secretary o State,
and I wanted to impress on hint, if I could, the importance of adopting a definite policy in regard to Cuba, as soon as possible.
78214-30--n 4---12

1672

LOBBY INVESTIGATION

Senator WALsH of Montana. Yes; but I gather from this letter

that the eagerness wao not on your side; it was on Morrow's.
Mr. LAKIN. Well, [ think that was kind of a put-up job to get
me to come down to Mexico, on the part of my friend.
Senator WALSit of Montana. What friend?
Mr. LAKIN. Mr. Jones, who is mentioned in that letter.
Senator IVALSH of Montana. You wrote to Shattuck [reading]:

an

&o

rPI

As I lave already told you, my visit to Mexico was primarily for the pur.

whi

Now, you think that Jones was misrepresenting the situation to

you?
Mr. LAKIN. Oh, I don't say le misrepresented it; no. Of cous.0I
he spoke to Morrow and he said "Yes, I would like to see LakinI
and I don't believe it went any further than that. t would not cl
it a misrepresentation.
Senator WAILsn of Montana. This, you think, was written in a
rather Pickwickian sense?
Mr. LAKIN. I think so; yes, sir.
Senator WALSH of Montana. Anyway, you say to Shattuck

Wal

pose of visiting Jones, but he, in order to make sure that I would come to
Mexico, cabled me that Morrow was anxious to talk with me about Cuba.

[reading] :

Morrow Ismuch in
terested because of the close relations between . P.
Morgan & Co. and the Cuban Government in the matter of Government loans.

per
wai
my
rem

ib
ais

LAKIN. Yes, sir.

Senator VALSH of Montana. I call your attention to a letter from
you to Aballi of date November 28, 1929, as follows [reading]:

As

I hope that the enclosed report Is all that will be filed In the official archives
of the association.

the
T
i

Mr.

Just what association is that?

Mr. LAKIN. The Mill Owners' Association.

Senator WALsH of Montana. You were sending a report to Aballi,

who was representing this Cuban association?
Mr. LAKIN. Yes.
Senator WALen of Montana. And then you sent to him a private
letter with a report, in which you said you hoped that the report
which you sent was all that would be filed with the association. In
other words, this letter was for th6 exclusive consumption of Aballi,
At least, it was not to go on the files?
Mr. LAKIN. Not to go into official files; no.
Senator WALSH of Montana. We will endeavor to ascertain later
why that course was taken. [Continues reading]:
I hope that the Inclosed report Is all that will be filed In the official archives
of the association; but I feel that the members are justly entitled to receive
unofficially some news of what Is being done and proposed as a sequel to the
.
public appearance before the Ways and Means Committee.

Perhaps you would not mind telling us now what the news was
that you thought they ought to have but it would not be wise to put
in the official files.
Mr. LArs. Well, is there not a copy of the report there?
Senator WALsH of Montana. There is a copy of the report. I am
not concerned about the report, but what went on the files.
Mr. LA~mW. Well I mean both; both the report that was to be
filed officially, and the other.

pub

pub

Oeoi
rat

Zat
it
con

que

and

sug

plet

b055

line
stn

exj

the
to

LOBBY INVESTIGATION

1673

Senator WALSH of Montana. Very well. This will probably tell

its [reading] :
There are still at least four lines of activity which ought to be followed:
(1) Keeping the Cuban argument In the minds of the members of the Wamys
and Means Committee and Impressing the argument on other Members of
Congress; (2) a certain amount of publicity; (8) probably some diplomatic
representations to be made by the Cuban Government to the State Department
or even the President of th8 United States; and (4) attempt to make a plan
which will meet the approval of the beet and Louisiana cane producers.

What was the objection to putting that on the files?

Mr. LAWIN. Well, my recollection-that is all I have, because this
was a long time agoSenator WlsH of Montana. A year ago.
Mr. LAmN. My recollection is that there were references to the
personnel of the committee which had been appointed by the association to come up here, and I disagreed with them, andI did not
want any of the controversies to be put in the official files. That is
my recollection, but I think that the report will explain.
Senator WALSH of Montana. You continue [reading]Ordinarily I would be in favor of a Cuban committee negotiating with the
remolacheros In the hope of persuading them to consent to a plan mutually bene.
jicial to both Cuba and the remolacheros, but in this particular matter Hon.
Reed Smoot is the real spokesman for the remolacheros, and lie is a Senator,
and it would be difficult in talking with him to draw any distinction between
his position as a Senator and his function as the leader of the remolacheros.
As for publicity, it seems to me that Cuban producers who are United States
citizens would probably better understand the psychology of the United States
public and Congress. Therefore, my present view Is that the Association of
Macentlados (ought not at the present time to participate officially in any of
these four lines of activity.
They almost unanimously agreed to contribute to a fund which shall be used
in defense of all Cuban sugar interests in this tariff matter. Already the
amount of their contributions exceeds $85,000. They have appointed Mr.
George A. Zabriskie, Mr. Shattuck, and myself as a committee to handle the
matter. As appears from the statement which was attached to the official
report of your committee, Mr. Shattuck is a friend of President Hoover. Mr.
Zabriskie is equally a friend of the President.
It is planned to have at variety of contacts with members of Congress. Such
contacts will be established under the direction of Mr. Shattuck who will fre.
quently consult the other two members of the committee. I anticipate that
be may find occasion to need the cooperation of members of this association
and other Cubans and American residents of Cuba.
Mr. Shattuck ht: been absent fromn New York for more than two weeks and
during his absence It did not seem to ,&%r. ZAbrlskle or to me or to the Amerlqan
sugar Interests now remaining In New York, advisable to prepare any complete plan of operations, By the time this letter reaches you be will hove
returned to New York and will have made some progress toward the formu.
lation of a plan of operations. That plan will cover (a) contacts with Mem.
bers of Congress, (b) publicity, (o) contacts with remolacheros. It is quite
possible that he will not formulate any unrevocable plan for any of these three
lines of activity, but will find it necessary to accommodate himself to cireum.
stances as they arise. Naturally, his first concern will be In respect to con.
tacts with Cont.ressmen, either personally or through chosen agents. I myself
expect to assist him in this line.
Probably It will be necessary for Mr. Shattuck and the other members of
the committee to ascertain the latest attitude of Congress before undertaking

to negotiate with the remolacheros.

This Is specially likely to be the case

because of the connection of Senator Smoot with the remolacheros. It should

also be remembered that an attempt ought to be made to interest President
Hoover in any plan before any attempt is made to reach an agreement in re.
gard to the plan with the remolacheros.

1674

LOBBY IUYVESTIOATION

but I
I realize the ludollniltoiess of this letter and of our present plas,
e the
Inlv
whlch
politles
Of
ninttemi.
ally
f(4l thilt yoI will appreciate that

of

Ideas and W tlatlolsi of at large nllnumber of limuan iniivIdulls, elreulnllftl*

wit'

cllalige from iday to lay and one must be ready to alter or ldJlst his owl, Afi-

lq w ith
tloi

ti e ( i r t

aict .
alcSt

It will not always bitpossible to explain our aetivIlles fi wailing, but we

will cnitrive In somo way to keel) you and your assoclales folly Inforined.
The lirobtl.IlIty Is flint at some stage of the matter, we shall need (he help of

you and assicintes, and I know that the help will be given to the fullest ex.
tent flint Is compatible.

Now, as I understand that, letter, it means that it was in content.

delegation of Cliballs should be sent up here, and you
plation that it
felt that that was an inadvisable course, because they would not ap.
preciate the psy('holoy of the American Congress as well as the
Americans would. Talit seems a very sensible idea, Mfr. Lakin.
You (lid not want that to go on the fies, but you wanted it coni.
municated orally to Mr. Aballi or some one else that you thought
that was a better idea. For m self I find it very difficult to under.
stand why you should not put that In writing in your formal report,
that in your judgment it would be unwise and iot profitable to send
Cubans up here.
Mr. LAKX. I did not want to hurt the feelings of those Cubans
who had been appointed on this committee, and I felt that Aballi

could explain it to them in a way that would eliminate any offense,

and I did not think it was a good thingto- have the open 'disagree.
ment Stated in the minutes of the association.
Senator IVArL5 of Montana. We will let that go. I call your at.
tention to this rather significant paragraph [reading]:
It will not always be possible to explain our activities In writing, but we

will contrive In some way to keep you and your associates fully informed.

Just what line of activity did you have in contemplation at that

time that it would not be advisable to put into writingl
Mr. LAKIN'. I hdinot have any line of activity in mind.
Senator WALSH of Montana. Why did you write any such thing
as that?
Mr. LAKIN. WelIl it was an inapt expression, I think, What I

really meant was that I did not want to spend so much time in

.men
writing.
Senator Wrsirsn of Montana. Ilut there is so much of your language, Mr. Lakin, that does not express your ideas. It was just a
matter of time, then-that it would take too mich time to put it i
writingI
Mr.-LA IN. I think that was upperinost in my mind; yes, sir.
Senator WALsH of Montana. rIlview of that, in another letter
where you refer to that, you said you would be down to Cuba.
Would it take more time to write a letter than it would to go to
Cuba and tell them about it?
Mr. LARIN. Well, I had to go to Cuba anyway.
Senator WALsH of Montana. You add [reading]:
But we will contrive in some way to keel you and your associates fully

informed.'

Mr. LKiN. Yes.

Senator WALsh of Montana. What did you have in mind?had to

Mr. LAciu. I had in mind frequent visits to Cuba which I
make anyway, on account of the business of my company.

_
on
0 ou,
talk,

talk
S

rath

3Man
AU
j5,o

iI
thai
iII
rlgu,,
relmr

will.-

Set
I
on t
Sc
bran

M
nol c
hearS
rigil
T
your
yon

you
nce,
M
Sel
Rodr
We
regar
at thil
give
in re
YC
Mr

I di(

So

Mr
yes.

LOBBY INVESTIGATION

1675

Senator W.LSH of Mfontana. I remenber a distinguished citizen

of my State, a inan of yery large interests, who, instead of talking

with his subordinates about things, would write a letter and put it
on their desk, for the purpose of sting time. He found that he
could save time by wrtiig a letter ra other than by going in and
talking You take the contra r y view of it.
Mr.LACI.

Yes, sir.

Senator Wmlisn of Montana. You could save time by talking

rather than by writing a letter?
Mr. LAKIN. Yes, air.
Senator WAstiS of Montana. I have another letter here from
,1anas, written from Iubana, March 10, 1029:
My I)P..; M. LAKIN: 11hilA Is to acknowledge receipt of your letter of March
15 1tlIdr.sessed to Mesmrs. Chadhourlmt,. Itotirlgulex. 8il4 11iP.

Iiit, lemlie or miI.

faimilmellmll1I mtd Mr. Itol'iguez, iiii IIi my own ltille I
hunk you for tlis letter innulthe Ilt(re.stlig 4l1,it which It nitaltls.
We woiiild llilltk yuuo Io keejp le hiformid
it
Io
oilr oictivilles it contiection wlhtliS
letter.

the fUtittl

ievehploients of

In fAirther rferncie to the later sent to vou by ,Mers. (lhndbottrue, Rod-

rigjuiu', wItd Imly. vif tIIkl'r illte of .1iurch 9. we tire Inelfising Ilerowhith copy of
relHirt givei by Mess..s. ('hn1uultsou11e, Itodi'ilguey. 11114il myself to tle president
(it thi Assploeluo
N tsidlal de lilcendudos de Cuba, Hr. Satche Abelll, In
wiihi ore exiltihitd the reasons why we did not sign tlie lorlvatte report you
Seitl1hii.

JTust what does tlat Ileall?

,11.

LAKIN.

Well, that is that report which I did not want to get

on the files of the association.

and they were-

They disagreed with the report,

Senuor AVATst of Montana. That is, Chadbouriie, Rodriguez, and

Manas disagreed with your report?
Mr. LAIX. They disagreed with it. They had been on the original connnittee which had attended the Ways .and Means Comnuittee
hearings, and had been here at that time.
Senator W.Aimt of Montana. Oh, yes. This is the letter of Rodriguiez, Chadbourne. and Manas.
There is another feature of this letter to which I want to invite
your attention. Your plan was not to report in writing everything
you were doing, but to communicate it orally, and the other gentlemen associated with you insisted upon a full statement of all that
you were doing, to the asociation. That was the matter in difference, wasn't it?
Mr. LAK N. I do not understand it was; no. sit.
Senator IVAixs of Montana. Let me read from the letter of
Rodriguez, Chadbourne, and Manas:
We also believe (lint any coninitieo appointed shouldd adopt a definite plan
regarding its method of procedtire In handling the matters to which w refer
at lie beglinnig of this report, and that that conmilte. should at any line
give an account of its activities to any Interested parties desiring information
In regard hereto.

You objected thereto; did you not?

Mr. LAKIN. No. I objected to the formation of a definite plan.
I did not object in the slightest to making reports.
Senator WALSH of Montana. But von told us that you objected.
Mr. LiAni. I objected to taking the time to write the reports;

1676

LOBBY INVESTIGATION

Senator WAJJ8H of Montana. You told them you would make a

report in part in writing for the files and you would give them other
were insisting
information by word of mouth, and these gentlemen
association.
the
to
officially
reported
be
should
did
you
that whatever
Mr. LAKIN. Yes, officially to the association.
Senator WASH of Montana. I think I will have this letter in full
inserted in the record.

W_
be a
that
inter

SiR: Under date of February 27, 1021) there was-sent to you an official report
of the activithes of th committee designated by tile Natlonal As.'ochition of
Mill Owners over which you preside, i December, 1928, to c(ioperate With
the committee designated by the Aiuerleoi Chamber of Commerce of Cuba to
defetl, among others, the lIterests of the Cubatn sugar Industry against the
proposal to Increae the tariff (ot sugar) lit the Uitel States of America.
That committee was formed by Mr. Herbert C. Lakin and the undersigned,
Pedro Rodriguez, W. A. Chadbourne, and Arturo A1. Munn.

regard
II
at W
reasl
dei'
quite

For his part Mr. Lakin

We
regar

at tilt
a1l fIe

ins also sent you a report on the itctivitles which

he hts developed lit New York and Washington site the signers of this report
terminated the work which they were given to do.
In that report Mr. Lakin points out four lines of conduct which may con.
tinue to Ie carried out in the United States to defend the Cuban sugar Industry
against t possible Increase lit the tariff.
The opinions of the members of the committee whose names are subscribed
to this report coincide with Mr. Lukin's Ideas lit regard to the convenience of
proceeding fit the maner Indicated oi page 1 of the private report which
he sent to you, namely:
1. That the work of mikng known to the ilnleubers of the Ways and MIeans
Committee of the House of representatives of the Uniitedl States ald otlher
position hi this
nuba's
&Mebtlwrsof Colngre.s the arguwtients which support
problem fie continued.
2. That therM be organfized a publicity campaign. to disseminate infornatlo0i
regarnlliig the Cuban point of view and make known to the American Imblue In
general the situation that would be created by nitIncrease li the tariff.
The neeessilty of establishing diplonil nlegotiations between tie Government
of Cuba and the Government of the Uted states of America lit order t)

defend the Cuban Interests.

4. Develop some plai that may be satifactory to the cote and belt su.ar
producers in the United Stites, which, hi substittitlo of tile proposed ninerea.e
in the tariff will permit them to obtain the same benefits as they would reteive
under said increase.
lit order to carry ou't n lahnl hasel ol ulaitig ito praltice the folur points
above Ineiloned, with tile exceptloll or diplolimtle tegotiatllons which ex.
clusively cIionev'II the GOVertiItl (of Cubi ittid will |he based Oil tile o1iloit
which the latter iany havo regarding the convenlence of that lrocedure. we
beilete that it eonmlttee cOllosed of the smallest Io.sslble nuibilier of members

having, however, 11lnple diseotiollary power. should be desiglateil. Hlt the

appoititent by tit United States Sugar Ass oiation of it committee for the
same purpose causes us to hesitate lit janualtg this suggestion its will lie ex.
piahied further on li this report.
Where we art. fulldiitullilly lit dilsagreenietlt with iMr. AkW Is in that part
of his report where he states that any steps that ay bt, taken inust be of an
Indeilnito eharilcter, whereas we believe that they should be fully defined
front the moment tie comnnlittee deslgnaled has decided upon the plait which It
WallI
follow. Tfils consideration his caused us not to sign the private report of
Mr. Lakin to you.
Iteturlilng to the uaniter of the appointment of a committee to carry out the
four suggestions to wihh we refer Wit the beginnhtg of thls report, we believe
that so long a$ithe thtited Slates t %sotlittionht

Ilreldy fl)plpOiit(4! It coi.

HAT

Sel

the i
I

was
1r
Se-dt

date

Farr
W
,r
but

not s

Se-

I e
talk at
Natloll
overpr
Th

A[r

Ser
.1r

Se

City,

Mr
Se
M[r

gl'Oull

uSe
Se
Sc

inittee which is eonipo.4ed of Mlessrs. Ueorge A. Zabriskie, l~dwin P. $liatttek

for li ('t"bal produce s to
.
aitid Herbert C. Likin,It Is extremely
appoilt it committee itnleA. they fitst reach n igreenlent with the Uilited

lecuball
the slt

States Sugar Asoelation. (-filter to accept the committee tilrealy uli'iollted. or to

couhl

propo.e that the bitter be reinforced with Cuban nemliers.

Tills point IArather delicate and we prefer to state the dlltc'ty which may
arise without inakilg any detllnite recoketidatiol because we believe th1ir this
Is it iatite which must lie deciled by the Cuiban producers after careful
consideration of the problem.

things
W v
tereste

LOBBY INVESTIGATION

1677

We do not wish, however, to refrain from stating that in our opinion it would
be a ilstake to create more than one committee to handle this matter and
that it would be preferable to permit the committee appointed by the Amerlean
interests In New York to net freely, rather than create a committee of Cuban
interests tO work ldepiewleitly of the committee alrea(ly established.
we also be1ee thit any committee appointed should adopt a definite plan
regarding Its mekthod of procedure in handling the matters to which we refer
at the beginning of this report, and that that committee should at any time give
an ;tccount of its activities to. any Interested parties desiring inlbrmation in
regard thereto.
Illthis report we have attempted to express to you clearly the conclusions
at which w0 have arrived. It I" pos.sible that you may desire to know the

reasons which have caused its to arrive at these conclusions or that you may

desir further information on some points mentioned in this report. We are

quite ready to report further if our opinion is desired on any of these questions.
Yours. etc.,
W. A. (4IIADoOURNE.
PEDRO It0DihOUE.
ARTURO M. 31ANAS.
IAB..,

March, 1929.

Senator WATqi of Montana. I want to go back to this matter of

the interest of New York banks in Cuban sugar.
I have before me a copy of a letter written by Mr. Francis. That
was Mr. Shattuck's law partner?

11r. Lm,uU. Yes, sir.

Senator VALsiH of Montana. To Mr. Shattuck in Habana, under
date of May 29, 1929, in which he says, ,I came to town with John
Farr this morning and had a very delightful talk about sugar."
Who is Farrf
Ur. LAKi.N. He is in the sugar busine.s. I think, in Porto Rico,
but I am not sure. He has interests In Porto Rico. What I am
not sure of is whether he has any in Cuba or not.

Senator W, SH of Montana [reading]:

I came to town with John Farr this morning otntd had a very delightful
talk ohout sugir. He sald that the trouble wax that the Exchange Banik, the
National City Batik. and the
voyal Banik of Canada were responsible for the
overproduction in Cuba.

The Royal Bank of Canada is a New York bank, isn't itI

Mr. LAXIUN. No. It is a Montreal bank.
Senator WALSH of Montana. But it has a branch in New York?

Mr. LAKIX.

Yes.

Senator WALsu of Montana. And it operates out of New York

City, doesn't it?
M16r. LAlI.. Wl7ell. I do notSenator WATIs of Montana. What is its interest inCuban sugar?
Mr. LAI.cN. It is also interested as a creditor. I went over this
ground the other day and I thought you remembered we had diseuved about the Royal Bank. I guess it was Senator Caraway.
Senator CAItAWAY. Yes. They gave a contribution of $10,000.
3Mr. LAK N. Yes, sir.
Senator WALSH of Montana. Well, ref rring to Farr, he says:
lie said the President seot for (Georgo Zibrisklie and wanted to lnerea.,o the
Culain preferential by I cent and that this wits going to ho done by the use of
the sliding seale. lie said that if Cuba would only control her marketing she
could get the full benefit of thi differential. lie also said a great many more
things too numerous to remember but which interested mte exceedingly, as he
was very ontw:'poken, and I am sending you the foregoing that you may be Interested to get this slant on tle situation.

1678

LOBBY I1VESTIGATIOX.

What do yoU understand by increasing the Cubati preferential

by 1 cent?
Mr. LAKIN.
treaty.The Cuban preferential now is dependent upolt the reci.
procity
Senator W11IANJ of Montana. Yes; 20 per cnt.

Farr thoughtSenator WAisiJ of Montana. Let us see how that will figure out?
Mr. LAICIx. The present full duty is 2.200. That Iniakes the Cuban
dty 1.76.
Senator WIAL-si of Montana. And 20 per vent of that would be-Mr. LA N. Forty more.
Senator WArSI of Montana. The difference between 1.70 and 2.20?
Mr. LAKIV.. Twenty per cent.

Mr. LAKIN. Yes.

Seofator WALSIX of Montana. So that Cuba has a prefereflid now
of 44i

S
Ban
Ban
AM
R
3.
MiR
S
cha!M

Se

Wa
S
S'

Mr. LAKI-N. Yes, sir.

Senator WAsLi of Montana. And the idea was to increase it to

1.44?
Mr. LAKIN. I think what hie meant was to increase it to 1 cent;
not by 1 cent. This has been argued back and forth a good deal-the rate that has been talked of was to have a flat preferential to Cuba
of I cent a pound, no matter what the duty was.
Senator WALsJI of Montana. Let me understand. You think that
the President's idea was to increase the preferential to 1 cent?
Mr. IJcIx. I do not know that the President ever considered it
from that angle at all. That I do not know.
Senator WALsH of Montana., Tbis says clearly, "He said that the
President had sent for George Zabriskie and wanted to increase the
Cuban preferential by 1 cent." That would increase the preferen.
tial to 1.44, would it not?
Mr. LUmt.
Yes; that would.
Senator WALS of Montana. But you think what Farr intended to
say-who do you think made the mistake?
Mr. LAKIN. I should think probably Francis. but I am not sure.
Senator WALSH of Montana. You think VFranicis made the mistake
in not reporting accurately what Farr told him?
Mr. LAKIN. I should imagine so.
Senator WAisi of Montana. Anyway, you think what Farr in.
tended to say, if he did not say it was that the President wanted to
increase the preferential to 1 cent?
e
Mr. LARIN. Well, that would be what I would guess; yes, sir.
Senator WALsH of Montana. Well, what do you know about that?
Mr. LAKix. I don't know anything about it.
.
Senator W,%LsH of Montana. Any further information about it
than this
Mr. LAICI. No, sir.
Senator WALsu of Montana. You have had repeated conferences
with Senator Smoot concerning this sliding scale, haven't you?e.
I
Mr. LAKxip. No. Mr. Shattuck had those. I testified that. I had
only one conference with Senator Smoot at the beginning.
Senator WALsHt of Montana. Did Mr. Shattuck at any time convey
to you what was the President's attitude with respect to this matter?
Mr. LAYm. No; I don't think so.

are
S
Apr
corr
be r
M

dow

wer

S
vate
M

iron
M
Wou

Se
Mr
pres
Men!
Anie
the
C

ann
bI
Se
ing

coni
bed
M
S
U
Se
the
open

LOBBY INVESTIGATION

1679

Senator W.%Hsi of Montana. You spoke about the Corn Exchange

Bank having interests in Cuba, but you did not mention the Chase
Bank, did you?
Mr. LAkiN. Yes, sir; oh, yes.
Senator WALSH of Montana. What interest has the Chase Bank?
Mir. LARIN. The Chase Bank is a bank that is interested in this

mill that makes 70,000 tons of sugar-the Fidelity Sugar Co.

Senator WALSH of Montana. I thought that was the Corn Exchange.
Mr. LAKIN. No.

That is the Chase Bank.

Senator WALSH of Montana. Is the Corn Exchange interested toot

Mir.

LAKIN.

Warner.

I think the Corn Exchange has a small loan to

Senator WALSh of Montana. Oh, yes.

Senator

CARAWAY.

Do you know how much that small loan is?

Mir. LAKIN. I think it is about $100,000, but I am not sure. There

are a lot of banks in that.

Senator WALSH of Montana. A letter from you to Aballi of date
April 1, 1929, marked "Private and confidential." Why should any
correspondence between you and Aballi with respect to this matter
be private and confidential?
Mr. LAImU. I don't know.
Senator WASH of Montana. Aballi was representing the people
down-there by whom you were employed, or at least wit whom you
were in association in connection with this matter?
Mr. LAmKN. Yes.
Senator WALSH of Montana. And you were writing Aballi privately and confidentially with respect to the matter?
Mr. LAKiN. Yes.

Senator WALSH of Montana. You say "We do not dare be absent

from Washington too long." 'Why not?
Mr. LArue. Well, I was afraid something would happen that we
would not know about I suppose.
Senator WALSH of Mfontana [reading]:
Mr. Shattuck and I both wish to place ourselves entirely at the disposal of
President Mlichado and his advisers, who I suppose are yourself and Doctor
Mollinet and Viriato. It will, of course, be necessary for us to talk w th the
American Chamber of Commerce and the other members of the committee of
the Assocation of IHaeendandos. Our report will be highly confidential, and I
leave It to your discretion to arrange the appropriate conferences.

Confidential to whom Mr LakinI

Mr. LAKIN-. I think that wvas merely meant to have it get into his
hands direct, without passing through the clerks. That is probably
all I had in mind.
Senator WALsH of Montuna. Well, that is a queer way of expressing that idea, Mr. Lakin. If you wrote to Aballi a private and
confidential letter, that confidence would. be violated if he told anybody about what was in the letter. That is what "private ad confidential" means, isn't it?
Mr. LARIN. No.
Senator WAuH of Montana. What is that?

Mr. LAiUx. He can make such use as he wants of it afterwards.

Senator WI usi of Montana. The point was that when you marked
the letter "Private and confidential," you meant it should not be
opened by the clerk?

IM'fi. TARuN.

Yes, sir. That is what always happens in btiine.,

as I iderstaitd it. If a letter comes to me marked that way, it is

not opened.
Senator CA1IAWAY.

But. that is on the enlopel.

This was in tile

tl
i t

letter. He could not have found it. until lio opened thie letter andt
read it.
31r. ImmixJ~. It was incloubtodly -on,the envel#1ope zilso.te
Senator CARAWA. Then wvhy &utit in the letter?
r. ILAif. Well, that it; a hiit of stenogra phlers.
M%
Senator CmA~WY. Does your stenographer put th ings in Your

letters that you do)not dictateIisI

I beg youri pirdlon?
1. 1~.
Senator OARAWv~mY.
say, does y'our stenographer put things in
yvour letters that you doa not dictat&?I~
Mr. LAJUNf. I fiope not,
Senator OARAWAy. Well, I would iniagine not.
Senator. W4 mLsmr of 3Montitmia1. I colntiiiue:
Mr1. 81i111ttuek uil I tire speilig u a rt of emeh ii'k fit WViiihiutilon. lie
118( C1"nert-iiCO-4 tlii' 111
tiIoulih It bmit4 for 1130 noit

tit menltion tii subject; In thoe onforei with Air. 19hatituek'I le mary U'l you
moibig (of those relations of his own-vition. -I call tell you prIiately 1jul11
h~e

JWuI.-h
thll

(it
W_
Al.
MeIAu
.11

Week *with Henitor Hniont. At the lust moment I

to alilml ttflioferi'nvem~ heviuse I kinow 1111t hoth

Shattuck miid $nmott have huul iteesolmil coitfermitie with Pres*idetlit 11411ovE'1' andW
I thought they '. .ilt(f hie ti11' o4)talk more freely In my ahlmenee.
fltseloimhs*4 of ftn' IeiilIolhI l1(!tWl Pidiunt
You lutive Ilarnegi froji 110nioHoover' il Mir. 14fintttk, Will vou kinly II.arrage withi IP comfeees hot
might

Co..~

eibarrsismg for those relations4 to be i*isseu&t II - piresenf

to (cfl1Wtiii those relahloim.4 imtmIuchI as5 Itimodb1k fIt order

Isp
t

qiuitf
id

INaturaihly ho Is Iblilgeul

not) to embolniiss 1'r)41'Itn HIoover1.

31r.
mall

III gi'
WoTculdr you care to niake ny~ explanat ion w~ith r'espect to that, M%'
New
Lakin?
Mrf. LAR . 1IN afraid tho letter speaks for itself.
Shha11
Senaftorl WAA of MNouitiluid. You~ employ-ed Mir. Shattuek, 11m1ong
the III
other conIsierations~. bcauseI5 of hlis (.lose rehuitiomis, With PresidentTh
the 1%
Hoover?
tree.
sil'.
yes,
others;
.1r. Ji~tKIx. Among
t'ir.p
Senator IV~~usit of Alontanat. And yet vou take the. view that it it
filet I
wits known thait Mr. Shattuck bore su('h r-elation to the, President, it
would be embarrassing to him? .Inipr
Air. LAIN It might, be misunderstood;- yes, sir.
Tm
Semiutor Almm of Nfont tm. A letter fioni y'ou to Colonel Deeds,M
of the General Sugar Co., at Hainu, iii which you may:
S

tribu
3ym o' illt bs for working funds (I the' sugar ImiIf prixln11 have
AM
now reilched file vinat wlire,there fire itcertsini mueeesw. mtil I tuke thei hlierty
'if Inclomiiug it Nutlocer'1i0)lo hihank for your tigIIItUme
I liachise it Iii dluplcttean
HIP thatt you 111
Inive oe~i~copy) for 3'ouI fhls.
h

I halve thle Irrev)cab)le 81ni'seripthimis for $10,000 each of thle followving Fit
colmijsanies : (.14inm C'o., Rboyal Baunk of Cizuitea. Itlonii. C'ubian Aimirlen. ubai
Uanev m 113tiilteu1 Fruit. fit aililtof to your ownii. I hanve whzt I unsilder
to lie it firm subseri j lion front Punts Ategie for $10,000. mind at 8tibseriptk'n for
fin lt yet itiietrnii'Itiout
fro'm l1rningiwo. Tho urul of lirtectr.- ef
C11b11u1 Dwiiminl will liiaet next WVeil m-miy ftil(
I feel that I can proliaidy
'Mr. ilonudit ibinks fhaul we cim alga get st,4erlip.
count fill then for $10,010h.
Mai~
1gm'iningig
uiom
Hln troml Asnwrenit Hiignr Reinn,
Niguvro, lunutimumni, amill Alatiiim ,Nfoo
Sua
elti.Armd

H-ow successful were you in that regard?

MrIt. LAINz. We didnt even try them.f

Thit,
Se.

niatic
Wr

that
view
Of 1I'

ag to
of p-

I(LBBY IN VESTlOATION

1681
68

Senator IVAISII of 'Montana. Anti I think von toldl 11%befort that

11t tiprit,.111 Sugiar n4'ver contibted anything. TIhait is corrctc,
is it?
Mri. JLi{IN. Tlhait is correct; Noes s1ir.
n letter f'oi
lieieIf lCte
hfrt
,9011tor WAuASn Of NMot1itii. V1 li10g1ive
tile Royal Bank of Canada, dated February 25i, as follows:
~r. xhcliftl%. jivt-41dQelt or i' ('erililk-n'~ *Suga~r
limnit -%fit. ja.ucv: I wrv if) Ai

co.. :6tt:wiit 11mik ilulilbur, Ilo.ti. ar-4dsuig Islia nielloitolit1)UtlIoi of $1,000

oil ltW('4ulit f our subserplon of $AJOOlito *OIIn.ct [ill with 010 acttvlles at
Ws~hni'it.I qua(te file tulho W-Iiig trins 11S rejily:
ii'v sColk( fir tii' wgirk (it thhls C4,111111iteo
"We kiusov iii'th'hig 11oa'1e1,11 1hsit
thaii iim npilred its IM,' papers. all(] lierefort- (to not feel (ha~t we ttre at
,III iiirmiutwu Ii Isl respet. Willi %#ou therefore kindly give u sonio luformaNit-iopiq it vojiy of (lie~ brief iisid you presented
X1
Would yoEu 111110 S'it~i..1I..
Ilihtk Krflniit.
01OU1%
at wliiligtoti, ill filly edil ite)Is.V

Aparently this Milln Xieliols wante'd some information. Did you

Fellid hi ju the iniforuuatiou C
Mr. LiUI . I thitik so., yes. sir.
801itiOr WA1LSH1 of IN101tithitt. WI'IS it linhiid ill (Xtetlt, the st111ie
as tivL information yoHl sent to Ctua for the recor(ls, or' did( you
eXo yourse0l118f 011tholY to Mr. Nicho'ls?
I think I wrote hiln
Dr. LjAKINC. I don't know what I wrote hinm.
quito a long letter.
Senator WATASn Of MHOUNmm. I (1itote from thle letter to 'Mr.
NichIos) dated Fecbruary 20, 1929:
Mri. Noble. (if Mhe Rtoyal Msik of czoiult. oxhks int io snd vout somett tutorWnhIlig,9tln.
dt-foue4 wm'k fli
sco1IC f Iho' cuban sugar takiri
Mallonu fiihoui tlei
avt-Iy8111d.
Iligent-ral. tit( worik consbsls f Mei tuual lltitI 11iitlice 11.-'re' tile
1t(.(. (fi 4Ed1iitutts
*I1-lit ( DI~ifll
3f1-1111 ('unuust tefe (In1cludilng tlei filing 'f i It r i
W;ttl Iiw Igienilierx .tit~ (!Mnumtte' uld oter iu'mhers f ('oiigiv-.s,, tod thle
of imul'lleh1ty, througia
towi(fld
So'nah' Fl1h111le Colninsittee. tog('th('r Mil sous slic
the uiewstitie'is 1114othc'rwtse.
lnu eoltgi'ited by' III ll jlivarllI( tifiiro
Trle tirst singe' of flu,' work lit- is
the Ways.u andu Iteaiwt Comiiiittee, mid1( tile fliligit iii 11brif su 0 siuiiliteistal
brie-f. Tis' work 0"he dupa irenftfh'in limm heenttnish' to a couinltt' of
k'.Mr. Edwin 11. Shaitlnek. and mlythree, couslsthig (if Mr. (Itorge A. ZOOMl(%
P-1t. 4 witig to lte lnuc'rnatioiiat nsreets f till. (11i1111 liliut of V!ew, tile
Aict tMal lifitli '/Abhi'isklo anud Sliatluik are Intinuie frtid-. (if Htoovr Is very
hullmrhilut.

That wam not. very definite information. was it, *Mr.L~akin?~

mr. LARUN. Well, 4it w"a4 all ho Wvanted.

Senator CAIIAWAY. That last statenit was din~fite. Did lie contribute?
Mr. LAKIN. 11.ll that wvas the first, I knew the lRoyal Bank had
any interest iii. hisunil. T supjposed the Royatl Batikc divided up
the subscription mnnong thri eoinianies of ihl it wvas a credIitor,,
That was th i nforence T drew fu'oi that.
Senator- WATAII: of Montana. Mr. Nilicls wvas asking for inforniation about what you were doing, what youir lansfl of operation
Woee, What the money was going to bit sl)Cft for, and you tell hi1m
that'"owing to theointer-national aspects of the Cuban point of
view, the fact that both Zabriskie and Shattuck are intimate friends
of Hoover is very important." That don't, enlighten him very ninell
as to what you ivero going to do. Hoc was asking for your plans
of p~rocedure', and you give him the infor'mationt thtat. the fact that

1682

LOBBY INVESTIGATION

Zabriskie and Shattuck were intimate friends of the President was

Sel
very important.
Of
C
Mr. JAKiz;. I wrote him all that I thought he was interested in.
M
Senator
sALSH
of Montana. You thought that would help get the
Con.
thousand dollars from him I
Set
Mr. LAKiN. Well, I wrote it at the request of the manager of the
date
bank.
Senator WALSH of Montana. Yes; but the manager of the bank
Hatch
was telling you that Mr. Nichols wanted information concerning
sugar
what your procedure was, what y6u intended to do and instead 0
the pr
telling him what you intended to do you told him the fact that Mr.
were.
be up
Zabriskie and Mr. Shattuck had intimate relations with the President
of Cu
was important.
Mr. LAiczN. I don't know what I told him. You have the letter.
Senator WALSH of Montana. A letter from you to Mr. Cochrane, Iraiseno Su
assistant to the president United States Industrial Alcohol Co., New
are a
York, dated February 20, 1929, in which you say:
benefl
Many thanks for Mr. Chatfleld's report on the proposeil Increase in the tariff

on mlasses. From the fact that many of the strong arguments are merely
hinted at an1d not

developed in the memorandum, I venture to guess that the

alcohol Industry hopes to accomplish its desires through the medium of personal
contact.

The
preside

which
sugar
up th
W_

A personal contact, apparently, the alcohol company thought

would be the better plan, rather than to put their arguments in writ.
ing. Didyou approve of that

prey
Mr
to th

Senator WALSH of Montana. Is it your experience, Mr. Lakin, that

that is the better way to proceed?
Mr. LAKIN. No; it is not.
Senator WALSH of Montana. Evidently you thought, however,
that the alcohol company thought so.
Mr. LAXId.
WVell, I made that guess. I read this argument and
wondered why they did not develop those points.
Senator WLisH of Montana. They thought they would accomplish
more by going around and seeing the representatives personally than
by lying before them and the general public whatever they had to
say in the way of a written brief.?
w r. L
Well,wav.
iKx.v.
I guess the public wouldn't have gotten it any.
Senator WALSn of Montana. A letter to Mr. Russell R. Brown, of
the United States Industrial Alcohol Co., from you, dated February
28, 1929, in which you say:

able
Won
Mr
of th
Se
them
Mr
Sel

Mr. LAKi.

Well--

Sel

r
Set
Mr
Set
Mr
Set
Mr

You will be Interested to know that we hIve raised near" $10,000 to Continue the tariff defense work witII the final bill is passed. This was raised
entirely among the sugar people. I do not call tlis to your attention for the
purpose of soliciting aiiy suliSekiption, but I should like, tit vour conveilence,

Wash
Mr
SeT

well I)( that you have had some experience

Mr

to come over and talk with you in regard to contacts with Members of Con.
gress an 11111ublty. It nmy very
which would be h lpful to us sugur people.

The alcohol people were interested, I think you told us, in the
blackstrap molasses.
Mr. LAIw. Yes, sir.
Senator WALSH of Montana. Did you go over and talk with them?
Mr. LAKxN. Yes, sir.

Se

Mr

Set
wasMr
Bel

LOBBY INVESTIGATION

1683

Senator WALSH of Montana. In regard to contacts with Members

of Congress. What enlightenment did you get?

Mr. LAri. None at all. He said he didn t know any Members of
Congress.
Senator WALSH of Montana. A letter from you to Shattuck, of
date March 2, 1929:
A few years ago the Consumers' LeMague, whose president then was a Mrs.
Hatch, if I correctly remember her ame, exerted a considerable influence on
sugar prices by opposing some scheme or other which was intended to increase
the price of sugar to the consumer. I do not know whether that league could
be used for our purposes. I observe that they are still in existence. They
were addressed yesterday by Governor Roosevelt. Of course, acting on behalf
of Cuba, we desire a better price for sugar, and it might be dangerous to dppreach tile league if we have any hope of working out an arrangement which
will enable everybody to get a little better price for his sugar. If we have
no such hope and decide merely to attempt to prevent tile -duty from being
raised the league might he Interested In our arguinelt that the best people
are aftempting to make the Amnerlean consum er pay $4,000,000 in order to
benefit the beet people by less than $9,000,000.
There is in Washington i General Federation of Women's Clubs. A vice
president of the federation, Mrs. IPentler, gave all interview In 1Ialana, it
which site announced the willingness of the federation to help Cuba in Its
sugar tariff matter. Our publicity bureau milgh find it worth while to look
up that organization.

Which side of the fence did you eventually get on, Mr. Lakin, to
prevent a further increase, or get an increase for both of you?
Mr. LARiX. To prevent an increase in the tariff and give a bounty
to the domestic interests.

Senator WALSH of Montana. And in that laudable course were you

able to enlist the sympathy and help of the General Federation of

Women's Clubst
Mr. LAKi,. A good many women's clubs; I don't know the names
of them.
Senator WALSH of Montana. You don't know the names of any of
them?
Mr. LAMcw. No; not specifically.

Senator WALSH of Montana. You spoke about the Consumers'

LeUgUe. Did you get them
M.

LAKim. I don't know whether we did or not.

Senator

WALSH

of Montana. With whom did you negotiate?

Mr. LAKiN. I didn't negotiate with anybody.

Senator WALns, of Montana. Who did I

Mr. LAmN. I think Mrs. Jones did.

Senator WAmis of Montana. Who is Mrs. Jones?

Mr. LAmN. Our publicity agent.
Senator WALSH of Montana. Oh, that is the Mrs. Jones here in
Washingtont
Mr. LAIMN. Yes.
Senator WALSH of Montana. You think she got into communica-

tion with some of these women's clubs?

Mr. LARN. Yes.

Senator WALSHi of Montana. Do you know whether or not there

was any expense attendant on that movement?

Mr. LARx. Only her travel expenses and correspondence.
Senator WAxan of Montana. Do you remember where she went?

1684

LOBBY IXVESTIOATION

Mr. LAI N. I think sie went to New York.

In fact, I know she

did.
Senator WALSi of Montana. Anywhere else
Mr. LAIMN. Not for that purpose that I know of; no, sir.
Wma~sit of Montana. Can you tell us what result was
8enator
Secured
secl~e~li

Be
OtrUide

OfofTile
earl

Mi,'. LAKIN. Yes, I think various resolutions were passed by these

women's organizations and sent down hero to Congress. She was
to speak at a number of meetings held by this association,
asked
wiCh she did.

0ene

Senator 1V.sLx of 3ontana. I find a letter from Mr. Shattuck's

office to Mr~s. Jones of date October 21, 1929, transmitting a check
for $1.139.00, covering salaries and expensses4for the week of October
10 to 24, as follows: Ma's. Jones's salary, $230, and expenses of help
in her office, lary Carpeiiter, Barbara Giles, Helen Kerehad, Rita
Nieh01son, amounting altogether to $395; then the expense account,
telephone $20.70, and Publshers' Press $90.85, and then M. J. Eichei

we

$58 6.r51.

then

by Ih
week
and h
deal.
Ty

we C:
W
Crol

Af

Do you know what that is?

Mr. LAKIN. That must have had something to do with that New
York comp)aign among the women. I had forgotten all about that.
Senator WAUIsH of Montana. Who is Eihel?

in le
the
ne]
undo

however. She may be it member of one of these associations, but I

think she is it newspaper woman. Senator WmAJSIi of Montana. Did sie write something on sugar?
Mr. L.%mctN. I really don't know whether she did or not. She may
have.
Senator WL 1sIt of Montana. What kind of service could a news.
paper woman render in a campaign of this character?
Ur. L.cix. Well, she could talk to these women's clubs or their
officers or members, interest them.
Senator W.roqHm of Montana. Mm.s. Jones, I suppose, would be able
to give us more definite information about this?
fr. L.uu N. I ain sure site would; yes, sir.
Senator WALSll of Montana. A letter of March 14 1 29 from you
to 0. H. Blackburn. treasurer of the Horid uero central Corpora.
tion, New York. That is a company doing business in Cuba?
Mr. LAIx. Yes, sir.
Senator WtLsH of Montana. In which you say:
I wish to thank you for your letter of March 13, promising a contribution of

terra,

Mr. LAm. I think she is a newspaper wonian.

I am not sure,

$500. and stating the terms on which you might possibly be able to contribute
something more.

What were the terms upon which Mr. Blackburn promised to make
further contribution?
Mr. XjAKI.. Well, I can only speak from recollection.
Senator WALSH of Montana. Yes.
Mr. LAKIN. I think he told me that if other people who were
already contributing would contribute in proportion to the amount
of sugar they made and those contributions amounted to more than
his $00 his company, which is a small one, might be willing to
contribute more.

I bi
Is0al

all

it

that
Whet

D
was
AI

with
Se
ting
hout

doin
M3
them

So:

to be
confe

Mr
Se-

to dl
Mr
Se
Mr

Soe

was
M
Se
fiablc
Mr

LOBBY INVESTIGATION

1685

Selaltor WAL.Sh of 3Montana. A letter fromt you to Chadbo'rne,

Orturo Manasa and Pedro Rodreguez, at Hfabana, your associates,

under (ate of Uatrch 15, 1929:

Th, Phlllpiiies (ile.stlOli Is flow not oie of the nublier of tois . 'Tho iuntunt
of 5W.OO touls has been deflltely decided upon by the et people. They are

hearlng i0 burden of Ihlat pjirtluhitr lhase of t!in question and we are helping
them whenever wO Clin. We I6i1e IPowerful sttgullent oil that *subJL00 from
lie.
General Crowder which We eX34wet to 4:4 Ii st'veral differlIt- (ilre(tlbfi.).
by the Wily, will locate himself I Vashington the first part of the coming

weel to remain for several weeks. We ind that lie has access to everybody
and Is received with deferelice itd IIolor. We expect lim to accomplish a good
deal.

This says:
We have a powerful argument on that subject from General Crowder which
we exlwet to use iii several different directions.

What does that meant What directions were you going to use

Crowder's argument in?

Mr. LAKII. Well, put it into a brief, get it before the Congressmen
in letters, get it published in a magazine, if possible, or perhaps in
the newspapers.
Senator WALsH of Montana. Memorandum for Mr. Shattuck,

under date of March 15, 1929:

I believe that I have sot measures on foot to get a genuinely slicere con-

ference between Bacharach and ourselves either In Wawhington or In New York

I sluill itot know deilinftI.iely 1111l1 the Ilrt of 11fxt week.
it was suggested to lie that -my ad(Iess to householders might be sent to
all Ipers'onq i Bavharehs district who dire in the telephone directory, mil
that the same uaight be dole wllh Watson. That looks to me atlittle dangerous.
What Is your opinilon

Does that refer to the conference with Bacharach that eventually

was consummated through SnyderV
Mr. LAKIN. I believe it does, because I liid. only one conference
with him.
Senator W'VLsi of Montana. Well, you had it in mind before getting this conference with Bacharch, to send your address to ,lt
householders in Bacharach's district. What was the purpose in
doing that?
Mr. LAIUx. To have them interested in it. That address urged
them to write their Congressman if they were interested.
Senator WALS of Montana. To bring a little pressure in advance
to bear on Bacharach, so as to kind of ease him up a little for the
conference you were going to have with him?
Mr. LARiN. Yes.
Senator WALs8H of Montana. And you thought it might be helpful
to do the same with Watson. That is Senator Watson
Mr. LAKIN. No, Congressman Watson.
Senator WAL811 of Montana. Of what State?
Mr. LAIX. Pennsylvania.
Senator WALsH of Montana. But on reflection, you thought that

was a little dangerous. WhyI

Mr. LmqtThx. Well, I thought that would get them mad, perhaps.
Senator WALSh of Montana. Do you think that would be justifiable?
Mr. LARIX. Do I

1686
Senator

LOBBY INVESTIGATION
WATsH

of Montana. Yes.

Mr. LAKIN, Well 1 I don't know. That is one of the puzzles to me

about this business in Washington.

Senator WALSH of Montana. I mean whether the Congressmen
would be justified in feeling a little incensed at that method of con.
trolling his action.
Mr. LAKIN. That is what I say. I don't know whether-trying to
put myself in their place, I don't know how I would feel about it.
Senator WALSH of Montana. Well, did you follow that impulse?
Mr. LAKIN.

Of
cn

I don't think so.

Senator OAPAWAY. What you are trying to say now is that the

more you know about Washington the less you know ?

Mr. LARiK.

Yes, sir.

Senator WALsH of Montana. I have here a letter from Mr. John

E. Snyder. Who is he?
v p
Mr. LAKIN. He is Hershey's wie president I think and-lawyer,
Senator WALSH of Montana. That is not Lhe Washington lawyer
we were asking about, by the name of Snyder?
Mr. LAKIN. NO, no.

Senator WALsit of Montana. It is another man

Mr. LAKIN. Yes. This Snyder appeared here before all the com.

mittees, I think.
Senator WALSH of Montana. Under date of March 21, 1920, as
follows:
Inclosed Is check to your order as treasurer, for $2,6100, being one-half of the
subscription of Hershey Corporation to the sugar tariff defense fund.
On account of other engagements I have not been able to be in Washington
any time during the week. I anticipate going to Cuba next week leaving as
early in the week as I can, say Wednesday, Tuesday if possible, but I think
unlikely.
I am desirous of seeing you before I leave to learn of any developments
since I last met you, to be in a position to discuss matters up to the moment
with Mr. Hershey and Mr. Staples In Cuba.
If anything occurs to you which would be of any assistance to you In Cuba
or I could be the means of conveying any communications from you to persons
In Cuba I would be pleased to do so.

hh
if
1a
L

Del

01

vot-

DIl you send any messages by him?

Mr. LAKIN. No, sir, I don't think so. I don't remember any, at
any rate.
Senator WALsH of Montana. How much did the Hershey Co. give

in all?

Mr. LAKIN. $5,000.

Senator WALSH of

them?

Montana. Was that the fair contribution from

Mr. LAIN. .Yes, I think it was.

.1

Senator CAAwAY. By the way, they maintain activities of their

own here, do they not?
Mr. LAWN. Yes, I think they do.

Senator WALSH of Montana. So $5,000 does not represent what

they spent?
Mr. LAxu.

I don't believe so.

Senator WALsHi of Montana. A letter from you to Dr. Louis Ma.

chado, Habana. That is not the President?
Mr. LArIN. No; no relation, I think.

Ian
Mr.
the
1
of t
ver

LOBBY INVESTIGATION

1687

Senator WALsH of Montana (reading):

Meantime there Isone very important thing that you might get under way
through your DU Pont connections, and that is to endeavor to persuade the two
swiators and the single Congressnmii from Delaware to act on behalf of Cuba.
of colrsv, we .shouldlike to have them willing to champion tie cause In the
congressIo011l debates, but it might Ie difficult to persuade them to do tatolon
the other hand, It might be possible to persuade them that when it comes time
to vote, they will Vote illfavor. of Cuba.

What was the relation between Machado and the Du Pont people?
Mr. LAKIN. He represents the Du Pots in Cuba in connection
with a colony they are founding down there.
Senator WALsH of Montana. -he Du Pont people?
Mr. LAIKm.

Yes.

WALSH of Montana. And that consideration you thought

Senator
might
bring
the Delaware Senators in line through the Du Ponts?
Well, I thought it was worth trying.
LARiN.
Mr.
Senator
CARAWAY. You say Lis Machado is not related to the
President?
Mr. LAKIN. I don't think he is any relation.
Senator CARAWAY. My information is exactly the other way; that
he is, both related by blood and in business, has large business
interests with him.
Mr. LAKiN. I don't think so. I asked him if he was, and lie said
if it could be traced at all, it was so far back there was nothing to

boast about.

Senator CARAWAY. I have some correspondence here that says he

is a cousin.
Senator WALsn of Montana. Anyway, the object is to get the
Delaware Senators in line, and you say:
On the other hnnd, It might be possible to persuade them that when It comes

time to vote, they will vote in favor of Cubt.

What would you think of a United States Senator who would

vote for Cuba as againt the United Statesf
Mr. LmKIN. Wel[, that was not what that meant.
Senator WALSH of Montana. That is what it says.
Mr. LAMIN. It means "not to do any damage to Cuba."
Senator WALSH of Montana. It doesn't say T'no damage to Cuba."
It says "in favor of Cuba."
Mr. LAKIN. Well, I was writing to a Cuban.
Senator VALsH Of Montana. That is another case in which your
language does not express the idea you had in mind, is that correct?
Mr. I,,trw. IVell, it wa. not intended to express any other idea
except that.
Senator WALSH of Morntana. Well, that very clearly indicates,
Mr. Lakin, that the Delaware Senators were to be persuaded by
the Da Ponts to take u your cause, because of Cuba.
Mr.'LAKIN. Yes. Well, I don't see thit that is wrong.
Senator WALs1 of Montana. Well I should think that United
States Senators would be taking ul the cause of the United States.
Mr. LAKIN. Obviously they wou d not vote against the interests
of the United States, but the interests of the United States might
very well coincide with those of Cuba.
78214-30-it 4-13

1688

LOBBY INVESTIGATION

Senator WALSH of Montana. They might, of course.

Mr. L&IUN. And in my opinion they would in this case.
Senator WALSH of ontana. Machado apparently acted in ac.

cordance with your suggestion, as appears from his letter of April S,

1999, in which he says:

S
to y
yo

I am writing to-daay to Mr. lrenee l)n IP6nt fit accordance with your request
and I am inclosing for your files it copy of my letter.

matt(
and

row this is what I would like you to do: There Is a Congressman from
Delaware in the House, Mr. Robert 0. Houston, wito live., fit Georgetown, and

0. Townsend, to whom I would like you to linvo tite whole sugar question
tnit you share
explained. Tihe Cuban cause setesas to us so Just, atd I k vow
my views that it should not lie difficult for you to persuade these Congressmen

lion
Se

follows, from Machado to Du Pont:

And the letter is as
I

there are two Senators from your State, Mers. Daniel 0. Hastings and John

to champion tie cause of Cuba lin the coaigrssionadl debates ait to oppose any
Increase iUthe duty, If not favor t reduction thereof.
I need not tell you that anything you eam (to to help our cause will be
greatly appreciated not only by the writer but by the Cuban government.

That seemed to carry out the same idea, that they were to chain.

pion the cause of Cuba.

Here is a letter from Congvsitman Jlamnes A. Frear to you, of date

April 4, 1929:
I have your letter of the 1st and when you are in Washington will be very
glad to meet you, because there are some matters that I would like to discuss
with you, although under the existing rule, which I think Is a good one, I Jam
unable to say anything about past or proposed action of tihe committee on the
schedules, but I have no hesitancy in expressing my own views, which I have
done to Mr. llartensteln.
I am not writing him or any one else, preferring to speak briefly to you or
some one else who represents hhn in order that my position may not be com.
promised under the rule adopted by the committee not to give out any Informa.
tion as to the committee's procedure until it is all completed. I seriously believe
that work should be carried on at the opposite end of the Capitol in the
interests of your people. That you must determine soon and then I will give
you some suggestions that will boe helpful.
Have Just returned and find the committee hans taken action on some of the
schedules, but I am kept busy with committee meetings, many people, and
heavy corresponlence. However, I am not too busy to see you when you cone
to Washington.
Did you see Congressman Frear Iei

Mr. i.

. Y04. Sir.

Senator W.mLsH of Montana. I think yout told us all that before.

You apparently had written .him.
Mr. LAKIN. Yes; I tilmbk I had seen his speech in the Congressional
Record.
Senator WALSH of Montana. Here is a cablegram from you and
Shattuck to General Crowder of date April 8, 1929. Was Crowder

in Havana at that time?

Mr. LAIiN. No; I think we were, weren't we?

Senator WALSH of Montaha. Oh, yes; exactly.
Think best to permit Colliers to proceed in their own way and we can later,
e.your more formal orderly ,rgument in some other direction. Very impor.
tant you should see Congressman Frear who is very sympathetic with our cause
and is expecting you. Think you should also see Mayhew Wainwrlght.
"rol
Believe you should begin on Reed as soon as he returns.
Who is Wainwrightf
.Mfr. L AK IN. He is a Congressman.

abn

Do
Se
M

them
M
rome

Se
M

that
2 rofi
8

take
by o
M

them

go t

Se,
M

Was
Se]
M
Be,
3t

Polio

or an
Mr
Sei
inter
M
abou

Sol

Mr
Sel
time
Mr
Sol

ThIs

LOBBY INVESTIGATION

168%

Senator WALSH of Montana. And Reed, is that Senator Reed?

Mr. LAicN. Yes, sir.
Senator WALSH of Montana. And the cablegram from Crowder
to you at the Hotel Seville, Biltmore, Habana:
your two telegrams received. I thoroughly understand the Collier Magaiaio
matter and will act accordingly. I have had protracted conference .wlth Frear
and am doing some work for .Ihm. Other Congressmen you named contIntui
absent from Washington. Kind regards.

Did the Collier Magazine eventually comes ' through?

Mr. LAJUN. No, sir.
Senator WALSH of Montana. What was the trouble?
Mr. LAKIN. I think that there wasn't enough what we call sensation in it.
Senator WALSH of Montana. Who conducted the negotiations with
them?
Mr. LAKIN. I think they came down to see Crowder. I don't
remember how they were come in contact with.
Senator WALSH of Montana. What was the proposal to Colliers?
Mr. LAHIN. To use the material that Crowder had, this argument
that Crowder had made in regard to the importance of sustaining a
profitable sugar business in Cuba from the standpoint of the United.
States.
Senator WALSH of Montana. Of course, Collier's don't ordinarilfr
take up these matters themselves, but publish articles that are writterL
by others.
Mr. LAKIm. No, no. Somebody, of course, got in contact with
them, but I don't remember who it was. I know they had a man
go to see him here in Washington.
Senator WALSH of Montana. What is that
Mr. LARIN. They had a man who went. to see him here in
Washington.
Senator WALstH of Montana. See Crowdert
Mr. LAKIN-. Yes. I think they spent a long time with him.
Senator WALSH of Montana. Possibly with the idea of this man
writing an article.
Mr. LAKIN. Yes, putting it into what they call popular form.
Senator WALSH of Montana. That reminds me. The Foreign
Policy Association has been interested in this matter in some way
or another. Do you know just how?
Mr. LAKIN. No; I have seen their publications.
Senator WALSH of Montana. Can you tell us just how they were.
interested in the matter?
Mr. LAKiz. No; not so far as I know. I don't know anything
about them.
Senator WALSH. Did you say Wainwright is from Pennsylvania?
Mr. LAKIN. No; Wainwright is from New York.
Senator WALSH of Montana. He is the gentleman who was at one
time Assistant Secretary of War?
Mr. LAKIN. I think so.
Senator WALSH of Montana. This is a telegram from you to.
Crowder:
Think you should also see Mayhew Wainwright.

1690

.OBBY1

INVE:STIGATION

Why did you pk him out I

Mr. LAmN. He was a friend of Crowder's, and also it friend o1
mine. I was a constituent of hi&.
Senator WALsH of Montana. You ought to be able to tell us very
definitely, then, whether he is the same man who was at one time
Assistant Secretary of War.
.
Mr. LAkIN. Well, I don't remember definitely. If there was a
Wainwright, he was it.
Senator CARAWAY. Don't you remember he retired from the War
Department aud ran for Congress#

Mr. LAIN. I think that is right.

Senator CAAwAY. Well, I know it is.
Senator WALSH of Montana. Another telegram from you and

Shattuck to Crowder, of date April 9:

For fker that yesterdiy*''s inessage 1a11y hiO be'en nilsunI8destood4

d by you we
repeat that we think you should allow Colliers to u-sie your material ill any
way they wish rind we believe this will not prevent subsequent nuto of your
brief In some other way.

That would seem to clear that matter up.

Also, from Crowder to you of date April 10:
If editorial Washington Post Hunday, April 7, Is available plese present
to generall M3tclado. Another
dlitorhil next Sundtay. Letter sent to-day.

Apparently, then, General Crowder was in close association with

the editorial offices of the Washington Post? .otem
Mr. LAIN. Well, that was our understanding; yes, mr.
-.
Senator WALsH of Montana. He was able to tell what editorial
.
would appear next Sunday
Mr. LAKIN. Well, we thought he might.
Senator WA.sH of Montana. No, but he tells you so, does he nott
This is the telegram hereMr. LAKIN. From him to us. I see.
Senator WALSH of Montana. From Crowder to you:
If editorial Washington Post Sunday, April 7. Is available plleast, pre.eni
to General Maehado. Another editorial next Sunday. Letter sent to-day.

That is an editorial which has already appeared iii the paper, and
he thought it advisable to have you get that and show it to Pri.
dent Michado, and then he continues, "Another editorial next Sun.
(lay," which is evidently in advance. General Crowder apparently
then had information in advance as to the editorial that was to ap.
pear in the next Sundity issue of the Washington Post?
Mr. LAKI.v. Apparently.
Senator WALSH of Montana. Did you have any information as to
who was the author of the editoril that had appeared or was to
appear?
Mr. LAIN. No.
Senator WALSn of Montana. Perhaps this will help. It is a cable.
gram of April 11, 1029, from Crowder to Lakin:
Imperative summons to Chicago. Will return Monday.
everything possible, Including Sunday's editorial.

Have arranged for

Just what do you understand by that, Mr. Lakin I

Well I suppose 6ohad persuaded somebody to write
Mr. .LrICN.
'
an editorial in the iashington Post.

ton
ditill

ti

for a
to th

lie do

autt
eie
1
M
M

H
all t
la&
Mr.

0.
09itiol
her
here
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intere

m tC
frP
meant
this
weal,
it

Itself.
Sol
ferrMtr
Se
by t
artic
Mr
Sei
Mr
Se:
you?
Mr

se,
Mr
infor
Mr

LOBBY I.X VEWProATION

1691

Senator WLsir of Montana. A letter from Crowder in Washington to Lakin in Habana, under date of April 10, 1929:
.Mr. Freur spoke to me at our eoNterence principilly In regard to it bounty

oi beet sugar, advocating that method as a most eftectivel one to meet the C0))dition of the beet sugar farmer of America. He asked me for an explanation

of the British beet sugar bounty and Its full duty and colonial tariffs. Also
for a copy of the prior Federal statute granting bounties, referring, of 'Course,

to the sugar bounty authorized In the United States by tarifN act of October 1,
180, effective April 1, 1801. I have complied with his request, lie ild tht
lie desired to make a public statement anti mail It to practically all labor organliations In this country. He remarked that there would be some extra
expense connected with the printing and distribution, which lie Cstilmated

at about $100. In your absence, I told din tint amount of expense would be
19sumed.

-Was it taken care of?

Mr. LAKIN. No, sir.

Senator WAL-sH of Montana. Why not?

Mr. LAIUN. Well, I don't know why.

*Senator WALSHt of Montana. I continue:

His purpose is, of course, to let beet sugar ride in the saddle while
all the other possessions and Cuba will be walking on foot. I shall
know from further conferences just exactly where his argument
leads him.
Mr. Petrekliu came to my rooms yesterday and asked for 15 minutes' cmversation. It took him about an hour to state his case. The substance of his
statement was that they no longer hoped for a fiat Philippine restriction to
500,000 tons, but had not abandoned hope for a sliding restriction. His proposition was to start out with 500,000 tons for the Philippines antd 8,000,4V)
tons for Cuba and then provide that In this same ratio should Cuba Increase
her importatios above 8,000,00 to the United States, the Philippines might
Increase their free Importations by one-sixth of the Cuban Increase. The merit
of this proposition lie said was that Cuba would have strong motives of selfinterest ndt to import Into the United States in excess of 3,000,000 tons and to
say to her that the penalty in so doing was to profido an additional market
for Philippine sugar. He said that beet sugar men would prefer an arrangement like this to a single sale agency decree. Petrekln is very anxious that
this be given no publicity as the Congressman who Is willing to father it
would probably not (1t) so If it became known that he was not the sole author
of the idea.
I Inclose a letter Just received this morning from Colliers, which explains
Itself.
Senator WALsn of Montana. Who was the ('ongre sman re-

ferred to?

Mr. LAKVX. I don't know.

u)tt out
Senator WAI.Slt of Montana. I have tere the docitnent
by the Foreign Policy Association. entitled 1,Sugar and Tl1riff." till
article by Raymond Leslie Buell. Who Is he?
Mr. LAsIts. I think-isn't lie the editor of that?
Senator WAs11 of Montaa. 1)o you know hun quite well?
Mr. LAXIN. NO.
Senator W.mAiI of ,Montialli. YOll hav, seen this docunent, have

YouI

Mr. LAKIN. Yes, I saw it.

Senator W,ALS of Montana. When lid you see it?

Mr. LAKtx. It was sent me by them after they published it.
Senator WALSH of Montana. Do you know where they got the
informationI
Mr. LAKiN.. No, I do not.

1692

LOBBY JNVF.STIOATION

Senator WALsH of Montana. Do you know anything about the ar.

ticle except that you got it?
Mr. LAikN. NO, Sit.
Senator WA,8s of Montana. Had you any information that it was
coming out I
Mr. LAKIN. I don't think I did. No, sir; I don't remember it.
I ani very sure I didn't.
Senator WALSHi of Montana. Do you know who is finaheing it?
Mr. LAKIN.

act,
ar
wo,
X_

No, sir.

Senator WALsU of Montana. It Is a rather expensive affair; isn't it?

3Mr. LAKIN. I think they sell It, don't they?
Senator WiALiSn of Montana. Sell it? Why, yes; it is marked
"25Icents-a copy," but who would be buying it?
Why, I don't know who would be buying it. Librar.
Mr. L uIC1X.
hus and people wiho are interested in questions of foreign policies.
I should suppose they probably have it membership.
Senator WAL-4h of Montana. Doesn't it strike you as a rather re.
nmarkable thing for the Foreign Policy Association to be getting out
.an elaborate document of this character upon the sugar tariff and

sending that to its membersI

Mr. TIUN. I shouldn't think so. That is a very important feature
-of a foreign policy.
Senator W1mLqn of Montana. The entire argument of the article
is that the sugar tariff ought not to be raised, in fact ought to be
reduced, isn't it f
Mr. LAKIN. I don't remember.
Senator WAiH[ of Montana. What is that?

f, Licix. I don't remember what was in it.

Senator WArirL of Montana. You would be willing to pay a good

.14al for that kind of stuff, wouldn't youth

Mr. LAKIN. If it would have enough circulation; yes, sir.
Senator W.%r.sn of Montana. It would be a very valuable, profitable
way to spend a portion of this $1t 0,000 that you raised, wouldn't t?
.Mr. LAxiU. Yes, sir.
"'

ab,
MI

of
Of

rev
telc

Senator Wiir st of Montana. It would probably he worth it good

slice of that $150,000 to you, wouldn't it?

Mr. LAKIN. Well, I don't know how much.
Senator CV-AW,Y . If you knw how many votes it would bring

you, you would know. wouldn't

yon., "Mr. Lakin? You would know
what it was worth then ?
Mr. LA'IN. Yes, sir; it would be worth a good deal.
Senator WAJJS, of Montana. A telegram of April 12, 1929, from
A. Portuondo, of the Cuban Trading Co., Hibana, to Manuel
Rionda, New York:

101

31r. Ltkli fil Jils inll

i
me i1tu
(h11t Mim stm.tlin to be some Cii:1l1ge of
attitude on the part of leading members of Ways and Means Commttee, which
hIforuaulot l h6 hIs from reliable sources.

Just what was that change?

I don't remember.
Senator WALsH of Montana. I continue:
Therefore, Mr. Lakin has sent out number of cables to important people
requesting them to u.e their Influence either direct or Indirectly with said
Representatives in order to bring severe pressure on ihem in favor of Cuban
Mr. LAKiN.

Interests.

all

101

1698

LOBBY INVESTIGATION

It seemed to be Important enough at the time to stir your special

activities, but you don't remember what it was?
Mr. LAWN. I don't remember specifically no, sir. The chances

are that I had heard somewhere that they Were not sure that they
would put Into effect the 3-cent rate, which would be 2.40 against
Cuba, which had been talked about.
Senator WALSH of Montana. I continue:
Mr. Lakin very anxious to have you as wel its Manolo and other New Jersey
friends get Senator Edge to coopente In Washington in the above direction.

The bill had not, of course, come to the Senate at that time?
Mr. LAKIN. No.

Senator WALsH of Montana. What was the purpose in getting

Edge active at that time?
Mr. LAM.

Well, as a prominent man from New Jersey. These

Riondas live in New Jersey, were constituents of his.

Senator WALSH of Montana. What was Edge to do?

had not come for any activity on his -part.

The time

Mr. LAKX. Vell, if he could become interested, he could talk

about it.
Senator W.sni of Montana. In order to influence the action of
Members of the House?
Mr. LAmIU.

Yes, sir.

Senator WALSH of Montana. I continue:

Following is copy of cable sent by Mr. Lakin to his friends in New York
and Philadelphia: "Havo just received reliable 'tip from Washington that
Congressmen Estep, of Pittsburgh, Bacharach, of Atlantic City, and Watson,
(fLanhorne, Pal., who ite all members of Ways and Means Committee are
almost convinced that the tariff on Cuban sugar ought not to be increased
and that prompt severe pressure from reliable persons known to them would
be Likely to cause them to vote for Cuba. This would give Cuba a majority
of the Jtepubll'an members of the coimittee and block any provisions in the
:revenue bill regarding Increase of sugar tariff. 'If you could telegraph or
telephone themn yourself and get others to do likewise, I believe it would help
greatly. It Is Important to do so hmunedlaaely. I.shull be back inNew York
Monday. Lakin."
A. Poaruooo.

That is a revelation, to some extent, of how legislation is procured

in Washington. I suppose, Mr. Lakin, you were in Habana at that
time.
Mr. LAmix. I must have been. What was th date
Senator WALSn of Montana. April 12, 1929.

Mr. LAK-N. Yes.

Senator WALSH of Montana. He says, you see:

Mr. Lakinl has Just "nformied me that tiere seems Iobe some change of at.
titudo on the part of leading members of Ways and Means Committee, which
Information he h. from reliAble sources.
You were then in HabanaI
Mr. TiActx. I must have been. I was there some time in April.
Senator WALsH of Montana. Anti your telegram, which you sent
out, as Portuondo tells Rionda, says:
1lave Just received reliable tip front lVashington.

How did you get a tip in Habana from Washington I

Mr. LAmtN. I must have received that before I went down, If at

all. I say if at all. Of course, I must have received it. I don't
remember where I got that.

.1694

IdounY INVESTIGATION

Senator IVALSU of Montana. But you say, "Have just receiv(,1'

Of course, you couldn't have received it then before you went down.
Mr. LAKiN. Well, I. just don't remember. I may have- had a tele.

phone message, or I may have had -Senator VmAL8 of Montana. A telephone message from whom I
Mr. LAKIN. We11, I am trying to think. I just don't remember.
Senator WA lsh of Montana. Shattuck was there with you in

Mt
t
one

Habana, wasn't lie?

Mr. LAxiz. I think he was.

Senator WALsH of Montana. And you had not yet employed

Carrollf
Mr. LAUN. No, sir.
Senator WALSh of Montana. Did you have any representative here
in Washington at the time?
Mr. LAKIN. No. The only person who would be likely to be here
at the time was General Cowder.
Senator WALsH of Montana. You don't know whether you got any
tip from Crowder or not at that time? .
Senator Ronm*soN of Indiana. Would it refresh your memory any
to take into consideration these names, Congremman Estep, of Pitts.
burgh, Bacharach, of Atlantic City, and Watson, of Langhorne, Pat
Mr. LAWN. No.
Senator ROBiNsoN of Indiana. Who you be most likely to mention
their name to you?
Senator WAlsh of Montana. Apparently you sent a good many
cables upon receipt of this more or less important tip.
Mr. LAKIN. Yes, sir.
Senator WALsH of Montana. You sent one, did you not, to Mark
Townsend, of the Trust Co. of New JerseyI
Mr. LAKir. I don't remember.
Senator WALsH of Montana. There appears to be a copy of tuch

in your files. That would seem to-I bef your pardon. I was speak.
ing about your telegrams. But, about ac hado's telegrams. Do you
know to whom he wired?
Mr. LAKIn. No.

Senator WAlSH of Montana. Apparently he wired or cabled to

Mark Townsend of the Trust Co. of New Jersey, in Jersey City,
to Dupone, to Rionda, to the United States Sugar Association, to
the United Fruit Co., to the Cuban America, to Junior Owens, to
James E.Mitchell, to F. Desaldo, of 67 Wall Street, New York, at
least.
I seemi to have been in orror. Shattuck telegraphed to Itionltht,
both of vou tothe United States Sugar A,%sociation, Shattuck to fht
United Pruit Co.. Shattuck to (iban Ametrican, Shattuck to Owen.,
Lakin to Mitchell, and Lahin to Desaldo.
Do you recall now?
Mr. LAKIN. Having suhnt those?
Senator WALsH of-Montana. Yves.

Mr. LAKIN. Well, I have no doubt I did.

Senator WALsh of Montana. And yet you can't tell tus what the
tip was nor who sent it-who gave it to you?
Mr. I AuNz. No.

te
the
BBC

wee

and
the

Pro
our

A
Re

mit
h101

him
APPI

has
eemi
the
mit

to

then

LOBBY INVESTIGATION

1695

Senator WAlsH of Montana. Another letter of April 1O, 1929, to

Mason B. Starring, president of the California and Pittsburgh
Utilities Corporation, Now York City. How did you co..o to be
writing to the California and Pittsbugh Utilities Corpoation?
Mr. LACIN. I think that Starring was introduced to me at lunch
one day, or else called me up on the telephone. He sadd lie was in-

terested in the work he had heard about and wanted to help.

Senator IVALsU of Montana. Just pro bono publicly

Mr. LAKIN. Well, I don't know whether he was interested financi-

ally or not.
Senator Wusan of Montana. You say to him'.

I wish to express my appreciation of the lthigs that you have done along
this line. I am especially interested in bringing pressure to bear on CongresAsman Estep. of Pittsburgh. We were informed by a member of the Ways and
Means Committee yesterday, while in Washington, that an actual majority of
the committee is now opposed to any increase In the sugar tariff, and that
Backaraeh, Watson, and Estep might be Induced to change their votes, which
have thus far been cast in favor of an Increase. We were also-toldoby this
same member of the committee that in all probability no final vote on the
sugar schedule will be taken by the committee for the next 10 days or two
weeks. Several members of the committee have appealed to President Uoover,
and he has instructed his secretary, Mr. Newton, to establish a contact between
the committee and ourselves. I understand that some suggestion of this came
from the Individual members of the committee. We are inclined to be a little
doubtful about this step, but In the end would, of course, have to do what
President Hoover desires, especially as he seems to be genuinely interested In
our cause. Heretofore our work has been In the direction of leaving final
negotiations to Senator Smoot, who, after all, Is the spokesman for the beet
sugar Interests.
Among other things, we have been Informed that outside 6f Smoot, Senator
Reed of Pennsylvania Is the most influential member of the Fitanco Committee of the Senate. I am very anxious to establish an Intimate contact with
him. I know that his secretary has become an advocate of the Cuban point of
view, and at Senator Iteed's request, has been preprIng a report on the subject
during Senator Reed's absence abroad.
On the whole we feel much encouraged. I was In Cuba last week and had an
extremely satisfactory interview with l're.ldent Mochado, who is much intertoted and anxious to do whatever he can to help. Thus far we have advised
him that It would be better for hin not to intervene, because Congress resents
approaches from foreign nations.

Do you care to disclose the name of the Member who was thus

keeping you informed of what was going on in the Ways and Means

Committee?
Mr. LAKIN. Well, I don't remember. If I could see the list, I
i'ht.
senator WALSit of Montana. I wish you would explain this part of
the letter to us:
Several members of the committee have appealed to President Hoover and he
has instructed his secretary,'Mr. Newton, to establish a contact between the
committee and ourselves.

Mr. Newton the secretary of the President has been instructed by

the President to establish a contact between the members of the committee and you. Just what does that meant
Mr. LArIN. Well, I think that refers to those negotiations for a
sliding scale.
Senator WALSh of Montana. That is to say, that Mr. Newton was
to bring you and some members of the committee into contact with
each other so that you could discuss the sliding scale with them. Is
that the idea t

1696

LOBBY INVESTIGATION

Mr. LAKIN. Well, I am confused about it. I can't carry that

language.
Senator WALSH of Montana, Well, it is your own language.
Mr. LAKIN. But it was written a long time ago.
Senator CAtAWAY. It is the same mattr you are interested in right
DOW.

Mr. LAKIN (after reading letter in its entirety). It does not refresh
my recollection at all.
Senator WALSH of Montana. That is inexplicable to you.
Mr. LAIxxN. Well, I want to answer, if you make the question clear
to me so that I understand.
Senator WASIi of Montana. This is what it signifies to me; that
President Hoover had instructed Mr. Newton to bring certain mem.
bers of the committee into contact with yo-.
Mr. LAKIN. I don't understand it that way-Newton to have con.
tact with Shattuck, and I would say with Senator Smoot.
.
Senator WALSH of Montana. What is that
Mr. LAWN, With Shattuck, and I would say with Senator Smoot.
I don't think there is anything there referred to outside of these nego.
tiations that were going on with regard to the sliding scale.
Senator WALsin of Montann. Now, Mr.LakinMr. LAKIN. That is all I can think of.
Senator WAlsh of Montana. You can't possibly introduce Senator
Smoot into this. The bill is pending before the House committee.
The special session begins the 15th of April, and this is the 29th, just
two weeks after the congress convened. You had certain informal.
tion concerning what was going on before the Committee of Ways
and Means of the House, and you say in this letter:
Several members of the committee have appealed to President Hoover and
he has instructed his secretary, Mr. Newton, to establish a contact between the
committee and ourselves.

That is to say, Mr. Newton was commissioned by the President to

get you into contact somewhere or other with the members of the
committee. That is what that means, isn't it?
Mr. LAKIN. Yes, it does.
Senator WAkmh of Montana. Now, what was done about that?
Mr. LmniN. I don't believe anything was done about it.
Senator WALmh of Montana. That is, the President gave direc.
tions to his secretary to do certain things, and they were not done?
Mr. LARuN. Well, I am not sure that it was done. T don't remem.
.
ber anything.
Senator ALh of Montana. Mr. Ltakin, let me remind you that
you were telegraphing all over the country to get people into contact
with members of Congress In relation to this matter, and hero the
President of the United States comes in and gives directions. You
were going around getting this young lawyer in New Jersey to take
you over to Atlantic City to introduce you to Congressman Bacha.
rach, and you were endeavoring to get into contact wnth other people,
and you tflought of employing Snyder here, who might be able to
introduce you to some Congressmen with whom you could talk about
this matter and urge your views upon them and now here comes
along the President of the United States and bids his secretary to
bring you into contact directly with members of the committee in,
order that you may explain to them your views about these matters,

LOBBY INVESTIGATION

1697

and you profess to tell us now you don't know whether anything

was done about it or not.

Mr. LAKIN. No, I certainly knew nothing about it, and I don't
remember whether Mr. Shattuck did or not. I had no contact with
the President's secretary.
Senator C.AI AV. It was not to be a contact with hin. It was
to be a contact with the Comnittee on Ways and Means.
Ma% LAKIM. Well, I certainly had none.

Senator WAsii of Montana. AVel1, let me ask you, how do yo1

know that the President directed Mr. Newton to bring you into contact with the committee?

Mr. LAKIN. I may have-I don't believe I did know. I thought

I knew.

Senator O,.awY.

You didn't read that in the paper, did you?

Senator WLSH of Montana. You don't believe you (id know?

Mr LAKIN. Well, I ought to remember it if I had, and I certainly
don't remember it,
Senator WALSH of Montana. The member of the House Ways
and Means Committee are the following: Hawley, of Oregon; Treadway, of Massachusetts; Bacharach, of New Jersey. -Hadley, of
Washington; Timberlake, of Colorado; Watson, of Pennsylvania;
McLaughlin, of Michigan; Kearns, of Ohio; Chindblon, of Illinois;
Crowther, of New York; Aldridge, of Rhode Island; Estep, of
Pennsylvania; Ramseyer, of Iowa;-Dafenport, of New York; Frear,
of Wisconsin.
Mr. LAU N. Well, nobody on that committee told me anything.
I know that.
Senator WAJ.J of Montana. But you say so.
Mr. LAKIN. Told us; yes.
Senator C,-aw.%Y. You sAid that you just (id not remember, and
if the list was read over to you you might remember the name of
the man, just a minute ago.
Mr. LAMM. Yes.
Senator CARAW.%v. And now you say you don't.
Mr. LAKix. I meant if there was anybody there who told me.
Senator CARAwVAY. You asked to have the list read to you so that
you could remember the man who told you.
Mr. LAItI.. So that I could remember the circumstances.

Senator CAnAWAY. Not the circumstances, the name. A name is

not a circumstance. You told, us that just a minute ago,. and the
book was sent for for that purpose.
Senator WILAJ of Montana. You told us one member of the committee was giving you information concerning what was happening
before it.
Senator CcAAWAY. And that if you had the list you might remora.
er the name.
Senator Ws.KII of Montana. Possibly it was a 1)emnocratic miemt-

ber. Let ni call those over: Garner of Texas: Collier, of fissis.

,ippi; Crist, of Georgia;s Carew, of Row Yorlk; Iainoy, of Illinois;
h0ll, of Tennessee; Doughton, of North Carolina; Ragn, of Ark.
anass; Hill, of Washington; and Canfleld, of Indiana. Was it tny
of them
Mr. LAKIN. I think it might have been Hull. I hadn't thought
of him.

1698

LOBBY MVRSTIGATION

Montana. You think it might have been Iut

Senator 1VLs of.
u
Mr. LAKIN. Yes.

Senator WALsH of Montana. Well, as a matter of fact, the bill was

written in the committee by the Rel)ublican members, wasn't it

Mr. LAKIN. Yes.

Senator WALqt of Montana. And the Democratic members did

not know anything at all about it.

Mr. LAxti. Well, I suppose lie had heard the gossip. I don'

want to say that he told me, because I am not sure, but I did tAlk

very often with Congressman Hull.

Senator CARAW.A Y. You just is minute ago said nobody told you,

and now you say it was Hull told you.

Mr. LAKIN. Well, I don't know whether they did or not.

Senator CAInAWAY, I an1 ttaVig to find out what you do know.

You said first that if you read the list you would kftoiw. Then after
the list was read'to you, you said none of them told you, and now
you say Hull told yol.
Mr. Lmuci. None of those Republicans told me.
Senator CARAIWAY. Just a minute. Did any member of that com.
mittee tell you this statement you made?
Mr. LAtIN. I an not sure.
Senator CAIAWAY. Well, you are in the record three ways now,
Mr. Lakin. '
Mr. LAnICIN. He nity have told that to somebody who told me. I
don't rnmembor the circumstances.
Senator CAnAW.Y. All riglt.
Senator IV ,Il of Montana. Another letter from you of date
April 16, 1029, to Victor Heintz, Cincinnati, Ohio. flow did you
happen tobe writing to him, Mr. Lakin?
Ir. LAKIN. He was interested in the molasses.
Senator WALsH of Montana. You say:
f tne com.
A verv sigiillh,t f 'tet1H thlt tal)Jiil eltly IllIvIlilll ilieanber
wl1,of Piident Joovet', anid I1( h'elg r,frol''1 ti
initte i.o see,klig tint,

NewtuOn, hits siretlary, who Is also keeilu'g I) toich with us.

We were told ve.sl4i4,vy IhMyat tt comlitt('t Is not likely to ttke it fiail vot,
oil the Klgil' selculheal
l for 1iiiotltier Iwo week.e. mlid were ltrgl tto hring more
Ii'tr'.
e'O to bea' oi m emerls of ti coninillitve.
Now, that ought to help you at little about. the other matter. How
was Newton keeping in touch with yot
Mr. LAic.
Through Mr. Shattuck.
Senator IV. in of Montana. Well, I should think that would
mean that Shattuclt was keeping in touch with Newton. But what
you say isthat, Newton is keeping in touch with you.
Ur.IAiti . With us; yes.
Senator W.Lmi. of Montana. You see no distinction, then, between
Newton keeping in touich with you and you keeping in touch with
Newton?
Mr. LARKN. No.
Senator Wi sti of Montana. Tie letter says:
Wt, were told yesterday that the committee Is not likely "to take a final vote
on tMe sugar schedule for itiothor two weeks, aund were rged to bring moro
pressure to heat' oil tmbeiOs of the comnmiteo.
Perhaps you can call who told you that.
Mr. LAKIN. I am sorry. I can not.

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So
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mlo
Ceongr
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So
Mr

Be:

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Mr

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Mr
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the N

LOBBY INVESTIGATION

1699

Senator WA11 of Montana. Were you at this time maintaining

onfrelations with the Southern Tariff 'LeagueI

Mr. LAKIN. No, sir,

Senator WALSh of Montana. Did they work with you in regard to
any matter?
Mr. LAx. No, sir.
Senator WAsn of Montana. You din't get tny information
through that sourceV
Mr. LAKIN. No, sir.
3enator WIVAL of Montana. Another letter from you to Colonel

Tarafa, under date of April 16, 1929, as follows:

Now that I comne (o deposit your $5,000 check In the bunk for the sugar inel,
lefeinse fuld, I feel almost uslumed to take the iioney. You have done fair

more than iny other Im-rsiol for tVubas sugar Interest.

In Washington yesterdhay we found things to lIe intivitg Imiore rapidly thllk
we expectetl. Preshienit lloover sent for Mr. 14haituck and suggested Shattuck
cooperate With the Ways aend Means Coeuwittee, whoi have already sought
Hoover's ndvlee. The coniittet, does not yet know what report to make to
congress next week. I think that probably at the last the committee will recomnmend a full duty of 3 tents which would mecu 2.40, against Cuban sugar. On
the whole we would rather prefer this while our negotiations with Senator
Smoot are being conducted, lie stated to Shattuck yesterday that If ho
en suc ed In litlthig the Pliillldie lmporiitlono, lie can reach Ani agreement
in regard to Cuba In five minutes.
In spite of till these favorable Indleations, I expect that we shall still be work.
lag with Congress its late its August.

This would indicate that Shattuck's conference with the President

was on April 16, Mr. Lakin. You say:
In Washington yesterday we found things to be moving more rapidly thair
we expected. President Hoover set for Mr. Shattuck unil suggested that "lSttuck cooperate with the Ways iid Meons (onsnilltee. who ive silready sought
Hoover's advice.

So that means on the 15th, doesn't itI

Mr. LAKIN. Yes.

Senator WALSH of Montana. How was it that you preferred that

the House committee report a $.cent duty?
Mr. LAeN. Well, I thought if it should be a little less it would be
liarder to carry on our publicity campaign.
Senator WAlsh of M ontana. That is, if they were going to make
it against you, you would be delighted to have them make it as bad
as possible
Mr. LAKIN. Yes.
Senator WALSH of Montana. A letter from you to Crowder in

Washington, of date April 17:

I am glad to see that you are circulating because the more people you talk
to, the more likelihood there Is of substantial results.

Evidently you had some confidence

abilities.
Mr. LAKIN. Yes, sir.
Senator WAL h of Montana. A letter
you of date April 6, 1929, in relation to
Cuba. Who is-Baldwint
Mr. LAKiN. He is a publicity agent.
Senator VALsir of Montana. He writes

in Crowder's persuasive
from W. H. Baldwin to
the inauguration down in
you as follows:

May I take this occasion to remind you that 11. 0. Speers, staff writer for

the Now York Times, will be sent to Habana certainly In time to cover the

1700

LOBBY INVESTIGATION

May 20 ceremonies, and that Myron Weiss, department editor of Time, the
weekly magazine, will arrive in Habana the first week In May with Mrs. Weim?
I would suggest that absolutely no publicity be given to the proposed trips of
either or these men. Title Is of the utmost Importance for reasons which I will
tell you upon your return.

Did he give you the reasons?

Mr. LAiss. i don't know.
Senator WASH of Montana. Do you know what were his reasons
for desiring that the appearance of these representatives of the

Times should be kept secret I

Mr. LAWN. No.

Senator W.L91 of Montana. Now, Speers did not. go to Cula at

all, did he I
Mr. LAKIN. I don't know whether he did or not.

Senator W.AS1I of Montana. A ineinorandni from you to Abaili,

Secretary of Communications, is as follows:

The New York Times will send one of the'r staff writers to Cuba within a
few days His mission is supposed to be secret. Therefore he should not be
approached or allowed to know thitt the Cuban Government knows that he Is
In Cuba. The man may be Mr. L. 0. Speers, who is now In Mexico following
the revolution. If he is required to remain In Mexico, I will hear and let you
know who takes his place.
The weekly publication called "Time" Is sending Mr. Weiss with his wife
In the first week of May. His trip is also supposed to be secret.
I think it advisable to learn, If possible, when they arrive, into whose hands
they fall, but they should not be allowed to suspect that they are being watched.
itundesirable persons got hold of them, measures can be taken to see that they
come In contact with the desirable element. If you will Inform me in the ease
anything suspicious or unlleastint occurs, pothaps 1 will be able to correct the
difficulty by conversation with the publications of the New York Tlne. and
of Time.

I suppose the word publications" in that letter means lubiishoa .

What is all this secreoev about, Mr. Lakin?
11r. LAIX. Every timt at oew.spper man goes to Cuba bie is be.
sieged by people who want to tnake trotiblh in Cnba. We found thai
has been going on for a long time, and I wanted to make sure that
they learned the good. I knew they would learn the bad. I waitel
to make sure that they would learn the good also.
Senator WALSn of Montana. How clid you learn that they were
going there
Mr. LAKIN. Mr. Baldwin.
Senator WALset of Montana. What is that

it

Mm'. LAKIN. Mr. Baldwin.

he

Mr. LAWIN. No, sir.

th

Senator WALSH of Montana. Do you know how lie found out?

Senator WATt4tl

of Montana. You wrote to Aballi, under datte of

April 24, as follows [reading]:

The Now York Times have somebody in Haibnit now, but I can not find out
who he is. Apparently lie is a man who Ias Ieeu there' some time and wae
not specially sent. I uniattempting to make arrangements to have hiin Interview me before he publishes anything, and I rather think that I shall scceel.
The other man, Mr. Myron Wel, with his wife, sails from New Y rk. on
the Munargo April 20, arriving in Habana May I and remaining there until
May 9. I think that he will be met by Mr. Sta es, who is llershey's manager,
and we can be sure that Staies will see thitt he does not fall Int Ow wrth.
hands. I do not suppose there will be tny harn in your (ontunteating with
Mr. Staples and offering him any facliltlis thit he might like tithuawv. for 31r.
Weiss.

th
he
I
to
r-

a,

LOBBY INVESTIGATION

1701

Do you know if Weiss did go ?

Mr. LAKNi. Yes; he went.
Senator WALSH of Montana. And went at the expense of the
Hershe people?
Mr. tAKIN. I don't know how his fare down was paid.

I paid his

wife's fare back.

Senator WALSit of Montana. How did you learn about the New
York Times having a man in HabanaI
Mr. LAHIN. I suppose from Mr. Baldwin.

Senator Wimin of Montana. You seen, for some reason or other,

to have been ini intimate touth with these matte s. Referring to
Mr. Speers, you say [reading]:
The man may be Mr. L. 0. Speers, who Is now In Mexico following the revo.
lutlon. If he Is required to remain In Mexico, I will hear and let you know
who takes his place.

How would you hear?

Mr. LAKIN. From Mr. Baldwin.
Senator WALLSH of Montana. Baldwin was in Habana?
Mr. LAKIN. No; he was here. In New York, rather.
Senator WAtxsh of Montana. Just what were your relations with
Baldwin?
Mr. LAKIx. Attempting to cooiperate. He came to mne about this
because my business was in Cuba.
Senator WALSH of Montana. How did Mr. Baldwin come to be
interested in the matter?
Mr. LAKIN. He represents the American Bottlers' Association.
Senator WALsn1 of Montana. He is publicity man for that organization?
Mr. LAKIN. Yes, sir.
Senator W.%.su of Montana. Item is a ltter from y-ou to Mr.
Staples, general manager of the Hershey Corporation, of date
April 24:
As a part of the publicity work in the tariff matter, a Now York weekly
itnblleation of large circulation called Tine is sending its department editor.
Mr. Myron Welss. and his wife to Cuba. This is being arranged through Mr.
Pike and his publicity man, Mr. W. H. Baldwin, who personally knows Welss.
He and his wife sail on the Munargo on April 20, arlving at Ilabona May 1.
It has been suggested to them that they get in touch with you.
Probably Weiss will wish to be free at some stage of the game to make his
own independent Inquiries but we are anxious that lie should not fall into the
hands of people who would attack General Machaido or general conditions in
Cuba.
Mr. and Mrs. Welss will sail from Cuba on May 0 on either the I'astores, of
the United Fruit Line, or the San Jaltito,of the Ward Line.
Mr. and Mrs. Weiss are people with a small income, and I understand front
Mr. Baldwin that their transportation to Cuba Is being provided for them.
He has asked me to obtahitransportation for them on their return trip on
either the Pastores or the Hat Jacoito. I do not consider it advisable to ask
the steamship compaies to provide them with passes, and I would prefer to
have their expenses paid out of our tariff eampalgn fund. At the same time
I do not wish them to know that that is the source of their expenses, because It
might seen to Weiss to imply an obligation on his part, and I do not wish hin
to have any such feeling. Should you diplomatically talk to lim about his
return trip and if the opportunity affords, tell him that his passage ham been
arranged ior. Then would you kindly obtain the transportation tind send
me a bill, which I will promptly pay out of our fund?

1702

.oB

INVESTIGATION

Were you in the situation to get passes from the steamship

companies?
Air. L, %Ki. In a good many cases; yes. I couldn't have gotten a
pass for him for this, though.
.
Senator Wiawn of Montana. Upon what conideration do you get
passes from the steamship companies? .
Mr. LAKI N. We do a great. deal of business with them.

Senator WALSH Of MoIntana. Do you usually travel on passes from

mlay

the steamship company?

Mr. LAKIN. Do It

Senator W LSH of Montana. Yes.

Mr. LAKI . Yes, sir' always.

Senator W wL8r of Iontana. What steamship companies are thow?

Mr. LAicUzq. The Ward Line and the Munson Line. I am entitleAl
topasses as a railroad official.
Senator WALSH of Montana. A cablegram from Aballi to you of
date April 30, 1929:
I had Miss Ordetz call up Mr. Staples who was at Hershey and offer him any
facilities he may desire for entertaining Mr. and Mrs. Welsm who were at
Hershey also, having gone to see the mill.

20to
I
ippi
w

men

From Staples to you:

I have never acknowledged your letter of April 24 In view of the faet that I
saw you In Washington anti told you that we were taking care of Mr. and
Mrs. Myron Weis&
I believe that we were able to carry out your wishes in this matter ail to
see that neither Mr. anti Mrs. Weiss fell into the hands of people who would
attack General Machado or general conditions in Cuba. In fact, from the

K
hot
K

way they were both entertained and taken care of I can see no reason, unle,

the policy of tile Time Is absolutely against Cuba. how he cain write anythingK
but satisfactory articles from the point of view which we all wish brought

out.

Apr

Of course, if he only got one side of the story, it might be expected

ho would write that side, and your purpose was to keep him away
from the other side.

Mr. LA
4 xIn. No; I asked them to let hin make his own independent investigation also.
Senator IVALsi of Montana. I continue:

Af(

Ivr

was called back to the States about flie mildle of May, but Mrs.
Mr. Vel
Weiss was having such it good time thai. she stayed over and Is not sailing until
the 0th. I had already arranged, as per your request, to take care of their

whlh I do not know tad actually left by airplane for Mlain and the North.
On the other hind, having niade he commitment, M3rs. Weiss's pas-mgm Jim
beet taken eare of persontlly by ityself. 111this connection, as I did not wish
to put this through the company's book, I am Incloshig herewith, as you iquest, a bill for tils amount and request lhtht the (heck be sent to ite
personally.

Y&
anti
Genei
learn'

return passage; Mr. Weiss, however, made other arrange'ments, the delnils of

192

ate

know why Mr. Staples did not care to put that through the
Do you books?
company
o jm Any
ook.
y, it was not a company matter. I 11(1 proii.eWi

tte
at

him that I wold iy the expensog.

the

Senator WLstH of Montana.

$l30.80

And you did send him a check for

%i'. ,.iKt.X. YPs, Si.

Senator WAue of Montana. Mr. Hershey answered that. lie feared
that investment was not especially profitable. That was your own

statement to Hershey in connection with the remittance, was it not?

but b
T
Phil
M

LOBBY INVESTIGATION

1708

Mr. LAKIN. I don't remember.

Senator WALsH of Montana. Well, here it is [reading]:

I fear that our Investment in her was not especially profitable.

How did she fail to come up to expectations, Mr. Lakin?

Mr. LAKIN. Well, they probably did not publish anything.

Senator CARAwAY. Maybe you entertain the same view that the
mayor of Pittsburgh does; that the women are not worth paying
anyway for any services they render.
senatorr WALSH of Montana. You seem to have had very settled
convictions about the matter, because you write under date of June
20 to Mr. Baldwin:
I inclose a letter of June 13 from Mr. Staples to me and some newspaper

dippings about the Weiss episode. -This venture was not exactly profitable.

What was the Weiss episode?

Mr. LAKIN. His going down there with his wife.
Senator WALSH of Montana. And you did not get a favorable
mention, then, in Time?
Mr. LAKI. 1io, sir.
Senator temusoN of Indiana. Did she remain after he came back?
Mr. LAKIN. Sir?
Senator RomlnsoN of Indiana. Did she remain after he came back?
Mr. LAWN. Yes; I understand she did.
Senator RoBiNSON of Indiana. He came back by airplane, didn't
he
Mr. LAKIN. Well, that is what the letter seems to show.
Senator RoBINsoN of Indiana. Didn't come on one of those passes?
Mr. LAxis. They didn't have any passes.
Senator WALSH of Montana. A letter from Tarafa to you of date
April 20, 1929:
After you left 1 had a long talk with President Machado. front which I fontal
that lie is willing udul ready to act as soon its lie is advised by you that tite

time has arrived when a 100 per cent control is neemary.

I hope that you are getthig real progress; the mutter Is most important front
every augle utmrl will prevent (uba from going to the bottom.

What does that mean?

Mr. LAWN. That single-seller plan, the plan to have all of the
Cuban sugar sold by one agency.
Senator WALsH of Montana. A letter from you of date April 20,
1929, to Rionda:
Your suggestion of April 19 to commuulkate with the Secretaries of War
ant Navy in regard to limitation of sugar Importatlons from the Philippines.
General Cirowder has written a lieinenmorinduna on ibis subject. lie hits al.oo
learnetl that the plans of the General iu iyovlde that i ease or war ay
attempt to keep it tratfle line open between

States would lie prompty abiandonled.

ilte Pliippluet ulnd the United

We phma Io use th.is memoraluml

and

title Information when wo can do so to the best ittlvutagti-probaibly after the

matter gets into the Semate. We at* Inclined Io believe thalt the secretary of
War would support $thnson because any limittion ott luniorls front the Phllippines would tenh to create imillticul disiumnbitees In tlie 11hillipples aid inereuas,
the work tor tht, Wor Deivartment. Hvinator moet renlli'.es nil tlte, things.
but is determined to eight. undn we slutll do our be.t to Ilti-Ii him.

That contemplated a lintitation of the importation from the

Philippines?
Mr. LARIN. Yes, sir.
78214-30--ir 4----14

1704

LOBBY INVESTIGATION

Senator WALSH of Montana. Where did you get the information_

that General Crowder had learned what the plans of the General
.Staff wereI
Mr. LAWN. It must have been from him.

gre
Ihi

Senator WALsH of Montana. Just one moment. Did you make

public that?
Mr. LAKIN. I don't know whether it is in my brief or not.
Senator WALsu of Montana. Did you get out in any way. this in.
formation that you got from Crowder concerning what the plans of
the General Stat were?

IV
the

Senator OmAawAY. Ma I ask a question#

the
not

Mr. LAKIN. I don't know whether I did or not.

Senator CAIVAY. I want to ask you: General Crowder is still an*

officer on the retired list of the Army. You knew that?

Mr. LAKIN. I suppose h1e is; yes.

Senator CMAAWAY. Was lie getting the plans of the Army and giv.
ing them to you?
M. LAIN. He just made that statement to me.
Senator CARAWAY. That is what I wanted to know..

Mr. LAKIN. That they told him over there the lanes would not be
kept open.
Senator CAHAwAY. He found out as a retired officer what the plans
were and gave them to you. He was helping the tariff fight?
t
Mr. LAIiIN. Yes.

.pr
bet
T

lov,

Senator CARAWAY. I think that will be very interesting.

Senator WATASIf of Montana. A letter of April 27, 1929. from yo,
to Tarafa:

Strictly for your private information, and not to be repeated, Smoot's ambition

to-day. is as follows:
(1) To limit the Philippines4.

This he thinks he can do in spite of Secretary

Stimson's argument. Shattuck and I are doing everything we can to help him.
(2) Prohibit the importation of cane from Santo Domingo to Porto Rico.
Smoot thinks this would be easy.
(3) Obtain some increase in the basic duty against Cuia, but offset it by an
Increased preferential over full duty sugars, in proportion as Cuba controls her
sales and thereby improves prices. We are endeavoring not to have this plai
presented, or even discusseil Ii the House of Represeitatives. Senator Smoot's
present Idea is that it oulght iot even be discussed in the Senate until tit the
very last moment.
I imstill spending twoor threo dpys it week in Was hington. and so is Shat.
tuck. This week we received it proposal from the While Hou., whihli we have
been studying. It is the result of it study Iit on of the governmental departments, but has not yet been specifically lreseliled to Pr'sildent Hoover. We
have not had time to nnalyze it full:.'. Tlhii. infornatluon, of course, is very
confidential Indeed.
I should like your advice as to whether We should ask somp of the Cuban
producers to contributed to out' fund. We have $05,00 subxcribed, but will need
about $150.000 I have made up my mind that if I can not get th money any.
where else I will iisk the directors of the Cuba Co. to subscribe the balance.
l)ut, of course, I hope that no sueh thing will hp neessary, 08 it e'talily would
be unfair to ask the Culba Co. tE. loan my entire services foer seven or eight
months. and in addition subscribe over onO-third of tle fund. There are some
obstacles against asking the Cubans to contribute. They would rightly feel
that they were entitled to participate in conferences and to be constantly
informed of what is going on. It would be awkward for ts to be obliged
to make reports to any considerable number of people In such a confidential
matter as this Is. For this reasoni It Is very important for m1c to get your advice.
You sent this information to Tarafa, butt it is for his prvato info'mation and not to be repeated. Again we encounter tis secrecy
"
matter. Can you explain that

hr

tl-

tir

LOBBY1"
1VST6I1kTIO

1705

Mr. LAKIN. Yes. Sit'. colonel Trailfat and Senator Smoot were
great. friends, and I understood this to be Senator Smoot's idea, that
this matter should be studied and kept as a confidential matter until
they had reached some conclusion about it.
Senator WAis![ of Montana (reading).:
We are endeavoring not to htve this plan presented, or even discussed in
the louse of Ripresentttives. senator Smoot's present Idea is that it ought
not even be discussed In the .8misite Utntil at -the very last moment.

How did that plan develop?

Mr. LAKI.X. How did it dewlop .
Senator WALsh of MontIana. Yes.
Mr. LAKIN. Well, it did not develop.
Senator WALshi of Montana. What was the idea in proposing a
phan 1111d then providing that it was not to be discussed at all, but
.prung at the last Ituontent'.
Mr. IAKIX. Well. I 5t1l)ol)Oe that its a matter of tactics it was

better to see how things went before proposing such a plan, ?f at all.
Senator W.i.8s1 of Montana. You say in the letter:

This week we ree'5ved, n ir'iosal from the White House which we have
I.ea studying.

Whnt was that proposal

Mi. LAKix. The sliding scale.

Senator RoiN.sox of Indiana. Where (lid you receive it from'

What do you niepan by " from the White House Al
Mir. LAinx. Well. rNit.
Shattuc had it--received it, I stippo-sefr,,m Mr. Newton.
S,,urlt RoTitustox of Indiia. But you say it hits uot been pre.
rentedd to President Hoover. Did you understand that Mr. Shattuck
Was connIected with the White House?
Mr. ]..
I uu h,r11414 that he was having a conferecce with
Mr'. Newton; yes.

Senator 1VoiiiNso. of Indiana. With whon?

Mr. I
. With Nir. Newtoli.
Senator 1iimnx xsiof hIdihtni. Whetn you say " from the White
IloiNe. (0You l iiude'stllid that this proposal cones front Mr. New111l f Is that fhllt you llalit to stiv?
Mr. L.KIN. Thut is wiat I thought it was; yes.
St-111ito' RoIIIN.i)N of Iniinat. Mr. Newton mamde it proposal to

Mr. Shattuck and Mr. Shattuck

Mr. L.tiau (inlerpositig). Oh, no. This was the proposal that
they were worllhg on.
Senator RojwxsoN. of Indiana. Where did you get this information-vyo yourself ? Front wholn (id you get it?
Mr. Lc'ix. Mr. Shattuck:
Senator Roiuxsox of indiatna. Did Mr. Shattack tell yot lie got
(his infornmtion front the White House?
Mr. LAKIN. I think so.
Senator ROIIINSEIN of I lidim. Well, do you kniow?

Mr.

J,.It.%.

Xo. That is miv recollection.

You it. doua't

Senator Ronmuso- of Indiana. Did lie tell you he had it frina Mr.

Newton?

Mr. ,dAKI. I at not sure. but I lihik so.

1706

LoBBYiwIV

.SrGTION

Senator Bojimsox of Indilha. Did you ever take any steps to

verify the staleinents made to you by Mr. Shattuck at any time
about his connection with the President?
Mr. LAKIN. No, sir.
Sonator Rom.NsoN of Indiana. You hired him, you said, and paid
him. or stlggested that he tns to receive $76,000, and it was a good
investment, or words to that effect. You hired hil chiefly because
of his friendship with Mr. Hoover. Do you remember that state.
uient you mado? It has been in evidence here some time ago.
Mr. ltAI N. Yes.
would be intersted
Senator Rolunst)N of Indiana. The committee
that Mr. Shattuck
fact
the
verity
to
to know what steps you took
was related in any way to the President.
Mr. LAKINh. I did not take any.
Senator Romuxsox of Indiana. Where did you get your informia.
tionI You retailed it generally. You told everl-),ody. Your cor.
respoildeice abounds with statements of yours about Mr. Shattuck's
friendship with President Hoover. From whom did you get that
information I
Mr. LAKIN. I told you the other day.
Senator RoBiNsoN of Indiana. WIell, tell it again. I do not
remember that you told where -you got it.
Mr. LAKIN. According to my recollection Mr. Zabriskie told me.
Senator ROBINSON of Indiana. Mr. Zabriskie? Did you take any
steps to verify the statements he gave you?

2fr. LAKIN. No, sir.

Senator lloixmisov of Indiana. Did you evwr talk to Shattuck

about it?
Mr. LAKIN. No, sir.
Senator RomNsox. of Indiana. What is Zabriskie's business?

to

Sb

of

obi

Mr.LAKIN. He is in the grain business.

Senator RoBnsox of Indiana. Mr. Zabriskie tells you that Mr.

Shattuck is a close friend of President Hoover. is that it?
Mr. LARIN. Yes, sir.
Senator RonisoN of Indiana. And youi engage Mr. Shattuck
on the suggestion of Zabriskie, is that it?
1r. LAKIN. Yes, sir.
Sehator RoBINsoN of Indiana..Without any verification of what
Zabriskio told you at all?
Mr. IjkAh. No, sir.
Senator Ronmsox. of Indiana. Then you commenced writing let.
ters all over the country to everybody that you are engaging Shattuck because of his friendship for President 'Hoover. and chiefly because of that fact he ought to be paid $76.001? On such a hasty
examination ol. no examination at a I of alleged facts, do you think
it is fair for you to write letters of that kind all over the country
and to everybody about something you confess now you know noth.
ing about, except hearsay, as to why one man should be valuable
to you and your interests because lie is friendly to the President
of the United States?
Mr. LAMRN. Well, I had not ever thought of it in that light.
Senator RoImoNS of Indiana. Do you think of it in that light

in

fr
fr:
to],
fo
Pr
fre
we

now?

all
anx

LOBBY INVESTIOATION

Mr. LAKIN. I

1707

don't know why-

Senator ROBNsox of Indiana. You think it is perfectly proper

to write letters of that kind to everybody or to everyone with whom

you correspond? That seems to be the chief motive of most of your
correspondene--always Shattuck; "he is a friend of President
Hoover and therefore very valuable to us"; and yet you mean to
sakv you never took any-means whatever to verify his connection
with President Hoover'
Mr. LAKIN. No, sir.

Senator RoeiIsoN of Indiana. None whatever; writing letters all

around, andyou were paying him $75,000 of your money, and still
yon (lid not know whether any of these things were true or not'
Vow let me ask you, in the light of all that has happened, what is
iur view now about Mr. Shattuck's close friendship to President
Hoover!
Mr. LAtN. Well, I think he is a close friend of Mr. Hoover.
Senator ROBINSON of Indiana. Have you every talked to Mr.
Shattuck about it?
Mr. LAKIN. Well. what do you mean?
Senator Roni-soN of Indiana. Well, I mean exactly what I say.
Yoit know what I mean. You say you think he is a close friend
of President Hoover. Is this still Zabriskie's opinion?
Mr. LAKIN. I do not know. I have not seen him for months.
Senator ROBINSON of Indiana. Well, have you talked to Shattuck
about it?
Mr. LAKIN. Why, certainly I have.
Senator RoBiNson of Indiana. What does Shattuck say about
that?
Mr. LAKi. Well, lie does not claim to be.
Senator Rom.isox of Indiana. He does not claim to be. Then
wat inakes y'ou claim h1it to be?
MIr. LjKmN. Well. I just have it feeling that Hoover had confidence
in him. Ho had known him for 10 years.
Senator lioninxsox of Indiana. Yte.
The President has known
m1y I)Cople fo' ten years, but you have only hired Shattuck. Does
this rezresentation ot Shattuck'S friendship 'with the President come
fron Shattock finally to you?
Mr. LAKIN. No, sir.
Senator Rouimxsox of Indiana. All you know about the allegeed
friendship between Shattuck and the President is what Mr. Zabrikie
told you? Does it come down to thatV
Mr. LAKIN. Yes. That is the only direct source of my information.
Senator RoBINsoX of Indiana. What advantage have you gotten
for your companies out of the friendship of Mr. Shattuck and the
President?
Mr. LAKIn. The only advantage that I can see was that he was
free to discuss with the Presidents secretaries the various steps that
were being taken to reach an accord in this matter.
Senator RoBiNsoN of Indiana. Oh, no. You said in one of your
communications that he had access to the President all the time.
Mr. LAuN. Well, I found out that was not so.
Senator RoBINsoN of Indiana. Well. have you found out anywhere
along the line that Mr. Shattuck's friendship with the President is
any different from the President's friendship with anybody else?

1708

i.onBY l vE:S*TA'ro0.

Mr. LK. No; I don't think so.

Senator ROBINSO" of Indiana. Their. yon think you have invested
your money on a false premise, is that i'?
Mt. LAKIN. No, I do not; because I have found him to be more
valuable as a lawyer than I over dreamed he would be.
Senator RonqsoN of Indiana. More valuable as it lawyer and less
valuable as the friend of the President, is tha it.?
Mr. LAl x. That may be so.
Senator IRoinm'sox of Indiana. 3r. Laldi, yau have used the Presi.
any
dent's name in this matter to everybody and apparently
Tou have without
thrown
just
sort.
the
of
anything
or
discretion
at
attempt
it around everywhere. It seems to me you ought to have some evi.
ayuence
t havn
o to
I am trying
upon, and
donee to base these remarkable statements
find out what evidence you have. You say to somebody that he was
the President'.O; confidential attorney. I believe, or something like
that. .

Mr

wo
Mr.

Set

Mr
Set
Mr

Set

about
Mr
Set
Mr
Soil
Se
Mr
Set
undet

Mr. LAKIN. Yes. I think I did.

when

Mr. LAKux. For the President personally?

for t

Senator RoBINso. of Indiana. What legal business has Mr.

Shattuck ever done for the President?

arran
that

Senator RomNsoN of Indiana. Yes.

Mr. LAitiz. I think lie drew a lease for the President's house
here in Washington, that I know about.
Senator Roinisox of Indiana. Where did you get that informer.
tionY
Mr. L.tcIN. I must have gotten it front Mr. Zabriskie.
Senator Roiiixsox of Indiana. How does Zabriskie know about
le
itr
felofMr. of
Shattuck.
ofM.Mrttc.ta
Mr imN. Whky, liis a great frienddid
not Shattuck tell you
Senator RomNsoN of Indiana. Now,
that?
Mr. LAKIN. No.
Senator RoBINsoN of Indiana. Well, don't you know where you
got the information?
Mr. LAKIN. I say I think I got it from Zabriskie.
Senator RoBiNsoN of Indiana. From Mr. Zabriskiel

Mr
Set
stren
these
and
he ne
Mr
Set
that
Xr
set

Senator RoBiasoN of Indiana. Zabriskie must have got it then

from Mr. Shattuck, is that the ideaI
Mr. LAKIN. I don't know whether he did or not.
Senator RoINsoN of Indiana. In other words, Mr. Shattuck,
according to your statement, was the attorney who, acting for Mr.
Hoover, drew up a lease or acted as attorney in the drawing up of
a lease for a house for the President to live in in Washington, is
that it?
Mr. LAWKN. No. A house that the President leased when he went
to the White House.
Senator RoBiNsoN of Indiana. He owned the house and leased it
to somebody else, and Mr. Shattuck drew up the lease; is that it?

Mr

Mr. LAKIN. Yes.

Mr. LAWN. Yes, sir.

Senator RoBIxsoN of Indiana. What other legal work do you

know of that he ever did for the President?
Mr. LA zrn.
I do not know of any other.
Senator RoBiNsoN of Indiana. Did you ever hear of anything
else he did-any other legal work I

I11M

this
Ser
your
yrn
Mren,

so,
Wr
who
hous
1o
9I
Sed
ated
t Mr
the I

Be

throw
Mr
Sol
abou

LOBBY INVESTIGATION

1709

Mr. LAKIN. Tie only thing that I ever heard aside from that, I
was told that he made a lease of the floor in the Mayflower which
Mr. Hoover occupied when he was here for conferences.

Senator RomzsoN of Indiana. Before the election?

Mr. LARIN. Yes, sir.
Senator RoBitsoN of Indiana. From whom did you hear that?
Mr. LAxiN. I think probably from the manager of the hotel.
Senator RojiNsoN of Indiana. Did you go and ask the manager
about itI
Mr. LAKmI. No; but he and I were talking.
Senator RoBiNsoN of Indiana. Did he volunteer the information?
Mr. LAKIN. I think so.
Senator RomNsoN of Indiana. What else now?
Mr. LAKiN. That is all.
Senator RoniNsoN" of Indiana. Now, tire are two items. You
understand that he drew a lease for a house occupied by Mr. Hoover,
when he went to the White House, and you understand that he
arranged for the lease of these rooms at the Mayflower Hotel, and
that is the only legal business you know of that he ever transacted
for the President?
Mr. LAKIN. Yes, sir.
Senator RoBINSON of Indiana. Do you mean to say that on the
strength of that knowledge, if it is knowledge, you wrote all of
these letters telling of the enormous influence this man would have
and why he was worth $75,000 because in the capacity of a lawyer
he negotiated two leases for Mr. Hoover?
Mr. LARIN. Well, that is all I knew when I wrote them.
Senator ROBiNSON of Indiana. And on the strength of that and
that alone you thought this man was so valuable, is that it?
3fr. LAAKI.. No; not that alone.
Senator RonINsoN of Indiana. Well, what else? That is what
I aum trying to find out. What other information have you got of
this man's remarkably close friendship to the President?
Mr. LAKIN. Oh, none about his friendship to the President.
Senator RoBiNso of Indiana. Wel, about his value to you and
your companies in influencing legislation, because of his alleged close
friendship with the Presidentf
Mr. LARiN. That is all the information I had to o by.
Senator RoBINsox of Indiava. What advantage didf you expect to
get from Mr. Shattuck's employment because of his alleged friendshpwith the President?
whoLAKIN. I expected to get the advantage that here was a man
who knew the Cuban sugar problems who could talk to the White
House, and 1)e known always is telling the facts, ond be. accepted at
100 percent in everything he said.
Senator RoBINsoN of Indiana. Because as an attorney lie negotiated two leases in which the President'was interested.
Was that

the reason?

Mr. LAKIN. I knew, of course2 that he had been associated with

the President in the Sugar Equalization Board.
Senator RoBINSON of Indiana. You knew many others had too,
throughout all the years, did you not?
Mr. LArs. Yes, sir.
Senator RosiNSo of Indiana. As a matter of fact, all you knew
about it was what Mr. Zabriskie told you?

1710

LOBBY INVESTIGATION

Mr. L&wn. I think so.

Senator ROBINSON of Indiana. You did not discuss it with Shat.

tuck at all?I

Mr. LAiuN. No, sir.

Senator RoerNsoN of Indiana. And its far as you know, both then

and now, after all your experience with this lobbying business, Mr.
Shattuck is a friend of Mr. Hoover's like thousands of other people
are his friends; isn't that it1 Isn't that the fact?
Mr. LAKiN. Well, I don't know about thousands; I don't know.
Senator ROBINSON of Indiana. Don't you think he has thousands
of friends that he has had for years?
Mr. LAHIN. He has had a great many; yes.
Senator RoBizsoN of Indiana. Have you discovered in all of your
lobbying work here any special advantage which Mr. Shattuck has
brought to you that any other lawyer could not have brought to
you under the circumstances?
Mr. LAxip. No-wellSenator ROItNSON of Indiana. I mean that any other honest law.
ver, if he were able. codd have brought to you? In other words,
have you found any advantage you gained because of this mans
alleged friendship for the President?
Mr. LAxI. N6; I can't say that I have.
Senator ROBINSON' or Indiana. Then I ask you again, do you
think it has been fair for you to bandy the President's name around
as you have done in all of this correspondent, with all of thee
different people
Mr. L.uuN. Well, it. has not been judieious.
Senator Rommusox of Indiana. 1Vel, has it been fair to him?
Mr. LAKCIN. Fair to President Hoover?
Senator RoutNso. of Indiana. Yes.
Mr. L.%ix. Why, I don't see that it has been unfair to him, be.
causo it would not affect him at all.
Senator RoutNoSO of Indiana. I n surprised to hear you make
here is,
that statement, whether it affects him or not. The question
correspond.
this
of
all
in
implhcation
the
see
Is it fair to him? You
euce. that this nman is close to the President and therefore you will
he .1nore sutee.fisl With your .many activities here in influencing
legislation. Do you think that is fair? I am anxious to get some
notion of your own moral fiber and your own moral mnake.up.
Mr. LAKIN. Well, I had not thought about it in that light at all.
Senator RomrxsoN of Indiana.
Wcli, you think about it now, don't
you
,Pres
Mr. LAXTIC. Well. I would rather get a little better perspective
Oft it.
Senator Ronmso, of Indiana. Well, what perspective do you
want?
Mr. LAxix. I want to be able to think this thing over.
Senator RonIxsoN of Indiana. You have been on the stand for
days and days, and I understand you to admit that you have received
no advantage of any kind out of this alleged friend-ship. Now, what
more perspective do you want? Do you think it is perfectly proper,
if all you say is true to bandy around the name of the man who
happens to be Chief Executive of the Nation, as one susceptible-

that

hirei
influ
and

fran
that
M
8
all
frier
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llette
Si

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qir
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81
Wh.
elour
lack
ing,
anui
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1106
De

LOBBY INVESTIGATION

1711

that is tile implication--of influence because a friend of his has been

hired by you I
Mr. LAKIN. Well, I never thought of it in the sense of any unfair
influence. Necessarily, I would not think of any such thing as that,
yrs-and that is the reason why tk
Senator RoBiNsox of Indiana. Of course you know you are not
frank when you make that statement. What (to you mean by saying
that?
Mr. LAKIN. I am absolutely frank about it.

Senator Roniwsoz of Indiana. That you never meant anything in

ali of your correspondence that Shattuck's friendship or alleged
friendship with tile President could gain you any advantage? Why
do you make a statement like that?
Senator CAIAW.Y. He said that was his chief hope, in one of his
letters.
Senator RomNsoN of Indiana. That is precisely what you said. I
think in one of the letters you said next to the President of Cuba.
Shattuck's friendship with President Hoover was your chief hope.
Now, what do you mean by now saying that y'ou will have to get it
different perspectivet Ildven't you got all the perspective you requiref
Mr. LAIN. No. It all boils down in my mind to whether there
was anything improper.
Senator RonnqsoN of Indiana. Oh. you know the thing is improper.
Why do you fence around with meaningless phrases here? Of
course you know it was improper or else there is something entirely
lacking i your intellectual make-up. If you think this means noth.
ing, these insinuations of yours, constantly used-and they are in.
sinuations-that this man is our chief hope because he is a friend of
the President-do you mean to say that you did not mean to convey
the impression to all of your correspondents that this man could
help you influence legislation up here through his connection with
the President? Of course that is what you meant, wasn't it?
Mr. LmTKix. Well, that would not be improper.
Senator Ronixsox of Indiana. Well, that is what you meant,
wasn't it?
Mr. LTjAuu. That is one of the things I had in mind.
Senator Ronirsow of Indiana. You still say that would not be
improper?
Mr. LAKix. No. I don't see it would 1)e improper.
Senator RonINso, of Indiana. You think you have treated (lie
Presidentiustly in using his inme in this manner without any further
investigation that yout admit you made?
Mr. -LAitl. The question in my mind is whether I have been
fair to the President.
Senator Ronixso-x of Indiana. And you think you have been, without knowing any more about it than you have confessed that you

know?

Mr. LAKIN. Well, I say I don't know whether I have or not.

Senator RoBinsoN of tidiana. Ol, that is all.

Senator CAJnAwAY. We will meet to-morrow at 10 o'clock. You
need not return, Mr. Lakin. Mr. Shattuck will be here to-morrow.
(Whereupon, at 12.66 o'clock p. in., the committee adjourned until
December 19, 1929, at 10 o'clock a. in.)

She

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so.1

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sir.

ha.

rg

LOBBY INVESTIGATION
THURSDAY, D. OBMR 19, 1929

UNIT= STATES SENATE,

SUBCOMMI'TrEE O, TIE CoMit'rriE ON TIHE JUDICIARY,

Waseungton,

b. a.

The subcommittee met. pursuant to adjournment. at 10 o'clock

a. in., in room 212, Senite Office Building, Senator' Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Blaine, Robinson of In.
diana, and Walsh of Montana.
Present also: John G. Holland, Esq., counsel-to the committee.
Senator CARAWAY. Mr. Shattuck, will you take the stand?
TESTIMONY OF EDWIN P. SHATTUCK-Resumed
(The witness was previously duly sworn by Senator Caraway.)
Senator CARAWAY. You were before the committee before, Mr.

Shattuck. Do you want to add anything to or modify any of the

statements.you made to the committee at that time I
Mr. SHA' .UOK. I don't recall any particular thing. I don't re-

call my testimony. I haven't read it since. Of course, I would

like to have the opportUnity, possibly, as you examine me, to do
so. if I have refreslied my mind in any way since that time.
Senator CAHAWAY. Senator Walsh, you have the correspondence.

Senator WATASi of Montana. There are a couple of features of

your testimony to which I desire to call your attention. Mr.
Shattuck.
Mr. SHA''1cUic. Yes.
Senator WALS9 of Montana. You, have followed the testimony of
Mr. Lakin, I suppose?
Mr. SHA1NuOK. I havo partially, sir.
Senator WALsh of Montana. In a general way at least?

Mr. SIIA'Iruci. Yes. I have been here at times when lie was
testifying.
Senator WALsJi of Montana. And probably you have paid some
attention to the newspaper reports?
Mr. SmAvruoK. To some extent.
Senator CARAWAY. I wish to ask you a question right there, please,
sir. There was a newspaper carrying an interviewSenator WAlsi

that.
igSenator
right.

.AWAY.

of Montana. I was going to question him about

0h, you were going to ask about that? All

1718

LOBY IXVESTIGATIOX

1714

Senator WALSH of Montana. When you were on the stand. you

were interrogated by Senator Robinson is follows:
Senator

lobbyist''

RODINsON

or Indiniia. Wvre you

Iit('4.tei

.nA itu
hWver

4, 1ot.-

You answered:
Well, Senator. . I urn Interested, I think. as a lawyer. That is my profession
Md 111y blsilllo.K

Senator IolNmmsox ,of lliitlii: But you (ild a great deal of work, Mir. Hlattuek,
flat wits 3no4t, gll work it this conhectoi, dit you note!

Te

Mr. 8inxri:vii. I think I have done very itle that is not the work of a

lawyer, sir, in the jripariiton ail pi.sentitlon of At'.s and legtil arguments
that pernieate the assembIlg and prewentathn of fiwtso
Hezitor ItOixItNiO of Iindlfllifl. Wi'llt CollitfilSti(fll t1ill'itigellelits liVf yosu
witln these sugar organizations tit the present tlimae?

Mr. SitVITLuec. I have no compensation arrangement.

Hesintor ItoliiNsox (If IndiaI. flow Illllh volley(1111 they 1agri-e to p~ay yDU.,
Mr. SIATTUcK. They haven't agreed to pIy me 1ny ustlmi
of tneoley.
Se-nator ltoixm'soN of Indlann. You Ive, tit, umilerstitauilg with thieni with
retference to coiipeiisittloin tit sill?
Mr. 8jirruczc. No, I have not.

!1

do

And being further interrogated:

th

Senator Wtq1t of Montana. You told us likewise (liit in addition to prep'r

lag these briefs and arguments you hitl Iuliny tconlfereilees with Senator Smoot
tiand tried to work out sone sliding scale proloositime.
Mr. Hu.%T1t;Uv. Yes.
Senator WALSH of Montana. And that you went to Cuba to see If somo
arrangements could be made on that kind of thing.
?Jr. SuIATuox. Yes.
Senator WArisu of Montna. And you likewise called oi Senator tlawes uud
Senator EIdge.
Mr. SHATTUCR. Yes.
Senator WALT of Montana. Are we to understand you regard this as the
professional work of a lawyer?
Mr. Sit rruox. Yes, sir.
Senator WA.sLt of Moitlti.
Hfow would you lstligulsih tint fliI similar
work done by one who Is not a lawyer?
Mr. Sn.rrrcK. Well. If file .4enatur rt-gards I1w iittlriit'lti1loll of i ,ttittat;Oe
the work of it lawyer. That Is coniewt.led wita nil or thil..

In tile light of what has been developed since you testified, Mr.
Shattuck, do you care to modify or qualify this testimony in any
wayl
I would like to-lave the opl)ortunity to do so, sir.
Mr. SnA'rrKu.

It you will give me about two liinites. I don't want to take your
time, but I think it is deserving. I think your investigation is de.
serving of knowing the background to this situation. I had been
conmiected with sugar matters for a good many years, and sugar
clients. I had particularly been engaged in 1923, in December, to
try the case before the Tariff Commission on the question on the dif.
ference in the cost of production between here and Cuba.
Senator WAI-sit of Montana. You renelmber, Mr.. Shattuck, we
have had all that.
Mr. .SxrA-rt-cx. Yes, but it is the background only. That was distinotly tile work of a lawyer. That was the trial and presentation
of facts and tle argumnents and briefs which were presented. It
was distinctly legal, in my opinion. That took about a year's work.
The Tariff Commnssion's findings were never incorporated into law.
Nothing was done about it, however, by any of my sugar clients.

ta

Ka
cat
nR

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if

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LOBBY INVESTIGATION

1715

rhey waited in the hopes that something might be reflected into law

as a result of that investigation.

-

Senator WAsH of Montana. Just wait a minute.

That was an

application under the flexible provisions of the at of 1922.

MVr. SIiATruoK. Quite true.
Senator WAVtU of Montanat. And you presented your case to the
Tariff Comni sion and the Tariff Commission made its findings and
reported to the President and the President declined to make the
reduction you asked.
Mr. SHA-iruoK. Quite so.
Senator IVALsi of Montana. That ended that matter, didn't it.?
Mr. SuATrUOtE. That ended it. Neither the President nor Conrress ever tried to put into effect that reeoininendation of this semijudicial body.
Senator WAILSH of Montana. There wais no way for Congress to
do it, except revise the tariff, was there?
Mr. SAT'ruoK. Except to pass a law, of course,
Senator WAlSH of Montana. You understand perfectly well under
the prevailing system the introduction of a bill revising the tariff
on sugar would practically precipitate a general revision of the tariff.
Mr. SiATruoK. Yes.
Senator WVALSH of Montana. And what you mean is that. Congress
did not revise the tariff.
Mr. Su TrucK. I didn't mean to go that far, Senator. I am merely
stating this as the fact, as the background. Now, when this matter
came up, when the domestic interests apparently-it must have originated somewhere--sought to have the tariff on sugar increased, my
clients were greatly disturbed, because in all fairness it should have
been decreased, as they thought, and they came to see me. Mr.
Zabriskie, the president of this same association, wanted to know
if I would und-ertake this. He asked me to think it over. I did.
Later he came to me,after a meeting, and said that they had decided
to employ me to write a brief and present the argument before any
committee of Congress, which I accepted and which I did. Later, I
think aafter the Ways and Means hearings possibly, after I presited
the brief, and was then working on a re ply brief, Mr. Zabriskie again
said that they would like to have me continue. Mr. Lakin, who wts
not a member of the Sugar Association, but who had joined a ,group
composed largely of the Sugar Association, and Mr. Zabriskie got
together and decided they would like to have me continue for this
purpose.
Senator W.Wq of Montana. For what purpose?
Mr. SiATrucK. I was just going to state.
Senator WASit of Montana. Yes.
Mr. SiLm'TuCic. To try and work out soiUe plan, sir. some economic
plan, that would be advantageouls to all the .;tigar interests aid be
damaging to none. 'I'le problem wits this: It 'was not a question
of tariff in my nind. What the farmers of the West wanted, as I
understood it, was an ease in ple,, and they were compladning
about Ctba dmpi ng-her sugars into- tis mularkot amd deprelingt the
price of sugar. It was not. a question of the diflrence in cost of
production. It was ia question of price. Therefore it presented an
i.onome question an(d involved in that economic tUesption were questions of great importance in the li, question of the status of fip,

1716

LOBBY INVESTIGATION

Philippine Islands, its history, what you could do with themin by

legislation, what p'u could tit-ke away'fromn themt; the question of
Hawaii, the question of Porto Rico, the question of the reciprocity

treaty with uba. All those questions immediately entered into tls
question of working out a plan which I began to have hopes might
work out to the great satisfaction and relief of the sugar industry,
without injury to the consumer. That was to me a laudable thig
to do. I got interested in it, and the first thing that I thought was
necessary to any such plan was to get Cuba to adopt. a marketing
system something like the grain marketing system that was being
talked about liere. It was a question of supply and demand, of dis.
tribution and of price..
Senator OARAWAY. Will you par1on me a minutes
Mr. SuA 'rucH. Yes I will.
Senator CARAWAY. 1ou are merely making an argument now.
Mr. S1Am'UCK. No, I ati not, Senator.
Senator CARAWAvY. Then, I don't know tin airg ument when I hear
it. It was your activities we were asking a out and not your
purpose.
Mr. S ATruciK. Tlien. I Hi.-StiI161StOOid the Senator. I thought
he wanted mne to point out the legal part of this work.
Senator W.,LsIJ of Jontana. No, no, no. You quite mistook me,
Mr. Shattuck. You have toldI its all this before. All this is in
the record. You haven't told us anything new. You told us all this
before, a
we ill appreciate that there are duties here that will
devolve upon a lawIVer, and a lawyer may very properly Undertake.
Mr. SHArI'UOK.
of Montana. That wasn't the question at all.
Senator WA tsn
Mr. Sn.vi'rtu'tii. Well, I misunderstood you.
Senator WALSn11 of Montanta. You told its here that you did no
work except the work of a lawyer, and I am asking you now if yol
care to modify that.
way: It is
Mr. SHruoit. Well, I think I can atswer it in this
purpose
the
be
to
stated
now
just
I
what
to
incidental
is
that
work
for which I was engaged, to work out. these plans, and to try and get
the facts before the public. That is what I did. You can call it the
work of it lawyer or not.
Senator AWiLUs of M0ontana. No, no. 1 dot want to call it any.
thing. It was you who called it.
Mr. Si.vrruck. Yes.
Senator W.Ar-.1 of Montauiai. You were asked if you did any work
except the work of at lawyer.
Mr. SHATrUCHi. 10ell--n
Sonator W'iisii of Montanu. And you answered you did not.
Mr. Sii.vrrucK. Senator, excuse ine. I said nothing but what a
lawyer could (o.
Senator WA,sn of Montana. Oh, yes.
Soator CAIAWAY. Of course, with that modification, a lawyer can
lobby like anybody else.
Strttor W msmm-of Montana. Of course, a lawyer could do it.
Mh. SfmrruciK. Yes.
Senator W.mI-sII of Montanai. But it would not be legal work because a lawyer did it. A lawyer might. asi I said. g out and dig
,lithIes, but that wouldn't be legal work.

S1
plaii

son.

0ou
ha
T
he
not
A
ara

IF
wor
M
_

Coi

Mr
e.Mehl
r

Mr

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The
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M
lega
wha
M

LABY INVESTIGATION

1717

Mr. SivrrucK. Well, I accept your interpretation.

Senator WALsh of Montana. I want to call your attention to the
plain language you used in answer to the question of Senator Robin-

son. He asked you were you interested as a lawyer or a lobbyist and

you answered, " W ell, Senator, I am interested, I think, as a lawyer.
That is my profession and that is my business.'
That was not an answer to his question, us you will observe, but
he puts the question directly to yoti:
liut you did a great deal of work, Mr. Siattuck, it this co)illectlolh
not legal work. did you not?

thant wis

And you answered:

I think I have til1e very little thit Is the work of a lawyer, sir, fitthe prep.
aratlon and presenitition of facts mid legal urguniouts thtat permeate the as.
semblilg and presentation of facts.

Mr. S.vrru(. Now, that is what I did. I tried to present facts,

and where legal questions were involved I tried to work them out.
Senator W.isi[ of Montana. Exactly. Senator Robinson asked
you if, as a iimttei' of fact, you did't 'do work which was not the
work of a lawyer.

Well?

Mr. SnATriUU.

Senator.WALRnl of Montana. That was followed, as I told you be-

fore, by questions by myself, and you told us:

lkewlse, in additlom to prepirlig these briers anuId argiilielits you liad anuty

conferences
proposal ,n?wilh lNwlilor H'inoot anul tried i work out soie sliding sealed
Mr. Suixai-I:K. Ye's.

Senator W.mi of Montaiia. And you went to Cuba to see If some arrangemelts could wipt be ttumik oil that IClid Elf thhig'.,
Mr. XSi'vuirre'.

Ye.

Senat,)r W.ulsit or m.nitatliil. Aid you likewise cvlh'd oil eivitor Hawes and
Selattor l,:dge'
Mr. $II.VrnlI
ex. Yms.
eliluitor w.isi of
,lsaitiiiit. .1re we to miiderstimil that you regard this as
the profe,"stliall work of it lawyer?
Mr. HNI.A1rvCe.
Y(v, sir.

Mr. Si.vriucx. Yes, Senator; I would stay that that was correct.
Senator WALSh of M[ontana. You would say what was correct.
that calling oil Senator Hawes and Senator Edge was the work ot
a lawyer?
Mr. SHATruox. '1'o present facts in this case.

Senator WALsit of Montana. You were making a legal argument

to those people, were youI
Mr. SHATruCK. I was. I made a good many legal arguments to
Senator Smoot.
Senator IVAJSU of Montuna. All right. If you are satisfied with
it, Mr. Shattuck. we will pass on to something else.
Senator CAR AVY. You know Mr. Lakin testified you a reed to
see Snyder and others and get them to go see members of Congress.
That was also legal work.
Mr. SHrrUCK. It was in the same category as this. I wanted the
Senators and everybody to understand the facts. It isn't strictly
legal work, but it is the work of a lawyer.
Senator CARAWAY. A lawyer could do it, but it is the work of
what is properly known as lobbyist, isn't it, Mr. Shattuck?
Mr. SIATrt'cK. You might term it that.

1718

.LBY INVESTIGATION

Senator CARAWAY. What do you call it, getting somebody to go

ond try to persuade him to vote for a bil hin to vote for the bill.
Mr. SHATruOK. I didn't try to persuade
I tried to get the facts to him so that he would understand them.
Senator CARAAVAY. You weren't getting the facts to them by get.
ting somebody else to go and see them 1?S
Mr. SHATTUCK. If he had the facts certainly.

Senator CARAWAY. And then running a publicity agency and hay.

ing them report to you every day. That was legal wvorka
Mr. SiIrTruox. No; that was not legal work. I say it was work
a lawyer might properly do in connection with legal work.
Senator CARAwAY. Then, my legal education has been entirely
ly
wasted.
Mr. SATTruoCK. Well, I am sorry.

211

He,
.D1
D

Il
here
of t

We

-e
he A

,i.

Senator CARAWAY. That is all right.

Senator BLAINE. Some statutes describe lobbying, or a lobbyist,
as a legislative agent. Have you any objection to applying the term
"legislative agent" to your activities?
Mr. SHATATUOK. No, Senator; I haven't, but it isn't my practice.
I don't recall any other case in my whole history that I have done
it, except here. i wouldn't hold myself out as a legislative agent.
Senator BuIkNiE. When it is all analyzed, an attempt to influence
legislation is probably known as lobbying, isn't it?
Senator CARAWAY. Oh, well, what is the difference?
Senator BLAINE. That is correct, isn't itt
Mr. SitATruCK. I think you are correct; yes.

Senator BLAi E. And a legislative agent is engaged in what is

properly known islobbying?

Mr. SIIAV'UCK. Yes; I think that is true.

Senator BLINE. So that you were an attorney and a legislative

agent with respect to this matter?
Mr. SHATTUCX. In respect to this matter. You might so charac.
terizo me. But I don't want you. Senator, to lose sight of the fact
that there were legal Iroblems in It.
Senator BLiNc. But the difference becomes the difference be.
tween Tweedle Dee and Tweedle Dum, after all. I say that witti.
out intending any offense, just analyzing it.
Mr. SIITrUCK. I mdertstand that, sir. I understand you are
doing this investigation for a purpose, of course. You have the
right to my opinions if they are worth anything.
Senator WALSH of Montana. Another feature of your testimony:

with
lie it
Pine
Se
t
Sk
S
Wor

M
You
Se
Juni

li-a

M
said
that
noth
Se
te

Senator RoBINsoN of Indlana. Mr. shattuek, have any contributions been

made to yonduring your conucetotie with the sugar Interests?
Mr. 8uAnroi. No. sir.
Senator Rolnissox of

work generally?

ioidy work hire or their

mtmin.ll, ro eatrry u tihir

Mr. S ATrUoc. No. sir: not a cent.

Senator RoBINsoN of Inuimiim. Iho you know anyllhig iibout thieotriliuton

that have been received?

Mr. SnArcK. Only wlht Mr. Lukhi has told

Ine.

Senator ItontlN.ox of I(laln. Well. Ist i iat t(se. Mr. slitmihek. that yOn
yourself went to Cub Iiiint
o
lhllted o)tributioiis?
Mr. SIErrtex. No. sir.
Ctln

I tiNsux

from iny source?

of Indihn: O

l 1Iver

on?

and what he Ia.t testified

to.

Reltator

Se
froi

s.ollelt

1111y

Cointributions lit

I (o
wid

LOBBY INVESTIOATION

1719

Mr. STi.vrriCK. Never In my life, sir, from anybody.

Senator iioinxsox of Indlina. You t-over were connected with the soleitiig?
.A1'.14rATTUCK. No, sir; front anybody.

Do yoil eare to make any chanlio in that?

Mr. Sux,rucic. No; I wouldn t care to make any change in that.
uAIsI[
of
o1otana. 'I'here was introduced in evlenco
Senator W
here a 1tter of (late IF'ebruary 21l, 1929, froln Juiuor OWenS, secretary
of the American Bottlers-of Carlmtated Beverages, to Charles V.
Rainwater of the Coca Cola Bottling Co., of Atlnnta, Ga., in which
occurredI the following:
I leaked with Mr. L1ewI%
wit a revision which
he fivls is quite coniprelitislve. for he lixls hiad ito opportunity of glviig It
sonme stk,,h
Colldersillon. hnmediately upon reelvhiig t copy we will proCen. Mhws are iehiig formulated for at very nggre*4ve pul)elly antd politicl
(iiiiipIaigti ugaluist Ie Iture"st-d tariff on sugar. ,Mr. ronetls who IsassoCat(,I
wllh a law lim witlh Mr. S hatluck wax i, tI see me la Thursday morning.
We have

tint

im

the liniphlet printed ivs. yet.

ye:lerday tilthe Isgoing (o t Il Illy OHice

S10111I.y

lie informed me conilhdetlilly lhat Mr. S hittuck has been ill Cubit md has
beei succe.-sfully raising otioney to earry oil the campaign.

Mr. SHAIrVcK. I never solicited 1 cent in Cuba or any other

place, sir.
Senator
W5misu of Montana. How (lid Mr. Francis come to make
tlat
stittentent?
Mr. Suvmrucic. I don't know.
Sentor WArosH of Montana. Mr. Francis is your law partner?
Mr. Siumlrsci. He is.
Senator WAsIMI of Montana. Was associated with you in this
work?

.W. Su~vruci. He was. Sentor,4 don't recall-what letter are

you reading from, a letter of r.Frailcs?

Senator WALSH of Montana. No; I anm reading from a letter by
Jutior Owens to 'Mr.Clarles P. Rainwater, in which he said Mr.
Francis called on himt and told hi so.
Mr. SAia-rucK. Well, I got the iutpres.sion you Said Mr. Francis
said that. I will make it. just as strong as the record will take it.
that. I have never asked for any money in this campaign and know
nothing about it.
Senator C,ut.,%w.. You were not asking for money, but were you
interested ina tuoveinent that looked to get money?
31. SiAuirucK. No; I was not. Senator, I had nothing to do with
the money.
Senator CAUAWAY. W1ell, let hue ask this question. Were you aware
that they were carrying on a campaign, and were you laying facts
before those that were to he solicited?
. Not for the purlipose of raising money. I knew
Mr. Siixivuecrl
Mr. Lakin was seeking mdney.
Senator CAAWAY. And you were sweing people lie was seeking it

from, and telling them whiat kind of a .campaign lie was carrying
on?
Mr. Su.Tvrucu. I think not.
Senator CARAWAY. You think not'l

Mr. SH,.-reI'1C. I (IoU'. recall dolng so. I will answer it further.

contributors until after they
I don't think I ever called on ally of i %were all solicited.
78214--t0--T' 4-15

1720

LOBBY INVESTIOATIOV.

Sena11tor. W1r.m4i of .1onitanai. T1he letter to Awini

been llhtd(' is' (f datte Fehlrii'y 2)' 11129.

rt'rerel('( huanjs

Mr. Sulix'vcK. Yes.

of Mfontimit. You were thieu in Cubit, were i'ol

S"elintoi' 1II.s1

no~t. "Mir. Shuttuck?

Mr. Sjiixrvci. February 25~? At the viid (if Jiiry
I 'vent to
M1V 11011W' iii M1itiiii 1111d flioi tliei't' I thiliik. OiH th' 10th Ori 14th or
lithe. I wils inl ('til for three oi, fourx daty. . hut not 11roun1d thlit 21-41.
l wits in Floridai tit that time.
Seniator IV.ms~ir oft Montiiaim. This letter of *Junior Owens of (late

Bit
coil

cite

Ne'w Yowl;- is~xt MmIidinyv. 1't'ii'tiiy 25-.'Il. 8Nlittuck wil~l get Imzek tip
"'lilt wis itbllt. tile title Voul got llIek. was it ?

Mr. SuirA'rucc. (Got hacki? No. six': I got backc jivst bout in time
for' the inautlgunitionl. I think~ atdayi or two dasinl IdviK'e.
Senaitor W.musli of "Montanai (coi41tiuig)

ig

Cut

ile t'
kllim Whait IlIri lde*s ire.t

Thait is the letter of thie 23d. whlic'h saysx you will be blk thie 250th.
8eiiator W1 %mmi of Moitii. We fid liere it letter from Mrm Jones
to Mr. Fraudvs, Eof datte Mardi-el 5 1)2 -

Pi
xI

Senaitor Wmmu olf Mont ana. In which shte miys:

,% star ml iu'iii'i
or mi.' wtismuiimvu

Wa it

fI111(
lud

l s'~uit

lli1get

ay

rtu'a11

-siiss
l'iiii
page'

li'(lills, Thli slilee Is4fillhlIAiM-!

wvith
I(s li1mtivi'
ireil'iii
Wesieusiyi 've'ailig. It I%vvry' hii'iill 11I fi
voue I, In w~'ils411ifill flill) U'iliivm'ssluiy I a~n]
31lr. 8lititlek 111iil its it'sail!li %V1111
tw~illdit. I suggest that1 ylii 11(141
fhot 1mul1inig it kIt''lto Ill s .\'tW Visi'k 1tiuI1iit'ss.
*viiui' 111i11is rolstM'i1lilg tlhe Seil'i's tip ('11i1111htii I sukmilit Ioliily's Ih'vIloiji.

r'eve thi1:,
#if 11111. If Is I1V4
liyu New VYai'k 41uhie Wit pil no
call
ge't 11(111
('411iit'et'hu us soon 11s pusihille.
p ill will fhe..'' suggest thast we gelI tisl-le III
yfiurs. Very t1u,Y

roliltallit. 11liiit 5('llltl's m-Ere tol go

,Mr. SHITi''. I think HO Senaitors that I kiiow of. T1hilt i, n0

liminles.
JoJNeS's plan?1
'Moiia.111 'Thi'S plan11 waS
Senttor WALiI (If
.Mr. SliA'm'e1v. 1 think it. wits. si'. It wats not mkine.
to

f 'Moiitt. You see what she says. Shte writes

SQ1nathr ~I. !I (Iao
Mir. Fri'l1(is-Mi'5%.. Joii's writes to l 't:

I Siigtgt'st thtu Vlllh 0t"l11it0.)

the Senator.s to Cuba.

as

i.
Ithe
full,
8
111

Whatn wits the plan for takiiig Seinators to ('ii ?

Mr'. Si,.v'vcic. I think that 'Mrs. Jlones -ulggi-st(ld that if some
of the 80enators Could lbe ililhied to go) tol (Cubla and Sve the situation
there it would be advisable to do so, mid I think sit' tlisc'iist'ld it
Iit 'Mr. Fimatis and lie uiidoubtedlv talked to nme alhout it. Ile or
Mrs
*oiles,) titid I passed it oil. I think thalt eiidi'ld 1lllt the'ie, if
Senator WAIsi (If

S1

u'lm igmiter ini

lit

pour lilaus (I*'mvueis's Iflan.4) for seamIIng

hi1
a ta

A
of v

Wo

v
IN

LOBBY

,1h. Sim-171JC.

or Mr'. Franciis.

It

ii111Vy

12
1721

N VESTICIATtON

hatve been Mr. Frleis

I sa-lid Mi'.

lie.

Rt wi1t. lIlliie. I. (lola thiiiic I origiiateil the(idl.

Biit(. 1 tinkli it deloped.'I~t'( l further. I donlt recall[ thatt it did.
of Mlontanail. Ani~tyay Mrs*oles was to halve a
Se.'iatoIS .i.
con ftrence within you ibotit thle maltter'
Mfr. S81vrti Shte or' lli. Franicis spoke to lie about it; ye"s, sir.
,eIIlIth~r AVAIDSL Of Montana1. ])idl site subsequeiitly have 11Confer-

euie with Youte

Mr. 8nSirucii. Oh, yes. Site, has had it numibpr.

Yes: huit I Inma it coiiei'tiite about
senldinig Senators to Cuba.
MAir. SIA'i'iUCI. I thlik SO. Seuititox. I think site did(.
Sejit(Ox' WALSH Of MNtanailil. Wht walS the(" nature of (Ile ConferQ1P Witt wits trfimsiteed tat that jflht ihltr 4!oiflereef'
M11. SHA-'rweR. I recall her Mientioning the Mect thut, it might hI'
a good phin to have sonie Senators, if they haid tiie. to go (townWi to
Cubt till([ investigate this tinmg titenliielves, to pget the suigarl
sit-11111orl Wmtisil of 'Monita. Tfile plan was. y'ou would pity their
exjkwliiN5 ilow thierei, of coiii's?
, 1.SIlI WrCH. 1 111141 I1)1 phi of that kind.
Senattor WmvmiI orf Montitiii. Of cour~lse we unders.tand it wats not,
youl 1)111it.
i'
till, it wis MNi'. 1riiis*s.phl, or Mr's. Jl.i*ie; j)Iil.
.Mr. SiIATJ'vcn. Yes.
Se'~tioI' WmA.sm[ ol Moitimiit. Andi I wanted to know wheilu'i' the
pl111 -oJitvlel)Iutteil t1livi1
tnntOf the expelises or fhw tipl i you ?
Mr. Slii-.cl'i. I 1 1111 recall anythling as- definite it- tha1t, -sir.
It might, have beeni. I dont recill it.
S0u1110o' RoMNxSOX of In1dianai. Would All. Fxerliis' haVe at plan11,
8sJunior unleanex' of yoiti'
of'itli ht kindly, without colliitiig von,
Air. Shattucek?
Mr1.
n'I"ue1. I thinki I wits in Florida, as., I told the Smiatox'. tit
dieethat, of thme oi'igiiiitiofl Of that, pliti. Hie might ; yes. Hie is it
full-grown 1111t1.
Senator Iholic1N54o of I1(litiliit. Buit imays in this lttem' very
thle 1)1ain is "~y'our plin "-nlot yoursw. biut Franis's.
thatt
Viultiv
wants you, your
That 1i14YOs
o, r tesent plinu. Ald -,hec says thait~si Ah
*fuitt
old til) youx' plain1 of spending Senaitors until
c;'0)41hv
a talkc Witht you.
Senlutor IVAI.sii of Monltanai.

Mr. SHA~'i'ci. YCs.

Senator lionusox of Indiaina (reading):

Titll, I wv 11 hike t4Wilt Mi'.

8.hnftli'k its smni us I eam, get hold of 11i1m.

A personal tailk. TIhls sending of Senaitors to ('nbit, is that parlt

of yourx legald work, too?
Mr11. SHxrUCK. NO; fti' is not legal work.
Senator Rtsox of Indiana. I note also from thle letter Senattor
Walsh reiad yot-

14.1ggerst

*'4111

hohld your junta fir' seunhhing Set,'sr, to C('111 until I s.ullinit

Whalt wetre to-(hit3"s (evel~liulibits?

Mr. SHATvITCH. 1dit ITeC111.

1722

LOBBY INV'ESTIGATION

Senator Ionttxo'x of Indi~ana. Wecll, but you bad it conference

wit Mrst. Jones shortly thereafter. T1'is wits tit thle beginnling of
Yor
1V11lit
p
, Mardi fl5,
it day or two after thle other (late menitionled.
Ali. 8li.V1'rucit. I tlon't; recall it.

Seniato* ltonxsox of 1ndiana. And it had to (d0 with '.:enilig

Don't 'oli reienilier nytlung about tile 'olierenlee

Senators there.

wilh Mrs. Jones onl that subject?

Mr. SHATTUCKa. 1 (d0, Sir.th.
Senator 1tbhuia,.sox of liontla. Well, what were the tleveloipitients
then-"' today'IS developments"? It seemed o11 to-duiy's (kwoIliCents
would lhige whether or not thle Setntors would be sent to Cubn, ill
li(t
lanWo
MFrancis.

with y'iur p~lan.

10h8
pregot

nl

oP

wha11
ap11

Thalit is, the 1)111l1 of 3'OU111,111, Your'3r.

ri~rih

Air. Saimvriecc. I don't know.

I think11 it wits a V'eryV embrJIYonic
plain. I (lout think it got very far.
s('nlator. WAJl.SJI of Moiitutnu. Reference WaHs 11111 byp thle chatirnion
of (het Colnumittee to) an interview givenl by You to thle niewspapjers.

app

Mr. sliiA'rrv('.

S9.
4

ing

No1-

Y(s sit..
not
Seinitor W~mSjt (if Montana. In the li lit of thie revelations muademy
by the Witenildutro)(Itcel its it pNul of the ted;iuiolty of Mr. Lakin,
;M~r
ill which you iippatientl"Y had the purpose, Its indicated here onl the
to tt

stand, to eulpate yourself from the implutationl of being a lobbyist,

inl whlich you sitidl

mvy

About it year aoo mty firma wits relidlieol to represent (lie cubaus~ugar Interests

V0O1I
A

Of Aviteanu M~izell, ii'foro tlie voilil1tee of Congress Ili respi'ct to thie tariff,
unid I harve written iriefs and presented their view.- to tile couuiuittees its teir
littrultty. SomelL ttime after I had) prs('5lld any b~ricf to fihe Waoys ahwl meausyo
(.luiuni Itee I "-it., asuipt by. mny clteniq to coutinue mny rettalai.
Before Ile new
adinilstraion ciiiw Ii I infOunued4 mr. Hoover of anyv connction, not to obtain
his upproval (of til important legal engagienut, but to huroranl himi what IanyS
coneetlh'ua Witsr, %:othisie would hie lit) nlsi~Utertlflhhug.

Now. Mr'. S11hattcli ht was obviously written for thle Hurpose of

gliviang tile public tile ideal that till y-ou (ild wits to write briefs aid
nmlke ugilunents before thle committees of Conlgress, wasn't it?

M11r. 8II.l'Fut'. No.

Senaitor' ALS1 Of AMontanal. WVell, let tile ask N,1 then. Whaftever wats your purpose, fin' that thle natural inference thiat thle reader
would draw from that, thalt that wats thle extentoof Your work? Let
1110 acai it to Youl aigni).
Mr. Suxvrrucei. I think 1 haive it weill in innl.
Sttnator WA.sma-j of Montiaa (reading) :

About it yvai' ago my firin was retaied to) rl'ireoet thle Cuban, sitnmr Ili.
tfi't~5ts ofl Aierteiti (iizenstt Iieffrtie Owtiu'Cllllihftees' (if Comgress Ill respit'4 to
the touuify-

M~r. snxr~rrcac. Senator, I call answer that question.

senalltor. W~kult (if "Monltana. Wait a minuiteat i i have written briers am! presented their, views' to thle, Chimiuttceei 11, thirife
ittililley. somell thn' aftei' I liad iarestentcd amy lirief to) tht, Witys ati AIeans
r~setitr. Before tim new
1 wwas an'kod biy iny 0(*liit to emniilili ily%
(61s111111164,
ldlil:striimi cte hli I Iiifoint i~i~ r. Ilovri of~ 6.v ct'neectiou.

You isay, Do I regard myself as having

Mir. Si-ivvrrci. Yes,
at legal ts-signuient
Senator W-m'At,[ of Montania. Xo; that is not tlie question.
Mr. SuuV.Well, I dot. I (do regar ui.lil retainer ats thie r-etalinci' of at Illwyer.

51

1-0o

ihe

are
14

S1
waS
info
art2

WaS
1

P1'C1
Voll
8

lIR
Info

stoin
L

1101
htlb
Oon!
a

1723

LOBBY INVE.TIOATION1

Senator WA~ISI of Montana. You are asking m, a question about

what my question wits. Weo have gotten through with that. The

present question, Mr. Shaltueck. is. Wouldn't the reader of this nrticle
get the impre.msion that all 'ou had dorne and all you had been
efl)lloyed to do was to preseInt 1Iriefs and arguments to dle committees

of (Congress?

Mr. Si.v-ru'u. T wouldn't think so. I said I had (lone that and
they wanted ine to continue my retainer. I iave told you, Senator,

whIIt the contintiane was. a1d it is. to mI muind. and you ought to
apprecinto it. a very important legal assignment that ,I have, and
itvou will allow ne to show you wherein it is, I woold like to (o It,

right at the start.

of Montana. I supposed you had done so.
Senator
9011011

Mr. SUA cCK'. Well. I haven t gone far enough. and you don't
appreciat it. The first thing that I considered netL,,.saI.y to working out any plan was to got cooperative marketing st id in sugar.
Now, thatis just chock full of legal questions. chock full of them,
)but here. and thatwas the first thing that T devoted
not only in Cuba
myself to upon the continuance of my retainer. Now. why try to
impute that that was not a leal a'signmnent? Haven't I the right
to try and serve a client in wh cl many important legal questions are
involved?
Senator WAtM! of Montana. Mr. Shattuck. no one is questioning
your ri htMr. IIArruCK. Well-Senator WV.%,snt of Montana. Wait a minute-to (1o anything that
you di(d. Bear that in mind. There isn't any question about that.
Mr. SirvrrucK. Then I don't get the pur0ot of your question.
Senator WAIs. of Mfontana We are endeavoring to see whether
you (raw any distinction at all between the work of a lawyer and

ihe work of a lobbyist.

Mr. SHATTuCK. ]I can, sir, just as well as you can: but I say they
are comingled hero. and this was essentially a legal job.
Senator WALS1 of Montana. Exactly.
Mr. SATruoK. Essentially a legal job.
Senator W,%sMi of Montana. AVe are quite agreed now that that
was comingled. But now I want to know from you whether the
inference that would ordinarily be drawn by a reader from this
article is not that. there was no comingling at all. hut that your work
was exclusively that of a lawyer?
Mr. SnArTUCK. I wouldn't say that the pul)liC would get that imI wouldn't get that imiprespression.
sion myself.They might. Being a lawyer
Senator WALS1 of Montana. But you continue:
])(,441l're f|OIWflip

lliml'

emiOIIIII li I |llfotr'lil

oIf fl
l ch I111j11)-diVl
o l1 Illy.41
hWhllt
1n41
llptIoe
thatlrlltel,r
sI) 1111114ti
o.{,cl)ll wag.
11hn1
Informalll.$4.

:%f.

l'gat
W t

noIove'

tit miy (-oll-

igeiellt, . hut to
ellg
l'l i t& llql llll'.lllde '-

stflifhii.

Did you convey to the President any further information than that

you were. as you state here. that your ftiin was retitneil to represent

Cuba suIgar interests of Americain citizens before the comnnittees of

Congress in respect to tariff, and thnt you had written or were to

write briefs and present their views to the committees as their
attorneyI

1724

LOBBY INVESTIOATION

Mir. SH.Trr('xc. I told hilt (hat I wits engaged l the Cubain .1ugar
intertist.c. the Anuerian sugari interests, and that f was going to try
and work out some economic plaint to see if I couldn't het ),tIlnj ltig

Sli

that.
Sellntor VAI.-lM of M'ontalnlll. MI'. SltMiuCk, that is tot event what

Mr. SuA-vrucit. Thnt is not whit is i'itnted. I didn't sixy that,

but I say that now.
Senator W.xLsHI of Montlna. You told the pUbliC What Yo0 were
employed to do was to writo briefs and make arguments before the
comnuttees of Congress.
Mr. Sn.vrrucnc. Originally I was employed for taint prpose.
Senator WAI~Sn[ of 'Montana. Then you say your retainer was con.
tinned. Tat is all you tell theni.
M.' Sn,1rvuec. Yes. ,
Senator W.vusm[ of Montana. Thie natural inference would be tbat

yor

fi

you would appear again before conimittees of Congress.

you

other things.
Senatiior oonNsON of Indiana. Wly did you see "Mr.Hoover about
it at all?

tibe
ing

coopei'ative methods to try to solve this problem. Now, 11 told you

you say in the interview,

Mr. Sii'Ivrcii. I don't think so. I have stated lero oil the ritand

of

s1

M1'. SilATr''IC. Why, 'Mr'.Robinson; I saw Mr. Hoover ats I us

-ally do. I usually C'l on| Mr. Hoover when I anm it tile viciiity.
(eiltOl' ROINSoN of Itdiana. Why did you ask Mr. Hoover about
youLr sliugar interests and your retainer, o. whether you should be
retained or not?

Mr.Sun'rfrtic. I didn't asc hint whether I should be. I told him,

'Mr.Hoover.

because of Iiy issociation with

Senator OiNSON" of Indiana. Wlt are your associnions with

Mr.IHoover? What have they been?
Mr. SirA'rucR. hassoc
u
itions I am talk ing abut.t
Senate' RoBnixsox of Indiana. What have tile. -been?
It would lie
bell.
interesting to this ('omltittee to kIllow what the hlive
Mr. SItmrru (.

been,
lleq have bein like any ohlir friends hiuve

him,at
nil)Osc. tll(] I have had also a good deal of public work with
and Itgood d1e111l Of Clmi'ilbio Wl'ik With ittl. I told the Cotnlitee
I

before I wits oil tile Sugar Equltalization Board 1s

direc.r ald its

eve

counsel. I wits cotitb-;elot' tl e Ameriln JRelief Adnillistrat1ion

that
the war. I wia (ll1.
wits set I.I) during lhe war. i lt tedi(atelv after
fund that

sel for tile E1'0aopean children's fund, which was a large

wits raised to take care of children abroad. I wa.s cour.mel lid director in all (hose organizations. At Ilis request T have ateed pro.
fe.,Nsionally for the Ate'itin Child Healtlh Associttion and other
('larita)le, o'organizations over wltich Mr. Hoover has )resided. over
t ltnlet'r of years. I have ittiles Ivised M'. I[oover )i'ofessiotl.

Sel

youn rendered toN1r. Hoover?

Mr. Sli.Vrrcot. WTell, Senator; (10 yeo think-

Ih

co

Who. not in ny)important wily.

Aenlatol 1III.oN (of Indallit. What l)rofeisionil services have
Senator

]RonBnNSoN

for

Of Itnoltnllnt. YeS; I think we SOhuld k(|now.

Mr.$ SHiilAi'uI. It is iot eblibartassing

ig to ime. I dot't, (,tire.
Senator ROImINON Of Indiania. ]it this must be embarrassing to
Mr. hloover, too.

My

LOBBY INVESTIGATION

1725

MJr. SHArruCK. I should think it might Ibe.

Senator RommB.so of Indiana. Lot me suggest to yol this, Mr.

Shattuck: It is in evidence now that you advised Mr. lloover with
reference to a lease here, or you took ecare of a lease.
Mr. SlIArT'ucK. Well. now, do you want to di.seli.s those things?
Sezitor RomiIxhso" of Indiana. Por property.
Mr. SuiAvrTec. For prolt did voll .ay l
Senator loni xsox of Itiiitlmln. Jhst a second.
Mri'. SHIIATrr:CI. I defer to tile conlllittee, but I salggesIn tile evi.
Senator liolisox of inditm. Let me say sonothliii.
deIct' Mr. Laikin testified that youi flegotiated or handled the legal

work connected with the leasig of a property, of a house, for M.

Hoover. 'That, of course, i s 'oul know. if it is trulle, is elellntary
legal work, nd is a matter of public record.
Mr. SIIATrr'clI. Very elementary. Senator.
il you call go to tile record and
Senitor RolI.so (kof Indianil.
find vWhat ilaj)POlletl. On anotiler oveastion it is in evidence that

you lased soille '0oollis at the 'Mayflower Hotel, and that is a matter
of public record, generally spealking, either in tile regular record at

the recorder's office, or in the niscellaneous record, so there is noth.

ing especially confidential about that.

Mr. SIrATucx. Nothing.

Senator RoBImsoN of Indiana. Now, all the professional services

you have rendered to Mr. Hoover are embraced in those two transactions, so far as this committee knows.
,Mr. SIIArLctK. I tell you, SenatorSenator RloluNsox of Indiana. Wait just a second.
Mr. Sm1AvruclT.
All right.
Senator RomI.Isox of Indiana. If that. is true, Mr. Wities.,

then

wiy should you be employed as belng tle colifidentiall representative

of Mr. Hoover. and why should all theSe letters have been written,
With Solie (of whichli i mlst have been cognlizalit, to tile effect that
yoni wel'r (ljployeld largely bea Use of your friendship with Mr.
loover, illd that woulol involve. of .c4mo, pr.sllllablyl inferenthIlly
ll it appears, so
at least, confidential relations as his attorney,
far as tile evilde'e is concerlled, the only confl(dential relations you
eVer ha d as it lawyer was In coiection witl two least s, elementary
luhlte'rs. hlotil itters of public record. Is that the re1ao you received $15,000, 0' were to receive $15h.0f0?

Mr. Sim.vrrtwK. I have not received any $05,000, and I have no

I iIIV' told youi that.

azret, nelt for a retallnl'r.

Sen1.r ltmimsox of Indiana. Is that thit, extent of the profesional

serviCe YOU have revered Mr..

oover?
Mr. Alvvrcit. No; it js not. Now, I iake no claintSenator llopimsox of Ildiana. Do you care to ilcake any other

Comment o1 that Subject I

deCeidC1lly. I nmake no claim to be the
Mr.
lVrITvClc. I do1; vi''
Illeall legal adviser.
adviser 1)f Mr. Hoove'. I |Lave ill the lustI have in the past over a period of 10 years done professional work
for Mr. Mover lit his request of, I sholilhl sly, not great importance.
But I ailli not. alid I resent tile iiliealtion that I all, Mr. Hoover's
closest legal fritld. I think that was tile phrasee that was used.
,My relations with Mr. Hoover have bCeen-

1726

LonB

INVESTICOATIOAN

Senator WAMi1I of Montana. Bear in mind, Mr. Shattuck, no mean.

bet of this conilittee has so chai'ged you.
Mr. StvxrUcic. I heard it in tho testimony, I thinkSenlatok WALrSlu of Molitanll.

Yes; it is in the testilmoy.

Mr. Sux1fv1eK. I didutt say it, and neither didltiny ninllwr of the

committee.

Senator W ,si of Montana. You spoke as though you were

making sone critieisn of this committee.
Mi. SirAwUCic. No; I certainly am not, and I beg you to so under.
stand, when I say it. I think it is unfortunate that any such inplita.
tion should be received by the committee, because it is not a fact.
I say my relations with Mr. HooverSenator Rontxsox of Indiana. It isn't only the relations with Mr.
Hoover.Mr. Su.ivivKx. Just one more stateinellt alld I will drop the sub.
ject. My relations with Mr. Hoover have been very pleasant. I
recall them with the greatest satisfaction. I have labored with him
in all these activities of which I have spoken, and I have been the
legal adviser in all those activities, and in some unimportant we will
say, generally speaking, matters, over a period of 10 years I have ad.
vised him professionally. I make no claim other than I hope I have
his friendship. That is all,
Senator Ronisox of In(iana. Then, you have had no special con.
fidential professional relations with Mr. Hoover over the past 10
years. Is that what you mean to say?
Afr. SJixivUciC. All professional relations are confidential.
Senator Ronixso.- of Inliana. I know. It is confidential to pre.
pare a lease. Of course it is. And yet It is a matter of public recorl
in all the records. You can go ond spo what took place. Aside from
that, and asitle front, as you say, rehtivolt uniinportant work, you
have had to deep confidential relations with President, Hoover over
the past 10 years professionally. Isn't that true? Or is it true?
Just state yes or no.
Mr. SHATMCK. It is difficult. It is confidential, but they are not
of great inl o1taice. They e0 confidential.
Senator RotnNsox of Indliana. W0ll, then, let me ask you the same
question asked Mr. Lakin. Do you think it is fair for Mr. Hoovers
name to be bundled about all through this testimony and through the
sugar-lobby investigation, as it has been, and tlrolghout the past
nine inonttis by. at. anih iate, your close associate Mr. Lakin?
Mr. SirAriTcic. I certainly' do not, and I (all not make iny utterance strong enough.
StaltorBLAIIR:. Mr. Shattuck, is there any evidence before the
committee regardinr Mr. Hoover that is not tried?
Mr. S.trrueic.
'lint is a pretty broad question. I would like to
stliinlila
ize.
Senator BAI E. Yes; it is broad.
Mr1'. SHAIr't'-C. Let. ine get that question.
It is limilte(, also, Mr. Shattuck, because if there
Spintor l3,,U'AJ.
art' 1ny untruti they cali N)speiffld its yol go 11loi1g.
the qllestlon?
Mr. SiAIrtic. 1A'ill VOI I'lt
(The question was read by the reporter its follows:)
31r. Hiit,
Ix-true,?ba
thrhoi', any evhhiietl lieforo
that is nlot
Hloover

cuinelhe regllihg Mr.

ini
lit

onC
the
tesi
i

Hl

HOl

till
wi
fie
Of
fl0

wit
CUS
the
di!
dii
M
t

0
oi
o

s,
tO
oI

t0
thi
thi

i
C

No

LOBBY INVESTIOATION

1727

Air. Suivrruvic. I think there ire a great many im1)lw'tlos.

Senator
BLAINER. I am not speaking of implications; I am speakn of facts.
Ir. Stwwcic. I think there are a great many statements that are
untrue, that are tot correct. I don't like to say untrue. The infer.
fences iroin them are incorrect.
Senator ]1,AINE:. Yes; but 1 amn speaking of the facts.
Mr. SmIATruOIC. Well, I have only read part of the testimony in
the newspapers, and I don't knowSenator lUAI.NI. Do any of the facts coie to your mind now as
testilled to that are untrue?
Mr. Snxvriwi.
Those facts concermning my relations with IHoover, I think those w,,ro given improper inference.
S0t1or BLAINM. You had professional relationship with Mir.
Hoover? ,
Mr. S.%1-rucic. Oh, yes; that is trite.
Senator BlIATNE. Yot'! called on the President in Florida ?
Mr. SiAi-rt'c-c. Yes. Now, on that stbjct I have not (iscussedSenator BLAxEF. I don't want to be antagonistic. I 11am1 just getting at what the facts are. I am just getting at what the facts are,
whether or not there are any facts regarding these matters as testified to before this committee that are untrue. I am not speaking
of inferences. People can place inferences upon facts which. are
not justiflable, of course. But I ani referring now to facts. Just
what facts are not true?
Mr. SAwrcic. Those in reference to Mr. Hoover. I have not dis.
cussed the sugar tariff with Mr. Hoover. I think there are facts in
there that are. I have discussed then with Mr. Newton. I have
discussed them with Senator Smoot and others, but I have had no
directions from Mr. Hoover about the sugar tariff. nor have I diseused the sugar tariff with Mr. Hoover. I have. discussed it with
M1r. Newton, one of his secretariess, a great niany times. That is,
three or four times.
Senator WAL.ii of Montana. The statement. is made in the record
over and over again, Mr. Shattuck, to the effect-that you were in
conference with the President upon the proposition of a sliding
scale. Moreover, It appeal%in the evidence I think repeatedly, that
the President proposed a aiding scale, and that yott * re working
oi it.

M.r. Sx rwTo. As Isay, I defer to the committee's questions all

the time, and I want to answer. If it is all right to go lint all these
things, I will do It.

Senator WVAsmH of Montana. I am merely calling your attention to

this, that you might more deflnttelyv answer the questions.

AMr. Snkrruox. It is ihcorrect, sir. It is incorrect. But I don't
want to have it misunderstood. I have discussed with Mr. Newton
questions pertaining to the sliding scale and he has discussed them,
I always understood, with the interested sugar people, not only the
Cubans, but the beets aid others, and I have been. asked by Mr.
Newton to discuss it with him, but not with Mr. Hoover.
Senator
,A,.-:. Is this statement untrue taken from a letter
dated April 21, 1929, to the Hon. flfael Abafi:
WK. slhattuck nul I are spending a part of each week ln Washlgtol. Ie
bad eoiferencos there last. week with Senator Smoot, but at the last moment I

1728

LOBBY INVESTIGATION

thought It best for me not to attend the conferences. cause I knew that both
Shattuck and Smoot had bad a personal conferences with President Hoover, and
I thought they would be able to talk more freely in my absence.

Is that a true or a false statementI

Mr. SHATTUCR. It is incorrect in part. Do you want me to tell

you wherein it is incorrect?

Senator BLAINE. Well -.

Mr. SIIATrucx. Well, if it is proper. Senator $moot had told
me ninny times that lie had talked to the President. I had talked
with Mr. Newton. I had not talked with the President about it.
Senator ROBINSON of Indiana. Then, the President never gave you
any directions in connection with this lobbying activity at all?
Mr. SIATTUCK. Absolutely not.
Senator ROBINSON of Indiana. Never made any suggestion about
it?
Mr SHAlrucx. Absolutely none.
Senator ROBINSON of Indiana. And the statements of Lakin made
generally and broadcast widely are not true in that connection?
Mr SHATruCK. They are not-true if they are stated to be from
the President. He may have thought that Mr. Newton was speaking
for the President. I don't know. I don't want to characterize
Mr. Lakin's testimony, but I never got directions from Mr. Hoover
about the sliding scale or any other scale.
Senator ROBINSON of Indiana. You didn't understand, did you,
that Mr. Newton at any time, acting for the President, was giving
you directions on what to do in connection with this lobbying
activity
Mr. SHATTUCK. I did not, sir.
Senator VALsH of Montana. Speaking about Mr. Newton, I find
here a letter under date of September 0, 1929, from Mr. Newton
to you:
My DEAR MR. SHATTUCK:
I appreciate your thoughtfulnesq in sending me the data in refertence to
.the Hawaiian sugar interests. It is very interesting.
Sincerely yours,
WALTER H. NEWTox,

th

re
m
hi
es
W

a
w

Reeretary to the Preafdenit.

Mir. SHATTUCK. Senator, excuse me. I am sorry. I apologize

but I was thinking of something else. Will you read it to me again!

Senator WALSH of Montana. Yes.

MY DRAR MIL SuATTUCK:

I appAeclate your thoughtfulness in sending me the data in reference to the
Hawaiian sugar interests. It is very Interesting.
WALTER H. N
Sincerely. yours,
secretaryy to the President.

Likewise, a letter under date of September 18, 1929, from New.

ton to yourself:
I have received your letter of recent date and wish to thank you for your
thoughtfulness in inclosing memorandum prepared by Mr. Schoenteldt.

Mr. SHATTUCK. Yei.

Senator WAuH of Montana. What was this data that you sent to
Mr. NewtonI

1729

LOBBY INVESTIGATION

Mr. SHATUCK. Those were two reports that were gotten up by

this statistician, Mr. Sehoenfeldt, of the New York 'University, regarding production, risces, and profits of these two insular groups.

Senator WALSH of Montana. Of course, we have seen Schoenfek t's

contributions. .Vell, just what particular legal problem were those
contributions directed to?
Mr. SHATTUCK. The legal problem was and is today before Conre.., I think, to determihe how to equalize Porto Rico, Hawaii, the
hilippines, and the United States.
Senator WALSH of Montana. But the Schoenfeldt article did not
have anything at all to do with that work?
Mr. S;HATrUCK. No.
Senator WALSH of Montana. As you know very well.
Mr. SHATTUCK. Then why did you ask ie the question, Senator!
Senator WALSH of Montana. I want to get the information on the
record.
Mr. SHATrUCK. Well, I am trying to answk- it.
Senator WALSH of Montana. It is a matter of no consequence to
me personally at ill. I know what the Schoenfeldt article was. It
had no relation whatever to any legal problem. It undertook to
establish and perhaps did establish that the Great Western Sugar Co.
was making a lot of money on its production of beet sugar. That is
a fact, isn't it?
Mr. SHATTUCK. Yes. That is a fact in another article.
Senator WALSH of Montana. Well, never mind. We will talk
about this. Now, to what legal problem was that directed?
Mr. SHATTUCK. Well, Senator, you do not want. me to answer. I
wS going to answer it.
Senator WIALSH of Montana. Certainly I do.
Mr. SHATTUCK. NO. You stopped me.
Senator WALSH of Montana. Well, all right.
Mr. SHATTuCK. You stopped me-when I tried to answer it. I am
glad to continue.
tocontinue ,il
Senator WALSH of
to continue, I
.,
.dbi
I
Mr. SHATTUCK.
the'.tOli.
answer
to
try
will

:.what legal
t you to
Senator WALSI f.,,ina. 1
,
feldt arti, directed?
-1 ,o you that
t.,
it,yes,11Itjf
c ta
.
19gtudy;ayid a eibatlo b stil I 9 it is
n;unerot,-d rad
t,.. a
4
ve
a basis for a I~
I ri
sth
.
.....
urther
Senator VijtdMont Anj. you ca~o i~n
m
~
~
.(
statement?l~f

problem was the

Mr. SHATruok.
..1
it was the basis
-J .
Senator

'("

#j~

Senator WIV~
material that

'."
"erO?

Mr. SHATTIUK.

Mr.

hte rgna

under

was thle

Septer-

'Of.

ofthe charter that I,

te~
WALSH ' 1YXb
attention has been cat I
;Lobby
Present reports of Mr.
a
'
Committee apparently created ,ht

Senator

*~

t6~r

. dVtot dlesc ribed.

which your

Investigating
was retained by the Cuban

sugar Interest because of possible influence I might have with the President.

1730

LOBBY INVESTIGATION

Now, you know, do you not, Mr. Shattuck, that Mr. Lakin at
least was counting very heavily upon your influence with the
President?
Mr. S.TrUCK. I would not want to say so. I remember his let.
terms and testimony. You appreciate I want to be fair to Mr. Laidn
and everybody else. I do not think he was counting so much on my
influenceSenator Ronxxsox. of Indiana. Well, he says he was.
Mr. Sn. r Cic. But he stated here, Senator, that it wEas not inu.
ence. You have got to take him at his word. That is his testimony.
He said because the President would have confidence in me. Now,
that is what he said, not influence.
Senator Roixso of Indiana. Why, he said you were employed
chiefly because of your influence with the President.
Mr. SugrcK. I do not think ho ever said "influence."

t
a
o
V

Senator Roumiso.4 of Indiana. Why, the letters are here. The

correspondence is here.
Mr. SHATTUCK. Why, I remember them. It was an inference.

Senator Ronnxso, of Indiana. He said you were employed because

you were a lawyer, but chiefly because of your close friendship with
the President.
Mr. SHATrUCK. Yes.
Senator RonixsoN of Indiana. And that you ought to be paid
$75,000. Now you know that? That is in the record.
Mr. SHTrUCK. I told you it was an inference from the record.
Senator RoBisox of Indiana. Did you know at the time that he
was depending on that* that he was relying on that?
Mr. SHAruCK. No, I did not.
Senator RoBIIso x of Indiana. Did you know he was sending these
letters all around?
Mr. SATrUcK. I did not.
Senator Romixsox of Indiana. That he was writing to the Presi.
dent of Cuba and othersI
Mr. SHATrucK. No, sir, I did not, Senator.
Senator Ronixsox of Indiana. About your influence with the
President?
Mr. SUA'rru'c.

o,sir, I did not.

Senator W.,qg of Montana. To be specific about this, here is a
letter from Air. Lakin to General Crowder, under date of January
29,in which he says:

I
at

oi
ti

I am already making some progress toward further efforts in Washington.

]By great good fortune I find that Shattuck, who wrote the brief with me, is

perhaps Hoover's closest legal friend.

Mr. SHATPUCK. Vell, I have just denied that statement.

Senator WAnLH of Montana (continuing reading):

le is the personal attorney for Hoover and all his family. I think I have
persuaded him to utudertake a confidential mission, first, to convince Hoover,
and secondly, to work on the committees and members of Congress on behalf
of Cuba, nd I believe I can interest several of the largest producers here to
undertake to bear the expense.
Senator Ronixsox of Indiana. Now in that connection, if you will
pardon me just a second that occurs ever and anon.
Mr. S
uATTUCK.
Yes, I know.

de
in

LOBBY IN VESTIGATION1

1731

Senator Ronh.%oSx of Indiana. "He is the personal attorney for

Mr. Hoover and his family." Now, as a matter of fact, you were
attorney for Mr. Hoover on relatively unimportant matters. Isn't
that trite, clear through the 10 years?

Mr. SHwTirUox. I Should say that was true; that is, personallySenator RomNsox of Indiana. And matters that were practically
all of public record, such as lease matters and things of that kind,
where you could go to the public record and see just what was done.
Is that true? W6ll, it isor it is not.
Mr. SiA'rrvcK. W1rell, it is not all true. They are not public recordst no.
Senator Roniz.sox of Indiana. Well, were they recorded
.
Mr. SnA'rrvcK. Well, I say-you say the matters that I have advised Mr. Hoover on were puiblic records. They were not all.
Senator RoBi.so.N of Indiana. Is there any further statement you
care to make?
Mr. Sjiiwrrucm. No. I think I have cleared up in your mind that
I did not attach tiny great importance to the legal work that. I performed for Mr. Hoover. I think it was incidental.
Senator WALsh of Montana. In the same connection, I want to call
attention to two letters. Here is a letter from Lakin to F. B. Adams
of date February 19.
Mr. SnAWrruCl. Yes; -I recall that.
Sentor WALSix of Montana (reading):
We have deldil to employ Shattuck to bear the laboring oar, partly betuo
be will be paid for his work, but chiefly beeiust of his relation with Iloliver ald
Smoot. le has seen Hoover within the last 10 days.

Mr. Si.vrrcic. I recall that.

Senator WALSII of MHontann. A letter of February 23, 1929, to
Colonel Tarafa:
I hvo raised n fund of over .$55.000 to con(iut the fligit. ,41sno of lte
money will be used forl publicity amnd some for employing p'eloto who have a
certain amount of Ilfluence in Washington. Our chief reliance will Ieol Mr.
ltattuck, who i4 a very intimate friend of Hoover trd has already talked with
Hoover about this subject.

Do you not realize now, whatever -%:ou may have thought about it in
the past. that you were employed chiefly because of your relations or
supposed relations with Mr. Hoover?

Mr. Sitv .rcctc. No; I do not, because I do not think Mr. Lakin

was the moving spirit in my employment.

Senator W.Asut of Montana. But you did know, did you not before Mr. Lakin ever testified before this ennittep. that he at least
was relying upon your influence with President Hoover to a very
large extent?
Mr. SUMfrrcK. No; I did not. On the question of influence, I
want to be fair with Mr. Lakin and everybody else. He distinctly
denied that lie llad anything to do with my employment because of
influence.
Senator WALs of Montana. I call your attention to a telegram
sent by Mr. Lakin to you on February 9, 1929, addressed to you at
Cocoanut Grove, Afiamt, Flh:
My first impression is that your suggested modification is good-you having

conveyed to him a plan of operation-though I must consider what the sugar

interests here have to nx whether it ham any serious flaws frmin tile Cuban

1732

LOBBY INVESTIGATION

stanlpoint. It ,,vercoine the obstacle to tile original Chadbourne plan, wVllC.

was that Congres would surely reject a proposal to forego $100,000,000 of

Ou

time if the ultimate outcome is to limit the 'liilliplnes and leave duly where

So

plait 1i iibr6 hinlltlious tian I would dare attempt, bliluso It nt onsly Ivolves
reduced duty on Cuban sugal but requires renegotiating the reciproclty treaty.
Clearly nobody bItt yeu, with yOur special connections, could hoe of 1CCel.S.

Po

easily collected revenue. My pej.sonil view is that Cubit would be lucky at tills
It is, und It you can accomplish anything more It will be a great victory, Your

Cal

Ca

What were the special connections that you had that could afford

fel

Nf. Sb-rcK. I do not know, Senator. All I have is my library

and, I hope, iny reputation. That is all.
Senator WAILqh of Monttin. I in not speaking* aoliut you now.
I am speaking about Mr. Lakin.
Mr. 1A'rrTICl. You wanted to know what special connections I
had. I say I do not know, more than I have said, whatever my
modest-Senator WALUqiiof Montana. Well, what did Vo llnde.1stnld from

1l

any h~ove of success?

this telegram of Mr. Lakin's, referring to your special connections?

rIUVCK. I don't believe I gave it very much consideration
H. S
in that respect.
Senator WALsIT of Montana. If you will give it sonie considera.
tion now, what interpretation will you plt on it?
Mr. SHAFVIUCK. That I was very familiar with the whole sugar
subject, pretty much the world over, and hail made a special study
of it, and that my reputation was such that I would be listened to
in dealing with the sugar problems.
Senator AV.%Lsh of Montana. But he does not refer to your vast
information about the nmtter, nor to your fauiliarity,with the sub.
ject, nor to the library that you lave, concerning which you could
inform yourself, about this matter. He refers to the conulleetiolli
that you have that would enable you to bring this to success.
Mr. SHATwcK. Well, I have, as I say, in my home town, I think,
something of a legal reputation, 1111(1 I have connections all over.
I do not know anything more than that.
Senator IYALsii of Montana. You appreciate, I suppose, that he
was talking about the revision of the treaty, do you not? Tliat
was. what was required, was it noti
Mr. SnAxrct-cj. It is not what was required, in my mind. I know
lie does, sir, but you asked me the question, and then you are of.
fended if I answer it.
Senator WArsit of Montana. Not at all. If I have exhibited any
offense in any wayI tried to answer
Mr. Sua'rxvic. Well, you show it with me.
your question.
Senator CARAWAY. If you would answer the question-you know

"connections " and "1reputation"1 have no relation at till.

know that, if you tire the brightest lawye inYw ok.i

You

Oh, I am not anyt ingSenator CAAWAY. "You treat us as if we were going to believe
any kind of a fairy story. We don't. Be somewhat consistent and
answer the questions.
Senator WALSH of Montana. I want to call your attention again
had proposed
to this telegram and ask your attention to it. Youabout
it:
you
wired
Lakin
Mr.
and
point,
this
solve
to
a plan

ha
1111

e
P
at
ha

i
is

Mr. SiAVucK.

LOBBY INVESTIGATION

1733

My personal view Is that Cuba would be lucky at this time It tile ultimate
outcome Is to limit the Philippines and leave duty where It Is, and If you
can accomplish anything more it will be a great victory. Your plan is more
ambitious than I would dare attempt, bet-au.e It not only involves duty on
Cuban sugar but requires renegotiating the reciprocity treaty.

And by reason of your connections he hoped that it might be

possible to accomplish a revision of the reciprocity treaty.
Now just. what connections have you got, or that Mr. Lakin referred to, that would enable you-you a lawyer of the city of New
York, a practicing lawyer of the city of New York-what connections did you, a practicing lawyer of the city of New York, have
that would enable you, by reason of your connections, to accomplish
a revision of the reciprocity treaty with Cuba I
Mr. SitATrLctC. Senator, I told you that my connections were with
11 the sugar people, over a period of 15 years, and now, one of the
chief things of this plan is a single marketing seller in Cuba. In

19'21 I was the attorney for a single marketing plan in Cuba. I

had been all through the gamut of this sugar history and had been
the adviser of nearly all of these sugar people, and to the beet
~l)ople and the Hawaiian people. I (to not know what he had in
mind at the time when I received that.
Senator W ALSHi of Montana. Mr. Shattuck, a revision of the
reciprocity treaty would have to be accomplished through the Do.
parttment of State, would it not?
3Mr. StATrUCK. ko, sir; not the revision that I have in mind.
Senator WALsi of Montana. No, no; but Mr. Lakin called your
attention to the fact that in order to accomplish the plan that you
had proposed there would be necessary a revision of the reciprocity
treaty.
Mr. SHAIWrucK. Yes.
Senator WALSH of Montana. Now, I ask you whether a revision of
the reciprocity treaty would not have to be accomplished through the
State Department?
Mr. SHATrUCK. That would; yes.
Senator WA~s of Montana. And the State Department would be
acting under directions of the President of the United States, would
it notI
Mr. SHAT UcK. It would.
Senator WAlSH of Montana. The President of the United States
is authorized by the Constitution to negotiate treaties, is he not?
Mr. SnATrucK. Yes, sir.
Senator WALsH of Montana. And lie acts through the Secretary of
State?
Mr. SHATrUoK. He does.
Senator WALsmH of Montana. And the connections that you had,
as referred to by Mr. Lakin were some connections that would enable
you to have that work done by the President of the United States,
under the Secretary of State, was it not?
Mr. SHAwrucK. Partially true. Partially. Would you like me to
make the other which I startedSenator WALSH of Montana. Yes, certainly.
Mr. SHATrUcK. To change the reciprocity treaty for the pTurpose
which I had in mind could be done by an act of Congress, and it does
not need to be negotiated, in my opinion, by the Secretary of State.

1734

LOBBY INVESTIOATIOq

Senator Wm1.sVi of Montana. Well, that was not Mr. Lakin's idea.
Mr. SIiATrucK. Well, I don't know how ho used his words. He
called it a revision,

what he meant?

fil

Senator CARAWAY. He was your client. Why didn't you ask him

Mr. SnArTrucK. Well, I did not pay much attention to it, really.
Semator CARAWAY. You do not pay much attention to your client?
He ought to be glad to know that. May I ask you a question?
Mr. SJ1ATruCK. Yes. sir.
Senator CARAWAY. When you work for somebody and he comes
back and colitnents upon your )lan and uses language like this, and
you see lie is wholly mistaken about what you meant, don't you ox.
plain to him what you did mean?
Mir. SATrTUCK. Yes.
Senator CARAWAY. Then, why did you not explain to Mr. Lakin
what you meant, and not what lie stated?
Mr. SAVIMUCJK. Well, I probably have.
Senator CARAWAY. Tou probably have? I thought you said you
paid no attention to it.
Mr. SIIATrUCIC. Well, I paid little attention to it.
Senator C. lt, WAY. If you explained it to hin, when did you do it?
MV. SIA'TnUCK. I am 6Me that I hacV told Nr. Lakin, during the
last six months. that an increased preferential could be obtained-Senator CARAwAY. That is not what lie is talking about here.
Mr. Si[ATrucK. Well, that is the elciprocity treaty. Yes.
Senator CARAWAwY. Bit, he is talking about a revision of it. What
is the use of wandering onAir. SiAvric,. That was the only revision that was ever in our
minds.
Senator CAnAw.Y. How do you know what was in his mind?
Mr. SHAToCK. I never heard hini mention any other.
Senator CARAWAY. Well, lie mentited it right here. Now, did
you ever talk to him about it?
Mr. SJLTrTcc. About legislation to change the reciprocity treaty?
Yes, sir.
Senator CARAwAY. Oh, well, you know thAt is not an answer to the
question. If you think you call get anything.by evading--M SiIAVTUCK. I thinl it is afisweri'ng the question.
Senator CARAWAY. Well, it is 1ot.
Mr. SHATrucK. I submit to the coinnttee that it is.
Senator CAAWAY. It is not. I asked you if you ever talked to
hint about this telegram.
Mr. SHArtTcCI. 01, no. I did not talk to hint aihout the telegram.
Senator CARAWAY. A minute ago you said you did.
Mr. Si.ATrucK. About the subject of the tethgran.
Senator CAAWAY. No. That is not what you were asked.
3Mr. Stitrucic. Well, I did not get such a fine distinction.
Senator OARAWAY. NO. I know you didn't, and we didn't get the
truth, either.
Mr. Sitn1rCc. Well. Senator, I beg of you that I do not careSenator CARAWAY. There is no use starting another wrangle. I
have heard all I want. You can answer the question.
Mr. SHATmrUoI. I want to.

A
l

81
YO

me
of

p1
b
the

ke

or

dli
th

LOBBY INVESTIGATION

1735

Senator WALSH of Montana. Where were you on January 30, 1920?

Mr. SirATIroK. I probably was here or on my way to Miami. I
do not remember the dates.
Senator VALsH of Montana. Here is a memorandum from your
files as follows:
SU AR PUI LJCITY
J,%xUAny 30, 1929.
Mento for Mr. Shattuck:
Last night I had dinner with a per.omn whin we will call "X." lle gave ine

the following information.

Who was X

;Ur. SHA'rUCK. I do not recall.

Senator VALsh of Montana (reading):
le gave nie the fillowg Informntion:
iv 'tt (or Lippot)
Mr. Petriken, (of tie (relt Western Shigitr Co., ald M[.
end three of four tther i)et-sllgiar executives and their publicly nen, were
In Washington till last week writing af brief and entertaining Members of
Con.gre.s. They attended the ieairings the list of tthis week iand then came to
the Hotel liltmnore for a few dtiys. ''iey have een studying together i New
iils Ij'rson silvs fliey pay their publicity
York and going out lgehther evetiiig.,.
men .1.O,1) a year whit extras when campaigns are on. This entire group ex.
in April for several weeks.
pects to go back to W'ilngton
i particular uot0
Not knowing joy interest in the sittilon this Imhoim made no
of their netivities hut was very certain flint they were All very aInch Interested and were till working together on the sugar tariff.
Later lit the evening I met Frank Hissomo on the train going home. lie qaId
having him recommend it publicity
that Mr. Pike had tiven In tos ee him alut
man and that he had told hit tint It was too late to uilld up it nation-wide
public sentiment on the sugar question, li said Mr. P;ke had bheeni talking to
Mr. Zabrlskio and some either sugar men. lie sent Mr. Pike to Ivy Lee. Mr
SimOui said that wihen lie wits organizing the Amtrlean Assoclahlon of Railroad
Executive., and doing other punbleily work wh!eh resulted in the Esci-Cinunins
bill; lie waq four years nit the joh ani spoke till over the United Stathe.. and
that their budget for publicity work was 3O0.O00 a year. The net result of
their work was tip save the railroad reauny millions of dollars.

What was the purpose of Mr. Francis communicating all this illformation to you?
Mr. SH.vrhrci.

To let amue know what information he had, I as-

slille.
Senator WALsh of Montana. Well, yes; but why should he be
giving to you? To what end?
fr. Sir-rUcK. Keeping me informed, Senator. That is about
all. I can see.

Senator WALsh of Montana. Well, yes; but to what end could ho

keel) you informed about the facts?

Mr. S 1 nATrucic. Well, Mr. Sisson"s opinion was probably worth

something.

Senator WVALsi tf Montana. Mr. Sisson was apparently endeav-

oring to impress Mr. Francis with the idea that a publicity campaign was a valuable thing.
M1r. SUATMuIC. Probably.
Senator WAtsil of Montana. Mr. Francis at that time was handling the publicity for you, was.he not?
Mr. SHArprumc. He was engaging some one to do that yes.
Senator WArtH of Montana. And did you confer with lini about
the idea of employing a publicity man?
78214-30--T 4---10

1736

LOBBY INVESTIGATION

Mr. SivJrvucjc. I think he conferred with Mr. Lakin and I, prob.

ably, in passing, to some extent.
Senator WALSs! of Montana. Now, referring to your work in the
preparation of briefs, who worked upon the original brief thlt you
presented 'o the Ways and Means Committeo?
Mr. SH1.(-K. Mr. Francis and myself. Lakin had confemnees
with us. Mr. Chadbourne, Mr. Schoenfeldt, Mr.-the statisticiln-Bernhardt, Mr. Johnson. Probably I consulted other people re.
garding the facts that I do not recall just for the moment.
Senator WALsU1 of Montaneca. But I was not particula'ly concerned

to

Wi
100

about the vrious parties friom whomt you got the information that
you put. in the brief, but I was concerned about who actually wrote
the brief.
Mr. Sn i-rucl. Well, I think probably Mr. Francis and myself.
Well. it was. Mr. Francis and I wrote the brief in our office withe the
help that I have mentioned.
Senator WaIsn of Montana. You filed a supplemental brief, did

you not, subsequently?

Mr. SHI-ruoIC. Yes.

Pe

Senator Wm.is4i of Montana. Who wrote that briefI

Mr. Simrrcit. That brief was outlined by me to Mr. Francis
before I went to Florida and then he worked on it with the various
lople that I have mentioned, and would send galleys to me in
Florida now and then and I would go over them an(1 send themi back,
or he would telephone me. It was largely his language, after con.
sultation with me.
Senator WALsit of Montana. That is, the supplemental report was
practically prepared by Francis and Bornhardt'( Isn't that the
case?
Mr. SHAWUCIC. Yes, largely; the text of it.
Senator WV,%ujri of Montana. There is just one other matter. lea
is a telegram fronn M.r. Francis to you of date February 8, 1929, you
then being in Miami, Fla.:
After

is
an
to

do

to
gre

further confer(neo with our recent visitor-

bu

Who was the recent visitor?

M~r. Sit-r.rucie. I do not connect it to-day.

Senator WL.iH of Montana. Perhaps the rest of the telegram will

help you.
I lr'op4io givig lilii frollowhig letter:

"ITit

eonfornity will my converra.

t1o1s with You (1ts letter Is to 1hldVie that this firm would lt, plela.ed to represent file Ulovernment of ,let as Its attorneys find advisers in this
no
country an(I to verve ft stch nIItters alffecleig the welfare of

as may

r ltre attention in Willidlegton ,; fIn the event that desires to confer with
us regerdeing s.ti it retalle we will b very glll to elnllt Its PejirelliltIet at

fil

mw" tun and to enter into such arrstigenteets as can be. mutually agreeable.
Sigteld. Francis." Visitor lelving soon; ceo expense; ulease approve.

That you doobtless recall.

Mr. SmAruicx. Yes. I (lid not recall the man's name. I think
it was in connection with Nicaragua. I think the Guaranty Trust

Co. had sent to Mr. Francis a client who wanted him to-I think it

was some agent of the Nicaraguan Governmnent.

Senator IYALhI[ of Montana. What was the particular matter in

Washington that the Republic of Nicaragua wanted you to look

after I

LOBBY INVESTIGATION

1787

Mr. SIAVLCcK. I think it was in regard to some loans they wanted

to get, as I recall it now. It is rather hazy in my mind.
(j11to1-WAL.M. -of MAlontana. That was legal work, of course?
Mr. SIiATrUcK. Yes.
Senator WALSH of Moptana. Getting loans?
Mr. SiATruuO. Well, legal work that was required in connection
with it.
Senator WALSH Of Montana. From whom were they to get the
loans, in Washington?
Mr. SbnArvKci. I (o not know enough about it, Senator. I asstutie that there might be some treaties or contrats-I think there
is 1k intervention in Nicaragua. I do not know enough about it to
answer.
Stenator WALsh of Montana. But you are quite sure that it refers
to Nicaragua?
Mr. SpiUCK. To the Nicaraguan Government.
Senator Wi.L4H of Montana. Can you explain how the latter happeed to get into the file marked "United States sugar tariff"
Mr. SIrAVTUCK. No; I could not.
Senator
LsH of M1ontama. You know that it was found in there,
don't you?
Mr. SIATrVcK. Well, I think that would probably be the filing
clerk.
Senator WVALsi of Montana. A mistake of the filing clerk?
M1r. Sitirr'uciK. Yes; I assume so. I know no other reason for its
being there..
Senator WALSH of Montana. Perhaps I should call your attention
to this telegram of February 7, 1929, from you to Francis:
Tlitmiks memorandum sent fbpurtlh. Suggest you try poll Members of Con.
grts trough LaGuardia or other source and see strength own forces. He
may not be Influential enough to lead but find he approved our position.

That was a part of the legal work you were engaged in, Mr. Shattuck, was it?
bMr. SHATFUciC. Well, that-I don't-no; that is not legal work,
but all those things are incidental, as I have explained.
Senator WALSH of Montana. It has no direct relation at least to
any legal question involved.
Mr. SnATrUCK. No ;it has not.
Senator WAIs of Montana. That is all.
Senator CARAWAY. Senator Robinson, do you have any questions?
Senator Romnxsox of Indiana. I don't thmik I care to ask any
further questions.
Senator CARAWAY. Who is Gladys Moon Jones, Mr. Shattuck?
Mr. S11ArUCK. That is the person in charge of the publicity
bureau.
Senator CARAWAY. At what was this Mary Carpenter employed?
Mr. SUAWruOK. I think she was an assistant of Mrs. Jones. I know
very little about the personnel of the office.
Senator CARAWAY. You do not know what her particular duty

was?

Mr. SravucK. N4'o; I do not.Senator CARAWAY. She seems to have been employed to translate

some Spanish documents. Do you know what they were?

1738

LOBBY INVESTIGATION

No: I do not.
M S81F'rr'ur.
Senator CARAWAY. You have no idea?
Mr. SuA7vrL'C1. NO.
Senator CAY..
Do you know anybody tlat would know?

Mr. S.tvrucK. Mrs. Jones I think, would know.

Senator CARAWAY. I thought Mrs. Jones was employed by you.

Mr. Si.'rTwci%. She was. She was employed by Mr. Francis for
Mr. Lakin.
Senator CARAWAY. Well, you were the head of the firm and Mr.
Francis wits a member of it?
Mr. SIr~v-rucic. Yes, sir.
Senator CARAWAY. And the employment of you was direct, and
Mr. Francis was asisting you.
Mr. S1A-rrucC. I think Mr. Francis took that up independently
with Mr. Lakin, originally.
Senator CAsvAY. Took up what?
Mr. SUMA'ructc. The employment of Mrs. Jones.
Senator CARAWAY. We had a letter here from Mr. Lakin in which
lie said you were in sole charge of this matter and nobody was to
advise with you or make suggestions to you; that you were running
it. You saw that letter?
M '. SUAvrUcmc. I heard that.
Senator CAIIAWAXr. Well, was that so?
Mr. SUATrVCK. No. He might have thought so, but I did not.
Senator CARAWAY. How coull he thilc anything except he knew
what contracts lie inade with you and what contracts he made with
Francis?
Mr. SHTrVem. But it was rather indefinite, I should say.
Senator CARAWIAY. Well, it seems everything is indefinite, but he
said you were employed particularly because of your close relation.
ship with Mr. Hoover; nobody was going to interfere witou nor
say anything to you about it. Everything was trusted to you. Now,
here IS a party employed under you and doing something, and you
don't know anything about it.
Mr. SIVIUCIC. Yes. I know somethib about it, but I say tlhat
emloyment was meade by Mr. Francis. I knew about it but "atthe
request of Mr. Lakin.. -rs. Jones was a friend of Mr. Francis and
he got in touch with her. I never knew her. I knew about the
emnjloyinent.
senator CARAIVAY. You didn't know Mrs. Jones?
Mr. StA:Trucic. Not until after she was employed. le knew her.
Senator CARAWAY. You conferred with her quIte frequently after
she was employed.
Mr. SUATrUCK. Yes.
Senator CARAWAY. All right. I don't think I will ask anything
more. That is all.
Senator Roni.sox of Indiana. I would like to put in the record
at this time the financial statement of the General Sugar .Corpo.
ration and its subsidiaries.
Senator CARAWAY. Very well. That will be inserted in the record.
(The financial statement referred to is as follows:)

In
D

1739

LOBBY INVESTIGATION

Oeneral Rugar corporationn and Subshllu

r,
ConwilidalCd Balance s heCt,
HI'rptcnlir .11%,
1129
ASSETS

Current uissels and growing ealie:

Cush In baiks and oii hand
- Suu(lry lLceiVivaCs, advane INIlylelts. 1li1
dvol isits

- - - - --

- - - - - - - - -

Sugar aind noltucss on hand and In lqUidtlion_

MlaterilJs

tIranit

alnd supplWis on hand

and Inl

Accounts reoIvlal)le front colonlos tenantt

fla nltd
) ......
g.o
......-Planlted anld gr'owinlg caea
----------------

$1,259, 725. 14
54, 069. 74
2, 05, 40. 03
1,401,230.80
2,600. 728. 00
4. 350, 10. 0

Bonds jurciwed on account of Oct. 15, 1020,

sinking fund requirements, cost plus Interest
to date of lurclise .....................
Property, phint aind equi nent --------------57, 769, 232. 33
Los reserve for depreciation ----------------0, 405,318. 91
Investments and mortgage rteivable ............
Deferred charges:
Preplhl rent, Insurance, taxes, and itnerest
Operating expenses paid In advance for
coming crip -----------------------

$13. 112. 324.82

239, 252,04

51.30-3.013.42

5.094,220.82

258, 003. 74
1, 182, W83. 8M
1,441,487.57
71.101.199.27

LIABILITIES

Current liabillUes:
Loans secured hy Iedged sugar-----Other current loans (secured by crop lien)Ijmans on adlunilslration coloala (forms)Sundry notes, drafts, and accounts payable.
Wages, rent, Interest, etc., accrued
Funded debt:
First niortgag, sinking fund 7 per cent gold
bonds, due 1042, of Comapanla Azucarera
Vertlentes......................
First mortgage snking fund 7 per cent gold
honds, due 19:12, of Compani Azucarern
(te Camaguey ...................
First mortgage 7 per cent gold bonds. dw1043. of Compania Azucarera San Cris.
tolal
-------------------------Sundry purchase money mortgages and
guaranteed loan
--------------Five-year 0 per cent notes, due 1032, of
General Sugar Corporation ....

2,130. 851.55
7.700,000.000
(193.473. 80
774,9027.62
869,014.40

12,174,807.43

9.100.000.00
4,9 50, 000, 00
1,800.000.0)
2,392,009.08
9.000.000.0O

Reserve for contingencies, etc ------------------------------Preferred stock:

Compania Azuearera Vertlentes-7 ptr cent
cumulative (dividends paid to June 1,
1025)
---------------------------2,273,200.00
Comnpanln Agucarera de Camaguey-8 per
cent, cuniulaitve (dividends paid to July
28, 1920) ----- ---------------------300,000.00
Common stock of no par value (issued, 1,884.000 shares) -------

27,242,009.08
427, 890t 09

2, 573.200.00
28,772,625. 47
71, 101,199. 27

Contingent liabilities: Guaranteed loans to Colonos (tenant

farmers-------.....
...
-,-............

1 437,102.84

1740

LOBBY INVESTIGATION

Senator CARWAY. This will conclude the hearing for to-dy. We

will adjourn until 10 o'clock to-morrow morning.
(Whereupon,- at 11.35 a. m., the committee adjourned to meet to.
morrow, Friday, December 20, 1929, at 10 o'clock a. m.)

C.
se

fr
mi
in
of
art
cia
to

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It

the
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the

Su
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of

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Tb

oil

LOBBY INVESTIGATION
FRIDAY, 3DEOEMBER 20, 1929

SUBCO.

'rIEF OF THE

UNITED STATES SENATE,

oN ~r~"oTHE
JVDIICARnY
Wahingto,

b.

a.

The subcommittee met, pursuant to adjournment, at 10 o'clock

a. in., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway (chairman) presiding.
Present: Senators Caraway (chairman) and Walsh of Montana;
Senator Robinson of Indiana appearing later, as hereinafter noted.
Present also: John G. Holland, Esq., counsel to the committee.
Senator IVAISH of Montana. Mr. Chairman, there are some letters

from the file of Mr. Lakin which, with your permission, I will submit for the record at this time, without interrogation of the witness,
in order to conserve time.
Senator CARAWAY. Very well.

Senator WAuSH of Montana. This is a letter from Lakin to Rionda

of the Czarnikow-Rionda Co., New York:
I note the r.'quext of Colonel Sinp.on. Of course, strictly, Shattuck and I
are working now for the conirllutors to theb fund oad not for the Sugar Asso-

ciation, but naturally that would make no difference in our attitude of eagerne- to kee)i the coIntributors to the fund and the imeinlirs of the association
informed. I very much dislike having an ol1e1 meeting. 1 shoud niuch prefer
to meet Colonel Simpson In your office without any outsiders present. The matter Is now at n very confidential stage and I am very reluctant to get it Into
the nrgumentative Wlage or to disclose just what we are

few intimate friends like yourselves.

,1ilngexcept to our

This is dated April 27, 1929.

Here is a letter which seems to me of considerable consequence.

It is a letter of May 14, 1929, from Luis Marino Perez, League of

Nations delegate at Geneva, to Lakin:

I ill hiclsing a cojy of the cotldldeial loreport which. I hve mlde regarding
the prellmhtinry negotiations wh~ch took I)a(e at (lieva i April. Th, Ctaban
Sugar defense Commns.ion has det-ided to accept flits prolp)sal itn prilieilph as a
basis for the dis, ugslomm to be held at Bru..els, and the Preshleiat of the lIepublic as well as Dr. Virlato Gutierrez will try to convince CiAwlo, Tarafa
that he should be (we of the riehtgates. Dr. VJato Outuerz will be going
shortly to Europe rand will be on of the ('ulan delegates also. The Sugar

Defense Comnitssion has circulated my relort to the Provincial Assoclations

of Haeeadado. to lie used it a confidential way, and has asked thena to express
their views on thl question, so that instructions may I. given to the delegates.
This communeaton to the Provineal Assoclations of Haenmdados ling lieen sent

out to-day.

Here is a translation of a confidential report, Reunion of Representatives of the Sugar Industry in Geneva. April 4-0, 199.
The report purports to recite an agreement entered into between
the experts of the sugar industry of the Republic of Cuba, the Re.
1741

1742

LOBBY INVESTiGATION

public of Czechoslovakia, -the Republic of Poland, the German Re.

public, the Kingdom of Hungary, and the Kingdom of Belgium. It
says:
CO.WIDENTIAT. REPORT
In the prTesenit report I will not make a complete slateient of fhe 1,ugar
confere,,ee held fitGeneva on the 4th to 0th April. Just past. hut slall limit
myself to giving an account of the tit-gotiatlons carried on pirlvately. outside
of the conference. by the delegates of Cuba an1d the five exporting coomtries
md Poland,
of Europe; that is, Germany, Belgium, Czecloslovakln, lungur1,
which culminated in a proposition signed the 6th day in GUaenw by said
delegates.
The private meetings of the group continued throughout the duration Of
the conference with the economic committee and, its the result of exclanIge of
ideas, drew tip a plan which each delegate engagedl to submit to his l'aductry
and which plan. therefore, I had the honor of conmutleatl Ig, verbatim, to
the honorable Secretaries of State, and of Agricullue, Commerce, and Iltbor.
This plan, the signers of which are exactly the samwe persons who signed or
Joined In the agreement of Paris of November, 1027, In name of their resl~e.
tire Industries, Is, literally, as follows:
TRANSLATION

Strictly confidential.
In an exchange of Ideas, between the experts of the sugar industries of the
Republic of Cuba, the Reputlic of Czechoslovakia, the Republic of Poland, the
German Republic, the Kingdom of Hungary, and the Kingdom of Belgium,
the following was proposed:
The above-mentloned countries shall form a "pool" of the amounts of
sugar produced by them in excess of domestic consumption.
In the event that a country not a member of this "pool" indulges In the
policy of "dumping." prejudicial to the Interests of the signers, these shall
attack it In the countries which constitute Its natural market. The loss which
may result from tits shall 1e borne by each country proportionately to its
interest in the "pool," either in sugar or in money.
The object of this plan Is tile resisting of attempts to depress the world
price of sugar and to compel unanimity between all exporting countries, In an
effort to harmonize production with world necessity.
The experts of the Industries of these countries will sulimit this plan to
their governments or to their industries and communicate the results of its
actions to the Belgian delegate not later titan the 1st of June. 1029, who shall
call a meeting in Brussels in the shortest time possible.
Lucla BEAuDUIx, Belgium.
]
o
Hn HADIBCTOE. GMc11011.

Lus MARINE PIMBZ, On0a.

JosmzH ZYOIn.iNSKI, Poland.
JOE HARTMANN, Ozcchosloaklda.

ALBERT HIRSCH, Ir',,gary.

A letter from Lakin to Colonel Tarafa, of date May 15, 1929:

Your letter of May 10.
The goal for.which Mr. Shattuck and I are striving In connection with the
sliding scale is to make the highest rate of duty on Cuban sugar 2 cents or
less. I think that the schedule which Luis Marino Perez saw was a tenta.
tive one prepared In one of the Government departments, and which was
shown to Mr. Shattuck and myself, and in which we found various objections
in addition to the objection of the high rate of duty at which the sliding scAle
began. There have been several tentative schedules made, one or two by
Smoot, several by Shattuck, and I think two or three by Government departments under the auspices of the White House. As a matter of strategy Itwas
decided not to permit any suggestion of the sliding scale to be made In the
House of Representatives during the proceedings there. If a sliding scale is
finally adopted, it will be upon confidential negotiations between Soote, Hoover,
and Shattuck, and Shattuck will not agree to any schedule without first sub.

1743

LOBBY 1V8ESTIGATION

hitting it to me. and naturally I shall confer with the producers of Cuban
sugar before giving my own definite approval.
My personal view of the situation as at present is that we have convinced
mloover that Cuba must be prlOtected, and that loover has conviuived Smoot
that the rate of duty which has appeared in the tariff bill in -the House of
Representatives is very much too high.
Colonel Deeds told me last week not to worry about the additional money
that we shall need. and for the present I think it would be better not to ask
the Cuban hacendados to contribute. I can talk that over with you when
I see you.

A cablegram dated June 11, 1929, from General Russel, Port au

Prince, to Lakin:
Would appreciate your assistance in obtaining suitable aecomodatlons for
Mrs. Russell and myself on Santiago-Habana train leaving Santiago 10 a. m.
June 17.

Also a letter from Mr. Lakin's secretary to Lakin, under date of

June 13, 1929, as follows:
I have Just received word from Mr. Brown that they are arranging to send
a private ear down to Santiago for General and Mrs. Russell, and Mr. Brown
is wiring General Russell direct to that effect. I told Mr. Brown that I iyas
sure that is what you would wish to have done. I thought you would be interested to know that this matter is being taken care of and that everything
possible will be done for the General and his wife.

Senator CARAWAY. Who is General Russell I

Senator WALsH of Montana. He is the high commissioner of the
United States to the Republic of Haiti.
Also a letter dated June 12, 1929, from Mr. Lakin's secretary to
IV. J. Brown, assistant to the president Consolidated Railroads of
Cuba, Now York:
General Russells full name, title, and address are as follows:
Gen. John H. Russell, American High Commissioner, Port au Prince, Haiti.
I inclose a copy of the cablegram received from General Russell, and which
I read to you over the telephone. Also inclose a copy of a letter which Mr.
LaklIn wrote to General Russell after his trip to Haiti in 1028. I believe that
Mr. Van Horne and Mr. Lakin stayed at General Russell's house and that all
of the members of Mr. Lakin's party were entertained and shown a great
many courtesies by General and Mrs. Russell while in Haiti.
Any courtesies that could be extended to General Russell and his wife would,
I know, be greatly appreciated by Mr. Lakin.
Sincerely yours,
coretary to Atr. Lakin.
P. S.-As suggested by you, I will cable General Russell to consult the Hotel
Casa Granda in regard to his accomodations.

A cablegram from Lakin's secretary to General Russell;

JuNE-12, 1929.
GE. mAL

RUSSELL,

Anerflhqu High Conmialsioner Port af Prieco, Haiti.

Cablegram received in Mr. Lakin's absence. Accomodations will be obtained
through office of president of railroad. Hotel Casa Granda, Santiago, will have
Instructions in regard train accommodations. etc.
MAWBEY, Secretary to Mr. Lain.

A letter from Lakin's secretary to Lakin at the Mayflower Hotel,

June 12, 1929:
I inclose a cablegram which I have to-day received front%
General Russell, of
Haiti, I Immediately got in touch with Mr. Brown, as you will see from the

1744

LOBBY INVESTIGATION

d copy of it ht(er which I have written to lin. I al;o lIcloge i1

i'0py
willeh I Illive4.eilt to (hlerill 1tuSsdl.
I ll(ltve that everylltug II.WAlle will liO dolne by the Illriiild for (Ieatertl
Ilus.sell. flowever, I sendI! tlis illnng to you lii ctso you wish. to do s'ol-lit,1hg
Inclose

of It ctAlih'glga1a

personally or live tide (O soimelig ilmore in th

nuitler.

Senator C.%R.,%WY. Who is Mr. ]hrown?

SeIantor WAL.,lqi of Montana. lie is assistant to the president of
the Consolidated Railroads of Cuba.; Now York.
A letter sent to stit.seribers to taril|f defense fitnid of date .June 8,
1029:
I 1411i1il 1ie ollgtl It you will seuld 3le at cheek for
-,
repres.-,llht tile
second in-alltlient (of your Hls.seriliol ln to the tariff tdefn. w, flnd. I(iO''
make (he'4!k inyvable to I! 0. Liakan- .pehal.
Owhag to te, fMet that the tioriff bill will proilibly be jkenidllg until fit letst
Novellibmr. 1 sh1ll s1O1 like the liberty of iskiaag ir you (11It ilierealse youlir s.u|l.
scription by, let uts say. 60 Ier cent, pa lvnent not to be nmde inlnledlately, Il id
probably not unlll August or Selitember.

A letter of June 8, 1929, front Lakin to W. C. Douglas, pre.ient

Punta Alegre Sugar Co.:
On Maiy 24. Ilaydetn tone. in tlir

weekly market letter, ,stated Iltit I'mita

has had this year an operating cost of about 1/ cents 1nd is erilhig interest
charges with i fair nargin. I si0cerely lope that your operating costs have
been as low as stated, but I wish the fact had not beeii published tit this time.
Somebody in Waashugton Is sure to seize upon this statement to reinforce the
argument that naot even 2.4 cents tadequately represents the difference between
(itn you thilk of imy eXphillitlton
CUbin and doinestio costs of proluctih.
which we could give privittely to nenlibers (f tile Seaate lFinanaee coitilittee
and other Senators which would tend to niltigate the effect of this statement
without hurting Punta in any way? I will telephone you tibout the nlatter

on Monday.

Senator CARAWAY. Is that from Mr. Lakin?

Senator VALsi of Montana. That is from Lakin to Douglas,

president of the Punta Alegre Sugar Co.

Senator CARAWAY. Who wanted to be so fair.
Senator IVALSU of Montana. July 17, 1920, from Cuban-.Aneriean
Sugar Co. to Hugo Hartonstein, sent by him to Lakin, referring to
a press release of Gladys Moon Jones of ditto July 11, as follows:
It Is very dlaingerous to stress tile fact tiat Cuba can Itllke suglr very8IUb.
thill .Ale one vII
tilOf MI'. .JoneS's
chealap. I think It very Irinoulli
lIleit$, or I ant afrahld sie nty do sonletlibg that nillglt hurt tile cause.

Senator CARAWVAY. I hope she read that letter.

Senator VAiasi[ of Montana. A letter front Lakin to Shattuck
under (late of August 24, 1929:
you land nit Interview with President
Just before we last went to Col
Hoover. You understood hnt to atllprove of Culmin newspaper criticimill. I
Counguezane). I think
Inclose translattins ot the two editorials (from EIl,%
that they ought to be given .4onie publicity, but to )e called especially to the
attention of the White House.

The only particular significance of this, Mr. Chairman, is that

here, Lakmn writes to Shattuck and says:
Just before
Hoover.

ve last went to Cuba you had an interview with President

This is offered in view of the testimony of Mr. Shattuck yesterday

to the effect that lie never talked to President Hoover.
Senator CARAWAY. I want the record to show that Mr. Lakin and
Mr. Shattuck will be given any opportunity to explain these letters

that they may desire.

LUJSISY JiNVES

IOATION

1745

Senator AVALIs[ of Montana.

I now offer also a report fro,Yes.
Mr. Lakin to President Machado
of late August 21, 1029.
('he report is as follows:)

lIo1.

(IIKAHO MACIADO,

I'rcesdent of eYuba, l1abana, Cuba.

EO.0IIII.Pu.. 1iA # It is iw
two niioithW sine I liave, imie it liemonal report
to you. I hatve hut; written ItreI)'oit bleetn.e
I expeetted Piwlh week to he Ohio
to Cime to Cull ItIId repor)rt orally. I ow find
t Illl lie several weeks
before I Call come to Cobitl andII tlink youl oughtthat
ti kow
Mo )itW Mr. Slalltutk

anl I (eel a141out tfoi sltulloll 1lu4 willt we hnlve

doingjr.
to( couIlrse. (olonel 'I'orifit hlis kept you fully been
ifornlwd of niiy events In
Washilngtoln and NOW York with which lie wis
Iberslonily follai
lie iad
Crowder ltld MHltlllluek and myself lilve
(coolerlltel.
agreed hhout polhicy, ilt we lllve hotil lilt rotrov(,rsy We hiv nt t aiIlways
Uhlolng (ollr.selvoe. AIl
tour have been trying to do what was licst for
Whell 'llriaft wits here it111o1th oir llore 11gO,the V'uhtui hilhr .st4.
we 1lglr1001 Iniilgoililnl way
fhnut Ile 'h.ihd devote hhiliself tit lh1P featt.res
of
the
coolirtltive selling 11ltd tile 'hll'trolalln legotilutloll, fllqetloll whilh ldeilt With
anl thnt 1hilttk ulnd
myself would Imake oUurselves responsible for
colduet if tillght
In Wns-*
luglon agolist tle Itlereilso I the trilff. 'lTs thetrrangeonent
hellet .
artfully
adhered to and explins why I have not expressed
myself tit regard to tlhe
Cooperative algency.
It Is Inilos.A lip to explain theiliniottilt of tine
sIf 4l (his tilttth sitev, wo Rtw vou. in June. Idevoted by 14iattuck and my.
devotid ourselves exclusively to the matter, all ell only say thlit we allive
there Is every prospect that
we slIall hoe ,bllged to colmitt to do so until at
least
l)ecember.
You, of course, know about tho I rings which took
place before ftli
Finance Committee.
Ilt
addition to the hearings, Shattuck lund I haveSenate
seen
Hnfilly ,Senntor-I And have

corresponded
manny others. le also has been
in collistanut towch with the White Hlouse with
alnd
Senttor
Sm1oot.
As you

know, Colonel Torafa, when he was first In Washington,

saw SenPresdident ][oover. Although the tlrrangeigp
ut to see tle
President was OGsttllsibly llade by Hoenltor
Smtoot, 'Mr. Shattuck had actually
arranged It some weeks hiefoye Trafin (amte
to Washington. Tarafa at that
tiie alproved our' neivllex liefore the Senate
FiiInce, Collmllitteo lut was
inclineI to believe tlit we hod nlot shown sufficient
willingness to cooperate
wilh ,1lenalor lloot or the remolhlcirom. A,4
Ia Iiainter of filet, Shattuck hind
u.,d every effort tI copernt, with Hetintor $Hiiiol,
ht found that to bo Implslihh lN'ota** HeisUitor Minool was not willing
to cOOperate, although Sen.
Nor moott oid ihvitttick hod been asked by the Presldent
to cooperate. Thils
rtvillt.4 Walx tintide, iny aonflis sgo. Shatituek obeyed
the request, but Smnoot
did lot d o.
Hhitlttk and I informed 'Throfa also thit
the remolacheros
wire not as yet willing to negotiation (.xsi) with
tio Cubatn interests because
atoir

iioot ani

they thought hnt they could obtain from Congres.s

a duty of 2.4 cents against
(uln sigar. it regard to the cooperative
agency, I 6iforlied Titrafo that
there would i some adverse pn lit
in tlie Ajperican papers, but thai I felt
that lie was right in belleving flint the advantage
hi (he price of sugor Arising
out (if thp~

creation of thei

t-oopea'ative agency would outweigh tile disadvantage

of publilciy, lie also thought
at tlit tine flint another advantage could be
obtiflned thioulhi negotiating sN-ino sort
of itcartel in -urope. lin that respect I
diRagree l with him.
Il the negolliations which Torafa had with
the Now York sugar Interests,
I refrained intentionally from any direct partlelpntion,
but both Shattuck aid
I u.ed itconslilerale amount of quiet persuasion
ti order to bring about the
harmony whi.h waR necessary for T'atfn itorder
ageney-into effect. We plainly told the Xew York to pitt the cooperative
Interests that we agreed
wil Tarafua thlit the heeltls of the cooperative
.gency exceeded the
disadvantages.
Among other senators with whom I hal business was
Senator Allen, of Kansas. lie requested me to prepare a complete memoratdum
of the sugar tariff
problem. I did so. It involved tle preparation
of a book of more than one
dred pages. Meantime some of the renaolacheros
took occasion to visit
generall Crowder hi Chicago. They complained about
the publicity which Shat,
tuck and I had pursue in our publicity relation
to them. This resulted In

**

1746

LOBBY0 INVESTIGATION

correspondence between them and Crowder and Tarafa and myself. The cor.
respondence and niy book appear to have convinced Tarafa that Shattuck and
I were justified fitour attitude toward Senator Smoot and the temolacheros.
At i:bout that time tliro American papers contained articles .criticisig the

CnaWII liotiIon towardl increasig the price of sugar. There was also an all.

nomiwement of the Cuban participation in the proposed European cartel.

Tarafit mld Shalttwk and I thereupon had some commuuieallon ami all came
to tilO mlL cnOelu'chsloh', nIhtnely, tlat It would Iebest lut to b)lhlng the Iltrol aln
negotiations to a conclusion at just this time. At some time In the future
those negotiations should 11e ro16wcuI. unl brought to itconclusion, 1)Ut We all
still feel that the the is itOt yet quito ripe for that even to take place. This
will explain why Shattuck afd I cabled to you requesting a temporary cessa.
tion of the E,uropean negotiations.
The battle in Washington Is following Its normal course. Shaltuck and
I feel that we have positive Information that a majority of the Senate
Finance Committee are opposed to any Increase in the tariff on sugar, but
unfortunately a majority of the Itepublicans on the committee favor some
Increase. The publicity which Shattuck and I had succeeded it rousing
throughout the United States eventually convinced the members of the senatee
Finance Committee that it would be poor polities for the Republicans to have"
as high a duty as 2.4 cents. Tho Republican members of the committee b.
came much worried. Whet it their deliberations the sugar schedule was
reached, they postponed decision because they could not agree. Meantime
they consented that Senator Smoot would present for public consideration
his so-called sliding scale. Tho Idea of this sliding scale undoubtedly origi.
nated with President Hoover, but only In an informal manner. I understand
that when Senator Smoot told President Hoover seven months ago that the
remolacheros must have additional protection, Hoover replied that such pro.
tection must not be damaging to Cuba. Smoot Insisted that higher duty
was the only remedy, and that there wits no method by which a higher duty
could be made harmless to Cuba. Thereupon Hoover asked if Smoot bad
ever considered some such plan as a sliding scale. It Is entirely Inaccurate to
claim that Hoover was a direct advocate of the sliding scale.
The sliding scate proposed by Smoot would have been very detrimental to
Cuba. It was an attempt to Impose the high duty of 2.4 cents unless sugar
should be selling at unusually high prices. It was not Intended in any way to
protect Cuba. I think that Colonel Tarafth himself will now agree with my
view that Smoot at no time had any consideration or regard to the Cuban
interests. Shattuck and I appeared tit the hearing on the sliding scale pre.
pared to defend Cuba, but we found that all the other sugar Interests. both
domestic and Insular, were opposed to the sliding scale, and we thought It good
policy not to make any public announcement of our position. I am sure that
our policy in this regard was correct.
The public opinion against the sliding scale forced Smoot to abandon It.
He then made it a personal matter with the other Republican members of
the Finance Committee to grant some relief to the remohitcheros as a per.
sonal favor to him. We are told that on the day when the sugar schedule
was considered by these Republicans In their secret meeting, they fought
all day over it. First of all they rejected the sliding scale; next by a vote
of 8 to 2 (1 of the 11 Republicans was absent) the 2.40 cents was rejected;
finally, at the end of a hard day, the compromise of 2.20 cents was reached.
We have not yet learned what Senators voted for 2.20 cents. We believe
that some of the Republicans stood out against as high a rate as 2.20 cents.
We may be able to learn more about this within a few days.
It Is still theoretically possible for the Republicans of the Finance Otimmit.
tee to change their minds and still further reduce the sugar rate wh,,n1 they
come to present their project of law to the United States Senate on September
4. I doubt, hoWever, if there will be any change between now id that
date.
The procedure from this date will be about as follows:
(a) The latter part of next week-about August 28-the Republican merebers of the Finance Committee will finish their work. They will then summon
the Democratic members to a general meeting of the whole committee of 18.
At that meeting, unless a permanent breach has occurred among the Re.
publican members, they will all vote together In favor of the 2.20 cents rate.
They will probably be supported by Senator King, of Utah, who Is a Democcrat. This would make 12 votes in favor of the 2.20 ceits rate against 8

F
In
C
lh
al

a
su
e'
S(
ar
l0
Is

10
ob
so
t5
A
th
tu
B
of
do
T
ex
e
S
P
th
Oil
8'
to
fo
It
U
$u
PD
to
an
Of
an
8

ye

ta
ati
g
g
tW
in
en
t

LOBBY INVESTIOATION

1747

opposed to it. although undoubtedly some of tie 11 republicans are personally

uch Opposed to sueh a high rate.
(b) After this formal vote his been taken I1I the committee Ctiugvess will
meet ,na Selteiher 3 or September 4 and Setator Smoot, as chailman of the
Finance Committee, will present a project of law covering the entire tariff,
in which will be Included a schedule providlng for a duty of 2.20 cents against

Cuban suigar.

(o) After a
ry few days (lie Memnber's of the Senate will beglis to debate
the whole tariff bill. 'the sugar rate of 2.20 cents will be opposed by neai'ly
all the Democrats and Most of the so-called insurgent Republicans. It is
a very cluse question whether i combination of the Democrats and" the in.
urgent Iepiublicans will wake a Miijority against the 2.20-cent rate. Undoubt.
edly a majority of the Senate will lie against the 2.20-mcet rate, but each
Senator hals sonie constituent who desires ana increase in the tariff on some
article which the constituent inutflctures. That constituent is probably thp
largest contrhilor to the campaign fund of the Menator, and the Senator
Is bound to obtain what his constituent desires. It order to do that the
Senator Is often obliged to exchange a vote for his product lit return for a
vote for the product of somebody else. This i what we call In this country
"log rolling." 'The danger to (lie Cuban Interest Is that in this process 4f
log rolling Senators who disbellev fit iny increase In the sugar tariff will be
obliged to vote for It fit order to obtain votes for their own schedules.
Senator Iorah, who is a polwerful factor in the Senate, Is studying tile question of a direct bounty to the renolieheros and (lie Louisiana cane producers.
According to his plan the bounty would be paid direct to the recipients and
the tariff on sugar would be reduced. There is some doubt about the constitutional validity of a bounty and we can not as yet be certain that Senator
Borah, who is a lawyer, will come to tho final opinion that the Constitution
of the United States will permit of the payment of a direct bounty. If he
does so, I think that we ay be sure that he will propose such a boutty.
This will result in a great deal of argument in the Senate, but I should not
expect that a bounty will be adopted oil final vote of the Sinate. Meantime
Senator Ifarrison, of Mississippi, will have charge for the Democrats of the
Senate debate on the sugar schedule. Ho has informed me that it is quite
possible that he will propose an amendment to tie project of law unler which
the duty would be reduced from 1.70 to 1.23 cents. 'The lower figure is the
one which was arrived at by the United States Tariff Commission in 102$.
Buell a proposal wv.l result in still further debate.
(d) Meantime, Mr. Shattuck and I must engage in the following activities:
(1) He must keep in cOnstant touch with the White House and endeavor
to persuade the advisers of President Hoover that it would be poor politles
for Congress to pass atiy law increasing the sugar tariff and poor politics for
h m to approve such at law if passed.
(2) We must Continue to stir up publicity on the subject throughout the
United States, calling attention to the injustice to Cuba, the injustice to consuniers, the injustice to exporters from the Unite# States to Cuba, and the
provable fact that an Increase In the tariff will not eventually be of benefit
to the remolacheros. This l)ubl:ciiy work takes nit enormous amount of time
and effort.
(8) We must constantly importune the friends of Cuba and the consumers
of the United States and the exporters to communicate with their Senators
and Congressmen and with the newspapers in order to keel) the sugar tariff
subject widely agitated while the debate is taking place in the Senate.
(4) We must also personally see many Senators md carry on voluminous
correspondence with them.
(e) Tito Senate debate will continue through September and October and
very likely into November. The most discussed qtetlon will be the sugar
tariff. It would be good lAiLt.es for the Democrats Mid the Republican Seaators and Congressmen to decide definitely not to Increase the sugar tariff.
Such an increase will be so unpopular its to jeopardize the Republican congressional elections In 1930. I doubt, however, if the administration will have
the courage to openly advocate such a course of action. I am sure that it
will not so advocate at the present time, but if Shattuck and I can succeed
In keeping public opinion roused, the administration may, along toward the
end of the debate in the Senate, secretly notify the Republican leaders that
the tariff on sugar must not be increased.

1748

LOBBY INVESTIGATION

M
on debates unless two-Ilbll41~of
(hueiit
Qf) Ili the Seinte there Is nthaw
flit, whole nuniir oft SeliuitoK. VOte In favor of such it linit. Oil till-4 tariff
II
ot. 'Therefore lio Mnild vote oil thie tirrt
~juesliii
CIIRI~ (Xl1~t ile.
will lie taken ill tile N'nalte 11111l fill the st-nn1tori halve Sold all thant fliey want
th
to %*fy. It they get fired of talking along toward Novembler, it- ti! Ville wIvll
to
be taken Ii thle 14einite. We van lie .4ire that tile vote of the Sc'niate will not
tor
lie for atgreater tarliY than 2.20 cents, fiel We have strong hopes that we Ca
re
obtaliia Vote flint tile tiniff shitil itot be Iiicrtasei obove 1.70 MeN. WVe pr.
Pose tol flight to f.11t11a1n are'dutioni lei tho tAiriff to 1.23 cents, lbut, of Cotlr.4eweJi
(if slc(.liiig Ill _1l11t res K44. 41111 A-0'11,
til Wlt IliQ fiy great ('leif.tiis
tv
will iiw ill ttvol' got ther~
ItI(it
is thalt If filly Vote fit till Is reluelii'd li111w011P
he
1.76 or 2 ce1nts. It im, not fii fill illlO,4$le( tat lio Voeo wiltitevei wlllm
reaeiiel. This will deIC'wnd til iti blc opinin. Trie tirguntielt lie te tilililie
ind'i, field1 iiniguise. Tkile i'(10l fight
press will center airoundi~ sugar, shoes.
fariraaes. Tie! lliUgezlt
ilth
lm, (if course. bietween tlie niniuifaitiiit'r

finly Iticrets Ill tlie tiirlff for tile jnttnifaelitrers. They nearly isuceveiil(4 inal
that respect two nionthsx ego. Thei(y 11(011(41 oile% I voeiI. T'Iinn~my IlIL,
to get this 1 vote soni' time within tilt nlext rew Imoniths. It ti1111; Inalleurer~i
b'~lit miiuber of regoii Henalor.s fwili loaiaitiiring
i cose rsiiS
e
sholditi UO&ced
ff ildPgtitles wVould fall frole to vole sigolltit fie% Ili('i'&'leIi lie uiuar WONr
perhaps- for it Elt'tr(ase because it. winiid higi tile efoiisiiiuiliig pulillc, Wili OoS
their coiistltueiit-.
(U) Whein unit If ta final vole oil (lie whlo~i tariff lill im-taken In (lie Xiate
the piroiject oif ittw will leave inny changes from what It wis who'll isi~n
of tepircset'itiis. ThereuponijitiI conilltO4', einipilosL'( of fire
by Mle Howe to
AMenili('rs of file St-nte f1ild fve Members of (lie Iouse, will hie tiphiited to
iiegollite for it couanjwonifse lia'tween (t views uif (lie Silitte (111(1 (lie lhouse.
flor l'kiwnats. '(hle
That coinitlt will (Iionslst (if sIx Iitniilettis i dS114
lteulliens~will hot 1441ealnltu Nn'u't, Wattson. uniti Reed (for pl-ierhl*: 1li~irt.
ridge lei tlie ple of Wtsoui or itedi) find Hvt('jlrOtitl('ive18wley, '1roailway,
31d i'iiisWatson or flood %Vill
tim11-10
anid J111i0li11r1i1-1. 'iidWily siiil a(lI(l
be0 agilgisl filly iilcir44lse. lii the 51i1ttI (tailif onl griniciph', but I havel sonie illilmit
wiitlur 1111.3' would 1w willInig to) vole ognInst fi lincietis miiless pressure Is
$111,10ant, Ilauwley. 1fin4 Hlir'.*:
biroiight top houar oni (hoot fromk (hw WhIlte
ridge woildi suriely ble i ftivgr of &ti hiieietis. Thue lh-mou(eIrais will li' tiiitr
1Hin111olisl-414 i11iiiiisoi lend Itelireselidtitilvt4' Uirner field1 Collier. Thiey WillEl
lbe iigaiist tiltliitei'i'ust, fill(] fit favor of i decr~iease. 'Tiletusk of Slifttimek iu(ia
lie lit Ilit %late fitf lit,' lpi'evitP
nligS will li' toi lerstilh'~ al least lwv)ioin~i
(11114
int Of HIe NIiS to) V01 0 tigtiluisl uny icrease. This mii thalit we woiiiil
hiavol tip ('('iter our1 1'Ceisiti' onl HeitouI' Wtid-mon ir1 Hliorridge tand Itet'4l1iitid
It('ilrvesetntlIves Tireadwiay fil114ihacianteh.
(I,) After (liei conIferenice (oiailftoL renelh their divisioni thiey reort Inick

to filie He11110tiie anhIe hoe.Where (lie' bill fixttigainl Voted oii (Alc). i'Vti,
thoul It IN tiossulie Ie coiiilolniiiIium of flit, JWinicrtis field protgressive ltopubll.
etl4Ins
i(le Senate would le-ject filly reiol of (ile eatilft'reIce commiite Wilet

should Illire'tiP(ie (tiriff oii suigar:' If thits should liaiisn there would be
s it liuil vo~te ttaken li lini thle
nii tarItY bill whitever. If, however. theI('

1141i1--t- uaid flit- Henlte lit favor of f(e relifort of (ilie conference conmmittee, (he
bill is (lien sent to the President, who has) the lirIvilege, of 11iliproving or
vetoilig It.
(1) 'j'ii Democrats elimh (lint 1're.4ident hloover would not hlave the courage
to vctl tiny (airilf bill onl (lie ole ground tlhat (ile sugar tariff Imtoo h1ih. Thiey
state It to bit it matter of courage. It might very well ho a matter of policy,
sililtl( for ldia to
Hvenl If lie should 1141Veto thle l1ull. It iay lienhliti li
obtain a report from tla6 Unite'd Sttes Tariff (?ominisslon. under which, with
their receondtion, 110 could~ reducev (lie tariff oven ltfter applrovinig (ho
project of law. *Tile next 10 days will be -devo0ted In (ie Senate F~inance Corn.
niittee largely to declining whiethieir (lie Toriff (niilsslon shitll hle continiieu,
and If so, the extent of Its poiverm and of (lie powers of (lie President withfr
reference to It.Mr
UI) You will see front thle foregoing fliat tlwre is still plenty of work to do
and 310 prospect whatever of tle tariff bill being enacted much before tile end
of November. An it matter of fact (he best piolIticial observers aro begnning
to believe that no tariff bill will be passed In this special session of Oongress.of
If once It Is continued over Inito tile regular session, which begins early Ini
December, (le probabilities are (liat no tariff bill will be passed. for several

01l~
O
as
IfA

C1

Re
l111
F
$1
tilt

Ell
be
WA
T

tit

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of
ge-

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to

yi.
nee
of~

LOBBY INVESTIGATION

1749

molitils thereafter, and4 perimaps none whatever will be passeil because of tile
Op~Irilleehifg t.:0gressiltiil eie.01lls oif the tkutinanli of 1930i.
Mr. 14iinitu1ek oil- iuyst-I for any -further Information or iiny
1108ea ciiiiiil

ivo thus for met with

action. It Is only fair for III(, to snyiy tt our tlltis
the imnlimoil approval of the New York sugnr Ifiterests. wiho have coirllntited
to tile t'XjPI('11 of our1 tiill11ligil. I ought to say 11l8o that the Caitliniagi In
fip New Yoirk linitiver of (Ciulimi sugar ivo
prillig to lie very exi'eaastve 111141
resioe hllttlS iy Iol)I14(ilt''I fll.eollhIiit111lis to lihe filliti. There never
hasj been a time during flip lite (t C'uba whent these Interests have coopert'at4
so thoroughly and willigly. I feel Ini lionor boundi toi Inform you oif thil fat
Lveis I consider It sj'eehaiily Important tt everybody lit Cubaii S4holfti
reahi'/A that the Ainerhaii pie"ducers (if (Colii stfguir ore acting entirely from
motives oif the Welfare (if (11111 and ile Cnia pirodutcers as well as for their
own welfare. I know 11m1 you1 f(eel it4 I (Ito. that without their ctioerat loll' It
Would hiiive lieli Ilju.ssihle 10 HNttmtiapllsla IAHY1hiliig whatefVer III WAsington9101.
Tihe VonlgreSP of flip Ififted States lnitsIN re-velt condition of mind regents
any foreign lIntervention3 Iii amitter.s of tariff, whether relating." to sugar or -any
olltr article 'Of Iimpiort. This resentment would have nnufe.t (sic) Itsewlf
agoiliist fily11 tervellthiil hIy Cubaif livviiist Cubaii Ix it foreign 04tiniy. I ('oni
der tlint Cubat 1. very fortunatte, tit the lirt'mat tl ime eio a considlerable
liart oif Cubansuo
i~l1
Isproductd by Amnericain Interests, who tre willing to
support the, light which Is ntow lijim ptm"' In (Cohgreps. These.,- Americanx,
as cit izetis of the. Villted Maotes 111141taiayer.4 of the( United State!. have at
legal right to ipr('stit their claims to Coingress,. andi they 1fire exercising flhnt
right to tlie fullest teilt,
lnot only fort 111(41 (ii
good lint for fihe wt'lfti'r of

Respectfully yours

HIERBERT C. TARIJ.

11. S.-I~ince (11(1,11 lg 11m above I haveW l('frtl fluff te vote, alluong thlt
flepulleans of tit(- Henitei IFliitit' ('omilittee. wIIS: 8111411,ihi. Ih'neen. ("uu'/.els,
Iinihtlim. Graee'ne. Kotye,:. a11nd Wol.fuin Ill favor ofthit 2~
.201 vtsb' mlid Rved.
Exlge, Shiortidge, mid( 89ackett liguiliast It. I alsoti h'zir thaft Rled. F~dge. find1
S~ackett tre nIot llt favor (if filly ieD'rem
tlllis'(l, bul thatt Hliiia'tfritlgt 4t'shreu
tlint thev titty shldttc lbe 2.40 ('cuts If chianlged at nil frtiom Mei lirveselt laie fi

15 4 (eIRs
I halve also ivee11 I.1i ullmuc I't'eyX, w14 lihit eplatinled tllt'- 8shlum of tile
Enrolieuul mc4goithtiis. i91'om lhium I lejirli flint there' will prlnitily IN,smlother
Euroipean cotiferenee late fin Segitenmhier or Its O'iober. By thant (line we should
be Milot to know whether to dt'lnite, mmomtileiuent of Meii HII'Eilhit't agrtecuiti
would or woul int it' ii1ulltiti to flit' mlse5 lit Ciilias In Wasliigtonl.
?dt'ttitliite tile Itepllll Illo(luio-of i't, Ht'ainti'f 10htuatuice ('00mnm11tteve hav'e
voted that tho poWers of flitp VnItted lSates 'rtiriff 6miii115hIo sliiiil lict We
c110119t41. TIMhed
ft of11
this
inht three utembler4 tof the coutnis.slon mutst be
Jlemoeats and tllre'. Itt'Illiicealls. It woiuild lie 1d1th1culi to obtaInl it illJorlty
of sti at comnnlsiot fin favor tit redicig te dilty 11el0w the lu'Ost'utt level
of L7648 cents. This makesm It iitssai'y to puirtie vigorously our tighlt It thip
80118t0, because.4 ive sliuliit
lie 11til0 to rely o11 finy ht'lit tha1t Peesidmi~t Hoover
catillmrstlde the TorlY (4lmnisslon Iti recommendt'i~ to himi t reductions it iph
duty.

Senator IVALRJ[ of Montana. Likewise a letter' in the nature of at

report of (Into St'jptembea 20, 1929), from Lakin to tite contributors
to his fund, stating what work had been 10110.
(The letter is as follows:)
DIrn .14m: Oaui you give into your flnal ati.sstmice tit prevent file tariff rate
from thing Increased? You knotw ho4w mityotur aiimplates, "Mr. 'Aubrlskie anti
Mr. Shattuck and 1. haute workt-d (in this matter Alnce Decembier 16. Without
your cooperation oiur work would have been Idle. .Tust at this moment wve
need your assistance more than ever ls'fore. To it very large extent the success
of our eftorts 1, going to depiend iti what you do within thle next 10 days.
From Senators w111 fire' mnxliu to help our cause we learn tlit(a) The publicity work has been a muce ms.

1750

LOBBY INVESTIGATION

(b) Personal interviews with Senator are valuable only when th' Infter.
viewers are well known 6), the Xenator.z.
the,
(o) A majority of the Senators would prefer not to have auy Increase ill
rate, but in the usuall log rolling and vote swalilplng many will aeeept itle de.

mand.4 of the hiigl.sUgar-rale advofesnttas unless their onstitulls show them

that their wislhos are against an Increase.
(d) T e final ouconrae of i vote oil(lie sugar schedule Is still ilhdoldbt and
might easily deliend oil whether the Selators feel that they know the wishu1s of
their constltuents.
(o)There Is not much sentinent for American Invostments in Cuba. The
Senators think tile Investors are only a few bloated intm of money. Tiais im.
presslon has been fostered by the advocates of ile 2.40 rate. I even til some
surprise oil tile part of Henutors whiti I ('all attention to Ih(, filet Iliilthe
Culia Co. Islilt
American corloration with eoyeral thou-s.and Anwrliean dk.
holders and Iay.-, large United States ineonto taxes.
(f) Tile chlot conern (f Senators Is to know the sontlinent.s of tie proml.
nent people anig their' constituents and of tile American eonsUlltlr4.
(g) Up to the ri'osenit time the Senators have not heard iauei protest unless
they were members of tt!e Finance Conmittee. Without reevimhg I'olests they
will not hesitate much about granting an Increase in the'ugar rate.
(1) Within file last week there lias arisen a comnnon desire of bdh1 lelibil.
cans fnd Demorats to pass some tariff bill before December 1. '1he S1nate
leaders will bend every effort to get a flnal tariff vote by October 16. though
the chances are that It will not go to fhe conference committee before Noveniber
1. The sugar schedule may be voted on within the next two weeks.
(I) Sonlit inwerfill ilterest..' life hdemtilty of whilsli. has not yet heell shown,
ita sentlitennt against Cubat litorder to draw attention
are working hard to rvtql
away froni the sugar conllroversy.
() '.i'elegrtnis Iaid letel'S-eSlpeelhilly teleganis-from Wonen consllituents
have itpowerful aplpeal with the Senators; il nulh greater at)Peal than pulb.
lility or argument.
every bit of hel, you can give. If you can persuade your stock.
we.ned
-n
holiere and oiiliholders to both write an1 telegrall their Senators, It would
I'ol veryl iueh. lo the line yourselves i idg(et your directors to do so. Have
the proltests strong In hlonguage. Have then refer not so much to what is
due 1o Cuba as to"their own rights is American voters and colssUalters. Have
your customers write and telegraph. Thltey ire bont fide consumers. Oet all
org,11i.
the wonemi you can to voice their protests. Do you know any wonie's11
zathnas that can l)o stirred Ito activity? If you iorsonally know Senatorsespl--I.ally ltelublealns-get after the11 Iitevery i)osslble wiy. I hope to learn
of Illnlreds of letters and tlhgr'nns resulting from this plea of 1ne.
Meantine we tire working In various other direlons, but we can not get
along without some Intensive efforts on your part.
All this should lie done within tile next few days.
(,'all
I help in any way? I still have available copies of my address to

hoilseholders.

Str
ar

an
pre
co

thu
put

This letter reads like the whoopee (if tile secretary of a small town board
of trade, but my suggestions as to niethods come straight front Senators who

want to help our (uhau cause.

linally, so far as possible, send protests not only to Senators but also to the
President. lie. is a devotee of statistics. Sooner or later lie will bIe inpor.
tuned by Congress to state his views. If he does so, ]is views will Ie Influenced
Ill soie degree by the size of his mail.
P. S.-Ttters and telegrans maust not he Identical In form. Each Individual
should us0 imsown language and argunients.

1
Copy Of attached letter sent to the following contributors of the tariff defense
fund:
Ool. J. R. Simpson, president Cuba Cate Sugar Corporation, 123 Front Street,
New York City.
Mr. George P. Chlttenden, vice president United Fruit Co., 1 Federal Street,
l0sfoi, lass.
Mr. W. U. Douglas, president Punta Alegre Sugar Co., 82 Beaver Street, New
York City.

Mr. S.R. Noble, assistant general manager Royal Bank of Catnada, Montreal,

Canada.

02

102:

the

LOBBY INVESTIGATION
Mr.
city.
Mr.
Col.
Mr.

1751

F. T. Walker, the Royal Bank of Canada, 08 William Street, New York

M. 1H. Rionda, Czarnlkow-tlondit Co.,, 103 Woll Street, Now York City.
11. A. Deeds, president General Sugar Co., 52 Wall Street, New York dity.
0. H. Blackburn, treasurer Hormiguero Central (orporatlon, 00 Beaver

Street, Now York City.

Mr. V'. 11. Adhms, president Cuban-IDonilhan Sugar Corporation, 25 Broadwaty, New York City.
Mr. Walter S. Bartlett, vice preshlet Culmn American Sugar Co., 130 Front
Street, New York City.
Mr. Jolin 10. Snyder, vie president, Hershey Corporation, Hershey, Pa.,
Senator CARAWAY. Is Mr. Petrikin in the room? Please come

arounil, Mr. Petrikin.

TESTIMONY OF W. L. PETRIKIN, PRESIDENT GREAT WESTERN

SUGAR 00.
(The witness was dulysworn by Senator Caraway.)
Senator CARAWAY. Will you give the reporter your name, address,
and occupation?
Mr. PfrinixiN-. 1W. ,. Petrikin Sugar Building, Denver, Colo.;
president Great Western Sugar Zlo.
Senator CARAwAY. How long have you been president of this
company?
Mr. P'ernizix. I think about eight years.
Senator CAAWAY. What is its capital stock; its resources?
Mr. PnrrJixi-. Well, the incorporated capital stock is $80,000,000.
Senator CARAWAY. Has it all been paid in?
Mr. PmruitK. Yes sir.
Senator CARAWAY. What is its resources now?
Mr. Prltn[icx. We have a surplus at the present time of about

$35,000,000.

Senator CARAWAY. What has been its earnings.?

Mr. Prrniu. Its total earningst
Senator CARAWAY. Each year, if you have got a statement.

Mr. PI~rtiKIN. I have a copy of a statement, I think. I do not

think I have it for each year. This is a statement that Mr. Lippett
put in before the Finance Committee and it was for the last 10
years, but if you want it for each year I will be glad to furnish it.
Senator CARAWAY. I believe if you will do that, that will be satis.
factory. What you have got is 10 years' earnings?
Mr. PmuTix. Yes sir.
Senator CARAWAY. 'What are they?
Mr. PknRiKiN. This is commencing with 1020. I will read it:
190 --------------- $11,507,000 192
------------- $10,577,000
121. ---------------4,344,000 1020 ---------------0 424, 000
1922, t loss of--------, 094,000 1027 ..---------------9 3605,000
1923 ---------------0,879,000 102..
30,000
19'24 --------------12,004,000 129 ---------------,785, 000
Senator CAIAIVAY. That is on a capitalization of $30,000,000?

Mr. Pi mvn-. Yes, sir.

Senator CARAW.AY. When was this company organized?
Mr. P rrKlN. In 1905.
Senator CARAwAY. 1-as it. paid stock dividends, in addition to
these earnings?
78214-430--rT 4-17

1752

LOBBY INVESTIGATION

Mr. PEMIKIN. Yes. There was some of the stock that was not
originally issued, and the balance of the preferred stock that was
authorized was paid out in 1923.
Senator CARAWAY. If you can tell me, without takingup too much
time, if one had taken a thousand dollars worth of stqc in this com.
p any at the date of its organization, how much would it have paid
him down to the present time in stock dividends and in cash divi.
dends, whatever he would have received from it?
Mr. PLrnIKIN. I should say something around $2,500 on a thous.
and.
Senator CARAWAY. He would have gotten $2,5001
Mr. Pwinrtiuv. A total up to this time.
Senator CARAWAY. Would he have gotten some stock dividends

also lHow much stock would he have now in addition to this cash?
Mr. PETrIKIN. If it was on common stock, the stock dividend that
was made was 42 per cent, if lie owned the stock previous to that
dividend.
Senator CARAWAY. He would have had $1,423 in stock?
Mr. PEmtRKix. Yes.
Senator CARAWAY. And would have received $2,500 in dividends?
Mr. PernutcN. Yes, sir.
Senator CARAWAY. From what year was that I
Mr. PEmruuw. 1923.
Senator CARAWAY. From 1928 until now ?
Mr. PzrRiKiN. Yes.
Senator CARAWAY. In six years. All right. I will have to go
now. Senator Walsh wishes to ask you some questions.
Senator WAtsH of Montana. Your company is one of the units of
the United States Beet Sugar Association?
Mr. PETrIKIN. Yes sir.
Senator WALsit of Montana. And your factories are in what
States?
Mr. PEmIuKIN. Colorado, Wyoming, Nebraska, and Montana.
Senator WM~swi of Montana. When did you take over the Billingo

Co.?

Mr. Pnitim . Senator, I don't know exactly, but I should judges

it was in 1909.
Senator WALsi of Montana. That was the year of its construction,
wasn't it?
Mr. PRMrxIN. I thought it was 1907. It was about two years
after it was constructed.
Senator WALsH of Montana. I think you are right. It was con-

structed in 1906 and 1907. Have you taken any part in the legisla.
tioh now pending with relation to the tariff?
I did not appear before either of the committees.
Mr. Piun.
Mr. Lippitt, our general manager, did.
Senator WALsH of Montana. And what has been your activity in
the matter?
Mr. PmRiKiN. Do you mean here in Washington?
Senator WAzen of Montana. Yes.
Mr. PzmmuzX. Well, during the time it was in the House I called
on the Congressmen, those that wanted or desired any additional
information in reference to the beet-sugar industry, and since that
time, on Senators.

S
her
N
mit
S
izat
Mr.
corn
Si
acti
A
sent

these

enc

Mr.
tion
pan
Be
acti
e

tak(

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froi

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M
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Mal
op

urn
thei
Of

LOBBY INVESTIGATION

1753

Senator WALsu of Montana. How much of the time have you been
here during the past year?
Mr P.rnIW N. I should say about 70 per cent of the time since the
middle of March, or since the first of April.
Senator WALem of Montana. What other members of your organization have been here?
Mr. PEnwKxN. Mr. Lippitt has been here for a trip or two and
Mr. Fried, who is our publicity man at home, connected with the
company, was here for a couple of months. I think that is all.
Senator WALSH of Montana. What has been the nature of your
activities since you came in March?
Mr. PETWIuKIN. Well, just what I said.
Senator WALsH of Montana. That is, calling upon various Representatives and Senators?
Mr. P==Kinz. Yes, sir.
Senator WAwsH of Montana. What part, if any, did you have in
these negotiations looking to a sliding scale, of which the correspond.
ence before us has told so much?
Mr. PEMIUN. Very little. I had a number of conferences with
Mr. Purdan, of the Department of Commerce. He wanted information as to the practical side of the merchandising of sugar.
Senator WksH of Montana. What contributions has your company made toward the tariff campaign
Mr. PmituN. None at all, except the dues that we pay in our
Beet Sugar Association.
Senator VALsH of Montana. To the Beet Sugar Association?
Mr. PmiRiuN. Yes.
Senator WALsH of Montana. You have prosecuted no independent
activities?
Mr. PormKIN. None whatever.
Senator WALisH of Montana. How are your expenses down here
taken care of?
Mr. PETRmIN. My own company pays them.
fiat proportion of the total beet
Senator WAhsu of Montiana.
comes from the Great Western
States
United
of
the
sugar production
factories?
Mr. Pm'LKiN. It varies. It has been running in the last few years
from 45 to 50 per cent.
iVAs
of Montana. What other companies are operating
Senator
in the same field in which you are engaged?
Mr. PwitiKiN. There is the National Sugar Cot, in Southern Colorado; the Holly; the American Beet; the Utah-Idaho; the Amalgamated. I think that is all. Do you mean in the States in which we
operate?
Senator WAsH of Montana. Yes.
Mr. PiMfMiN. Yes, sir.
Senator WALSH of Montana. You contributed, each of you, as I
understand, on the basis of your production?
Mr. PmiKxN. Yes, sir.
Senator AVwVEs of Montana. So that your contribution would be.
then in the neighborhood of 50 per. cent of all of the contributions
of all of the beet-sugar companies?
Mr. P'rRIKIN. Of all of the beet-sugar companies; yes, sir.

1754

LOBBY INVESTIGATION

Senator WALsit of Montlrna. I have before me what purports to be

a statement showing that of the $20,000 assessment, you paid some.
thing over $10,000.
Mr. PmrrtIz. I presume that is correct.
Senator WALsii of Montana. Do you recall now about what your
aggregate contributions for the present year have been?
fr. PEohIKIN. No, I do not. It would be in about the same pro.
portion of the total of the association. I do not know what it has
been. Mr. Austin would know.
Senator WALSH of Montana. What other people have you been
working in association with Mr. PetrikinI
Mr. PmIKIN. None at all, Senator.
Senator WALSH of Montana. Are none of these other beet com.
panies represented?
Mr. PmaTlKIN. Oh, yes. They are all represented, and also as you
may know, what was called the Domestic Sugar Producers Issocla.
tion, which comprises the beet-sugar industries, the Hawaiian Islands,
Porto Rico, the Louisiana cane industry, and the corn industr
Senator WALSH of Montana. That is what I wanted to know. id
each of them have a representative here?
Mr. PTiIxN. No, sir. Now let me see. I think Louisiana has
one here permanently. Porto Rico has not, to my knowledge. The
Hawaiian Islands have. I do not know whether the corn industry
has or not.
Senator WALSH of Montana. Now, take the United States Beet
Sugar Association, what other companies than yours has had a rep.
resentative here more or less continuously?
Mr. PrIKxN. Why, about the only one is Mr. Love, of the Utah.
Idaho Sugar Co.
a
Senator WAsLH of Montana. He is likewise president of the Beet
Sugar Association?
Mr. PzritIKIN. Yes sir.

Senator WALSH of M!ontana. It has been represented in connection

with this matter, Mr. Petrikin, that your company has perhaps pros.
pered more than other companies engaged in the same business.
Mr. PzmztX. Yes sir.
Senator WASH oi Montana. Is that your understanding about
this?
Mr. PrmimN. I think so.
Senator WALSH of Montana. That naturally arouses the question
as to why your company should be doing better than other companies
that are operating in exactly the same field.
.S
Mr. Pjixm..-Well.Senator, I think it is mainly because we are
located in a territory that has a large acreage available and suitable
for the raising of beets. We have a favorable market, and on account
of our quantity we are able to reduce our unit costs.
Senator WALSH of Montana. Well, what do you mean by "favor.
able market "?
Mr. Pw rxiN. Well, I think we are more favorably located to dis.
pose of our product in reference to freight rates and things like that,
than some others.
Senator WALSH of Montana. But I was interested in the compari.
son between you and others operating in exactly the same field.

M
hay

Idah

Idah
h

age
Se
betw
M
Se
ferer
M
thin
comr
M
Se:
M
insta
the
r
east
V
SiM
S1the:
mar
M
Bill'

they

*u
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M
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800
M
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M
SI
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woul
figur
M
So
M

LOBBY INVESTIGATION

1755

Mr. PrmiciN. Vell, those others that are in the same field only
have a part of their plants in that field. For instance, the.UtahIdaho Co. have one in Montana and their main operations are in
Idaho and Utah.
Senator WALSH of Montana. You have but one in Montana also.
Mr. PETiRIIN. We have but one in Montana also but we have a
number in Colorado that are more favorably situated than the average of the Utah-Idaho Co.
Senator WALSH of Montana. That is, the difference in distance
between Denver and Salt Lake City is it not?
Mr. PrmirciN. Yes.
Senator WAsI of Montana. That is practically the only difference?
Mr. Pzmzxiz. That amounts to about 15 cents per hundred, I
think.
Senator WALsH of Montana. How are your rates from Denver as

compared with the rates from Billingst

Mr. P=RiKtz. To where? To the eastern markets?
Senator WALsH of Montana. Yes.
Mr. PwuwixN. To Chicago they would be less from Denver; for
instance. From certain points in the Dakotas they would be about
the same as from Billings and Denver.

Senator WAL3H of Montana. Billings sugar does not go very far

east does it?

. PnmmzN. Duluth is about the farthest.
Senator WAusH of Montana. Your Denver sugar goes to Chicago?
Mr. PRMIKIN. Yes; and some of it as far as Buffalo.
Senator WALSH of Montana. So that the freights from Billings to
the Billings market and freight from the Colorado fields to its
market ought to be practically about the same.
Mr. PnEfwx. Well, the freights that are actually paid on the
Billings sugar, the nets received on the Billings sugar, are more than
they are on the Colorado, but that is because we choose to route these
sugre to these favorable points.
senator WALSH of Montana. The Sidney factory is a Holly factory, is it not?
Mr. PorTrKIN. Yes, sir.
Senator WAlsH of Montana. They have the advantage of about
800 miles over Billings, haven't, they
Mr. PB'Pm. Yes; but their eastern rates are not much less, I
don't think.
Senator WALSH of Montana. Two hundred miles, perhaps.
Mr. PzmtmzK.

Yes.

Senator WALsHx of Montana. A pamphlet has been quite widely

distributed signed by the United States Sugar Association by 4.
Do ran, secretary, which you no doubt have seen?
Mr. PT rIN. Yes, sir.
Senator WALSn of Montana. That purports to give the dividends
paid by the Great Western since its organization. Perhaps that
would supply what the chairman was asking for. I suppose the
figures are correct?
Mr. PTinKi. No sir; they are not.
Senator WALsH oi Montana. Have you got a CO)y of it there?
Mr. PzmiKix. No. I haven't looked over it for some time.

1756

LOBBY INVESTIGATION

Senator WALSH of Montana. I think the figures are given at

page 8.

Mr. PirPmuN. It states here the total dividends paid during the
year, $84,000,000.

Senator WALSH of Montana. Since its organization?

Mr. PMKIN. Yes sir.
.

Senator WALsH of Montana. You say It purports to give the divi.

dends for each year on the common an preferred.1
Mr. Pmwuizr. I thought I had here Mr. Lippitt's statement as to
the total dividends paid. Mr. Lippitt says that is substantially
correct.
Senator WALsH of Montana. This schedule here I
Mr. PMMnnuN. Yes, sir.

(The schedule referred to is as follows:)

Fiscal year Totaldlvi- Common

ending
dendspaid dividends
during year
Feb. 28_

1900 ..........

$9

Preferred
dividends
-

00............

1912 .......
.......... .. 48930
in
1908
..........

110..........

148

1918 ..........

81002,

Fiscal year
ondln
Feb. 2
_

Total dil. Common Prehmd

endspaid
year dividends dividends
dduring
_

67
0
M 0
1995..........
.04
954. 100..........
...

....

to

0e

10
t2o

0000

&szW
193.. ...

01

di
let

_th:

100

1919..........

846370410

No I

8.60.23..2..7.0

Senator WASH of Montana. Now, with the.matter before

whether it is particularly pertinent to this, if you do not mind I
would
like #481,3.
to getAnything
some information
about this matter.
Mr. N
that I have,.sir.
WALHthat
of Montana.
Youpaid
will byrecall
that itWestern
was figured
outSenator
in the House
the divdends
the Great
were
something like 40per cent on its capital.
80
Mr.
PirrnINs.
it has beenWhat
more .than
that.
Senator
WALsHOh,
of Montana.
is that?

Mr. PmmixN. Do you mean the total dividends paid

* Senator WALSH of Montana. Oh, no..

Mr. PIe
. Oeha the one yearly divdend
.w
Senator WALSH0? Montana. The current diidends.. The capital

stock
$15 ,000,000
common
$15,O0,000 preferred isn't it?
Mr. isPrmxiKi.
Yes,
sir. and m
Senator WAlRs of Montana. That is 30,000,000.
Mr. PmniuuN. Yes, sir.
Senator WARLSH of Montana. The preferred stock of $1r,000,000

pays
annual dividend
of. 7 per
doesn't it?
Mr.an
Prnumci.
Yes. I think
thatcent,
is i,0d0,000..

Senator VALSH of Montana. And the total dividends paid for

1929
to thisstock
statement,
were $6,090,000,
encdis according
on the common
were $5,040,000.
p e so that
it the divi.ra
Mr. P-rrnim. I think that is correct.a
Senator WALSin of Montana. On $15,000,000.
Mr. PrliKi. Yes, sir.

Pe

LOBBY INVESTIGATION

1757

Senator WAL6IK of Montana. Which would make it in the neighborhood of 80 per cent on the common stock.
Mr. PmmiKiN. Yes sir; on the capitalized common stock.
Senator WALsH of fontana. From a statement issued by your company it was represented, tid I have no doubt with entire accuracy,
that your total assets amounted to about $64,000,000.
Mr. P=rWN. Yes, sir.
Senator WAuis of Montana. And if dividends were paid on the
basis of the assets it would be about 7 per centf
Mr. Poirutiz. I think about 8t/2 last year.
Senator WALSH of Montana. Would you care to say anything, Mr.
Petrikin, about the appropriateness of computing the size or the
dividend on the basis of your assets rather than on the basis of your
capitalization?
Mr. PrmIRKN. I think it is entirely proper to compute it on the
total amount you have invested in the company.
Senator WAsu of Montana. Of course, everybody will agree to
that, but the question then arises, how much is invested in the cornMr. PmKu. The full $64,000,000.
Senator WAL U of Montana. You do not mean, of course, that you
put $64 000,000 in cash into it

Mr. Ij;lIKIN. Originally; no, air.

Senator Waist of Montana. Well, either originally or subse-

quently.

Mr. PmIKIN. Well, we ploughed back the earns into building

new factories and buying other property.

Senator NVAvsi of Montana. That is to say, that in addition to
these dividends which you paid, your profits were so large that you
built additional factories out of your profits?
Mr. PeTrruc%. I think it figures about 1 per cent larger than the
dividends paid.
Senator WALU of Montana. And the excess over these dividends paid eventually makes your assets practically $64,000,000 or
$65,000,000?
Mr. PEmrnIxu. That is correct.
Senator WATsII of Montana. Your dividends on your common

stock from 100 to 1929, 23 years, amounts to about $60,000,000, or

practically $3,000,000 a year on $15,000,000. That would be 20 per
cent.

Mr. Pirrnitix . That is on the capital stock.

Senator WVAsi of Montana. So that in addition to paying average dividends during your 23 years of existence of from 15 to 20
per cent, you laid by enough additional money so that now, out of
your original investment of $30,000,000 it has mounted up to
64,000,000 or $65,000,000?
Mr. PmIuKIN. Ves, sir.
(At this point Senator Robinson of Indiana entered the room.)
Senator .%LsH of Montana. Now, the question has also been
raised, Afr. Petrikin, as to whether you did actually invest in the first
place $30,000,000, or whether the actual cash investment was only
what you paid into the preferred stock, $15,000,000. Do you care to
say anything about that?

1758

LOBBY INVESTIGATION

Mr. Pm'iciz. Vell, all stock issued was issued in payment fol
properties.
Senator VALSH of Montana. That is quite right, but it is a mat.
ter of considerable concern how much was actually paid. Reference
has been made also, Mr. Petrikin, upon this aspect of the thins, to
the testimony of Mr. Morey, in the case of United States v. American
Sugar Refining Co., given on May 21, 1912. Your attention has no
doubt been called to that. osle
Mr. PzrxiwI;. Well, I don't remember just exactly what it was,
Senator WALSH of Montana. Well, I would like to get, if I could,
Mr. Petrikin, about what your actual original investment was; how
much actual cash was represented. I may say, Mr. Petrikmn, that
I ani very desirous of satisfying my own mind about this matter,
because my action in the Senate will depend very largely upon these
matters concerning which I am now interrogating you, and I dare
say the action of other Members of the Senate.
Mr. P TBwiNi. Senator, I haven't the amount with me now, but I
will say this, that there is not anything with reference to the com.
pany but that, if you will give me time, I will furnish you; any in.
ormation with respect to the structure of it, or anything that you
desire.
Senator WALsH of Montana. I do not think there is anything fur.
ther that I care to ask. 'Perhaps Senator Robinson desires to ask
you something.
You were here, Mr. Petrikin, you came here in March?
Mr. PiPi
RK . About the first of April.
Senator WALSH of Montana. An& remained continuously here
until when f
Mr. P.FrIJci. Oh, I was back and forth from Denver. I think
at that time I stayed until probably the 15th of May. Then I was
home for a period and was back here again and returned about the
first of Jul and come back about the first of September, and two
weeks ago was home.
Senator WALsH of Montana. My attention was called to a press
dispatch under date of October 11 to the following effect:

the
den
ask

the

has

N
mat
to 9
the.
feat
Don
rotiml
intl
at
sub
Coll
in
w
Lep
we
old
it w
bad
all

Slow progress on the tariff bill In the Senate forced W. L. I'etrikln of Dinver, of the the Western Sugar Co. to leave Friday for home.

day

That probably will refresh youl' recollection about the matter.

Reference has been made to your departure at that time, because
it was just about that time this committee began its operations, its
inquiry. Was there any relation between the two?
Mr. P=RiKI;N. None at all.
Senator .WAwh of Montana. I asked you, Mr. Petrikin, about
your negotiations concerning this sliding scale
Mr PzmUxU. Yes, sir.
Senator WALH of Montana. And you talked it over with Mr.
PerdUn at the Department of Commerce?
Mr. PxTmiIKci. Yes, sir.

Ho.
notle

repr

S
bon

Senator WAist of Montana. Was that the extent of your negoti-

ations with anybody concerning the matter?

Mr. P~mmr. Oh. no. I have talked it over with Senator Smoot.
There are quite a number of Congressmen who asked me about it.

pose
all

LOBBY INVESTIGATION

1759

Senator WALsH of Montana. Did you have any negotiations with

the President about theonatterf

Mr. PmtniKiN. No, sir.

Senator WALSH of Montana. Have you talked with the President on the subject?
Mr. PimmiRIN. I called on him in just an informal way, and he
asked me what I thought of it, and I told him I thought it was
surrounded With a good bit of hazard to prevent afty manipulation of
the price on it.
Senator WALSH of Montana. A letter from Mr. Love to Mr. Austin
has the following:
Note from the papers that Senator Smoot has gone to rlorida to talk over
matters with the "Big Chief." By the way, Mr. Lippitt told me when I called
to see him at Denver, that Mr. Hoover mentioned the sliding scale proposition
to Mr. PetrikIn and himself in the Interview they had with him the morning
they called me over to the Mayflower, but neither of them mentioned that
feature to me at lite time. Had they done so. it would have helped some.
Don't you think so? However, I was glad to get the information since It corroborates our own views of the situation.

Is that correct?
Mr. PmmiKxI.

Well, I didn't remember it was mentioned at that

time. We were at the Mayflower and he was there, and we just went
into say "How do you do." I didn't remember we talked about it

at that time. We surely could not have talked very long on the
subject, because we were there only just a minute or so.
Senator WALSH of Montana. Another letter from Mr. Austin to

Colonel Gallagher, dated June 8,1929, of the Continental Sugar Co.,

in which he says:
We have had a hard fight against heavy odds so far. Two days before the
Republican caucus, Love and I were called to Speaker Longworth's room, where
we met the "i'our horsemen "--Logvorlh, Tilson, floor leader;, Snell, chairman
of the Rules Committee; and Hawley, chairman of the Ways and Means--and
told that unless we accepted a sliding scale we would get nothing at all; that
it would be Impossibe to get the 2.40 rate through the Republican caucus. They
had no definite sliding scale, nor had anyone attempted to write any sliding
scale into a law. Coming at the eleventh hour, you can imagine that this threw
a bombshell Into our camp. Our answer to this was a farm block caucus, the
day preceding the regular Republican caucus. Seventeen beet-sugar States were
represented by about tS0 Congressmen, who voted unanimously to stand by the
2.40 rate and oppose the opening of the sugar schedule on the floor of the
House for amendment. This made the administration leaders sit up and take
notice, and you have been advised of the result.

D you know anything aboutithat?

Mr. Pn xKIN. I was not present at that conference.

TESTIMONY OF JUNIOR OWENS

(The witness was duly sworn by Senator Walsh.)
Senator Ronixsoq of Indiana. Mr. Owens, what is your business?
Mr. Ow xs. I. am secretary of the American Bottlers of Car-

bonated Beverages.

Senator RoBINsoN of Indiana. Of what is your association com-

posed, what line of business?

Mr. OwExs. Bottlers of soft drinks, such as ginger ale, Coca-Cola,

all types of carbonated beverages.

1760

LOBBY 19VESTIOATION

Senator RomNsoN of Indiana. Does the bottlers' association of

which you are secretary have an incorporated organization?
Mr. OwENs. -Oh, yes.
Senator RoniNsoN of Indima. Where is it incorporatedI
Mi OWExs. District of Columbia.
Senator RoniNson- of Indiana. The ows~ociato members-who are
some of them?
Mr. OWENS. The associate members or the active members?
Senator Ronux0oN of Indiana. I mean the members associated in
this organization. Who are some of them, who are some of the people
you represent? You are secretary of an organizations. Who are
Some of the concerns in that organization?
Mr. OWENS. Canada Dry.
Senator Ronwsox of Indiana. What?
Mr. Owz..s. Canada Dry Ginger Ale, Cliquot Club Ginger Ale.
Senator RomiNsoxv of Indiana. Is that a Canadian institution
Mr. OWENS. Oh, no. It is American. The bottlers of Coca-Cola.
There are 1,200 bottlers of Coca-Cola in this country. About 800
are members.
Senator Ronxzso, of Indiana. Are these bottlers independent oft
the Coca-Cola home office in Georgia?
Mr. OwSs. Oh, yes. They work under franchise, but they are
on1y independent units.
Senator RoBiNsox of Indiana. There are 1.200 such concerns?
Mr. OWENS. Yes.
Senator RoBiNsozi of Indiana. And they are all members of your
organization?
Mr. OWENS. Not all. I think between seven and eight hundred
o
of them.
Senator RoBiNsoN of Indiana. Who are some of the othersan
Mr. OWENS. Well, in Washington here, the Hermann Ginger Ale
Co., the Pepsi Cola Co. You see there are about 12,000 bottlers in
.
the country.
Senator RoBiNsoN of Indiana. You have mentioned Coca.cola
and ginger ale. What other concerns, bottling concerns, are con.
nected with your organizationt
Mt. OWENS. The White Rock Co., and the local concerns. There
are 2,200 of them in our organization, scattered in every State of the
Union. Of course, the bottling industry is a local distribution prop.
osition ordinarily. They are local manufacturers. For instance,
the Yonkers Co.Senator Ron'xsoN of Indiana. )o you think of any others besides
those you have mentioned?
Mr. OWENs.'Oh, yes.
Senator Ronixso of Indiana. Well, name some of them.
Mr. OWENS. Well, the Coca-Cola Bottling Co.of Indianapolis.
Senator RoniNso. of Indiana. I don't mean local concerns. I
mean any other ilustries except those you have suggested. You
have mentioned White Rock and Coca-Cola.
Mr. OWENS. And ginger ale.
Senator Rornvsox of Indiana. Ginger ale. And what other lines?
Mr. OWENS. Orange Crush, Good Grape, Pepsi Cola, Ni Grape.
Senator RomNsov of Indiana. I think that is enough.

aSSA
Cal

gai
pre
the
l
sor
lt
yoL

yea

LOBBY INVESTIGATION

1761

Mr. OwENs. Those are trade names of the various drinks.

Senator RoBINsoN of Indiana. Mr. Owens, you have an office here?
Mr. OwENs. Yes, sir.
Senator RoBisoN of Indiana. You are secretary of this

association?

Mr. Ow Ns. Yes, sir.

Senator RoBINsoN of Indiana. How long have you acted in that
capacity?
Mr. OWeNs. Ten years.
Senator RoINS2o N of Indiana. Have you been located in Washington during that entire time?
Mr. Owexe. For nine years.
Senator RoniNsox of Indiana. Where is your office?
Mr. OWENS. Bond Building, 726.
Senator RonINso" of Indiana. Is there any particular significance
in having your office in Washington, the Capital?
Mr. OwkNS. Oh, yes.
Senator RoBizsox of Indiana. What is it?
Mr. OWENS. On-account of the wealth of information that is here
in the Government in connection with any industry. This is the
logical place, I think, for any trade association.
Senator RoBINsoN of Indiana. You could get that information
just as well, however, if you were in some other city?
Mr. OWENS. No; not as easily.
Senator RoBINsoN of Indiank. What other purpose does your organization have for doing business here?
Mr. OwENs. Well, how do you mean, Senator? I don't quite comprehend you.
Senator RoBIsoN of Indiana. You are in Washington. You have
an organization of these bottlers throughout the country. What is
the pur ose of the organization.
Mr. OwENs. Well, as any other trade association. It is a service
organization to bottlers. I might say that we have such things as
scientific research, a traffic department, a legal department.
Senator RoBINSON of Indiana. Do you publish a journal of some
sort?
Mr. OWENS. No; we do not publish any magazines. We have a
little 4-page bulletin we send our members once a month.
Senator RoBINSON of Indiana. How much of an office force have
you?
Mr. Owss. About twelve or thirteen people.
Senator RomNsox of Indiana. What does it cost you to run your
establishment, a year?
Mr. OwExs. Annually, in the neighborhood of $100,000.
Senator RoBIxsoN of Indiana. $100,000.
Mr. OwEs. In that neighborhood.
Senator RoBINSON of Indiana. How much is it costing you this
year?
Mr. OwEN. About the same.
Senator RomNsoN of Indiana. About $100,000?

Mr. Owwos. Yes.

Senator RoBINsox of Indiana. What is that money spent for,

mostly?

1762

LOBBY INVESTIGATION

Mr. Owizs. Well, I would say a large portion of it-for instance,

we have a fellowship at Iowa State College, at Ames, Iowa.
Senator ROBINsoN of Indiana. A fellowshipI

Mr. OwENS. A fellowship; yes, ir.o

Senator RoBINsoN of Indiana. What is the purpose of the fellow.
ship at Iowa State College?
Mr. OwENs. Scientific research on beverage-manufacturing prob.
lems.
Senator ROBINSON of Indiana. And what does that cost you?
Mr. OwENs. $10,000 a year.
Senator RoINsoN of Indiana. Is that included in your budget of

$100,000?

Mr. OWENS. Yes, sir.

Senator RoBINSOx of Indiana. What else do you havo
Mr. Owzs. Well, the major portion of the other, expense--we
carry on, for instance, a cost-accounting survey, or have for the last
two years, on the cost of the manufacture of beverages in various
plants throughout the country.
Senator RosiNzoN of Indiana. Have you been interested in this
tariff legislation this year?
Mr. OWENS. Yes, sir.
.
Senator RoBINsoN of Indiana. To what extent?
Mr. OwENS. To the extent we did not want to see the price of
sugar go up. That is a basic ingredient in our beverage.
Senator RoBiNsoN of Indiana. Have you been interested in any
other legislation in Washington at any time?
* Mr. OWENs. Yes. We were interested in the securing of the reat
pealing of the excise tax of 10 per cent on our gross sales as levied
under the act of 1918. That was one of those war excise taxes.
Senator WALsu of Montana. That has been repealed.
Mr. OwzNs. That was finally repealed in the revenue act of 1924.
We have not been interested in anything since the 1924 act.
Senator RoniNson of Indiana. You were interested in the tariff
in 1922, were you not?
Mr. OweNs. No. We have never been in the tariff before. I
know nothing about it.
Senator RoBNsoN of Indiana. You don't know anything about it?
Mr. OwENs. No.
Senator R msox
lo
of Indiana. You have taken a very active interest in it this time, have you not?
Mr. Owims. Yes, in an attempt to keep the tariff on sugar at its
present rate, so that the price of sugar would not go up in the cost
of manufacturing of beverages.
Senator RoBiNsoN. of Indiana. You say you were not interested in

1922?

Mr. Owi.s. No.

Senator RoU%sox of Indiana. What interested you then this yea:,
if you were not interested in 1922?

Mfr. OwP--s. Well, I tell you: We are interested to this extent.

We have gotten pretty near to the point where we can not maintain
our price any longer of five cents if the cost of manufacturing keeps
going. up.
Senator RoBixsoN of Indiana. But if it went up, you would charge
a higher price, wouldn't you?

Nil
tar

&I&

pr
pr
ar
cor

are
wo
get
no
lati
leg
hal

in .
coni

LOBBY INVESTIGATION

1763

Mr. Owzss. No, unfortunately we have a roof price of a nickel.

Ninety-fiveper cent of our beverages are sold for 5 cents.

Senator ROBINSON of Indiana. But you have from time to time

told your constituents they would have to increase the price if this
tariff would advance?
Mr. Ow~ss. No.
Senator RoBINsox of Indiana. Haven't you had correspondence
along that line that it was important to keep the cost down?
Mr. Owi:Ns. keep the price.of sugar down.
Senator RoBINsoN of Indiana. No, to keep the price of your
product to 5 cents, rather than indrease it to 6 cents.
Mr. OWENs. Certainly.- We don't want to increase it.
Senator ROBINSON Of Indiana. I know you don't, but you are
prepared to do it, if you have to.
Mr. OwEN.s. If we have to. We can not run at a loss.
Senator Rorn.sox of Indiana. And haven't you used that
argument with your constituents, people with whom you have.
corresponded?
Mr. OwExs. I doubt it. I don't recall it if I have.
Senator Romsox of Indiana. The Coca-Cola people have, have
they not?
Mr. Ow Ns. I don't know about that.
senatorr ROBINSON of Indiana. Well, it would be in your correspondence, wouldn't it?
Mr. OweNs. Possibly.
Senator RoBINSON of Indiana. How did you get started in thin
attempt to influence this tariff legislation this year?
Mr. Ow.Ns. How did we get started?
.Senator ROBINSON of Iidiana. Yes, how did you get started. You
are directing it, are you not?
Mr. OwEms. Yes, sir.
Senator RoBINsoN of Indiana. How did you get started in this
work?
Mr. OwnNS. I don't grasp your question. I don't know how you
ge ;startd. You just start.
Senator RoBINsoN of Indiana. No. You took no active part, had
no part in the tariff legislation, or in any attempt to influence legislation in 1922, according to your own statement.
Mr. OwExs. fThat-is true.
* Senator RoINsox of Indiana. This year you started in to influence
legislation with your organization.

.X. OwEs. Xes.

"Seinator RonIssoN of Indiana. 'hat is lobbying. How did you

happen to get started at it this year, when you wore not interested
in 1922. That is what I mean.
Mr. OwExs. Well.Senator
&
RoBINsoN of Indiana. Any body talk to you about it?
Mr. OwENs. Oh yes. We talked it over with our legislative
committee when this question of the sugar tariff came up.
. Senator RoBINsoN of Indiana. Do you have a legislative com.
mittee?
Mr. OweNs. Yes, sir.
Senator RoBINsoN of Indiana. How often does it meet

1764

LOBBY INVESTIGATION

Mr. OwENs. Whenever we call it.

Senator RoBixsoN of Indiana. When did you call it in relation to

this tariff legislation?
Mr. OwENs. It has never been called.
Senator RpBINsoN of Indiana. Then, it had nothing to do with
your action
Mr. OWENS. Well, it had this to do. I talked informally with
the members. We have never had a meeting of the legislative com.
mittee here in Washington or any place else.
Senator ROBNSON of Indiana. Well, you just on your own initia.
tire, then, started this activity? *
the
Mr. OwENs. Oh, no. After talking with various peopleweincould
what
do
to
try
to
us
for
time
was
it
decided
we
industry
to prevent an increase in the tariff on sugar.
Senator RonINsON of Indiana. Do you know David J. Lewis?
Mr. OWENS. Oh, yes; very w,ll.
Senator ROBINSON of Indiara. Who is Mr. Lewis, what official
position has he ever held, if any?f
Mr. OWENS. He is a former member of the Tariff Commission,
I believe.
Senator RomsoN of Indiana. Did he leave the Tariff Commission?
Mr. OWENS. I don't know that.
Senator RoBiNsoN of Indiana. When did you first employ him?
Mr. OWENS. January, 1929.
Senator RoBISON of Indana. January of this year?
Mr. OWENS. Yes, sir.
Senator ROBINSON of Indiana. What did you employ Mr. Lewis
to do?

Mr. OWENS. We employed Mr. Lewis to help us find out something

.nere;
about the tariff on sugar.
Senator RoBINsoN of Indiana. How did you happen to employ
Mr. Lewis, had you known him beforeI
Mr. OWNs. Never heard of him.

Senator RoBINON of 1'idiana. How did you find out about him?
Mr. OWENS. Oh we want around and tried to find out who knew
something about tis.
Senator ROBINSON of Indiana. Who recommended Mr. Lewis to
you?

"

Mr. OWENS. I believe that the first time I heard of Mr. Lewis,

his name was suggested by Harrison Jones, of the Coca-Cola Co.,

im

Atlanta.
Senator ROBINSON of Indiana. Did Mr. Jones suggest that you em.
ploy Mr. Lewis?
Mr. O ENs. No. As I recall it, Mr. Jones had heard of Mr. Lewis.
He never had met him. We were trying to find somebody who knew
something about sugar.
Senator ROBINSON of Indiana. Is Mr. Jones counsel for the Coca.
Cola Co.
Mr. OWENS. No; he is executive vice president.
Senator RoBINsoN of Indiana. And the Coca-Cola Co. has been
associated with you very closely in this tariff matter, has it not?
Mr. OWEN. Yes.
Senator ROBINSON of Indiana. Did you know that Mr. Lewis
was a Representative in Congress from Maryland at one time?

men
S

M
M
S1
tho
alon
and
S1
S
on
JI
W
eve
ment
assOC
A
to thi
obtat
Fit

to th
sft
th
otTh
as b

Fo

of a
assoe
si:
furth
pubiTh

than

Thl

light

T
M

S1
sent
M
S
M
S

sent

M
S1
byet
M
S
ploy

LOBBY INVESTIGATION

1765

Mr. OWENS. I did not know that until after I employed him. He
mentioned it one day.

Senator RoBINsoN of Indiana. Well, you (lid employ Mr. Lewis.

Mr. OWENS. Yes.

Senator RoBINsoN of Indiana. When?
Mr. OWENS. Early in January. I don't know the exact date.
Senator RoBINsoN of Indiana. What were the terms of the

employment?
Mr. OWENS. He was to prepare for us a brief to be presented to
the Ways and Means Committee, at its meeting, I think some time
along about the 20th of January, the first meeting oi the Ways
and Means Committee, when they took up the sugar schedule.
Senator ROBINSON of Indiana. How much were you to pay him?
Mr. OWENS. $2,000, I think.
Senator ROBINsoN of Indiana. Does this state the terms of your
contract? I read from a communication of yours addressed to David
J. Lewis, attorney at law, Cumberland, Md.:
With reference to your employment by the American Bottlers of Carbonated

Beverages, this letter summarizes the conditions as follows:

You are to receive a retainer of $00 herewifh inclosed, and a further payment of $1,000 upon the completion and delivery to the secretary of the
association of the following:
A statement in detail with the official sources of information with respect
to the tariff on bugar, which will furnish the most decisive and reliable data
obtainable within the time limit set, with respectFirst. To differences in costs of production of American sugar as compared

to that of Cuba.

Second. The relative cost tO consumers of American sugar direct and indirect,
of the existing rate and of proposed rates.
Third. The distribution of such protective benefits in the United States,
as between the farmers raising beets and the manufacturers of beet sugar.
Fourth. The effect upon trade between Cuba and the United States of an
increase in the tariff on sugar.
Fifth. Any information which may be procurable as to the especial effect
of an increased tariff on sugar upon the Industries represented in this

association.
Sixth. Information generally of effects or conditions which would render
further increase in the tariff on sugar undesirable from the standpoint of the
public welfare.
This report must be in the hands of the secretary of the association not later
than January 18, 1929.
The competency with which this report is made should be Judged in the
light of the brief time available for that purpose.

That is the form of the contract, is it?

Mr. OWENS. Yes, sir.
Senator RoBINsoN of Indiana. But Mr. Lewis continued to repre.
sent you; in fact long after January 18, did he not?
Mr. OwENs. He still is.

Senator ROBINSON of Indiana. And still is representing you?

Mr. OWENS. Yes, sir.

Senator ROBINSON of Indiana. Now, on what basis has he represented you since the expiration of this contract?
Mr. OweNs. On the basis ofSenator RoBINsoN of Indiana. This report was to be in your hands
by January 18?
Mr. Ow.Ns. Yes.

Senator RoBINsoN of Indiana. Now, what is the basis of his employment now?

1766

LOBBY INVESTIGATION

Mr. Owws. A retainer of $250 a month.

Senator RoBINsON of Indiana. And have you paid him $250 a
month since that time?
Mr. OweNs. Yes, sir.
Senator ROBINSON of Indiana. That is to say, you paid him $,000,
and since then have paid him $250 a month I
Mr. OWENS. Yes, sir.
Senator RoBINsoN of Indiana. And you are still paying him $250
at month. How long do you expect to continue that rate 1
Mr. Owzss. Until we get over this thing.
Senator ROBINSON of Indiana. Until the tariff bill has passed, do
you mean?
, Mr. OwENs. It is a question. It is a contract subject to cancella.
tion at iny time.
.ti
Senator RomNsoN of Indiana. Now, Mr. Owens, what does Mr.
Lewis do to earn this $250 a month that you expect to continue to
pay him until this is overI
Mr. OwENs. Well I will tell you. Mr. Lewis knows something
about tariffs. Franily we don't know anything about it and never
did, and never had any association with a sugar tariff or anything
else. When we have to know something about it, or do something
Mr. Lewis is our source of information. He has been a student ot
this.
Senator RoBINso- of Indiana. He is practically managing your
tariff fight, is that it?
we want any
Mr. OwENs. No; I wouldn't say that. Any time
the tariff, he
to
as
statistical data or causes or effects, or anything
is the man we turn to.
Senator RIoiNmo of Indiana. Have you anybody else employed at
the present time in a similar capacity
Mr. OWENS. You mean in connection with the sugar fight?
Senator RoBINsox of Indiana. Yes.
Mr. OWENS. Yes; we have a publicity organization.
Senator ROBiNsON of Indiana. Who?
Mr. OWENs. The publicity. organization.
*Senator ROBiNSoN of Indiana. What organization do you have?
Mr. OwExs. W. H. Baldwin, of New York.
Senator RoBINsoN of Indiana. What is the financial arrangement
with-the Baldwin Co.?
Mr. OweNs. $1.500 a month.
Senator RoBINsON of Indiana. $1,500 a months
M .'OwENS. Yes, si1 " .V
Senator RoBpiz4N of .Indiana. How long have you had the Baldwin Co. workigjst
. Mr. O*w.Ns. If I recall correctly, I believe it was the latter part
of March.
Senator Ro~nwsox of Indiana. They have continued until the
present time on the basis of $1,500 a month?
Mr. OwENs. Yes, sir.
Senator ROBINSON of Indiana. I suppose they are to influence

public opinion in favor of a low tariff; is that the idea?

* Mr. OwENs. Yes, sirr.
Seiator RoBiNsoN of Indiana. On sugar?
Mr. OwENs. Yes, sir.

Be
cont
M
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to d,
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tim
Car

LOBBY INVESTIGATION

1767

Senator ROBNSON of Indiana. How long do you expect them to

continue on your pay roll?
Mr. OWENS. Well, the shorter the better.
Senator ROBINSON of Indiana. You mean until it is over?

Mr. OWENS. I suppose so.

Senator WALSH of Montana. What is the Baldwin Co. expected

to do?
Mr. OwENs. Prepare publicity copy, Senator.
Senator*WALsia of Montana. And how do they earn their $1,500
a month? What do they do?
Mr. OwENs. Oh, the prepare amphlets.
Senator WALsH of ontana. What is that?
Mr. OWENS. Prepare pamphlets, publicity copy. It is the general
activity of a publicity organization.
Senator WAuix of Montana. You say publicity. They prepare
circulars. How are those circulars scattered around?
Mr. OWENS. Well, they are mailed.
Senator WAT.Ii of Montana. Mailed to whom?
Mr. OWENS. Newspapers, the press, any periodicals that will use
them.
Senator WALSH of Montana. Do they send those papers to you,
the papers that use their stuff?
Mr. OweNs. We have a clipping service.
Senator WAlSH of Montana.. Clippings?
Mr. OWENS. A clipping service.
Senator WALsH of Montana. Do the articles as published in the
newspapers disclose the origin of them? Does it indicate that this
matter is prepared by the Baldwin Co.?
Mr. OWENS. If any copy is sent to a newspaper it is sent out as
coming from the publicity department of the American Bottlers of
Carbonated Beverages.
*Senator VALsH of Montana. But as it is published, does that appear in the published report?
*Mr. OwwNs. Some times a story will carry that.
*Senator WAlsH of Montana. Vhat is that?

Mr. Owiiss. Some tines a story will indicate that itself. Other

times it will not.

Senator Vuswi of Montana. That the information came from the
Carbonated Beverages Association?
Mr. OwpNs. Yes, sir.
Senator WAtsuc of Montana. And some times it does nott
Mr. OWENS. Yes, sir.
Senator WALSH of Montana. Some times it would appear to be
just an article gotten up by the newspaper itself?
Mr. OWENs. The paper itself.
Senator WALsi of Montana. Or possibly a dispatch from "Our
Washington Correspondent," or something of that kind?
Mr. OWENS. Yes.
Senator W sn of Montana. Or perhaps a "Constant Reader"
or "Pro Bono Publico," or something of that kind?
Mr. ONwNS. Well, that depends, of course, on the type of material
it is.
78214-30-PT 4-18

1768

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. Mr. Owens, you are acquainted with

Mr. Charles V. Rainwater?
Mr. OwEics. Yes, sir.
Senator RoBiNSON of Indiana. Who is he?
Mr. Ow..N. Mr. Charles V. Rainwater is secretary of the Coca.
Cola Bottling Co. of Atlanta, and a former president of the Amer.
scan Bottlers Association.
Senator RoBINsoN of Indiana. Secretary-treasurer of the 4oca.
Cola Bottling Co., in Atlanta, is he not?
Mr. Owts. Yes, I guess that is it.
Senator RoBINsoN of Indiana. I read from a letter sent by him
and addressed to-you:
Now that your brief has been filed with the Ways and Means Committee
and no doubt you have decided to some extent the general plan of campaign

for the future, we would appreciate it if you would work out, as soon as is
convenient, a definite plan as to how this expense shall be prorated and an
estimate as nearly as possible of what expenditures very probably will be.
The Coco-Cola Co. is anxious to do whatever you feel is necesary and
wise in the handling of this question but we know that you and Carl Jones
together with the legislative committee will no doubt be able to decide on
this particular feature better than anyone else.
In connection with the printed pamphlet to be sent out to the trade, Mr.
Sibley makes the suggestion that he feels that the conclusion which' relates
particularly to our own business should be put at the last of the pamphlet
instead of the first. This for your consideration.

They were leaving it pretty much to you, weren't they?

.
Mr. OwENs. Largely.
Senator RoniNsoN of Indiana. As to how much the campaign was
to cost, where to use the publicity and how to use it?
Mr. OwENs. Yes, sir.
Senator RowIsoN of Indiana. Now the constituents felt in your
organization that ou did know something about the tariff, notwith.
standing the fact that you claim to have no knowledge.
Mr. Owzs. No, I don't think any of them thought I knew any.
thing about the tariff.
Senator RoBNsoN of Indiana. But they were willing to trust you
with any &'iount of money apparently; they were willing to do their
share and leave it to you.
Mr. Owms. That is what it says. .M
Senator RomisoN of Indiana. That is February 4, and under date
of February 17there is a copY1 which I presume is from you, addressed to Mr. Rainwater. Without reading it in full I quote one
paragraph:
You can realize from the above facts that it is extremely difficult to try to
estimate any expenditures. Frankly, I would not know how to go about it
at this time any. more than we did when we were in the old tax fight. That
fight of course, was actually very cheap, and I do not believe that this will

run Into a lot of money, but that all depends upon what we have to do when
the time comes. Unless there is a great expenditure, I feel that the Assoclation should absorb it, so I would think that the thing to do now is to let it

Sei
for"
1
inM
Be]
M
Sei
figure
S
Uni
it, so
situat
If
Be
chea
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81

lobb,
M
5'

Her
8
Coc
M
S1
M
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M
sell
Pik
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-

ride along until the situation clears up.

You say that it was very cheap. How cheap was it, this tax fight?
Mr. Owms. Well, I don't recall the figures, Senator.
Senator RoBIsox of Indiana. But you know it was very cheap.

You sa to him it was.

Mr. OwPNs. Yes, did.

fr2

LOBBY IN VESTIGATION

1769

Senator ROBINSON of Indiana. What do you regard as very cheap

for influencing legislation?
Mr. OwENs. Oh, I would say that the whole thing didn't cost us,
in 1920 to 1924, $5,000
Senator ROBiNSON of Indiana. $5,000?
Mr. OWENs. Yes.

Senator ROBINSON of Indiana. Do you mean to say that is the

figure, the outside figure?
Mr. OwEss. I would think so. It was very, very cheap.
Senator ROBxNSON of Indiana. You continue:
Unless there is a great expenditure, I feel that the association should absorb
it, so I would think that the thing to do now is to let it ride along until the
situation clears up.

That is an answer to Mr. Rainwater?

Mr. OwENs. Yes.
Senator ROBINSON of Indiana. Do you consider this fight has been
cheap?
Mr. OWENS. Well, not particularly; no.

Senator RoBrSON' of Indiana. How much do you figure these

lobbying activities of yours have cost you up to date?
Mr. OWENS. About $25,000.
Senator ROBINSON of Indiana. $25,000?
Mr. OWENS. Yes.
Senator ROBINSON of Indiana. Where did this $25,000 come from?

Mr. OWENS. It is being subscribed by the Coca.dola Co. and the

Hershey Co.
Senator ROBINSON of Indiana. How much do you receive from the
Coca-Cola Co.3

Mr. OwENs. Well, it comes to me fixom Mr. H. H. Pike.

Senator ROBINSON of Indiana. Who?

Mr. OWENS. The money comes to me through Mr. H. H. Pike.

Senator ROBINSON of Indiana. Who is Mr. H. H. Pike?
Mr. OWENS. H. H. Pike & Co., of New York, sugar brokers, that
sell the Hershey sugar.
Senator RoBiNsoN of Indiana. You get your money from H. H.
Pike & Co.?
Mr. OWENS. Yes.
Senator ROBINsoN of Indiana. These sugar brokers of New York?
Mr. OwzNs. Yes.

Senator ROBINSON of Indiana. What is their address there

Mr. OWENS. I have forgotten.

It is there some place. It is on

Wall Street I think.

Senator ROuiNSON of Indiana. Wall Street.
Mr. OWENS. I think so.

Senator ROBINSON of Indiana. Do they send you a certain amount

of money each month?
Mr. OWENS. No.
Senator ROBniSox of Indiana. Is that address 91 Wall Street?
Mr. OWENS. I think it is, yes.
Senator ROBINSON of Indiana. How do you get these remittances

from Pike & Co.I

Mr. OwExs. We have what is known as a revolving fund.

Senator ROBINSON of Indiana. No. I didn't know bout that.

1770

LOBBY INVESTIGATION

Mr. OweNs. A revolving fund is where a certain definite amount

is put in a fund, and then on submission of receipts for expenditures

1
thin

Senator RoBWzsoN of Indiana. Let us see. Pike & Co. received

contributions from various interests and that money is put on
deposit with Pike & Co., and as Pike A Co. receive from you receipts
for the expenditures-Mr. OwENS. Yes.
Senator ROBINSON of Indiana. For the expenses you have con.
tracted, they send you checks out of this revolving fund, or this
amount on deposit?
Mr. OweNs. I don't know about what they have. I am talking
about in our office. In other words, I was given $8,000. That $..0
is just a revolving fund. I tm accountable for $3,000 all the time.
Senator ROBINSON of Indiana. I don't follow you.
Mr. OWvENs. When I expend any of that $8,000, Senator, I get a
reeipt for it.
Senator RoBzsoz of Indiana. But you keep on hand all the tirge

of
$per
1
S
b

ir. OwEs. I am responsible, I either have cash or receipts for

that amount.
Senator RoBINso-N of Indiana. And if you spend $1,500 in a week,
you send a statement of that expenditure to -Pike & Co., and they
send you $1,500 to replenish that $8,000
Mr. OwiEzs. That is right.
Senator RonisoN of Indiana. Now, the committee would be in.
terested to know how Pike & Co. are reimbursed for the money they
..
send you.
Mr. OWENs. Of course, I think I know, but I imagine possibly the
man who takes care of it could tell you better thanICEwould.
Senator RoBINsoN of Indiana. Where does that fund come from,
in your opinion I
Mr. OwE.s. In my opinion?I4
Senator Rouiwso,- of Indiana. Yes.
Mr. OwENs. It is coming from the Coca-Cola Co. and the Hershey
Co.
Senator Roniwso. of Indiana. How much is coming from each of
those companies?
Mr. OwsNs. I imagine-that is my understanding-it is 50-40.
Senator RoNsoN- of Indiana. As a matter of fact, the Hershey
people and the Coca-Cola people .were each to pay half of that
expense, were they nott
Mr. OWENs. That is. my understanding of it. Of course, I don't.
know.
Senator RoBINsoN of Indiana.. Do. you know how much money the
Hershey people have put up up to date?
Mr. OwENcs. I do not.
Senator RoniNsoN of Indiana. Mr. Owens, I don't suppose you
are familiar with this statement, but it is a copy of a statement from
H. H. Pike, jr., special accountant, It shows that they have ex-S
pended to date $29,450. That is, up to November 20.'
Mr. OwENs. Of course I don't know anything about that..
Senator RowIsoN of Indiana. Well, you have spent it all, have.
you notI

hav

that amount is returned to you.

$8000?

ser
S
whe
1
nat

1
1

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able
wor

LOBBY INVESTIGATION

1771

Mr. OWENS. I don't know whether our statement is there. I

think you have a copy of what we have expended there.
Senator RoBINSON of Indiana. We have a Junior Owens payment
of $3,000. In addition to the Baldwin Co., you think you have
spent $25,000 to date?
Mr. OwENs. In addition to them?
Senator RoiNasoN of Indiana. Yes.
Mr. OwENs. No, including them. That is everything we have
spent.

Senator CARAWAY. May I initerrupt? I was not here, Mr. Owens,

when you commenced your testimony. By whom are you employed.

Mr. OWEs. The bottlers of carbonated beverages, secretary o the
national association.
Senator CARAWAY. You are secretary of the national association?
Mr. OWENS. Yes, sir.
Senator CAliAWAY. How much is your salary?
Mr. OweNs. $10,800.
Senator CARAWAY. And how much expense account?
Mr. OwENs. Well, I haven't any expense account. Whatever it
happens to be, in traveling, I am p aid.
Senator C.ARAWAY. There is nothing set aside particularly?
Mr. OWiENS. No.

Senator

CARAWAY.

But whatever your expenses are, that is paid

in addition to your salary?

Mr. OwEzs. Yes.

Senator

CARAWAY.

How long have you worked for them?

Mr. OwENs. Ten years.

Senator CARAWAY. At that salary?
Mr. OWENS. Oh, no.
Senator CARAWAY. What was the opening salary?
Mr. OwENs. $7,500.
Senator CARAWAY. When did you reach the $16,800?
Mr. OWENs. This year.
Senator CARAWAY. After this tariff bill commenced to be con.
sidered? Was your salary raised after the tariff bill came up?
Mr. OwENS. Oh, no.
Senator CARAWAY. What date?
Mr. Own. a. Well, under my contract I have an automatic raiss
and have had an automatic raise each year.

Senator

CARAWAY.

Mr. OwENs. Yes.

Sort of arithmetical progression?

Senator CARAWAY. After a while it will get to be a right respectable-sized salary?

Mr. OwENs. I hope so. That is what I am working for.
Senator CARAWAY. What was your occupation prior to beginning
work for this Association?
Mr. OwEs. Newspaper man.
Senator CARAV'AY. Where were you located?
Mr. OwENs. Detroit ChicagoSenator CARAWAY. ahicagoi
Mr. OwpsS. St. Louis, Cleveland
Senator CAR.WAY. Were you an editorial writer?
Mr. OWENS. No; I was a reporter.

1772

LOBBY INVESTIGATION

Senator CARAWAY. You we2e a reporter?

Mr. OwPEss. Yes.

Senator CARAWAY. Who are the actual people that make the con.

tract with you, Mr. Owens?

Mr. OwzEs. The executive board of the national association.
Senator CAnAWAy. What are the names of those men? Have you
already given that?
Mr. OwENs. No.
Senator CARAWAY. Will you give it to us now?Ing
Mr. OwENs. I can give it to you. In my files there is a letterhead
that contains them. There are 15 of them, scattered all over the
country.
Senator CARAWAY. Do they meet once a year or oftenerI

Fe

At
P

cam
in

will
r
t

Mr. OwmNs. They meet twice a year.

Senator CAnAWAY. Here in Washington?

Mr. OWENS. Once in Washington in May, and then in November

in conjunction with our annual convention.

Senator WALSH of Montana. Mr. Owens, what is the aggregate

amount of the business done by these organizations having member.

ship inyour association?
Mr. OwENs. Well, there are about $050,000,000 gross. That is the
best we can figure the business in the beverage industry, and we rep.
resent about 20 per cent numerically, but about 75 per cent of pro.
duction.

Senator

CARAWAY.

Something over $400,000,000 production?

Mr. OwieNs. Yes.

Senator WALsit of Montana. What is the aggregate amount of
sugar consumed in the industry?
Mr. Owns. About 800,000 tons.

go
to'

Senator CARAWAY. Is your company also interested in blackstrap,

or is that the alcohol people?

Mr. OWRNS. No; we are just purchasers of sugar. That is all.
Senator WALiS of Montana. If, then, the raise in tariff, as recom.
mended by the Finance Committee, 44 cents, should go into effect
the aggregate significance to you would be very considerable, would it
Mr. Ow'.-s. I think it is around $3,000,000, or something of that
sort.
Senator WALsH of Montana. V'ou figure your sugar bill would be
$3,000,000 annually-se
Mr. Owims. More.
Senator WALsH of Montana. More?
Mr. OwE s. Yes; about $4,000,000 under the House rate, as I recall
it. I have forgotten just what the figures are.
Senator Ro'BINsoN of Indiana. Mr. Owens, are you acquainted with
Mr. Shattuck?
Mr. Owsss. .1 have met him; yes.
Senator RontNso- of Indiana. Do you know his partner, Mr.

Francis?

Mr. OwvENs. I met Mr. Francis once.

Senator RomINsoN of Indiana. You wrote about that interview
*with him at that time?
Mr.OwzNs. I saw in the paper last night I did. I had forgotten it.
Senator RoINsoN of Indiana. You have written a.lot of letters on
this controversy you had forgotten about; is that it?

M
fr
f
Bt

tile

1773

LOBBY INVESTIGATION

Mr. OWENS. I imagine that is true.

Senator ROBINsON of Indiana. I have here a letter under date of

February 23, or what purports to be a copy of a letter from you, Mr.

Owens, to Z. Charles V. Rainwater, of the Coca-Cola Bottling Co.,
at Atlanta. I quote one paragraph. I assume you can identify it.
plans are being formulated for a %*ery aggressive publicity and political
campaign against the Increased tarlit o sugAr. A Mr. Francis. who Is asoelated in the law firm with Mr. 14hnttuck, was In to see me last 91hursday morning. lie hlifurmed me confidentially that Air. Shattuck fins been In Cuba and
has biea successful in raising money to carry on the eainplgtz. Mr. Shattuck
will get back to NOw York next Monday (Februtiry 25) at which time he and
Mr. Francis and Mr.LAkin are going to get together, to work out some tentative
ans, and they will then get in touch with me and let me know what their

dens are.
Did Mr. Francis tell you that Mr. Shattuck had been successful in
raising money in Cuba to car yo the campaign?
Mr. OwF.S. I would not have written it, Senator, if he hadn't.
Senator RoBnS.oN of Tndiann. You know Mr. Lakin?

Mr. OWFNS. Yes.

Senator RoBntsoN of Indiana. You have been working with Mr.

Lakin and Mr. Shattuck throughout this campaign; is that it?
Mr. OwE.s. No.
Senator RoBiNsoN of Indiana. You have been working independ-

ently?
Air. 'OwEas. Entirely.

Senator RoBiNsoN of Indiana. What do you mean, then, when you

say that Mr. Francis and Mr. Lakin, together with Shattuck, are
going to get together and work out tentative plans and will get in
touch wit

you and let you know.what their ideas are?

Mr. Owzks. We did not want to cross fire, duplicate.

Senator RoriNsoN of Indiana. You wanted to work together, one
for all and all for one?
Mr. OwE.Ns. We were traveling toward the same objective.
Senator RoBINsoN of Indiana. On February 27 you again wrote to

Mr. Rainwater. At any rate, here is a copy.

from that letter:

I quote this paragraph

I had a 2-hour talk yestrday with Mr. Doran, secretary of the United
States Sugar Association. You will recall he was the chap who attended our
meeting at the Racket Club, avid who is well posted on sugar affairs. His
organization and the Cuban interests have about $10,000 available for any
use that is necessary.

Where did you get that information?

Mr. Ownis. I must have gotten that from Mr. Domn.
Senator Rounxsow of Indiana. And who is Mr. Doran, again?
Mr. Owi. s.I don't know what his official position is.
Senator ROBINSON of Indiana. You say here, "Secretary of the
United States Sugar Association."
Mr. Ow.Ns. Well, that it what it is.
Senator CARAWAY. Senator Robinson, I didn't understand.

Was

that the Racquet Club, or the Racketeers Club?

Senator ROBxNSOx of Indiana. Meeting at the Racquet Club. Did
you have a meeting at the Racket Club?
Mr. OwiP.s. Yes, sir.
Senator Rouisox of Indiana. Was that held here in Washington?
Mr.OwEs. Oh, yos.

1774

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. What kind of a meeting was thatA

Mr. OwENs. Well, I will tell you just exactly what kind of a meet.
ing it Was. When the people filed for time with the Ways and
Means Committee at the hearings the first meeting of the commit.
tee, which was late in January, I believe, of 1929, I got hold and
fotnd out Who were going to appear against the sugar tariff and then
wrote them and asked them to come to the Racquet Club at 11 o'clock
on Sunday morning and let us know each other and find out what
was going to happen, what we were going to do. None of these
people did I know at that tihie. That is the first time I ever met
them.
Senator RoBiNsoN of Indiana. You had a meeting and Mr. Doran
was thereI
Mr. OWENS. That is the first time I met him; yes, sir.
Senator Roni-sow of Indiana. And at that time Mr. Doran told
you the Unitedl States Sugar Association and the Cuban interests had
$150,000 available for any purposeI
Mr. Owp.xs. What date is that letter?
Senator RoBiNsov. of Indiana. February 27, last February.
Mr. OwENs. This meeting at the Racquet Club was in January.
Yes. I must have seen Doran after that.
Senator RoBINsoN of Indiana. What do you mean by $150,000
available for any use that is necessary?
Mr. OWENs. Why, any type of-the employment of attorneys,
publicity-any type of activity in -connection with the work.
Senator RoBINsoN of Indiana. Well, you had Mr. Pike of Pike &i
Co of 91 Wall Street sending you your remittances.
r. OWENS. Not at that time.
Senator RoBINsoN of Indiana. But you did afterwards?
Mr. OwENs. Afterwards.
Senator ROBINSON of Indiana. You never did receive any money
from the United States Sugar Association, did you?
Mr. OwzN. Oh, no. We had no connection with that.
Senator RorNsoN of Indiana. But they had $150,000 available for
any use that was considered necessary, even as early as February,
1927?

the

o,
Str
lob

pc

sho
of

me

not

Mr. OwENS. Yes.

Senator RofiNsoN of Indiana. *Subsequentlyyou have been receiv.

ing money from Pike &Co,, of 91 Wall Street, furnished by Hershey
and Coco.ColaI
Mr. OWENS. Yes.
Senator ROBINSON of Indiana. That is in addition to the'$150,000
these people had. What did you understand they were going to use
.
that $150,000-for?
Mr. OwENS. I guess just what they have been doing.
Senator RonwNsoN of Indiana. What they have been doing, is what
you understand to mean-this is your own language--for any use
that is necessaryI
Mr. OwENS. Yes.

Senator RoBiNsoN of Indiana. Anything in connection with the

general lobbying activities?
Mr. OwESs. Yes.
Senator RoBINsoN of Indiana. You had your information from
Mr. Doranf

am

beei
k

pai(

has
this
som

LOBBY INVESTIGATION

1775

Mr. OwENs. Yes.

Senator RoviNsoN of Indiana. This publicity was all put out Under
the name of the American Bottlers?
Mr. Ows. Yes, sir.
Senator ROBINSOx of Indiana. None under the name of Hershey?
Mr. OWENs. No, no.
Senator ROBINsoN of Indiana. Hershey was keeping in the background all the time, and the Coco-Cola people were keeping in the
background, covering their activities through Pike & Co. of 91 Wall
Street, who in turn sent the money to you, and you handled the
lobbying campaign?
Mr. Owmss. Yes, we are the people who have. to buy the sugar and
pa yfor it.
senator RoBzsoN of Indiana. October 18, in your statement, you
show $200 paid to you for incidental expenses. What was that for?
Mr. OwzNs. Oh, taxicabs, luncheons, and so forth, over a period
of months, just the general expenses that run over months.
Senator RoBiNSON of Indiana. Who selected the Baldwin people
to handle your publicity?
Mr. OWENs. We all did. We looked at a number of different
concerns.
Senator ROBiNSOx of Indiana. Isn't it true that the Pikes selected
Baldwin?
Mr. OwE,.s. Well, Mr. Pike selected them after conferring with
me about it. Mr. Pike got in touch with them in New York, being
in New York.
Senator ROBINSON of Indiana. The contract was made with Pike
&Co., was it not?
Mr. Owims. The contract?
Senator ROBxSON of Indiana. Yes.
Mr. OwBsS. I don't know.
Senator RoIXSON of Indiana. I mean the contract with Baldwin.
Mr. OWENS. I don't know.
Senator ROBINSON of Indiana. Is this the contract, dated March
12, 1929, signed by William H. Baldwin, made with Pike & Co., and
not with you?
Mr. OwzNs. I have never seen that.
Senator RonzqsoN of Indiana. Now, he has been receiving $1,500
a month all the time and is to-day-that is, the Baldwin Co.?
Mr. OwzNs. Yes, sir.
Senator ROBINSON of Indiana. And in addition to that Pike has
been paying him an extra $1,000, isn't that true?
Mr. OwEns. I don't know. I heard the other day he was. I
know nothing about that.
Senator RoBINsoN of Indiana. That is $2,500 they have been
paid on this arrangement, and 12 months at $2,500 on this retainer
alone would be $30,090 a year, and that is just for your publicity,
thatittyour campaign has cost you vastly more than $25,000,
so
hasn't
Mr. OwENs. No, sir. As a matter of fact, I know nothing about
this $1,000 and.knew nothing about it until the other day. That is
some arrangement between Pike and Baldwin.
Senator ROBINSON of Indiana. But it has been paid?
Mr. OwENs. I understand it has not been paid or 1 months.

1776

LO3BY INVESTIGATION

Senator CARAWAY. May I ask you just a question about that

Baldwin is the publicity agent you are discussing now?Ind
Senator RoBiNsoN of Indiana. Yes,

Senator OARAWAY. Did he discuss with you this campaign of

sirrin
hup Central American Republics against the United Statesp
Mr. O w s. No.
Senator CARAWAY. And you thought it was too dangerous to
undertake?
Mr. OWENS. No.
-Senator CARAWAY. That was Lakin's idea, not Baldwin's?
Mr. OwENs. I know nothing about that.
Senator CARAWAY. You never heard that until Mr. Lakin put it

int

Mr. OWENS. That was news to me.

Senator ROBINSON of Indiana. The William H. Baldwin Co. is

using your name constantly and acting as your publicity represent.

tiveM
Mr. OwzEs. Yeg, sir.

M
sdf
just

M
who
1
this.

BAk
corr

Senator RoBINsoN of Indiana. And you don't even know how much

8
upI

Mr. Owens. I know how much money I am paying him.

Senator ROBINSON of Indiana. You are not paying him anything,

K
8

money he is receiving?

Cola

are you?

func

Mr. OwENs. I certily am.

Senator RoBINsoN of Indiana. I know. You say you are paying
him $1,500.
Mr. OweNs. Yes.
Senator RowNsox of Indiana. You only think you are paying it.

Hershey and Coca-Cola are paying it.

Mr. OWENS. We are making out the checks.

Senator RoBIMsoxr of Indiana. And Pike, as a matter of fact, is

paying it, Pike & Co. of 91 Wall Street. Presumably, so far as the
pote knows, Baldwin is the publicity representative of the
bottlers

Mr. Ow@Ns. He is.

Senator ROBINSON of Indiana. Of whom you are secretary?
Mr. OwlENs. Yes.
Senator ROmNSON of Indiana: And he receives in that capacity
$16500 a month?
Kir. OwzNs. Yes.
Senator ROBINSON of Indiana. Which, in a sort of complicated
maner,you pay him through Pike & Co.?
Mr. OweNs. WellSenator RoniNsox of Indiana. And at the same time Pike & Co.
are paying him another $1,000 a month for the same purpose. That
is $2,100 a month or $30,600 a year, representing the bottlers, and

the secretary f the Bottlers' Association, you yourself, don't even

know how much your publicity agents get. Isn't that true?8
Mr. OIVENS. I know-how much lie is getting from us.

Senator RoBI.NSON of Indiana. I know. He is getting nothing

from you. He is getting it all from Hershey and Coca-Cola.

Mr. OwE.Ns. Well, Hershey and Coca-Cola are members of our

association.

8
hem

isr
the

ary,
en
beli
trw
nin

Coc

bott
sells
ate
this
on

on

M
S
han

LOBBY INVESTIGATION

1777.

Senator RoBINsoN of Indiana. I recognize that, but they are share

and share alike paying these expenses?
Mr. OwEss. Yes.
Senator RoBiNsoN of Indiana. And Pike, as a matter of fact, is
paying the money?
"Er.-OWENs. Yes.
Senator RoBINson of Indiana. That is, $80,000 a year. Now, in
addition to that, all theother expenses are to be paid, and that makes
are
your campaign cost a lot more money. In other words, they
not?
they
just using you, are
Mr. OWiNs. Yes, to this extent; that our bottlers are the people
who have to pay the increased tariff on sugar if it goes up.
Senator WALsH of Montana. Mr. Owens, I don't quite understand
pay
this. I gather from the testimony now given that you do not
that
Is
company.
the
of
treasury
Baldwin out of the general
correct?
Mr. OwENs. We have a special fund.
made
Senator WAoIqI of Montana. And that special fund is not Cocacompanies,
two
these
only
but
up by your members generally,
Cola and Hershey?
Mr. OWENS. Yes, sir.
Senator WALSH of Montana. Each contributing one-half of that
fund?
Mr. OWENs. Yes, sir.
Senator WALSK Of Montana. Really, then, the campaign that is
being carried on in the nam6 of the Carbonated Bottlers Association
in
is really not carried on by the asociation at all, but is carried on
oterorganzations?
the name of the association by these two
Mr. OwENs. Senator, let me explain that: We started out in Januinstance, we employed Mr. Lewis that has
ary, if you recall-for
ago. We paid that ourselves.
while
a
about
been spoken
Out of your general fund t
Montana.
of
WAlst
Senator
Mr. OWENS. We paid the expenses up to the mile of MarchOk Ia
possibilities
believe. Then we saw this thing going beyond theWe
were not runBaldwin.
employ
not
trade association. We did
Baldwin.
employed
we
time
the
to
up
campaign
a
ning as intensive
then, the
people
We didn't have the finances to do that and theso
of our
800
members,
our
Coca-Cola people, representing 800 oi
Co.
Hershey
the
and
Asociation,
bottlers, being members of our
the
course
of
and
industry,
bottling
the
to
sells a great deal of sugar
associas
known
is
what
ate
Co.
Hershey
the
Coca-Cola Co. itself and
finance
ate members of the A. B. C. B., and they agreed, then, to
this all the way through.
carried
Senator WALsH of Montana. So that althoughi t is being
carried
being
is
it
fact
of
matter
a
as
on by the Bottlers Association,
Hershey?
and
Coca-Cola
bottlers of
by the
onMr.
OWENS. Being aid for by them.
Senator WA.%stt of Montana. Being paid for by them?

Mr. OWExS. Yes.

who is
Senator CARAwAY. Did you make a request of everybody
Congress?
at
members
to
handling Coca-Cola to write
Mr. OwEs. Yes, sir.

1778

LOBBY IN VESTIOATION

Senator CARAWAY. That explains, then why certain people who

were doing a few dollars of business with Coca-Cola were writing
me how necessary it was to keep froh being put but of business.
Mr. Owr.Ns. I thought you meant the Coca-Cola bottlers. Those
are the only people I had any business with, the people ill our
association.
Senator CARAWAY. Well, that is the source. I wondered what
started the correspondence.
Senator RopirsoN of Indiana. You did work in close connection
with Mr. Lakin and Mr. Shattuck, did you not?
Mr. OWENS. We hkve no relation whatsoever with Mr. Lakin and
Mr. Shattuck other' than the fact that I have probably seen them-,
Senator RoBiNsoN of Indiana. You are interested in the same

cause?
Mr. OwENs. Certainly.

Senator RoNSON of indlana. And they did wire you and write
you from time to time about the most intimate matters in connection
with this tariff?
Mr. OwzNs. I don't know how intimate they were.
Senator ROBINSON of Indiana. How about this telegran.I Here
is what purports to be a telegram from H. C. Lakin, president of
the Cuban Sugar Co., dated April 4, to Junior Owens in which he
asks you to write Mr. Hawley protesting against any increase. He
evidently knewyou Would do that, did he not?
Mr. OWENS. Do you find anything in there that says I did I
Senator RoBINsoN of Indiana. Well, di4 you?
Mr. OWENS. No.
Senator RoBixsoN of Indiana. You didn't send such a telegram I

Mr. Owws. No.

M
Se
all t
M
So
nittn
what
This
arril
M

Se
peni l
three

won

tip c
from
doin
thin
M
Se
to 1
M
8
and

it.

Se
tek

Senator RoINsoN of Indiana. But he did ask you?

Mr. OwEvNs. Obviously.
Senator RoBINsoN of Indiana. Did you ever send any telegram to
Mr. Hawley 1
Mr. OWNS. No.
Senator RoBINSON of Indiana. Did you ever talk to any of the
Congressmen?
Mr. OWENS. No.
Senator ROBINSON of Indiana. Did you ever have anybody else
do so in the name of your concern?
Mr. OWENs. No.
Senator ROBINSON of Indiana. Here is a cablegram from Mlessrs.
Lakin and Shattuck, from Habana. See if you recognize this one.
It is dated April 11, 1929, and addressed to Junior Owens, 720 Bond
Building:
Reliable confidential tip just received from Washington Indicates we have
chance Ways ano Means Committee voting against Increase in tariff provided
we can win over Watson, Estep, and Bacharach, who are wavering, thus giving

tool

through your organization. Most important.

us majority. Please immediately bring 6l1 possible pressure on these men

(Signed)

LAxIt, SHATUoK.

That was from Habana. You remember receiving that cable?

Mr. OwENs. Yes, sir.
Senator ROBINsoN of Indiana. Is it reasonable that they would
send you wires and cablegrams of this kind if they thought you were
not in a responsive or receptive mood to receive them?

ther
M

S
Prai

S
have

Yor

M,

long

A
8
him
S
Pe

Ter?
lead

LOBBY INVESTIOArION

1770

Mr. OwENs. I was in a receptive and responsive mood.

Senator ROINSON of Indiana. Then, you were working with them
all the time?
Mr. OWENS. Working towards the same goal.
Senator RoB,-soN of Indiana. I wish you would tell the committee, if you can explain this situation. As I understand it from
what is before us, Messrs. Lakin and Shattuck were in Habana.
This was in April. In some manner or other a confidential tip
arrived in Habana from Washington.
Mr. Owvs. Yes; that is what they say.
Senator ROBINsIO of Indiana. Telling them precisely what is happening on the Ways And Means Committee, and indicating that if
three members of Congress who are alleged to be wavering can be
won over, then they have a chance, to use his own language. That
tip comes clear from Washington to Habana and then is transferred
from Habana back to you in Washington. Then you are to start
doing your work, putting on the pressure. Is that the way these
things were handled generally, that tips would goMi'. Owm.as. I don't know anything about the telegram.
Senator RoBINSON of Indiana. A tip would go from Washington
to New York.
Mr. OwE.Ns. I don't know a thing about it.
Senator RoBINSON of Indiana. Then from New York to Habana,
and from Habana back to -you?
Mr. OwE.%s. All I know is what the telegram said when I received
it.
Senator ROBINSON of Intliana. What did you do on receipt of the
telegram?
Mr. Ow~sS. On receipt of the telegram I got out a night letter
to our members in the districts in which these gentlemen were located
and asked them to get in touch with them and try to prevail upon
them to vote against an increase in the tariff.
Senator ROBINSON of Indiana. You did put on the pressure?
Mr. OWENS. I did put on the pressure.
Senator ROBINSON of Indiana. Are you acquainted with Mrs.
Pratt, the Congresswoman from, New York?
Mr. OwES. No.
Senator RounsoN of Indiana. Here is a letter that purports to
have been written by you to H. H. Pike, jr., of 91 Wall Street, New
York, dated April 95, 1929.
My DzAR Ms. Pnca: Mr. Lakin has just left the office after our having a

long chat about the situation in general.

Andyou did know Mr. Lakin pretty well?

Mr. OwES. I said I knew Mr. Lakin.
Senator RoBiNsoN of Indiana. At first you didn't seem to know
him very well.
Mr. OwENs. I beg your pardon. I told you I had met him about
a dozen times.
Senator RoBInsoN of Indiana. I continue:
Personally, us I told you the other day, I think everything
as nWely as could be expected, and that we are now laying
very well for a real constructive fight at the oplportune time.
I think it would be a masterstroke if we could get Mrs.
lead the fight on the floor of the House against pilfering of

is moving along
the groundwork
Pratt to openly
America's sugar

1780

LOBBY INVESTIGATION

bowl through au increased tariff. If she would get on the floor and speak
constructively against this tariff, calling attentjou of the women of the country
to this attempt to make additional levy on one of the basic household commodi.
ties, It would mean publicity in every paper In the land. In my opinioit sud,
a move would be of untold value to Mrs. Pratt, provided she Is ambitious to
be one of the OUtstanding women of America. It Is one of those cases where
It is six for her afid Aix for us. That WOuld be my Idea of a suggestion to her.
We could furnish her all the material she needs to make this fight and, of
course we would be mighty glad to do it.
Hoping to see you the next time you are down, and extending my kindest
personal regards, I am
Very truly yours.

That is your letter, is it not?

Mr. OwENs. Yes.

Senator ROBINSON of Indiana. There is a great deal more of this,

but, Mr. Owens, we will have you come back again. There is quite

a bit of this correspondence we will discuss at a later date.

Senator CAawAY. The committee will stand adjourned, to meet
on notice of the chairman.
(Whereupon, at 12.05 o'clock p. m., the committee adjourned to
meet on notice of the chairman.)

Cl

I.,

yE

en

-LOBBY INVESTIGATION
TUESDAY,

ANTARY 7, 1980

UNITED STATES SENATE,

ON THE JUDICIARY
COMMITTEE
THE
OF
SUBCOMMITTEE

Wae1&ingon, b. a.

The subcommittee met, pursuant to adjournment, at 10 o'clock

a. in.m room 212, Senate Office Bulding, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Blame, Robinson of Indiana, and Walsh of Montana.
Present also: John G. Holland Esq., counsel to the committee.
Senator CARAWAY. Is Mr. Baldwin m the room?
TESTIMONY OF WILLIAM H. BALDWIN
(The witness was duly sworn by Senator Caraway.)
Senator CARAWAY. Will you give the stenographer your name?
Mr. BALDWIN. William H. Baldwin.
Senator CARAWAY. Your place of residence?
Mr. BALDWIN. Of residence?
Senator CARAWAY. Yes.
Mr. BALDWIN. Uncasville, Conn.
Senator CARAWAY. What is your occupation?
Mr. BALDWIN. Publicity.
Senator CARAWAY. What does that embrace, Mr. Baldwin?
Mr. BALDWIN. Dealing with news in its various manifestations,
newspapers, magazines and so forth..
Senator dARAWAY. Dealing with it in what way?
Mr. BALDWIN. Distributing news through the media of publications.
Senator CARAWAY. That is distributing news somebody has paid
you to distribute?
Mr. BALDWIN. Yes, sir.
Senator CARAWAY. Trying to get it into the news columns instead

of putting it into the advertising columns?

Mr. BALDWIN. Yes; on the basis of legitimate news, if it has a news
value.
Senator CARAWAY. What do you mean by legitimate news?
Mr. BALDWIN. That is, with a real news value. Of course it is left
entirely with the editors whether it is accepted or rejected. If you
put in advertising, you put in anything you want to.
Senator CARAWAY. How long have you been so employed?
Mr. BALDWIN. I have had my own office for three or four years.

Senator CARAWAY. And prior to that time?

1781

1782

LOBBY INVESTIGATION

Mr. BALDWIN. I did a number of different things. I was on a news.

paper, and I was with a corporation in New York. I was also the
executive secretary of the American Arbitration Association for a time.
Senator CARAWAY. And what is it?
Mr. BALDWIN. It is an organization that is trying to promote the
use of arbitration of disputes in business rather than take them to
the courts.
Senator CARAWAY. What newspaper were you with?
Mr. BALDWIN. The New York Evening Post.
Senator CARAWAY. In what capacity?
Mr. BALDWIN. Various editorial capacities; reporter, copy reader,
assistant editor of the Saturday Magazine, and so forth.
Senator CARAWAY. You have a contact with the bottlers associa.
tion?
Mr. BALDWIN. Yes, sir.

ver
wit

W&

but

Senator CARAWAY. When did it commence?

Mr. BALDWIN. As I remember it, March 18, 1929.
Senator CARAWAY. And how long was it to continue?

Mr. BALDWIN. It was a 3-month agreement, and since then it has

been continued from month to month.
Senator
tariff
bill? CARAWAY. You were waiting to see what happened to the
Mr. BALDWIn. Yes, sir.
Senator CARAWAY. The purpose of those who employed you was
to influence the result of the tariff legislation on sugar?
Mr. BALDWIN. It was to try to arouse-to educate public opinion
on the various factors involved in the sugar tariff schedule.
Senator CARAWAY. The result they hoped to get was either to have
a lower sugar dutyMr. BALDWIN. It was to retain the present duty, sir.

Senator

CARAWAY.

Mr. BALDWIN. Yes.

Retain the present duty?

Senator CARAWAY. It was aimed at legislation?

Mr. BALDWIN. It was aimed to prevent any further legislation on
this point.
Senator CARAWAY. There is no hesitancy on your part in saying the
intent was to influence legislation on that question?
Mr. BALDWIN. Absolutely none.
Senator CARAWAY. How much did they pay you?
Mr. BALDWIN. They paid me $1,500 a month for the first three
months. At the end of that time that retainer continued, and I
received a bonus of $1,000
Senator CARAWAY. ier month?
Mr. BALDWIN. Per month.

Senator

CARAWAY.

What was that for?

Mr. BALDWIN. For the same work, very largely.

Senator CARAWAY. Were you to do anything more than you were

doing?

Mr. BALDWIN. No; nothing more than what I was doing.

Senator CARAWAY. Why did they increase your pay frbm $1,500
to $2,500 a month?
* Mr. BALDWIN. When the thing started we did not know how much
of a job it was, how much time my office would have to expend on
this. I have other accounts, you see. And I found it was taking a

it
CUs

to
her
aid
dir
tha

stol
901
nal
ass

Ass

Pr

the
Ti

Lo

LOBBY INVESTIGATION

1788

very considerable amount of the time of the office, so I took it up

with them, and they felt the work we wore doing justified this bonus.
Senator CARAWAY. Did you have a contract with them that you
would got so much of their matter in the news columns?
Mr. BALDWIN. No, sir. I never do. That I can not control.
Senator CARAWAY. Then you do not guarantee?
Mr. BALDWIN. I can not deliver, because I don't control it.
Senator CARAWAY. How many columns of news stories did you get?
Mr. BALDWIN. I have no idea, sir. We have kept a clipping book,
but have never measured the space at all.
Senator CARAWAY. You have no idea at all?
Mr. BALDWIN. I have no idea at all.
Senator CARAWAY. You know whether it was 1 or 50, don't you?
Mr. BALDWIN. How is that?
Senator CARAWAY. You know whether it was 1 or 50, don't you?
Mr. BALDWIN. Columns, you mean?
CARAWAY. Yes.

Senator

Mr. BALDWIN. Considerably more than 60.

Senator CARAWAY. Was it 150 columns?

Mr. BALDWIN. It was considerably more than that, I am sure.

Senator CARAWAY. How many newspapers did you succeed in
havifig accept your news stories?
Mr. BALDWIN. That I don't know either. We have never analyzed
it at all.
Senator CARAWAY. Don't you have some way to .report to your
customers what you do for them Mr. Baldwin?
Mr. BALDWIN. I do in cases of other clients.
Senator CARAWAY. But these you don't.
Mr. BALDWIN. In this case I haven't reported in those terms.
Senator CARAWAY. Why?
Mr. BALDWIN. This was such a b*g subject it would be very hard
to determine exactly what my office did. There were a certain number of direct things we know we did but I think we stimulated a considerable amount of discussion and news about sugar that was not
directly tied up with the American Bottlers of Carbonated Beverages.
Senator CARAWAY. Will you give us the names of the newspapers
that you know did carry some of your stories?
Mr. BALDWIN. I can tell you the press associations that carried the
stories, and those press associations deal with groups of papers, from
900 to 1,600.
Senator CARAWAY. All right; give us that.
Mr. BALDWIN. The Associated Press, the United Press, the Inter-

national News Service, the Universal Service, the N. E. A., and other
associations.
Senator CARAWAY. Isn't that about all the news services?
Mr. BALDWIN. No, sir, there are some others. The Central Press
Association. I think they may have used some; the Consolidated
Press.
Senator CARAWAY. Do you know the names of some newspapers
that carried your stories?
Mr. BALDWIN. Well the New York World, the New York HeraldTribune, the Springfield (Mass.) News, the Baltimore Sun, the St.
Louis Post-Dispatch. Any number of them.

1784

LOBBY INVESTIGATION

Senator CARAWAY. Give the rest of them. Lot us see if we can't

get all?

Mr. BALDWIN. Senator, I just have to guess there, because I

haven't checked them but I know those papers have carried news,
and statements of the bottlers association.
Senator CARAwAY. Will you make us a list some time, and send

it to us?

Mr. BALDWIN. I shall be glad to file the whole clipping book.

Senator CARAWAY. I dont want the clipping book. I just want
the names, because I don't want to read the clippings.
Mr. BALDWIN. All right, sir.
Senator CARAWAY. Did any of the papers comment editorially?
Mr. BALDWIN. Some of them have.

Senator CARAWAY. Will you be able to furnish us the names of

those papers?

Mr. BALDWIN. At least one of them.

Senator CARAWAY. All right. I would be interested in knowing
those papers. Did you do anything else for those people except get
out news stories?

Mr. BALDWIN. Yes, sir; I tried to interest various groups in looking into the sugar schedule, and taking such action as they thought
the situation merited.
Senator CARAWAY. Or, rather, what you thought it merited?
Mr. BALDWIN. All I could do was to call it to their attention and
let them do what they wanted to.
Senator CARAWAY. You gave them the reasons?
Mr. to
BALDWIN. I gave them my reasons for thinking that they
'ought
doCARAWAY.
something..
. were your reasons, or
Senator
Did you tell them they

that the public was clamoring for this action?

Mr. BALDWIN. I told them I was representing the American
Bottlers of Carbonated Beverages in this thing, and that such and
such were the facts as I saw them.
Senator CARAWAY. But you always saw them just like the bottling
association saw them, didn' t you?
Mr. BALDWIN. I don't get that.
-

Senator CARAWAY. I say, you always saw those facts as the

bottling association saw them?

Mr. BALDWIN. I think so. I don't think I have ever had any differences with Mr. Owens on any major thing.
Senator CARAWAY. Do you make any speeches?
Mr. BALDWIN. No, air; I do not.
Senator CARAWAY. What association did you take it up with, Mr.
Baldwin?
Mr. BALDWIN. The American Exporters and Importers Association.
Senator CARAWAY. What action did they take?
Mr. BALDWIN. They passed a resolution protesting against any
further increase in the sugar schedule.
Senator CARAWAY. What other association?
Mr. BALDWIN. The Chamber of Commerce of the State of New
Yor
CARAWAY. What action did they take?
Mr.

BALDWIN.

A similar action, similar resolution.

LOBBY INVESTIOATION

1785

Senator CARAWAY. What other association?

Mr. BALDWIN. I took it up with-I had a conversation with
Doctor Buell.
Senator CARAWAY. Who is he?

Mr.

BALDWIN.

Of the Foreign Policy Association; and I found he

was planning to do something.

Senator CARAWAY. Did he do it?
Mr. BALDWIN. The Foreign Policy Association issued a bulletin
entitled "Cuba and the Sugar Tariff," as I remember the title.
Senator CARAWAY. It was for the present rates or lower rates?
Mr. BALDWIN. It didn't come out for anything. It was just a
study or survey of the whole situation.
Senator CARAWAY. Did you take it up with an association that
would not pass a resolution, that did not agree .wthyou?
Mr. BALDWIN. Another group I took it up with was the Federal
Council of Churches of Christ.
Senator CARAWAY. I thought they were preserving peace. I did
not know they were fixing tariffs.
Mr. BALDWIN. They just issued a bulletin which studied the situation, gave both sides, and so forth.
Senator CARAWAY. Who prepared the bulletin?
Mr. BALDWIN. That I don't know.
Senator CARAWAY. Who paid for it?
Mr. BALDWIN. They get out a bulletin periodically, and one of
the issues was devoted to this subject.
Senator CARAWAY. Did anybody pay for that particular bulletin?
Mr. BALDWIN. Whoever
Tas
for all the bulletins. There was
no special financing of that bulletin.
Senator CARAWAY. Did your group finance any publication that
was issued or pretended to be issued by some association?
Mr. BALDWIN. The only publication that we financed was the book
What Price Sugar?
Senator CARAWAY. And who issued that?
Mr. BALDWIN. It was issued by the American Bottlers' Association.
Senator CARAWAY. Did you finance or assist in financing any other
bulletins?
Mr. BALDWIN. No, sir; not that I know of.
Senator CARAWAY. Did you contribute to any other association
that was helpingMr. BALDWIN. No, sir.
Senator CARAWAY. To carry on this campaign?
Mr. BALDWIN. No.
Senator CARAWAY. Did you pay for any of the propaganda that
you got into the papers?
Mr. BALDWIN. N ever.
Senator CARAWAY. Whatever you got you kept?
Mr. BALDWIN. What?
Senator CARAWAY. I say, whatever you were paid, you kept?
Mr. BALDWIN. Yes sir; that was my retainer for my services.
Senator WALSH of Montana. I am curious to know about this
bulletin gotten out by the Foreign Policy Association. What did
you have to do with that?

1786

LOBBY INVESTIGATION

Mr. BALDWIN. All we had to do was to supply certain statistics.

We submitted certain statistics and a very informal brief of our
feeling on the situation. Some of that may or may not have been
incorporated in the bulletin.
Senator WALSH of Montana. Anyway, you supplied it with that
end in view?
Mr. BALDWIN. I did.
Senator WALSH of Montana. Where did you get the information?
Mr. BALDWIN. We got it from various sources. We got it from
the United States Sugar Association, from various Government
reports, from the hearigs before the House Ways and Means Com.
mittee, and so forth and so on.
Senator WALSH of Montana. And who of your force actually did
that work of assembling this material?.
Mr. BALDWIN. I did some, my associate, Mr. Murmey did some,
and another man in the office did some.
Senator WALSH of Montana. And as to the bulletin gotten out by
the association of churches?
Mr. BALDWIN. Exactly the same procedure there, sir.
Senator WALSH of Montana. How did you come to be supplying
information to the Foreign Policy Association?

Mr.

BALDWIN.

an
th
w
of

ti,
th

P1
di

On my own initiative, I went there, because I knew

they were interested in foreign affairs and I thought it would be well

to take it up with them, to see whether they were planning to issue
any study of the situation at that time.
Senator WALSH of Montana. So that you really instigated the
bulletin?

Mr. BALDWIN. No; I found they were already thinking of it. I may

have speeded it up a little, but I have no control over the Foreign

Policy Association or any of them, naturally. I just went to them.
Senator WALSH of Montana. How did you come to be concerned
in the church association?
Mr. BALDWIN. Exactly the same, sir. I thought it would be very
helpful if the churches would come out with a study of this situation
for the benefit of their members.
Senator WASLH of Montana. Well, that is what I am trying to find
out. What prompted you to go to a church association to carry on a
tariff fight on sugar?
Mr. BALDWIN. Well, because that particular church association
deals, through its research bulletins, in subjects of general interest
at the tune, general and timely interest, and I felt that the sugar
tariff, involving relations with Cuba, and involving various domestic
relations, was such a subject.
Senator WALSH of Montana. Do you mean to tell us this Association of Federal Churches of America issues bulletins on current topics?
Mr. BALDWIN. Yes, sir.
Senator WALSH 6f Montana. On, for instance, the pendeney of the
Naval Disarmament Conference in London?
Mr. BALDWIN. I don't know. I imagine they might have. If you
would like me, I would try to get from them a list of their subjects.

Senator WALSH of Montana. On farm relief?

Mr. BALDWIN. They may have on farm relief.

Senator WALSH of Montana. Oh, they may have i but I am trying

to find out from you what it was suggested to you going to the Federal
Council of Churches on this.

y
Z

0
g

LOBBY INVESTIGATION

1787

Mr. BALDWIN. Because I knew they got out a periodical bulletin,

and I wanted to see whether they would devote one of their issues to
this subject.
Senator WALSH of Montana. But it seems to me so remote from
what we would judge from the name of the organization was the scope
of its activities.

Mr.

BALDWIN.

Well, I just knew there was such a bulletin.

Mr.

BALDWIN.

Yes, sir.

Senator WAL:SH of Montana. Do you know if they got out a bulletin on Muscle Shoals?
Mr. BALDWIN. I do not know, sir.
Senator CARAWAY. Do you know any bulletin they got out except
this one?
Mr. BALDWIN. No, I do not. I can't tell you the title of any other
bulletin. I just know they got out a periodical bulletin.
Senator WALSH of Montana. Who did you see about this matter
in connection with the Federal Council of Churches?
Mr. BALDWIN. I saw several of the officers there. The one I saw
primarily I think his name was Doctor Johnston. He is the research
director.
Senator WALSH of Montana. Have you got a copy of the bulletin
they got out?
Mr. BALDWIN. I have, but not with me.
Senator WALSH of Montana. I wish you would send us a copy, if
you please.
Senator WALSH of Montana. We have a copy of the Foreign
Policy Association bulletin. With respect to the Federal Council
of Churches, you went to them just simply because you knew they
got out bulletins?
Mr. BALDWIN. Yes, sir.
Senator WALSH of Montana. On various subjects?
Mr. BALDWIN. Yes, sir.
Senator WALSH of Montana. And what was it that inspired you to
go to the Foreign Policy Association?

Mr. BALDWIN. A similar understanding, that they got out bulletins

on various subjects of national interest, and I went with the hopeSenator WALSH of Montana. But there are so many organizations
that get out bulletins. Take the American Peace Society. It gets
out bulletins?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. The Carnegie Foundation gets out
bulletins?
Mr. BALDWIN. Yes sir.
Senator WALSH of Mlontana. The American Federation of Labor
gets out bulletins?

Mr.

BALDWIN.

Yes, sir.

Senator WALSH of Montana. The Farm Bureau Federation gets

out bulletins?.
Mr. BALDWIN. Yes.

Senator WALSH of Montana. How did you come to pick out these
two particular organizations that got out bulletins?
Mr. BALDWIN. Well, perhaps one reason was that my office is in
New York, and their offices are in New York.

1788

LOBBY INVESTIGATION

Senator WALSH of Montana. To whom did you report concerning

your activities?

Mr. BALDWIN. I reported to Mr. Pike and Mr. Owens.

Senator WALSH of Montana. Who is Mr. Pike?
Mr. BALDWIN. He is a sugar broker in New York.
Senator WALSH of Montana. A sugar broker?

wa
teil
mu

Mr. BALDWIN. Yes, sir.

Senator WALSH of Montana. I thought you were hired by the

bottlers association?
Mr. BALDWIN. I Was.
Senator WALSH of Montana. Who employed you?
Mr. BALDWIN. Mr. Junior Owens.
Senator WALSH of Montana. But you reported to a sugar broker
in New York by the name of Pike?
Mr. BALDWIN. At the suggestion of Mr. Owens. I reported to
both of them.
Senator WALSH of Montana. You reported to both Owens and
Pike?
Mr. BALDWIN. Yes, sir, and Mr. Pike being in New York I was in
perhaps more frequent contact with him than I was with Mr. Owens.
It all dependedSenator WALSH of Montana. Where was Mr. Owens's place of

He

is

tio

business?

Mr. BALDWIN. Washington.

Senator WALSH of Montana. How did it come about that you

reported to Pike?
Mr. BALDWIN. At the suggestion of Mr. Owens.
Senator WALSH of Montana. What did he have to do with the
matter?
Mr. BALDWIN. He employed me and told me what to do.
Senator WALSH of Montana. No, but I am speaking about Pike.
How did Mr. Pike come into the picture at all?
Mr. BALDWIN. That I don't know, sir.
Senator WALSH of Montana. You don't know?
Mr. BALDWIN. No.
Senator WALSH of Montana. There are a great many sugar brokers
in NeV York, are there not?
Mr. BALDWIN. I believe so.
Senator WALSH of Montana. That is what I want to know. How'
did it come about that you were reporting to Pike?
Mr. BALDWIN. Because Mr. Owens told me to report to Mr. Pike.
Senator WALSH of Montana. Yes, I understood that, but can you
give us any enlightenment whatever as to why it was Mr. Owens
asked you to report to Mr. Pike, a sugar broker in New York?
Mr. BALDWIN. I imagine itwas because Mr. Pike was an associate
member of his organization and particularly interested.
Senator WALSH of Montana. But there are some thousands of
members of that association, aren't they.
Mr. BALDWIN. I believe so.
Senator WALSH of Montana. And quite a good many of them live
in New York.
Mr. BALDWIN. I imagine so.
Senator WALSH of Montana. Well, we are still in the dark as to
why this man Pike was picked out, and you can't enlighten us.

tic

at
W
as

W
y

LOBBY INVBSInGATION

Mr.

BALDWIN.

"1789

Except that he had a particular interest which he

was ready to express. He can probably toll you or Mr. Owens can
tell you more.
Senator WALSH of Montana. Really, as a matter of fact, Mr. Pike
must have represented somebody in this matter.
Mr. BALDWIN. I believe he does. I know he does.
Senator WALSH of Montana. Whom did he represent?
Mr. BALDWIN. I understand his firm is selling agents for the
Hershey Sugar Corporation.
Senator WALSH of Montana. And the Hershey Sugar Corporation
is interested how?

Mr. BALDWIN. As a producer of sugar.

Senator WALSH of Montana. Have you any more definite information concerning it than that he is the broker for Hershey & Co.?

Mr.

BALDWIN.

No, sir, I have nothing.

Senator WALSH of Montana. As a matter of fact, your compensation to a large extent came from Hershey & Co., didn't it?
Mr. BALDWIN. I imagine it did.
Senator WALSH of Montana. What makes you imagine so?
Mr. BALDWIN. Well I just received it from Mr. Pike.
Senator WALSH of Montana. Mr. Pike paid you?
Mr. BALDWIN. Mr. Pike paid me.
Senator WALSH of Montana. You weren't paid by the bottlers
association that hired you, but paid by Pike?
Mr. BALDWIN. The thousand dollars I was paid by Mr. Pike.
Senator WALSH of Montana. Just why was it that, being employed
by the bottlers association, you were not paid by the bottlers association but paid by Pike?
Mr. BALDWIN. I was paid $1,500 a month by the bottlers association, by Mr. Owens.
Senator WALSH of Montana. Well?
Mr. BALDWIN. And Mr. Pike gave me this extra thousand a
month, which I always carried on my books as a bonus. When he
;ave it to me the first time he said he had the privilege of stopping
it at any time, and I said of course he had.
Senator WALSH of Montana. That is a matter concerning which I
want to inquire.

Mr. BALDWIN. Yes, sir.

Senator WALSH of Montana. You had a contract with the bottlers

association by which you were to get $1.500 a month?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. And that is all you got for three
months?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. And at the expiration of three months
the $1,500 compensation was continued?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. And you got $1,000 riioro from Pike?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. Whet was the arrangement under
which you got the $1,000 additional?
Mr. BALDWIN. There was no further arrangement.
Senator WALSH of Montana. Well Mr. Pike just came and tendered
-you the $1,000?

1790"

LOBBY INVESTIGATION

Mr. BALDWIN. No; I took it up with them. At the end of three

months I saw exactly how bkg the job then was, how much time it
was taking of my orgaization and my own time, and I took it up
with Mr. Pike and Mr. Owens and said I thought it really rated
additional compensation.
Senator WALSH Of Montana. Yes.
Mr. BALDWIN. And the matter was taken under consideration by
them, and by about the end of the next month Mr. Pike told me he
was going to give me a thousand dollars a month extra for such time
as he wanted to. Of course the former agreement was only for the
first three months. Thereafter the whole thing has been running
along, because we did not knowSenator WALSH of Montana. After the expiration of the three
months you had no definite period as to time?
Mr. BALDWIN. No, sir.
Senator WALSH Of Montana. With either of them?
Mr. BALDWIN. No, sir.
Senator WALSr of Montana. It just ran on?
Mr. BALDWIN. Yes, sir; with sort of an agreement that there
would be 30 days' notice.
Senator WALSH of Montana. But after the three months you
insisted you should get additional compensation?
Mr. BALDWIN. I didn't insist, Senator.
Senator WALSH of Montana. Well?
Mr. BALDWIN. I asked whether they didn't think I rated it, and
apparently they decided the service did.
SP-enator WALSH of Montana. I am curious to know why you desig-

P
P

o
I

nate it as a bonus.
Mr. BALDWIN. Well, that is just the way I carried it, because it
was an addition to the current retainer I was getting and I didn't
know how long it was going to last.
Senator WALSH of Montana. Yes but as I understand you, you

conceived you were not getting what you were. really entitled to

considering the value of the work you were doing, and the amount of
time expended on it.
Mr. jSALDWIN. Yes.

Senator WALSH of Montana. And you took that up with the

gentlemen interested in the matter and they apparently agreed with
you and they thereupon accorded you an additional thousand dollars
a month?
Mr. BALDWIN. Yes with the privilege of stopping it at any time.
Senator WALSeH of Montana. That would seem to be a straight
agreement for that amount of compensation, and why should it be

designated a boiius?
Mr. BALDWIN. That was the way I just carried it on my books.
I carried it that way because I did not know. When it was given it
was also stated that they reserved the privilege of stopping it at any
time. I looked on it as a bonus so long as it should run.
Senator WALSH of Montana. Yes, but we generally speak of a
bonus as something one gets in addition to what he is really entitled
to under his agreement.
Mr.

tion.

BALDWIN.

Well, I hadn't thought of bonus just in that defini.

LOBBY INVESTIGATION

1791

Senator WALSH of Montana. You don't know then why it was that
part of your compensation was paid by the bottlers association and
part by Pike?
Mr. BALDWIN. No, sir.
Senator CARAWAY. Did you say that was the Federal Council of

Churches, or the Federation of Churches?

Mr. BALDWIN. I think it was the Federal Council.
Senator WALSH of Montana. Now, as a matter of fact, Mr. Baldwin, the bottlers association didn't pay you anything at all, did it?
Mr. BALDWIN. That I don't know. I got my money. I was told
to bill Mr. Owens and I did it. He was introduced to me
Senator WALSH of Montana. Told by whom to bill Mr. Owens?
Mr. BALDWIN. Mr. Owens himself.
Senator WALSH of Montana. You know, as a matter of fact, do

you not, that the amount paid you by the bottlers association was
simply paid to the bottlers association by Pike?
Mr. BALDWIN. I have since found that out.

Senator WALSH of Montana. Did you also find out the reason for
that?
Mr. BALDWIN. No, sir.
Senator WALSH of Montana. I want to call your attention to some
of the correspondence. I have, here a letter from your files of date
March 23, 1929, written by Pike to P. A. Staples, of the Central
Hershey Co., Cuba, in which he says:
I feel that in working this thing out you are performing a distinct service to
Cuba.

Who is Staples?

Mr. BALDWIN. I understand he is manager of Central Hershey.

Senator WALSH of Montana. I continue:
And if you have not done so, I wonder if it would not be both advantageous

and proper to tellPresident Machado what we are doing in connection with the
bottlers association. Might not we also offer our service to him for the purpo08
of putting before the Amerlean public any views he may have on the subject,
which he would like to have expressed but does not want to have as coming from
the Cuban Government?

How did this letter get into your flips?

Mr. BALDWIN. Probably Mr. Pike sent it to me as an information

copy. I don't know what it is there. It is a carbon copy, isn't It?

# Senator WALSH of Montana. Mr. Pike wanted you to know what
he had written to Staples?
, Mr. BALDWIN. Yes; because that might work into a certain
publicity lead.
. Senator WALSH of Montana. Do you know whether President

Machado did, through you, communicate any views to the American

public or the American Government, that ho preferred not to appear
as coning from the Cuban Government?
or Mr. BALDWIN. To the best of my knowledge nothing ever came of
that.
Senator WALSH of Montana. He didn't seem to think well of
that idea, apparently?
IMr. BALDWIN. That I don't know. I don't know whether it
went to him.
Senator WALSH of Montana. What did you think about it?

1792

LOBBY INVESTIGATION

Mr. BALDWIN. Well, it seemed to be a good thing to try out.

Senator WALSH of Montana. You would have been quite willing

to put out through your news agencies and otherwise the views of
President Machado that It would not be very wise to communicate
through official channels?
Mr. BALDWIN. Yes; I certainly would. Naturally I would have
to give some sort of source for them or it wouldn't get very far in the
news channels.
Senator WALSH of Montana. We find from your files your letter
to Mr. Pike of date March 29, 1929, in which you say:
Yesterday afternoon I approached the New York Times with the suggestion
that they should send a special writer to Cuba to go into the whole situation
behind the present superficial news from Cuba.

us.
192
M
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it r0
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IN

abe

Just what was the situation in Cuba at that time that you thought
in the interest of the sugar tariff it would be wise to send a special
.
representative to Cuba for?
Mr. IIALDWIN. As I say, the situation, as I remember it now, at
that time there was nothing but the routine news coming through
from Habana, routine Cuban news. The sugar tariff was coming
into the forefront, and it seemed to me that some newspapers might
be interested in going down there and writing up the background
the whole thing, that it would be made timely by- the action in Con.

not
A

Cuba.

Th

M
Jour

vac

the
the

gress here on the sugar tariff.

Senator WALSH of Montana. How could Cuban news, what was
happening down in Cuba, have any bearing whatever on the sugar
tariff?
Mr. BALDWIN. Well, it might have because of our relations with

1%
saic
pap
con'
wit

Senator WALSH of Montana. What?

Mr. BALDWIN. At least from the news point of view, it might make
e
an interesting story.
Senator WALSH of Montana. What was going on in Cuba?
.
.
Mr. BALDWIN. Yes; the general situation in Cuba.
Senator WALsi of Montana. What could have been going on In
Cuba that would be interesting so far as the sugar tariff is concerned?
Mr. BALDWIN. The life of the people, what the sugar crop meant
to them,.the whole economic life of Cuba.
Senator WALSu of Montana. I continue:
I have just talked to Mr. Lincoln, the assistant general news manager, and he
tells me confidentially that in all probability, L. 0. Speers, who Is one of their
crack men, will be ordered within the next few days to proceed from Mexico
City, where he now Is, to Cuba to cover this assignment.
Spears is attached to the Washington bureau of the New York Times and
accompanied Hoover on his South American trip. He has been sent to Mexico
City on a special assignment because of the revolution.
How did you come to get into such intimate relation with Mr.
Lincoln that he would convey to you confidentially this information?
Mr. BALDWIN. I met Mr. Lincoln once before. I knew he was
assistant general news manager over there, and when I had this idea
I naturally went to him as the appropriate man to see, and he told
me that Mr. Spears might go over there. The confidential part
was
that it was entirely up to 1dm, up to the New York Times, if they
were going to do it, to announce it at such time as they wanted to
and I didn't want anybody to give any prior announcement to it.

the
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LOBBY INVESTIGATION

170

Senator WAL8s of Montana. Another letter is of some interest to

us. This is a letter from you to Mr. Staples under date of April 24,
1929, in which you say:
Mr. Myron Weiss, associate editor of Time, Is making a trip to Cuba leaving

Friday, April 26.

How did you learn about that?

Mr. BALDWIN. Because I had been in touch with Mr. Weiss and
knew he was going down there. In fact, I think I suggested to him
it might be a good place to go.
Senator WALSH of Montana. That was a part of your work?
Mr. BALDWIN. I was trying in every way to get as much news
about Cuba and about sugar into the papers as I possibly could.
Senator WALSH of Montana. This, I see, is from Pike to Staples,
not from you.
Mr. BALDWIN. Yes.
Senator WALSH of Montana. Mr. Pike says:
Mr. Baldwin tells me that Mr. Weiss is therefore an important person in the
journalistic field here. Ho Indicated to Mr. Baldwin that he wanted a little
vacation and would like to go to Cuba with his wife.

Mr. Baldwin has arranged

for him a trip out on the Munargo at an extremely low rate at the courtesy of
the Munson Line.

Just what did you do about that, Mr. Baldwin?

Mr. BALDWIN. As I remember it, I went to the Munson Line and
said that Mr. Weiss would like to go to Cuba, that he was a newspaper man, and that if they could give him a better than regular
commercal rate it would be a courtesy to him. That is often done
with newspaper men by various lines to various parts of the world.
There is nothing abnormal in that at all, but what I was hoping at
the time was that Mr. Weiss would go down there, learn something
about Cuba, and have that in the back of his head when he was
performing his duties as the editor of Time thereafter. It was just
another thing to try to stimulate news about Cuba and about sugar.
Senator WALSH of Montana. Is this courtesy that is extended- by
these ship lines confined to the newspaper fraternity?
Mr. BALDWIN. That I don't know. I know that newspaper men
are given trips at reduced rates from time to time on various lines to
various parts of the world, thereby stimulating the news interest in
those places that they visit.
Senator WALSH of Montana. You don't know whether that extends to Members of Congress or not?
Mr. BALDWIN. I don't know, sir.
Senator CARAWAY. Senator, if you will just wait, here is your letter
just a little bit further down.
Senator WALSH of Montana. You add:
Mr. Lakin will give him passage over the railroads in Cuba, and will see to
his return voyage being pleasant and Inexpensive, but Mr. Lakin doesn't want
his name to appear. Neither does ours in connection with his trip out on the
Munargo.

What arrangement did you make with Mr. Lakin about that?

Mr..BALDWIN. I advised Mr. Lakin of this trip, and he said if I

could get Mr. Weiss down there, he would arrange for his return.
And, as I remember it, Mr. Weiss was called back earlier than he had
expected, and came back by train and paid his entire expenses back.
78214-80-T 5-2

1794

LOBBY INVESTIGATION

Senator WALSH of Montana. Do you understand that the railroads

in Cuba grant passes generally?

Mr. BALDWIN. That I don t know sir.
Senator WALSH of Montana. WeVl, why didn't Mr. Lakin want
his name to appear in this matter?
Mr. BALDWIN. That I don't know.
Senator WALSH of Montana. Well, you do know why you didn't
want yours to appear?
Mr. BALDWIN. Well, there was no use giving any publicity to the
fact that Mr. Weiss' trip was being-we didn't want to give advance
publicity to his trip down there. It was entirely for him to write
about it, and so forth. There didn't seem to be any particular reason
wh It should be.
senator WALSH of Montana. This don't relate to the fact of his
going down. This relates to your connection with the fact. Why was
it you didn't want your connection with the fact known?
Mr. BALDWIN. Is this my letter, Senator, or is that a letter from
Mr. Pike?
Senator WALSH Of Montana. This is a letter from Pike to Staples.

aT

Pie

bo
tali

Mr. BALDWIN. Well, I don't know whether I want to talk for Mr.

Pike, then.
Senator WALSH of Montana. Oh, that refers to Mr. Pike.
Mr. BALDWIN. Yes.

Senator WALSH of Montana. Mr. Pike did not want his connection
known with this thing, for some reason.
Mr. BALDWIN. Possibly not.
Senator WALSH of Montana. You don't know why he didn't want
it known?
Mr. BALDWIN. I do not.
Senator WALSH of Montana. Of course, it seems perfectly plain
does it not that these gentlemen did not want their names mentioned
in connection with the matter lest the value of Mr. Weiss' writings
upon the matter be discounted by that fact?
Mr. BALDWIN. That might be true.
Senator WALSn of Montana. Well, isn't it perfectly obvious?
Mr. BALDWIN. Yes I think so.
Senator WALSH of Montana. They were perfectly wiling that the
public should understand that Mt. Weiss, a newspaper man, went
down there on his own initiative, and at his own expense, and Without
prompting from any source whatever and therefore his observations
and his views would have a greater value than if it was known he was
sent down or spurred to go down by you and your associates?
Mr. BALDWIN. We knew Mr. Weiss. We knew we couldn't buy
his views at all:
to Mr. Staples
Senator WALSH of Montana. Mr. Pike writing
adds:
0
Whether he is eligible for entertaining or not I do not know.

Do you know what that cryptic phrase means?

Mr. BALDWIN. I have not the slightest idea.
Senator WALSH of Montana. A letter from Mr. Pike to Mr. Gurri.
Who is Gurri?
Mr. BALDWIN. I believe he is manager of Mr. Pike's office in
Habana.

en

fr
it
0
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LOBBY INVESTIGATION

1795

Senator WALSH of Montana. He says:

The attached letter to Mr. Staples will tell you of the visit of Mr. Myron
Weiss, associate editor of Time.
I would appreciate your meeting him on his arrival on the Munargo due to
arrive on May 1. I would sugg et that you book rooms for Mr. and Mrs. Weiss
at the Florida and indicate to the hotel people that he is a publicity man and it
would be well worth their while to give them an absolute rock-bottom rate.
Please do the beat you can in titls way getting him a nice room at a iery low price.
Please see that he promptly meets Mr. Staples or someone connected with
Hershey and that he goes out to the mill.
His return trip will be arranged through Mr. Lakin, president of the Cuba
company.
I think it most desirable to have this man friendly to Cuba in general and more
especially to Hershey refined sugar in partl6ular. We should get some publicity
both out of his paper and indirectly through him from other papers.
When you see them you can size up whether they are eligible for some social
entertainment, and if you think so, I would consider it proper for you to entertain them, billing me with the cost.

Do you know whether Mr. Pike did take care of the cost of entertaining this man?
Mr. BALDWIN. I do not know.

I know that Mr. and Mrs. Weiss

were very well liked down there, and were entertained quite widely.
Senator CARAWAY. Then they were found eligible for entertain.
meant?
Mr. BALDWIN. I think when Mr. Pike wrote this letter he had
never met Mr. or Mrs. Weiss.
Senator CARAWAY. I say, they were found then to be eligible for
entertainment?
Mr. BALDWIN. Yes.
Senator CxAAwAY. Whatever that means.
Senator WALSH of Montana. Mr. Murmey is an associate of yours?
Mr. BALDWIN. Yes sir
Senator WALSH of Montana. I have before me a copy of a letter by
Mr. Murmey to Mr. Pike, in which appears the following:
I am also Inclosing several copies of a highly confidential memorandum regarding sliding scales.

Do you know where that highly confidential memorandum came

from?

Mr. BALDWIN. No, sir. Have you it there? I don't know what
it is.
Senator WALSH of Montana. No I haven't.
Mr. BALDWIN. I don't know anything about it. There were a lot
of memoranda at that time.
Senator WALSH of Montana. I find in the files a copy of a sliding
scale. Perhaps the memorandum will be recalled, if I read the initial
paragraph as follows:
There Is considerable objection to the Garner plan because of the danger of
price manipulation. The Garner plan is based on the New York price of the
previous day,

and so forth and so on.

Does that recall it?
Mr. BALDWIN. We naturally, as soon as the sliding scale came up,
tried to get as much information as we possibly could on it, and we
got it from various sources. I can't identify any one of these things
without a very careful study of it.
Senator WALSH of Montana. If you looked at it, could you?

1796

LOBBY INVESTIGATION

Mr. BALDWIN. I might possibly. I don't know, sir.

Senator WALSH of Montana. I wish you would do so.
Mr. BALDWIN. I don't remember that. As I remember it, you said
Mr. Murmey sent that. He mi ht know more about it.
Senator WALsH of Montana. This is a letter from Mr. Murmey to
Mr. Pike. Mr. Murmey continues:

sha

The authority for the Information on the Inclosed memorandum entitled

"Report on sliding scale" is Mr. Thompson, sugar expert, United States Tariff

aop
t

Does that help you?

Mr. BALDWIN. Some. I imaine he must have been in touch with
Mr. Thompson and gotten that information.
Senator WALsH of Montana. And got the highly confidential
memorandum from an expert of the Tariff Commission?
Mr. BALDWIN. It probably would be confidential at the time.
Senator WALSHt of Montana. What is that?
Mr. BALDWIN. It probably would be confidential at the time.
Senator WALSH of Montana. Well, is your firm in a situation to
get private and confidential information from the Tariff Commission?
Mr. BALDWIN. Not as a rule. I don't knowSenator WALsH of Montana. Well, was there a variation from the
rule in this instance?
Mr. BALDWIN. I didn't get that information. You had better
ask Mr. Murmey about that, because I can't give you any information on it.
Senator WASLH of Montana. The question was scarcely along that
line. The present question is, is your firm in a situation to get
private and confidential information from experts of the Tariff
Comnssion?
Mr. BALDWIN. Not that I know of. I certainly don't set up to
do anything like that.
Senator WASLH of Montana. Do you know Mr. Thompson?
Mr. BALDWIN. I have never met him.
Senator WALSH of Montana. Well, you appreciate, I suppose, that
puts both you and Mr. Thompson in a somewhat embarrassing

Tb

ComaissIon.

situatiQn, Mr. Baldwin?

Mr.

BALDWIN.

It does. I don't know anything about the thing

at all.

tol
re
doi
kn

thi

pr
pr

of

44
h

Senator WALSH of Montana. Perhaps your recollection will be

refreshed by this letter, Mr. Baldwin.
Mr. BALDWIN. I see that that was signed by my secretary. It
must have been signed while I was out of the office, or something
like that.

Senator WALSh of Montana. That is not your signature?

Mr. BALDWIN. That is not my signature. There are two initials

underneath.
Senator WALSH of Montana. This reads as follows:

MAY 29, 1929.

Esq.,
Wehi ngton, D .
DBAH MR. OwENs: I am Inolosing a highly confidential memorandum on
sliding sales whfoh you may be Interested In seeing.
JUNIOR OwWNS,

nrey yours,

WILLIAM H. BALDWIN.

LOBBY INVESTIGATION

1797

And then appears the highly confidential memorandum, which I

shall ask be incorporated in the record in this connection.
(The memorandum referred to is as follows:)
[Ilghaly Confidential
I. L. Purdun, chief of the sugar section, foodstuff divison) Department of
Commerce, has been asked by the White House and Senator Smoot to work out
a practical sliding-scale. His name must not be mentioned In connection with
the following Information which he has given.
There are various bases that might be used in working out a sliding scale.
The sliding scale Idea just transfers the argument over the tariff rate from what
will be the tariff rate to what will be the base line for measuring the tariff on the
sliding scale.
The sliding-scale would be price fixing if the changes in duty were exactly
corresponding with the change In price; but If a change in duty does no, orre..
spond to the change in price, it would not be price fixing, but merely a tendeno:
to stabilize prices.
He personally believes that a sliding scale would be practicable, and that it
represents a scientific effort to protect the consumer and at the same time the
domestic industry. However, he says it must be administered by somebody who
knows the sugar business.
The Garner plan will not work. The first thing to do In attempting to work
out a sliding scale is to get an honest price on sugar. It can be done. It Is just
a matter of administration by some one who knows the sugar business.
The important factors are the price where the sliding scale begins; also the
price at whatever date line may be determined upon and the method of administration. All plans mentioned publicly today, so far as he knows, would give
the edge to some factor or other in the industry.
REPORT ON SLIDING SCALE
There is considerable objection to the Garner plan because of the danger of
price manipulation. The Garner plan is based on the New York price of the
previous day.
Since many buyers of raws are producers in Cuba, they might pay themselves
more for the sugar in order to reduce the tariff.
Guard against manipulation might be possible by inflicting penalties for sharp
practices--whatever they may be has not been determined--br by the creation
of a Government commission.
The same objection of manipulation holds for the price of refined sugar coming
in under the Garner plan.
It might be possible to fix the price of sugar as the foreign price obtained. But
this Is not a good method. Foreign price is affected by Internal taxes, such as we
do not have in this country.
The Idea of a sliding scale at first appealed to our Informant, but he has found
It to be unworkable. It can be juggled by making the Increment between degrees
higher or lower. The sliding-seale Increment might be so slight as to make a
750 duty relatively high.
The effect of the Harner plan is one of conjectire.
There has been no request directly from the White House for a sliding scale;
Mr. Hoover would like a plan worked out if possible so that if the c and f price i
New York got too high, the duty would not raise it. A request for a so-called
workable sliding scale has been made by Senator Smoot.
Mr. Hoover has worked out no sliding scale, nor has Representative Fort.
Our informant believes there is justification for an increased duty on refined
sugar. He finds the change from 960 to 040 confusing, but will not comment upon
it. The United States Tariff Commission has made no recommendations to the
Ways and Means Committee as to what the tariff should be.

Senator WALSH of Montana. Can you tell us anything now about

the matter?
Mr. BALDWIN. I had nothing to do with that. I can't give any
direct testimony on that, sir.
Senator WAlan of Montana. And you don't know to whom it was
that he gave this highly confidential information?

1798

LOBBY INVESTIGATION

Mr. BALDWIN. I do not, sir.

Senator WALSH of Montana. A communication from you to Mr.

Pike of date June 24, 1929, which is very interesting, referring to the
appeal of General Harbord in connection with the Leonard Wood
memorial for the eradication of leprosy. Do you recall that letter?
Mr. BALDWIN. Yes; I remember something about that.
Senator WALSH of Montana. You say to Mr. Pike:
I have before me the appeal from Gen. James Q. Harbord as national chairman
for the Leonard Wood Memorial for the Eradication of Leprosy. You will
remember that we briefly discussed this appeal the other day, and you brought
out the universal respect and affection of the Cuban people for General Wood.
What a graceful and significant thing it would be it President Machado,
himself a general and a patriot of those trying days when Cuba was fighting for
her independence, should make a personal, unsolicited contribution to this memo.
rial. This would create a splendid opportunity for him to point out that, whereas
Cuba and the United States may be conscious at this time of conflicting economic
interests, they do share certain rich memories which will persist as a common
heritage and a guiding inspiration in the settlement of any a parent conllict of
interests. In the spirit of this mutual tradition to which General Wood con.
tributed so whole-heartedly during his life, General Machado could most graciously offer his contribution to so constructive a Wood memorial.

What consideration inspired you to write such a letter as that?

Mr. BALDWIN. I had heard about the campaign for a Wodd memorial. I knew that President Machado had been prominent in the
Cuban war of independence and undoubtedly knew General Wood
and respected him, and I thought it would be, as I said in that letter,
a very gracious think if President Machado on his own volition
should offer a contribution to that fund.
Senator WALSH of Montana. Unsolicited?
Mr. BALDWIN. Unsolicited from the front.
Senator WALSH of Montana. But was this just merely a kind of an
inspiration from you, because you were particularly interested in the
Leonard Wood memorial?
Mr. BALDWIN. No; because I was interested in promoting CubanAmerican relations, and I thought ifSenator WALSH of Montana. To what end?
Mr. BALDWIN. To the end that it would have a possible effect on
the sugar tariff schedule.
Senator WALSH of Montana. Yes. And you were seizing on the
movement to erect a memorial to General Wood for the purpose of
affecting tariff legislation?
Mr. BALDWIN. I was.
Senator WALSH of Montana. You were going to utilize that
movement in order to reach your ends?
Mr. BALDWIN. Yes; and at the same time help that movement.
Senator WALSH of Montana. This was, as you wanted it, to appear
as a perfectly unsolicitedMr. BALDWIN., Yes.
Senator WALSH of Montana. Contribution from Machado?
Mr. BALDWIN. Yes.

Senator WALSH of Montana. Whereas, as a matter of fact, you

were yourself promoting it, at the same time?
Mr. BALDWIN. What I was hoping-I had no relationship with
the Wood memorialSenator WALSH of Montana. Exactly.

th
to
th

al

LOBBY INVESTIGATION

1799

Mr. BALDWIN. I thought if I made the suggestion to themthat was my first thought. Why don't you ask-President Machado
for a contribution? Then I thought well, if it should be suggested
to him by some of his friends it would be a very graceful thing to do,
the result would be even nicer than the other way.
Senator WALSH of Montana. In that way it would be unsolicited?
Mr. BALDWIN. It would be unsolicited; yes.
Senator CARAWAY. Did he do it?
Mr. BALDWIN. I don't know whether it was ever brought to his
attention.
Senator WALSH of Montana. In a letter from Pike to His Excellency Dr. Orestes Ferrara, he says-a copy was sent you. You will
recall the letter now?
Mr. BALDWIN. Not at the moment.
Senator WALSH of Montana. In this letter, a copy of which was
sent to you, he says:
It has taken me a day or two to secure the information concerning the Leonard
Wood memorial fund about which I talked to you at the Ritz on July 3. I
hope, however, my cable to you to-day has given you the information that you
wished in good season.
I got in touch with General Harbord and through him with the secretary of
the organization who has all the detail, and who is running the campaign. It
happened that in my conversation with him he, himself, referred to the Cuban
matter and in this connection I was able to talk to him further, viewing this
as a new idea which interested me personally as a very great admirer of General
Wood, both as to his record in connection with the Plattsburg idea and his
administration in Cuba.

That is, Mr. Pike introduced this as a new idea which interested
him personally by reason of the very high regard he had for Wood?
Mr. BALDWIN. Yes.

Senator WALSH of Montana (reading):

The gentleman in question outlined that the question of the amount of money
given was very unimportant. He seemed to feel that $5,000 would be quite
as good as any larger amount. In fact,.$2,600 probably was, but that he felt
the impetus to his campaign from such a gift would be tremendous; and that
it was just what they wanted to put them over the top.
This, of course is the frame of mind that we wouldlike them to be in should
the subscription he made, and after my talk with him, I feel doubly sure that
if such a gift were given with an appropriate letter of transmittal, the effect
would be tremendous; and that such a gift has a very great sentimental and
publicity value in the cause which is dearest to your heart and mine.

That is the sugar tariff, of course?

Mr. BALDWIN. And Cuban-American relations.
Senator. ROBINSON of Indiana. Well, they come together in your
mind, in this thing, They have a very close relation, do they not?
Mr. BALDWIN. Yes.

Senator ROBINSON of Indiana. You had no interest in CubanAmerican relations outside of sugar, had you?
Mr. BALDWIN. I had always had a great admiration for Cuba.
I had been down there.
Senator RoiINsoN of Indiana. Of course, but your admiration was
sweetened with sugar?
Mr. BALDWIN. Naturally.

Senator CARAWAY. It never manifested itself until you got your

bonus?
Mr. BALDWIN. It did. It had tried to manifest itselfSenator CARAWAY. What have you ever done prior to that?

1800

LOBBY INVESTIGATION

Mr. BALDWIN. I had tried to become interested in one or another

Cuban publicity account and I wanted to Senator CARAWAY. Tried to do what?
Mr. BALDWIN. I tried to get a Cuban publicity account, because I
was interested inCuba.
Senator CARAWAY. You wanted to be paid for advertising Cuba?
it that
Mr. BALDWIN. Well, if you want to put
her your dis.
outway; yes.
to find
tryig
just
was
I
CARAWAY.
Senator
interested interest in Cuba did not always go back to the pocketbook?
Mr. BALDWIN. Not always.
Senator CARAWAY. Can you name anything you ever did which you
did not expect to get paid for?
Mr. BALDWIN. No, I can not.
Senator WALSH of Montana. We have a memorandum here from
your associate, Mr. Murmey, as follows:

Here are some wild suggestions, the successful development of any one of which
might mean much in our publicity program on the sugar tariff.
M.M.

That means Maurice Murmey?

Mr. BALDWIN. Yes.
Senator WALSH of Montana (reading):
2. Lining up one of the women Congressmen, preferably Mrs. Ruth Pratt
and having her take up the cudgels of the housewife, the ultimate consumer ok
sugar who is also the ultimate payer.
3. Your suggestion of Senator Copeland, a splendid handle for publicity.
4. Arrange to have President Machado visit President Hoover.
Would this not focus the whole country on the problem. The mechanics of
the meeting? Machado might accept an invitation to attend the Cuban Chamber
of Commerce Independence day banquet--in which case, as a matter of diplo.
matio courtesy, I believe he would first call on Hoover.
5. The Will Rogers trip to Mexico. I understand Three Cheers is closing in
a couple of weeks, or going on the road. Rogers may be free to go to Cuba and
do for them what he did for Mexico.
8. The Platt-onlo neighbor, through a cartoon in a Havana newspaper, or
through Rogers.

How well did you succeed with Mrs. Ruth Pratt?

Mr. BALDWIN. We did not succeed on the basis of the housewife.
She was not interested from that point of view. She was interested
in representing her constituency who are consumers. I think I had
one talk with Mrs. Pratt, and that is all.
Senator WALSH of Montana. Of course, most of her constituents
are housewives, are they not?
Mr. BALDWIN. Yes; or heads of families.
Senator WALSH of Montana. What was the nature of the talk you
had with Mrs. .Pratt?
Mr. BALDWIN. I just wanted to find out whether she was interested in this sugar schedule, and if so whether we could supply any
information for her or do anything like that.
Senator WALSH of Montana. Did you have any similar conferences
with other Members of Congress?
Mr. BALDWIN. I think I saw Representative Frear once on the
same basis.
. Senator WALSH of Montana. Mr. Mermey refers to your own suggestion concerning Senator Copeland, "a splendid handle for pubHcity." What suggestion did you make with respect to Senator
Copeland?

LOBBY INVESTIGATION

1801

Mr. BALDWIN. I do not remember having made any suggestion.

Probably Senator Copeland would be interested in the tariff. I do
not know him. Never met him.
Senator WALSH of Montana. Mr. Mermey refers to your having
made a splendid suggestion. What was the splendid suggestion
that you made to your associate with respect to Senator Copeand?
Mr. BALDWIN. I don't know. I think that is headed "Wild
Ideas," is it not, that memorandum?
Senator CAuAWAY. Well, I think that might have been the title
of the whole correspondence.
Senator WALSH of Montana. How successful were you in this
effort to get President Machado to come up here to call on President
Hoover?
Mr. BALDWIN. I do not think we ever really took it up. We found
it would be impossible, so we just dropped it.
Senator WALSH of Montana. That was a wild idea, apparently.
Mr. BALDWIN. It was.
Senator WALSH of Montana. You evidently also contemplated
getting Will Rogers worked into your campaign. How successful
were you with Will?
Mr. BALDWIN. We did not take it up with him.
Senator WALSH of Montana. Why didn't you?
Mr. BALDWIN. I have forgotten why we did not.
Senator WALSH of Montana. Would you dare make such a suggestion as that to Will Rogers?
Mr. BALDWIN. I certainly would.
Senator WALSH of Montana. Well, I thought I knew him. Did
you contemplate telling Will that this was a part of your campaign
to help out on the sugar tariff?
Mr. BALDWIN. If I had gone to Mr. Rogers I would certainly have
told him my interest in it. I have always done that in every case.
Senator WALSH of Montana. Your letter of April 0, 1929, to
Mr. Lakin says:
I am taking the liberty of writing you this letter as a memorandum of my

ideas for the proposed presidential tour of Cuba prior to the inaugural coremonies on May 20.

To what does that refer?

Mr. BALDWIN. That was another idea-it was not a new idea.
Some little time prior to that the President of Mexico had invited a
group of distinguished newspaper men to make a tour of Mexico and
had occurred to me
ft had been a very helpful thing, and the thought
that if President Machado organized the same type of presidential
tour to show some American newspaper men something about modern
Cuba, show them the new highway, show them the new public building, just prior to his reinauguration, it would be a very good thing
to do.
Senator WALSH of Montana. You continue:
My sug estloh Is that about April 20 President Machado send a formal Invi-

tation to the heads of the Associated Press, United Press International News
Service, North American Newspaper Alliance, Now York H'erald-Tribune Svndicate, Now York Times Syndicate, Chicago Tribune Press Service, Central 1ress
Association, Public Ledger Syndicate, Consolidated Press Association and
N. E. A. Service; and to the Pox News Film, Pathe News, Paramount News
Times Wide World, Pacific and Atlantic Photos, and Underwood and Underwood
news photo services.

1802

LOBBY INVESTIGATION

How did that project come out.

Mr. BALDWIN. It did not come out.

Senator WALSH of Montana. Your letter to Mr. Lakin of date

ba

April 6, 1929, the same letter:

May I take this occasion to remind you that L. 0. Speers, staff writer for the
New Yrork Times, will be sent to Habana certainly in time to cover the May 20th
ceremonies, and that Myron Weiss, department editor of Time, the weekly
magazine will arrive in Habana the first week in May with Mrs. Weiss? I WOuld
suggest that absolutely no publicity be given to the proposed trips of either of
these men. This is of the utmost importance for reasons which I will tell you
upon your return.

Will you kindly explain that to us?

Mr. BALDWIN. All I-wanted to make sure of was that no advance
publicity was given about the going of these two men to Cuba. That
was entirely up to the New York Times. _
Senator WALSH of Montana. That is what you said in your letter,
to give no publicity to the fact that they were going there.
Mr. BALDWIN. Yes; and I wanted to make sure. I thought the
best way of making sure that no publicity was given to it was to say
that I would give the reasons for it upon his return, and then he
would not use his better judgment and give itout. I did not want to

Cal
co

ta

run that chance. If I had given my reasons and just said "It is up to

the New York Times to announce this," he might possibly have felt
that a larger good would have been accomplished by announcing it
down there, and it might leak out, and.I did not want that to happen.
Senator WALSH of Montana. He might do that, even though you

told him, as you told him in this letter, that you would tell him about
it on his return.

Mr. BALDWIN. He might have.

Senator CARAWAY. Why were you wanting to tell him that they
were going to go?
Mr.BALDWIN. Because Mr. Lakin, as I remember it, was going to
Cuba at that time, and I had taken up with him the question of this
presidential tour, and when that failed, I was telling im
Senator CARAWAY. That has nothing to do with the question I
asked you. Why were you wanting to tell him that Weiss and his
wife and Speers were going to Cuba?
Mr.BALDWIN. Mr. Lakim was going down thereSenator CARAWAY. But why did you want to tell him? That
doesn't answer it.
Mr. BALDWIN. He was intouch with the situation. He was going
to Cuba. There were certain persons itwould be well to have know
that those people were coming.
Senator CARAWAY. Oh, yes. You wanted to prepare some persons
to take charge'of them and give them a personally conducted tour,
so that they would know what they ought to know and not know
what they ought not to know?
Mr.BALDWIN. Those men would find out what they wanted to
find out.
Senator CARAWAY. Then why did you want to tell this? You had
some purpose indoing it.
Mr.BALDWIN. Simply to advise Mr.Lakin so that he could advise
his friends that they were coming.
Senator CARAWAY. Why was it necessary for his friends to know
that they were coming?

LOBBY INVESTIGATION

1803

Mr. BALDWIN. It was not essential, Senator.

Senator CARAWAY. You know you have got some reason in the

back of your head.

Mr. BALDWIN. I have no reason in the back of my head.

Senator

CARAWAY.

Well here was something you did not want to

get out, and you proposed to tell it so that t would not be told.
Why did you tell them? You know you had some reason for wanting
Mr. Lakin to know that they were going.
Mr. BALDWIN. I had no reason beyond that that he was going
down there; he would probably see President Machado, and he had
certain friends down there that would want to know if these men were
coming.
Senator CARAWAY.

Mr.
them.

BALDWIN.

Why?

Because they would like to see them and talk to

Senator CARAWAY. Why?

Why should they want to see them and

talk to them?
Mr. BALDWIN. Because they were interested in Cuba and interested
in Cuban-American relations.
Senator CARAWAY. And therefore you wanted to see that they got

this information?

Mr. BALDWIN. Yes.

Senator CARAWAY. Well, why didn't you tell me that a long time

ago? Go ahead, Senator Walsh.

Senator WALSH of Montana. One of these wild suggestions, the
last one, No. 8, was "The Platt-onio neighbors, through a cartoon in
a Habana newspaper or through Rogers."
What became of that wild idea?
Mr. BALDWIN. It was just dropped.

Senator WALSH of Montana. Nothing was done about it?

Mr.

BALDWIN.

As far as I remember there was no such cartoon

ever drawn, as far as I know.

Senator WALSH of Montana. What I really wanted to know was
what reception you gave to this wild idea of Mr. Mermey's, and what
did you do about it?
Mr. BALDWIN. I think I may have taken it up with somebody to
see what reception the idea would get from some cartoonist in Cuba.
I have forgotten what happened on that.

Senator WALSH of Montana. Perhaps this letter will refresh your

recollection, April 18, 1929, to Walter S. Bartlett, 136 Front Street,

New York City.

"Dear Walter." Who is "Walter"?
Mr. BALDWIN. He is a friend of mine in New York, in the sugar
business.
Senator WALSH of Montana. In the sugar business?
Mr. BALDWIN. Yes.
Senator

WALSH

of Montana.

A sugar broker?

Mr. BALDWIN. No. He is vice president of the Cuban-American

Sugar Co., I think it is.
Senator WALSH of Montana. The vice president of the CubanAmerican Sugar Co.?

Mr.

BALDWIN.

'Well, I believe so.

1804

LOBBY INVESTIGATION

Senator WALSH of Montana. You say in this letter:

When you get to Habana will you see whether you can not get in touch with
the editor of La Semana and find out whether he could get one of his cartoonists
enthusiastic about the following suggestion for a cartoon:
As I visualize the thing, President Machado would appear in it as a school
teacher asking a question of a small boy symbolizing the Cuban public.
President Machado asks: "What is a platonic friend?"
The school boy replies: "A platonic friend is a nation which restricts our
sovereignty under the Platt amendment while starving us through its sugar tariff."
Over the top of the cartoon might be a caption such as "Our -Platt-onic
Neighbor."
Of course, the wording would have to be in Spanish, but inasmuch as platonic
is a Oreek word, and as the Platt amendment is known throughout Cuba, I
think the thing would be understood and go over well. If so, we can arrange to
have it picked up by various papers in this country.
If the cartoonist had some good idea for including in his drawing some obvious
symbol of Pan-Americanism, that might be well.
Sincerely yours.

You think, however, that Mr. Bartlett was not ableMr. BALDWIN. I have forgotten what happened to that, whether
he decided not to do anything about it, or whether he saw anybody
and they did not like the idea. I don't know. All I know is that I
never got an follow through on it.
Senator WAL81I of Montana. The purpose of the cartoon would be
to stir up animosity or intensify whatever animosity exists in Cuba
against, the United States? That was the idea was it not?
Mr. BALDWIN. It was to-if they had done t, it would have been
to reflect their irritation at the pending or proposed action, and might
help to forestall such action.
Senator WALSH of Montana. And likewise to intensify it if it did
exist, and to create it if it did not.
Mr. BALDWIN. It was there, all right.
Senator WALSH of Montana. What was that? It was there all
right?
Mr". BALDWIN. Yes.

Senator WALSH of Montana. You simply wanted to intensify it?

Mr. BALDWIN. I wanted to make it graphic so that it could be
brought over to this country..
Senator ROmNSON of Indiana. Is that one way you wanted to
improve the Cuban-American -relations?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. By intensifying the hatred of Cuba
for America?
Mr. BALDWIN. No. By showingSenator ROBINSON of Indiana. You say it was there, this resentment? It.was there, you say?
Mr. BALDWIN. Yes.
Senator RoBINsoN, of Indiana. You would intensify it? A moment ago you said you wanted to improve the Cuban-American
relations. How do you reconcile those two statements?
Mr. BALDWIN. I said I wanted to make it graphic so that it could
be brought over to this country to forestal7-the Cuban-American
relations will be perfectly happy if the tariff is not increased.
. Senator ROBINSON of Indiana. Oh, I know, but a moment ago you
said you were interested in fostering Cuban-American relations.
Mr. BALDWIN. Absolutely.

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1805

L)BuY INVSTIOATION

Senator RomsoN of Indiana. Friendship between the two count.

tries.
Mr. BALDWIN. Yes.
Senator ROBINBLNof Indiana. And now you admit you tried to
intensify the animosity of Cuba for America.
Mr. BALDWIN. Noi I did not. I did not admit that I wanted to
intensify the animosity.
Senator RogiNsoN of Indiana. Here is your letter suggesting a
cartoon that would do that very thing.
Mr. BALDWIN. It would make graphic the animosity against a
thing that had not gone into effect.
Senator ROBINsON of Indiana. Well, "Platt-onio neighbor."
Mr. BALDWIN. Yes.

Senator RoBiNsox of Indiana. That was trying to starve Cuba;

the Platt-onic neighbor would be America, would it not?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. Perhaps this will shed a little further
'ght

on this interesting question.

You tried to get the Literary

Dest to print a cartoon of that character, did you not?

Mr. BALDWIN. I offered the cartoon to the Literary Digest.

Senator WALSH of Montana. So your letter of August 27, 1029,

says.
AUGusT 27, 1929.
WV. CARMAN RoBnTS, Esq.,

Literary Digest, Neo York 1 N. Y.

D-AR MR. RosvRTs: I dropped In this afternoon, and In your absence a Mr.
Duffy was very nice to me.
I left with him a cartoon from La Politics Comics one of the Cuban weeklies,
which Is the most telling cartoon, either foreign or domestic, which I have seen
since the beginning of the sugar tariff controversy last spring. Having shackled
Cuba with the Platt amendment and the reciprocity treaty, Uncle Sam Is now
preparing to brand her with a 2.20 tariff on her staple product, and as a final
touch the Philippines, Porto Rico, and Hawaii are enjoying the process hugely
from behind the wall.
It would seem to me that this cartoon is a significant commentary on Secretary
Stimson's recent explanation that the State Department had not received protests from foreign governments, but merely statistical communications.
Naturally, I hope that the Literary Digest will feel that this cartoon is worthy
of reproduction, but whether or not the Digest does so, I shall deeply appreciate
if you can have sent back to me the copy left with Mr. Duffy to-day, because I
want to show it to one of the Senators in Washington.
Trusting that you have had a good vacation, I am,
Sincerely yours,

What success did you have with the Literary Digest?

Mr. BALDWIN. Ag I remember it, they did not want to publish it.
They returned it to me.
Senator WALSH of Montana. Yes. I have their letter. It reads
as follows:
Mr. WILLIAM

H. BALDWIN2

AUGUST 29, 1929.

New Vork.
DEAR MR. BXLDWIN: Mr. Rdberts and I agree that the cartoon is a little too
rough for the Digest, but we appreciate very much your offering it to us.
RIcHArD DUpryq
Sincerely yours,
Editor Foreign Comment.

That was the way you were trying to improve relations with Cuba?
Senator CARAWAY. Which one of the Senators did you want to

show this cartoon to?

1806

LOBBY INVESTIGATION

Mr. BALDWIN. I do not remember. I really do not.

Senator CARAWAY. Lord! It is a great misfortune to have a
memory like that, with all of these bright ideas. You can not remember now what they were.
Senator WALSH of Montana. In your files we find a letter from
Gladys Moon Jones to yourself of date May 3, 1929, as follows:
Through General Crowder our Bustamante story Is destined to be editorialized
on Sunday in the Washington Post.

What was the Bustamante story?

Mr. BALDWIN. As I remember it, Doctor Bustamante came through

from Cuba over the railroad, up from Key West, on his way over to
Europe, and I saw him on the train and got from him a statement;
an interview.
Senator WALSH of Montana. I did not understand the term you

Bug

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mc

used.

Mr. BALDWIN. I got from him a statement or interview.

Senator WALSH of Montana. Oh, yes.

Mr. BALDWIN. Which was given to the press associations and was

widely published, as I remember it.

Senator WALSH of Montana. Where did you see Doctor Busta-

mante?

Mr. BALDWIN. I saw him on the train.

Senator WALSH of Montana. Where?

Mr. BALDWIN. Somewhere between Philadelphia and New York.
Senator WALSH of Montana. How did you happen to see him on
the train?
Mr. BALDWIN. I knew he was coming through, so I made it a
point to board the train.
that you
Senator WALSH of Montana. Did you represent to him
were the paid agent of the sugar tari lobby?
Mr. BALDWIN. As I remember it-Senator WALSH of Montana. What did you represent yourself to
him to be?
Mr. BALDWIN. I have forgotten. As I remember it, I had a note
of introduction to him.
Senator WALSH of Montana. From whom?
Mr. BALDWIN. From Ambassador Ferrara.
Senator WALSH of Montana. Have you got a copy of that letter of
introduction?
Mr. BALDWIN. No, ai.
Senator WALSH of Montana. Whom did Doctor Ferrara represent
you to be?
Mr. BALDWIN. I have forgotten what he said. I think it was in
Spanish, so I would not know.
Senator WALSH of Montana. What was the nature of the interview
you got fror Doctor Bustamante?
Mr. BALDWIN. I have forgotten. I have a copy of it somewhere.

I think it is in "What Price Sugar."

in your files here.

that book.

You may have a copy of that

The Bustamante statement I am very sure is in

of Montana. Was it about sugar?

Mr. BALDWIN. It was about Cuban-American relations, as I
remember it, emphasizing the economic factors. I have forgotten
exactly what it was now.
Senator WALSH

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LOBBY INVESTIGATION

1807

Senator WALSH of Montana. What relation did it have with the

sugar tariff?
Mr.BALDWIN. Well, it was just one more method to try to keep
sugar in the discussion.

Senator WALSH of Montana. He was on his way to Europe at that

time?

Mr. BALDWIN. I believe so.

Senator WALSH of Montana. He is one of the judges of the World
Court, isn't he?
Mr. BALDWIN. I believe so.
Senator WALSH of Montana. Utilizing him as far as you could to
help the sugar proposition?
Mr. BALDWIN. Calling the matter to his attention, if he thought it

merited comment by him; helping him.

Senator WALSH of Montana. Have you any idea that he knew what
your scheme was?
Mr. BALDWIN. That he knew what my scheme was?
Senator WALSH of Montana. Yes.
Mr. BALDWIN. He knew only what I know, that I was concerned
about the proposal to increase the sugar tariff.
Senator WALSH of Montana. What I want to know is, could you
tell us whether Doctor Bustamante knew what you were engaged in
at that time was an effort to make use of him in connection with the
sugar tariff pending before Congress?
Mr. BALDWIN. I think that was obvious.
Senator WALSH of Montana. You think he knew that?
Mr. BALDWIN. I think he did.
Senator WALSH of Montana. Did you see the editorial in the Wash-

ington Post induced by this interview?

Mr. BALDWIN. I probably did..
Senator WALSH of Montana. What is that?
Mr. BALDWIN. I probably did.
Senator WALSH of Montana. What was the general tenor of that?
Mr. BALDWIN. I don't remember, sir.
Senator WALSH of Montana. It could not have made a very deep
impression on your mind.
Mr. BALDWIN. I have read a lot of editorials.
Senator WALSH of Montana. That is perhaps reasonable enough.

Now, I find here a letter from you to Mrs. Henry Moskowitz, under
date of May 24, 1929. Who is Mrs. Muskowitz?
Mr. BALDWIN. Why, she is-I don't know how to describe her
exactly. She is a lady in New York. I think she has an office in
public relations herself-an organization of publicity and public relations. I went to her because she was a close friend of Governor Smith.
Senator WALSH of Montana. A close associate and cooperator with
Governor Smith in his presidential campaign?
Mr. BALDWIN. I believe so.

Senator WALSH of Montana. Manager, to some extent, of the publicity in the campaign?
Mr. BALDWIN. S6 1 have heard.
Senator WALSH of Montana. Just why did you want to interest

Mrs. Moskowitz in this affair?

1808

LOBBY INVESTIGATION

Mr. BALDWIx. Because I hoped that she, in turn, would interest

Governor Smith.

Senator WALSH of Montana. This is your letter?

the country
What the situation bitterly needs are an issue which the people of
will understand without argument, and a leader to put that issue clearly and
directly to them.
Get that issue across to the people of the United States and Congress will find
that the sugar tariff Is too hot to use as a pawn in its usual game of log-rolling.
Tariff Is ceftanw.a political issue but the sugar tariff can and must be pulled out
of the ruck of petty olitos,
The man to do that Job is the one who put up such a gallant fight to forestall
the situation Into whioh Congress is now trying to mire us; the one who knows
from experience that a real man, with a real issue can talk to the people of a
State or of the Nation over the heads of the legislators.
If sugar has become the symbol of the present tariff raid, Governor Smith is
the man to bring its Implications to the people of the country. I do hope that
you share my enthusiasm for this opportunity to do something really big and
terribly needed, and that you will pass that enthusiasm on to him.

Mr. BALDWIN. Yes.

Senator WALSH of Montana. How successful were you in your

effort to catch Governor Smith?

Mr. BALDWIN. He has not made a speech on it yet, to the best of

my knowledge.
Senator CARAWAY. What do you mean by "yet"?
to do it?

Did he promise

Mr. BALDWIN. He never promised anything to me.

Senator CARAWAY. Whydidyou use the word "yet"? That implies
that it was promised and yet has not been performed.
Mr. BALDWIN. No such implication was meant, Senator.
Senator WALSH of Montana. You have not learned from Mrs.
Moskowitz how successful she was in getting Governor Smith thus
enlisted in your cause?
Mr. BALDWIN. No. All she said as "Just keep me advised."

Perhaps a polite way of dismissing it. I don't know.

Senator WALSH of Montana. Just what success did you have in
interesting Mrs. Moskowitz in your proposal?

Mr. BALDWIN. Well, that is all I can talk about because I do not

think I had any success really in interesting Mrs. Moskowitz.

Senator WALSH of Montana. Has she ever taken any part in the
discussion, as far as you know? *
Mr. BALDWIN. Not to my knowledge; no, sir.
Senator WALSH of Montana. So, that was another bright idea that
did not materialize?
Mr. BALDWIN. That did not materialize.
Senator WALSH of Montana. You went after Mrs. Moskowitz
later again, did you not?
Mr. IALDWIN. Yes.

Senator WALSH of Montana. I see by your letter of August 15,

which reads as follows:
Mrs. HENRY MosgOWlTs,

AuousT 15, 1929.

New York, N. Y.
DEAR MRS. MoSKowir: The Town Hall Club s of which I am treasurer, would
be delighted to extend an invitation to Governor Smith to speak on the tariff
situation at the first club dinner of the season, if you believe that he would like
to avail himself of such an opportunity.

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1809

LOBBY INVESTIGATION

Naturally, if he would accept, I am sure we could make adequate arrangements for broadcasting his talk. The club has facilities for about 450 persons
at such a dinner and I believe it would create the right sort of occasion for the

governor to give his message to the country.

Sincerely yours,

Did the governor have any message at that time to give to the
country?
Mr. BALDWIN. That I do not know.
Senator WALSH of Montana. Anyway, he did not give it?
Mr. BALDWIN. No.

Senator WALSH of Montana. You add a postscript:

P. 8&-I trust you are seeing Robert Barry's articles on the child-labor phase

of the beet-sugar industry, appearing in the Evening World.

Mr. BALDWIN. Yes, sir.

Senator WALSH of Montana. I find here Mrs. Moskowitz's reply

under date of August 16:
Mr. WILLIAM H. BALDWIN,
New York City.
DUAs Mu. BALDwIm: Governor Smith is not making any engagements for

speaking at this time. While I am sure he would appreciate the Invitation to

speak at the dinner of the Town Hall Club, I am certain that it would be declined.
Sincerely yours,

BELLI MOSOWIT.

That would seem to dispose of that.

Mr. BALDWIN. Yes.

Senator WALSH of Montana. Who is Hugo Hartenstein?

Mr. BALDWIN. He is an American who has lived for many years in
Cuba and who has been president of the American Chamber of
Commerce of Cuba, or of Habana. I have forgotten the official title.
Senator WALSH of Montana. You had a lunch for him up in New

York, did you not?

Mr. BALDWIN. Yes: I did.
Senator WALSH of Montana. To which you invited as many
editors of newspapers as you could get to attend?
Mr. BALDWIN. I have a selected list of those whom I invited.
Senator WALSH of Montana. You wrote him under date of May 8
as follows:
Huo HARTENSTEIN Esq.,

kew York, N. Y.

DEAR HARTTENSTEIN: The present line-up for to-morrow's lunch at the Harvard

Club at Io'clock is as follows:

H. H. Pike, Jr.

That is the Mr. Pike that you mentioned?

Mr. BALDWIN. Yes.
Senator WALSH of Montana. Was he an editor or newspaper man?
Mr. BALDWIN. No.
Senator WALsH of Montana (reading):
George Soule, New Republic.
Rova J. Davis, Evening Post.
Tei Thackroy Telegram,
F.W. Jones 'Yournal of Commerce.
William L. McPhorson, foreign editor Herald-Tribuno.
if. V. Kaltenborn, Brooklyn Eagle.
78214-30-T r-3

1810

LOBBY INVESTIGATION

Raymond L. Buell, Foreign Policy Association.

B. C. Forbes Hearst Publications.
In addition the following may be there:
M. E. TrIy, special writer for the Scripps-Howard papers.
Carman Roberts, associate editor of the Literary Digest.

Dr. S. L. Oulick, secretary of hte Federal Council of-Churches.

Representatives from the editorial staffs of the Times and Evening World.

How many of those attended?

Mr. BALDWIN. I have forgotten, sir; I think there were about 14
of us, all told.
Senator WALSH of Montana. Was Mr. Soule there?
Mr. BALDWIN. He was there, and Royal Davis.
Senator WATSH of Montana. And Ted Thackrey?

Mr. BALDWIN. He was not, as I remember it.

Senator WALSH of Montana. Jones?
Mr. BALDWIN. I think he was.
Senator WALSH of Montana. McPherson?
Mr. BALDWIN. Somebody was there from the Tribune, I have
forgotten the name.
Senator WALSH of Montana. Kaltenborn?
Mr. BALDWIN. He was there, I believe.
Senator WALSH of Montana. Buell?

Mr. BALDWIN. He was there.

Senator WALSH. And Forbes?

Mr. BALDWIN. I think he sent one of his editorial associates.
Senator WALSH of Montana. Tracy?
Mr. BALDWIN. He was not there.
Senator WALSH of Montana. Roberts?
Mr. BALDWIN. I have forgotten whether he was there or not.
I think he was.
Senator WALSH. of Montana. Doctor Gulick?
Mr. BALDWIN. He was not there, as I remember it.
Senator WALSH of Montana. Representatives from the editorial
staffs of the Times and the Evening World?
Mr. BALDWIN. The Times had an editorial writer there. The
World did not, as I remember it.
Senator WALSH of Montana. Hartenstein talked to them at the
luncheon?
Mr. BALDWIN. It was a very informal luncheon. They asked him
questions about various phases of the Cuban situation and the tariff,
etc., and he answered them.
Senator WALSH of Montana. Did you convey to those gentlemen,
when you extended them the invitation to luncheon, that this was
all for the purpose of helping you along in your tariff campaign?
Mr. BALDWIN. That was perfectly obvious. I told them Hartenstein was coming here.
As I remember it, that was done in a hurry, and was done by telephone.
Senator WALSH of Montana. Did these gentlemen all know that
you were under employment, helping out this tariff campaign?
Mr. BALDWIN. I think they did. I had been working with all of
those newspapers.
Senator WALSH of Montana. The Federal Council of Churches is
an organization of so-called evangelical churches?

Mr. BALDWIN. I believe so, sir.

LOBBY INVESTIGATION

1811

Senator WALSH of Montana. Did you confine your activities to

the evangelical churches or did you extend it into other denominations?
Mr. BALDWIN. The only contact I had with the churches was
through that group, through the Federal Council, to the best of my
knowledge.
Senator WALSH of Montana. I find a letter under date of April 19,
1029, to you from Mrs. Jones as follows:
Mr.

WILLIAM H. BALDWIN.
DEAR MR. BALDWIN: You might be able to use the Inclosed in your acquiring

the cooperation of the Federal Council of Churches. Have you been able to
get the cooperation of the National Consumers' League?
Very truly yours,

0. MooN JoNES.

What was the inclosed referred to?

Mr. BALDWIN. I thought it was that [indicating).
Senator WALSH of Montana. This pamphlet which I show you?
Mr. BALDWIN. Yes, sir. I think that was inclosed with that letter.
Senator WALSH of Montana (reading):

Two leading churchmen, vice president of the National Consumers' League,

protest high tariff rates on sugar.

And then follows a picture of Dr. John Haynes Holmes, minister

of the Community Church of New York, and Rev. John A. Ryan,
director of the department of social action, National Catholic Welfare
Association, Washngton, D. C.
This comes from the All States News Service, Gladys Moon Jones,
1130 National Press Building, Washington, D. C.
What is the All States News Service?
Mr. BALDWIN. That I do not know. I just know there is such a
service in her office.
Senator WALSH of Montana. In Mrs. Jones' office?
Mr. BALDWIN. Yes. She has such a service.
Senator WALSH of Montana. To this letter I find a reply under
date of April 23 as follows:
Mrs. GLADYS MOON JONES,
Washington, D. 0.
DEAR MRS. JoNES: Thank you for sending me the statements of M'. Holmes
and Father Ryan. They are good publilcty but I am afraid that they would

not be very helpful ii dealing with the Federal Council of Churches because
Mr. Holmes Is a leftwing Unitarian, and Father Rean is a Catholic, and between

these two Is a very wide channel through which the Federal Council marches.

Some time ago, I telephotied Mrs. Florence Kelly, who is an old friend of
mine and she told me that the Consumers' League would take no part in any

political Issue. However, in view of what these two men have publicly stated,
will go back to her and tee what can be done.
Sincerely yours,

Apparently you did not make use of the pamphlet.

Mr. BALDWIN. What pamphlet?
Senator WALSH of Montana. The pamphlet containing the pictures
of Doctor Holmes and Father Ryan.
Mr. BALDWIN. No, sir; I did not.
Senator CARAWAY. What is the left wing of the Unitarian Church?
Mr. BALDWIN. I don't know, sir.

1812

LOBBY INVESTIGATION

Senator CARAWAY. Well, you used it.

something about it.

You ought to have known

Mr. BALDWIN. Well, I was just trying to bring out the fact that
he was pretty far away from the evangelical trinitarian group on the
one hand.
Senator WALSH of Montana. You told us about furnishing information from time to time to the Federal Council of Churches.
Mr. BALDWIN. Yes sir
Senator WALSH of Montana. I call your attention to this letter of
May 2, 102 0, from you to Mr. F. E. Johnson, Department of Research

and Education, Federal Council of Churches, 105 East Twentysecond Street, New York City.

My D-AR Mn. JonrsoN: I take pleasure in forwarding to you herewith the

study of the tariff on sugar which has been made for Editorial Research Reports.
Please accept my sympathy for you in your unfortunate break through the
illness of the man to whom you were looking for a study of the sugar tariff
situation. I certainly hope that the delay will not prevent action prior to Cuban
independence day on May 20, for that may well be a most important turning
point in relations between Cuba and the Unitd States.
If there is any way that I can be of assistance, please call upon me.
Sincerely yours,

What is the Editorial Research Report?

Mr. BALDWIN. I have forgotten exactly what that was. As I

remember it there is an organization here in Washington that gets

out editoriaf research reports and it was a copy of that devoted
to some phase of the sugar tari or the Cuban-American relations that
I referred to.
Senator WALSH of Montana. I have here a copy of a night letter
from you to Mr. Hartenstein or Mr. E. A. Odell, Habana, as follows:
Regarding conference In Habana Juno 20-30 on Christian work in Caribbean
in which Federal Council of Churches in America is taking active part.

I believe it your duty and am counting on you to put through at opening of

Habana conference, first, that right of American delegates to sit in this conference
be unqualifiedly and publicly challenged. Second, that an emphatic resolution
be indorsed by general conference in time to be cabled before June 23 to Smoot,
chairman Senate Finance Committee, condemning proposed tariff increase on
Cuban sugar. Third, that suitable resolution be cabled to administrative cornmittee of Federal Council urging definite official protest at its meeting 28th.
Finally, that full publicity be given these several actions through Habana repre.
sentatives of Associated Press and United Press.

That, I suppose, was for the purpose of cultivatingMr. BALDWIN. Who sent that telegram?

Senator WALSH of Montana. This is a telegram from you to

xeuse me. It is from Hartenstem to Odell, but Mr.

Hartenstein sends a copy to your office.
Hartenstein-

Mr. BALDWII. Yes. 'It is an information copy.

Senator WALSH of Montana. Do you recall the cable?

Mr. BALDWIN. I remember reading it, yes, sir.

Senator WALSH of Montana. Hartenstein

apparently

was

like

you, engaged in cultivating friendly relations between the Jnited

States and Cuba.

Mr. BALDWIN. We were, I think, both engaged in trying to forestall worse relations.
Senator WALSH of Montana. And one way was to have delegates
from the United States to a convention of the Federal Council of
Churches at Habana, openly challenged in the convention?

LOBBY INVESTIGATION

1813

Mr. BALDWIN. Yes, sir; by Americans.

Senator WALSH of Montana. By Americans?
Mr. BALDWIN. I think that was the purpose. There are American

members.
Senator WALSH of Montana. Have American delegates challenged
by Americans?
Mr. BALDWIN. I mean there are Americans who held pastorates in
the Caribbean district there, and I think the purpose there was to
get one of them to do it, just to bring the matter before the group.
Senator WALSH of Montana. I thin- I will ask that this entire
telegram be placed in the record without reading it.
(The telegram referred to is as follows:)
E. A. ODELI, Habana, Cuba:
Regarding conference in Habana Juno 20-30 on Christian work in Caribbean
in which Federal Council of Churches in America is taking active part:
On June 24 United States Senate starts hearings on sugar schedule of tariff
bill and outstanding influence there is Senator Smoot, of Utah. He is already
on record as actively working for tariff rate that would strangle Cuba, causing
not only widespread physical suffering but also bitter disillusionment among
Cubans as to typo and oxtnt of Amerca-A iinterebt in their welfare.
I have just been informed that efforts were started last March to got Federal
Council to speak out against iniquity of tariff policy which definitely repudiates
expressions of good will first stated by President McKinley and reiterated by
leaders like Roosevelt, Root, Hughes, Coolidge. These men spoke, not merely
as party leaders, but specifically as representatives of American people. Obligations for economic and political welfare of Cuban people which they clearly
recognized transcend party politics and constitute responsibility which no selfrespecting American. citizen or organized group of Christians cani evade.
rain told Federal Council has beea renuinded that a study conference organized
by it in Columbus, Ohio in March, 1928, attended by 124 picked representatives
of 35 communions publicly affirmed that sitce tariff walls and other trade
barriers constitute a primary source of international irritation and hostility our
Government in fixing its tariff rates and other foreign economic policies should
take into account not merely interests of its own industries but welfare of all
peoples concerned."
Hardly had that statement been printed and distributed whon hIouso Reprosentatives, with callous disregard of young Republic for whose creation our
citizens fought in 1898 flung specific challenge at Federal Council's generalization by voting for cruel tariff against Cuba. Now Sonato prepares to consider
this lndquity. as if it were wholly upright and proper.
In face of this situation Federal council has uttered not single word and yet
is preparing to send delegates to and participate in conference on Christian work
which meets just where lash of selfish American interests leaves most bitter sting.
Habana conference called for June 20. Senate hearings on sugar tariff start
24th, and administrative committee of Federal council meets Juno 28.
I trust there are those in Cuba who will challenge right of American delegates
to participate tinder those circumstances fit any conference oi Christianity.
Thus can we bring directly home to council, to Senate, and to American people
a situation which is stulti ying our country.
I believe -it your duty and am counting on you to put through at opening of
Habana conference first, that right of American delegates to sit lit this conferonce be unqualifiedly and publicly challenged. Second, that an emplatie resolution be endorsed by general conference in time to be cabled before Juno 23 to
Smoot- chairman Senate Finance Committee condemning proposed tariff Increase
on CuLan sugar. Third, that suitable resolution be cabled to administrative
connittee of Federal council urging definite official protest at its meeting 28th.
Finally that full publiclty be given these several actions through Habana reprosentatives of Associated Press and United Press.
Please cable me acknowledgment, care Founders, New York.

Senator CARAWAY. Did anything come of that suggestion?

Mr. BALDWIN. I have forgotten. I think some resolution was

passed.

1814

LOBBY INVESTIGATION

Senator WALSH of Montana. Was the right of the American

delegates to sit challenged?
Mr. BALDWIN. I don't think it was.
Senator WALSH of Montana. I see that Mr. Hartenstein expands
a little in his telegram and proposes to challenge the right of the
American delegates to participate under those circumstances in an
conference of Christianity.
Mr. BALDWIN. That I do not know.
Senator CARAWAY. It is rather ungrateful after having gotten this
Federal Council of Churches to issue your bulletin to put them out
of the conference.
Mr. BALDWIN. I think the chronology is just the reverse. This
happened before the bulletin came out.
Senator CARAWAY. They had not been apprised of your activity
to try to silence them down in Cuba?
Mr. BALDWIN. That was not my activity. That was Hartenstein.
Senator CARAWAY. You were indorsing it?
Mr. BALDWIN. He sent me a copy and I did not protest.
Senator CARAWAY. I say you indorsed it.
Mr. BALDWIN. I thought it was a good move.
Senator WALSH of Montana. A letter from you to Mr. Hartenstein of date July 12:

in

Most confldentially, and for your own ear I have just learned from the Federal
council that its executive committee refused to take a public stand on any tariff
matter, but has forwarded to the President and to Chairman Smoot copies of the
cablegram received from the recent conference it llabana. I have not yet
worked out the final strategy pt probably I shall tip off Senator Harrison and get
him to demand the text of this communication front the Federal council.

What was there so confidential that the Federal Council of Churches

would not dip into politics?
Mr. BALDWIN. I think the "confidential" was to apply to the entire
letter. I have forgotten how it reads.
Senator WALSH of Montana. Did you tip off Senator Harrison?
'Mr. BALDWIN. I don't think I did.
Senator WALSH of Montana. Why not?
Mr. BALDWIN. Well, I don't know. You sometimes have ideas
that you do not put through.
Senator CARAWAY. Had you been accustomed to tipping him off?
M r. BALDWIN. No. I met him once.
Senator CARAWAY. What suggested to you that you could go and

suggest to him something?

Mr. BALDWIN. Because he was taking a very fine leadership in
the Senate Finance Committee discussion of the sugar tariff.
Senator WALS11 of Montana. I find a letter from your associate,
Mr. Mermey, td yourself, dated September 10, as follows:
Dug into the military-Pike situation at the Navy all (lay to-day.

What was the rmilitary-Pike "situation?

Mr. BALDWIN. That was another idea.

Senator WALSH of Montana. Well, what was it?

Mr. BALDWIN. One of the reasons for developing the American

sugar industry has always been the military defense, national defense
reasoti. We have always felt there was a very strong argument against
that; that if you drive your main source of sugar from a point only
90 miles off the coast to the Philippines, 0,000 miles away, it was bad
0

~.4

1#1

LOBBY INVESTIGATION

1815

naval and military strategy, and one idea we had was to develop that
into a statement.
Senator WALSH of Montana. I was simply inquiring about the
expression "imilitary-Pike."
.

Mr. BALDWIN. Well, Mr. Pike either suggested that-made the

initial suggestion or was interested in it; that is all.

Senator WALSH of Montana. So, you called it the "military-Pike
situation."
Mr. BALDWIN. Yes; to identify it to my associate.

Senator WALSH of Montana (reading):

Dug Into the military-Pike situation at the Navy all day to-day.

How does the Navy get into this?

Mr. BALDWIN. If you have got 6,000 miles of communication to

keep open it is a naval matter.

Senator WALSH of Montana (reading):

Two things:
1. There is no point. lit trying to find out how much Navy would be required
to maintain a line of communication with the Philippines.
2. No pmint in ascertaining sugar tonnage sunk by U-boats during the war,
because all naval experts agree that in case of war In tie Pacific Japan would take
the Philippine Islanls atnd Guam without a struggle.

Where did Mr. Mermey get the information that all naval experts

agree that in case of war in the Pacific, Japan would take the Philippines and Guam without a struggle?
Mr. BALDWIN. That I can not-say.
Senator WALSH of Montana. Mermoy never conveyed to you the

source of his information?

Mr. BALDWIN. No. I think he just took it for granted.

Senator WALSH of Montana. He continues:

I am told confidentially that we would make no attempt to save the Philip.

pines in time of war with'Japan.

Who gave that confidential information?

Mr. BALDWIN. That I do not know.

Senator WALSH of Montana. Mr. Mermey did not convey to you

that information?
Mr. BALDWIN. No. That is all.

The matter was dropped then.

I did not take that too seriously. All I know was that he had looked
into the matter and decided there was not a story there for us, so we

quit.
Senator RoBiNsoN of Indiana. You were covering a great, deal of

territory in bringing about amicable relations, were you not?

Mr. BALDWIN. There is a lot of territory to cover in a short tine.

Senator WALSH of Montana. He continues:

Books on the subject of a Pacific war have been written, of course; all show the
untenability of the American position. I have extracts from the writings of
Gardiner (ntaval expert, not like Shearer); Captain Knox, United States Navy,
retired, and ifector Bywater, also respected naval expert, on the subject. Expect
to get to-morro.w copye of s)eech oil subject by Admiral Seibold.
HIerc's lity thought: I think I can write out a Burklan speech against a sugar
Increase, pjm|uting out the possibility of breaking of the Washington arms conference provisions and also the po ;ibilitv of seeing a situation develop which
would be inimical to the cause of naval reduction.

Did you see the Burkian speech?

Mr. BALDWIN. I don't think it was ever written.

1816

LOBBY INVESTIGATION

Senator WALSH of Montana. Do you suppose the gentleman would

be available to write some speeches of that character for Members of
Congress?
Mr. BALDWIN. I don't know, sir.
Senator WALSH of Montana (continuing):
All bpcauso of hothousing of sugar In the Philippines at the expense of the
United States; and Cuba may force us to defend those islands by greatly increasing
the size of our Navy adequately to police the Pacific and by iransforming Guam
Into a Pacific Hellogoland.
I'll write the speech (which will be buttressed with strong quotes), send it to
New York for criticism, and if Its 0. K. try to sell it to a Senator for use on the
floor.
Mr. BALDWIN. That is the modern definition of the word "sell,"
I think.
Senator CARAWAY. Well did you find any market for the speech?
Mr. BALDWIN. I don't tiink it was ever written. That was one
of the gems that did not fly, also.
Senator RoBINsoN of Indiana. Mr. Mermey is your assistant,
isn't he?
Mr. BALDWIN. Yes.
Senator CARAWAY. What experience has he had in writing Burkian
speeches?
Mr. BALDWIN. I don't know. It may have been his maiden
speech, for all I know.
Senator WALSH of Montana. ie concludes:
It isn't a question of maintaining a line to Plilipphie Islands. Its a question

of holding the Philippine Islands. The unanimous answer Is: "It can't be
done."
Senator RoBINsoN of Indiana. Did you get a decision from Doctor
Bustamente on that question?
Mr. BALDWIN. No.
Senator RoBINsoN of Indiana. And did you get Admiral Seibold's
speech?
Mr. BALDWIN. I don't know whether he did or not. All I know
is nothing was done about it.
Senator CARAWAY. He says:
Expect to get to-morrow copy of speech on subject by Admiral Seibold.
Did you over hear of that speech after that?
Mr. BALDWIN. I take it Admiral Soibold had made the speech
sometime prior to that, that had been published, and he was going
to got that as material for this Burkian speech.
Senator CARAWAY. Did you ever see it?
Mr. BALDWIN. No, sir. As I say, the thing was entirely dropped.
Senator CARAWAY. And the speech dropped with it then?
Mr. BALDWIN. Yes, sir.
Senator WALSH of Montana. Mr. Baldwin, shall we accept your
activities underthis particular employment concerning which we have
inquired, as indicative of the charact or of business that you carry on?
Mr. BALDWIN. Yes, sir.
Senator CARAWAY. I would like to ask you, since you say that is
the character of your business, who are your customers? Give us a
list of them.

LOBBY INVESTIGATION

1817

Mr. BALDWIN. During the time that I have had this account, some
of my clients have been the Lehigh Air Port competition Downtown
Homes (Inc.) of New York, Amp itrite Corporation of Rew York.

Senator CARAWAY. What was that?

Mr. BALDWlN. That was a very minor little account that I had.

Senator

CARAWAY.

What was its business?

Mr. BALDWIN. It was a floating hotel that was up in New York

for the summer.

It is now down in Florida.

Also R. H. Macy &

Co. of New York.

Senator WALSH of Montana. I ask to have incorporated in the

record without reading a letter from Mr. Baldwin to H. H. Pike, jr.,

of date March 17, 1929 outlining a plan of campaign.

Senator CARAWAY. Very well. Let it be placed in the record.

MARCH 17, 1020.
(The letter referred to s as follows:)
R,
..

Jr.,9{)

Mr. H. H. PIKE, Jr.,

New York, N. Y.
DEAR MR. PiKE: As the result of our several conversations and of the various
material which you have given me to read, I have assembled a number of suggestions as to what we might do In the furtherance of our campaign. Some of these
ideas are undoubtedly wild or at least impractical for one good reason or another
and will have to be discarded eventually, but it should be remembered that certain
things which seem hopelessly foolish upon first reading may contain a suggestion
that can be applied to good purpose if handled in some other way.
For the moment I am listing all these suggestions without much regard to relative importance, and I shall appreciate It if you and your associates will look over
this list antd pick out the Ideas that are now all right. Then we can begin to work
on thom while other plans are held up for further thought. Because of the comparative brief time at our disposal we must get to work on some things just as soon
as possible and then build up our activities as we go along; we can not afford to
delay action until we have developed on paper a detailed program.
Just one other word of introduction before giving you the list. We must bear
in mind that some of the most Important things we canl do will in themselves appear to have no relation to the matter in hand. They aro ammunition which wl
have effective use a little later. The first suggestion on the list may work out as
an activity of this typo.
1. Open Letter to Congress: act Prof. F. W. Taussig, of Harvard; Prof. Irving
Fisher, of Yale; and a score more leading economists throughout the country to
compose and sign an open letter stating to Congress that the United States Tariff
Commission is the result of a fundamental principle of our tariff protection policy
and that its flouting in respect to any specific item menaces the integrity of the
whole policy and ol all tile items on the entire list. If this letter can be put
through and released to the press of the country just prior to the opening of the
special session, I believe it will create a considerable amount of editorial comment
which will be preponderantly favorable. Having thus established that point, we
shall have the foundation for hammering on the fact that this commission has
already made an exhaustive study of sugar costs and has officially recommended
a reduction in the present duty.
2. Now York Dairymen's League: This is a powerful organization of farmers
who sell to the condensed milk packers as well as to the New York City market.
The production of condensed milk requires a great amount of sugar; furthermore
Cuba is an important market for condensed milk. We should get a statomont
from officials of this league and broadcast it to all farm papers as well as to the
general press. If that goes over well we can then get after the dairy farmers'
organization in Wisconsin. They face a similar situation and they are on the
fringe of the beet sugar belt where their influence would be most effiective.
3. Electric Bond & Share: This corporation has a tremendous stake in Cuba,
but apparently is afraid of coming Into the open because of its Interests in the
West. We might try to find some stockholder (the more prominent he Is the
better) who will write an open letter to the president of the company asking him
what he is doing to protect the stockholders interests.
4. League of Nations: The league has created a special committee which is
making a study of all sugar-produeing countries. Thus it formally recognizes
tile importance of sugar in International relations. It would seem ,lse to check

1818

LOBBY INVESTIGATION

up on tie study, for If we could get a story out of Geneva it would have widespread publicity and would be seriously considered in Washington.
5. American Federation of Labor: the federation is closely affiliated with
the Cuban federation. I know how to get to Green, the president of the federation. It night he well to have a talk with him and find out how he stands.
6. Mexican contract labor: This Is a matter which will also Interest the
federation, and way affect its decision to enter the lists for Cuba. It Is also an
important story in Itself. We can best "break" this story by getting an accolnt
and photographs of activities of the recruiting depots eat abl shed every spring
in Texas I)v the beet-sugar producers.
7. Beet-iugar seed is cerman: Here is the basis of a getteral story emphasizing
that any attempt of Congress to make America self-supporting In sugar Is doomed
to failure because the seed has to be imported annually from Germany.
8. New York State Chamber of Commerce: This is tile oldest body of its
kind In the world. It dominates New York, is influential in Washingto;, and Is
well liked throughout tile Mississippi Valley because of important activities in
behalf of that region. It should be well worth while to sound out the chamber and
see whether there is a basis of cooperation. Incidentally, the chamber has
twice had receptions to Machado and has twice sent delegations to Cuba in the
last three years or so.
0. Los Angeles Chamber of Commerce. A Times dispatch from Manila
recently reported that this chamber was most interested in the Philippine agitation against restriction. It would be worth while to find out exactly how the
chamber stands on sugar, and whether there Is any basis for Its developing an
Interest In the Cuban situation. This might be (lo e through some West CoaRt
member of the American Bottlers. If so, the sounding out should be handled
most discreetly.
10. Friends of Cuba: There must i)e any number of individuals who are not
now connected through business associations with the Cuban market but who
retain an active friendship for Cuba. Tiey should be found and listed because
from this group we can pick persons who'will give us interviews for the press,
speak for us at luncheon clubs, write letters to the editors of the papers, etc.
The only way such a list can he built up quickly is by everyone now Interested
in our campaign sending in suggestions for tile list. Besides the name we should
have a brief sketch of tle person, showing his present position in the community,
his club affiliations, and the reason for lis interest in Cuba.
11. Celebrations: Within the period of our intensive campaign there are, I
believe, a number of anniversaries celebrated by Cuba In commemoration of
great events in its history. I am going to list these dates. We can then try to
arrange for observances of these days itone way or another that will prodlico
publicity.
12. Pan American Society: The very best thing this society could (o would
be to stage a banqtuet, here "inNew York on some anniversary" holiday In Cuba.
We could make a big thing of this, get Machado to speak to the guests via the
telephone and loud speaker. If handled right we might get the participation
of a lot of big Republican'guns, such as Hughes, Root (at least through a inessage
from Geneva if he has not returned heroby then), Sthnson, CharlesE. Mitchell,
etc., onl the basis of friendship for Cuba tind thus spike their guns in tile sugar
tariff agitation.
13. Steamship lines: There are several lines which derive all or a large part
of their revenue from Cuban freight and passenger business. They should l)e
canvassed within a view to seeig what specific things they can do to ielp ts.
world relations: Here is a toi6 for a i)osisille magazine
14. Sugar versus oil lit
much witI the monthlies,
article. The tim9 is so short. that we can not holpe to ot)
but the ,%turdav Evening Post, Collier's, an'l Liberty offer a possible market
for an article otl this subject or some other phase of the situation.
15. Friends i Congress: These should he listed and approached so that their
efforts will be coordinated. Tile list. should e lengthened if possible . I notice
that Hanilton Fish was scheduled to appear at the liearilgs. Mrs. Ruth Pratt
tile cudgels for Cubant sugar as representative of
might be Ipersuaded to take ill)
the housewives.
10. Women's organizations: Fortunately, Senator Smoot has offended a great
charge that the Anteriean kitchei Isthe Imost wasteful
number of womnei by ills
in the world. 'I'k' lblie is nuch nore interested iii ataecing ptr.Omialltits
thon in arguing about economies.

8n1111(- of the wonlell's clubs Imight be in(lled

to cone back strong at Simoot without our appeaLriIli

i ny way in that fight.

LOBBY INVESTIGATION

1819

At the same time the women's organizations should be acquainted with the
menace of higher living costs Inherent In an increased tax on sugar.
17. American bottlers of carbonated beverages: We should have a complete
list of the member firms with the names and addresses of their oMcers. It may
well be that there will be certain types of publicity which can best be given
wide and simultaneous distribution through this list. We should also be able
to pick from this list speakers for luncheon clubs, etc.
18. Ramifications of sugar producing: We should also have a list of the principal firms selling supplies of one nature or another to the sugar producers in
Cuba.
19. Ramifications of sugar consumption: Another desirable list would be that
of the types of manufacturers using sugar, so that wo can get our story to all
of them through their trade papers. Certain users are obvious, such as confectioners, bakers, condensed milk packers, canned fruit packers, and pill makers,
but there may well be others about whom I do not know offhand.
20. American Chamber of Commerce In labana: Its membership consists
largely of representatives of American firms who are doing business with Cuba.
Undoubtedlv all of them have felt the effects of the Coban depression. We
should pick the most important companies from this list and either gel. them
directly to register their concern about the tariff agitation or smoke them out
through the cooperation of some stockholder. (See suggestion re Electric Bond
& Share.)
21. Spanish War veterans: Here is a group whose active cooperation we most
certainly want.
22. South America: These countries are watching our attitude toward Cuba
with real concern. It is the straw which will show them how to size up Iloover's
good-will tour. We should do everything possible to drive home to the American
people, Congress, and Hoover that South America is most restive. This can be
done by stimulating the press associations to get interlows from South American
leaders (which will of course be cabled here and distributed to our press) and by
inducing the Presidents of some of the South American countries to cable fellci.
nations to Machado on one or another Cuban national hol(lay, such felicitations
to include direct or implied references to the sugar situatloni. This latter suggestion might be handled through the embassies of these countries it Washington.
I shall await with interest the reactions of you and your associates to the
ahove list. One, result will be, I hope, that, it will produce a supplemientary list
of ideas which occur to you.
Sincerely yours,

Senator WALSH of Montana. Do you recall that letter?

Mr. BALDWIN. I remember that I did try to outline a plan of campaign of something I knew nothing about at that time.
Senator WALSH of Montana. I refer to paragraph 5, as follows:
The American Federation of Labor: The Federation is closely affiliated with
the Cuban Federation. I know how to get to Green, the president of the
Federation. It might be well to have a talk with him and find oit how he stands.

Will you explain that?

Mr. BALDWIN. I don't know what to say. 1 did know somebody

Aenever followed up that
who could introduce me to Mr. Green.
particular thing.
Senator ALSH of Montana. What. did you menln by the expression "I know how to get to Green, the presidentt?
Mr. BALDWI1. I knew how to be introduced to Mr. Green.
Senator WALSH of Montana. Why didn't you say so?
I (lid.
Mr. BALIW.
Senator

WALSH

of Montana. But you are a newslper writer, are

you not?
'. YAs, sir.
Mr. BAI;
Senator WALSH of Montanit. And (1() you meron to say that this
expression here "I know how to get to green , the president of the
Federation" simply meais that you knew some one who could
ntro(luce you to (ree'?

1820

LOBBY INVESTIGATION

Mr. BA.,j ,iN. Absolutely.

&4ator WALSH of Montana. That is the way you write editorials,

is it?
Mr. BALDWIN. I do not write editorials. There is nothing beyond

that. I have never in any caseSenator WALSH of Montana. You know, Mr. Baldwin, that that
is not the significance that would ordinarily be given by an ordinary
reader to that language, don't you?
Mr.

BALDWIN. I

don't know that. That was written exactly--af

I meant there was that I could get to Mr. Green. I knew how to get
to the editor of this paper or the other.
Senator WALSH of Montana. Do you not know that that is not the
significance that would be given by the ordinary reader to that
expression?
Mr. BALDWIN. I don't know.
Senator WALSH of Montana. Don't you know that that means that

you had some means or you believed you had some means of inducing
Green to accede to your proposal?
Mr. BALDWIN. No, sir.
Senator WALSH of Montana. And some dishonorable means?
Mr. BALDWIN. It was not meant that way, and I am sure it was
not taken that way.
Senator WALSH of Montana. Isn't that the natural conclusion to
draw from your language?
Mr. BALDWIN. No air; I don't think it is.
Senator WALSH of Montana. Anyway, you did not get to President
Green?
Mr. BALDWIN. I got to President Green later.
Senator WALSH of Montana. Just how?
Mr. BALDWIN. I was Introduced to him by a friend and I talked
to him about quite another phase of this thing and left him, and he
did not do what I hoped he would do.
Senator WVALSH of Montana. YoU got a letter about this matter

from Mr. Staples, (lid you not?

Mr. BALDWIN. You say I got a letter from Mr. Staples?
Senator WALSH of Montana. No, no.

I beg your pardon.

Your

proposals of activity in this matter went to Mr. Staples, did they not?
BALDWIN. I believe they did.
Senator WALSH of Montana. Through Mr. Pike?
Mr. BALDWIN. Yes, sir.
Senator WALSH of Montana. And Mr. Staples commented on them
in a letter to Mr. Pike?
Mr. BALDWIN.. Yes.

Mr.

Senator WALSH of Montana. Of date March 27, 1929, which I ask

to be incorporated in the record, but I will read only a portion of it.
Senator CARtAWAY. That may be inserted in the record.
(The letter referred to is as follows:)
HERSHE Y CORPORATION (COMI'ANIA DE HIERSHEY),

Central Hershey (Cuba), March S7, 1029.

Mr. 11. HI. PI'[m, Jr.,
01 Wall ZrdeI, Now York.
DR:AI MIN.Piot:: I havo your letter of March 19, inelosing letter from Baldwin,

outlinhig the pIbllclty campaign.

as a whole.

It seems to ine that le a very good scheme,

LOBBY INVESTIGATION

1821

I sent you a day or so ago a list of all the members of the American Chamber
of Commerce which I thought might be of help and indicated such concerns in
the United States as I knew wore represented by some of the individuals it the
chamber.
Apparently the first shot has been fired, for this morning in the liabana Post
there appears a front-page .article stating that the bottlers' association were
presenting a brief, ote., against an increase In tariff; in fact, requesting a decrease.
It sounds like good dope to me.
Taking tip the items in Baldwin's letter, I have very few suggestions, but my
first impression is the following I will cover these by (he same numbers he uses:
1. Open letter to Congress.-It seems to me that this should also be covered
from the class-legislation standpoint, as the benefit to the few is at the cost of
every man, woman, and child in the country.
2. O. K.
3. 1 discussed this with some of the officials of the Electrio Bond Share, and
they felt that their middle west and western business were so large that they
could not afford to come out in the open in this matter. You might got some
indirect support from them, however.
4. 0. K.
5. I question the advlsability of taking this matter up with the American
Federation of Labor, in view of the fact that an investigation would Indoubtedly
develop, and our wage scale in Cuba and the fact that we work 12 hours per day
Is against the federation principles.
6. 0. K., but should be kept out of the federation hands, in my opinion.
7. 0. K.
8. Would suggest that bottlers' association write to Dr. Luis Machado,
whom you know, as I understand he appeared before the Now York State Chamber of Commerce and was well received by them. He might help along this
score. I believe that several refiners are in this State chamber of commerce and
they might oppose any action taken by them.
9. 1 question not being familiar with this phase of the issue.
10. Hloratio hubens might help along this line. You know him, of course
and he likes this kind of business. I do not have anybody else, at the present
time, in mind.
11. 0. K., but time seems rather short.
12. This sounds like a good idea.
13. In reference to steamship lines, I believe they will cooperate fully, but
do not see that we can do anything at this end to help out.
14, 15, 16, and 17, 0. K.
18. 0. K. I have sent you American Chamber of Commerce list.
190. 0. K.
20. List already sent you.
21 and 22. 0.
Please let me know if you wish any further information and I will got same
out for you immediately.
Yours very truly,
P. A. STAPLES, General Manager.

Senator WALSH of Montana. I read the following:

I question the advisablllty of taking this matter up with the American Fedoration of Labor, in view of the fact that an investigation would undoubtedly
develop, and our wage scale in Cuba and the fact that we work 12 hours per day
against the federation principles.

Did you understand that to be the fact?

Mr. BALDWIN. I don't know anything about it.

Senator WALSH of Montana. You do not know whether that was
correct or not?
Mr. BALIWIN. No, sir.
Senator WALSH of Montana. You do not know whether the wage
scale in Cuba of 12 hours a day prevailing there is against the federa-

tion principles or not?

Mr. BALDWls. Oh, yes; if they have those conditions of work, they
were certainly against the American Federation of Labor, which is
for an 8-hour day.

1822

LOBBY INVESTIGATION

Senator WALSH of Montana. You do not know whether those conditions existed or not? *
Mr. BALDWIN. I do not; no.

Senator WALSH of Montana. Apparently Mr. Staples is in a

situation to know.
Mr. BALDWIN Yes, sir; he is in Cuba.
Senator WALSH of Montana. You made no inquiry into that
aspect of the matter at all?
Mr. BALDWIN. Not into that phase of it; no, sir. I was not sup
porting Cuban production at all. All I was interested in was the
tariff matter.
Senator WALSH of Montana. But this was a consideration that was
quite pertinent to the question of the tariff, wasn't it?
Mr. BALDWIN. I imagine so.

It had been handled by the Tariff

Commission.
Senator WALSH of Montana: At least, if you expected to get the
cooperation of President Green, it was.
Mr. BALDWIN. Yes.
Senator WALS1 of Montana. Well, you were furnishing information about pertinent matters to these various associations and organi.
zations, were you not?
Mr. BALDWIN. Yes.
Senator WALSH of Montana. You did not furnish any information
of this character to them, however?
Mr. BALDWIN. I did not. They know I came as a partisan on the
thing, and I said "If you want to get the other side I suggest you got
in touch with Facts About Sugar or one or another of the domestic
interests that are supporting the other side.
Senator WALSH of Montana. To whom did you make that suggestion?

Mr.

BALrWIN.

To every one of these persons that I took it up with.

Senator CAHAWAY. You were giving the research bureau informa-

tion, but you said "I only have got haIf of the truth".
Mir. BALDWIN. Yes.

I am supplying what I know.

If you do not

know where to got the other side Iwill be glad to help you to find out.
Senator WALsh of Montana. Another report by you to Mr. Pike
of date April 0,1029, I ask to be incorporated in the record without
rea(ling.
(Ti report is as follows:)
Aork, 0,
Y2
i.,
I f. II. PIKe, Jr., Us
91 Wall Street, New York, N. Y
DEAI MR. PIKEz: Confirming and coorditting my daily verbal reports to
of (dovelol)nte~s dlrilig tho last

in giving you
votl I weeks:
threo
"" the following 8tlmnlary

I. The brief of the American bottlerm was mnaIo the occasion for a general
publcitv wle iso to p)pcrs on March 25. As yet It Is too early to expect itf(tll
press elfpplng return from this, but to (iate we have received clips whilh show that
thV release was picked upIn, by:

rhe Associtted Press I ii.nclal Service.

Tihe Universal Service.

The Chicago 'TrilittH., Press Service.

'The Udtl(I states l) tDly

''het Now York Journal Of Commerce.

Edgar Markhainm's svileated artlelt, from W15sihiMltO1.
Basil Manly's Ser'ie to the New, York lRvemuIng Worl(.

LOBBY INVESTIOATION

1823

A clipping front the Habana Post of March 27 shows that the A. P. South
Amerian service carried this release it full, and I understand that the U. P.
South American service also used some of It.
2. Trips were lnade to Boston to see Professor Taussig, and to Now Haven to
see Prof. Irving Fisher, in ai attempt to develop leadership for a joint statement
to Collress by the leading economists of the country urging further recognition
of
the Tariff
Commission.
Both of these
professors
were
sympathetic
butIneither
would
take the
leadership because
of press
of other
activities,
Before
had az
chane to try out any other economist I learned that the Now York State Chamber
of Commerce would consider a resolution along the same lines at Its regular
mnothly
meethig
on April
1 therefore
gotrelease
lit
hnidlatetouch
with of
tilethat
chamber
resoand
arranged
to write
slid4.place
tile news
on tile adoption
hion.
My story was carried ltall of the Now York newspapers and Inspired
a editorial iathe No
as
w York
le
ending World of April 0. I am now trying to get
tile P-haier to ask a selected list of economists to indorse the chamber' noi
slid already letters from Professor Taussig and Professor Fisher have been
received .If this plai goes through I shall get out a story summarizing this i.
dorseniont front tile economists.
Of course, this ot the way I had originally planned to get the Tariff Commission Into public discussion, it it seemed best to get behind something that was
already started in an important quarter and to swing the economists in line as an
Indorsement of that rather titan as a pioneer thing of their own.
3. Learning front Mr. Making that General Crowder had something Important
to say about the sugar tariff inrelation to our national defense, I got in toucl
with "the editor of Colliers, who assigned one of his best writers to see General
Crowder. Yesterday this writer reported to me that he had had two Interesting
talks with the general, but that Colliers coull not take this matter on for publi-

cation iI less than two llonths, and therefore declined to use it. I am now trying

to get in touch with m.y contact with Liberty Magazine and, If that falls, I shall
see whether General Crowder can not prepare a statement of his views in the
form of an open letter to the American Legion. Certainly, lit
one way or another,
I am1 gonlg to caitalizo General Crowder's point of view.
4. Last Saturdav I had a talk with John Barrett, tie so-called "Father of
Pan Anericanism, and I think that I ('all Indico hint to prepare a statement oi
the critical effect which anv increase In the sugar tariff will have upon our relations with all of Latin America. Mr. Barrett is at present out of town and I am
taking this time to develop the beat possible inedlum for a statement by him.
5. Before Mr. Lakin left Sunday evening for Cuba to report to "President
Maclado, I talked with hilm and gave hint a memorandum proposing that President
Mat,hado invite representatives of all of America's leading press associations
andl iows syndicates to nake a "presidential tour" of Cuba prior to May 20 and
to remain it labana over the InTependence Day celebrations. Mr. Lakfii appareitlv thinks well of this Idea and believes that lie call put It over.
. 1 have also put ipto the New York Times tile proposition that It send one
of its correspondents to Cuba to write a series of articles, and I understand that
,. C. Speers, who Is now in Mexico City for the Times, will be ordered to Cuba
as soon as tho Mexican revolution ulets down; or Ifthat takes too long, that
some other Times staff writer will be sent to Cuba. 'ThisIs extremely confidential.
7. I now have before Merritt Bond, of the North Americatn Newspaper Alliance,
to which sixt.y pal)ers subscribe the matter of senlig a correspondent to Cuba.
Ai([ I have iso put ti1)
to Mr.hond the question of using atstory from Mr. John
Barrett.
H. As you know, we both attended a recent hilch(on of the American Exporters
ailinjorters Ashotiatlon and paved the wiy for a I)reseltatiO

of a nenlo-

radmimn wide I prepared. Time resolutfti.s lb:s'ed on (iis nemnoranduin are to be

aieted upon by the directors of this assotlatiuu at their meeting ol Thursday,
and I have arranged to cooperate li llIIUllg (he ptbliity in ic1so
the resoltlois
Ilro adopted.
0. I llinvO also paved the way for tie sublilsslon of a similar inentoramdillt to
tile New York-8tate Chamber )f(omminerce with a view to getting that body to
ado)t aJlprol)riato r(solultions.

10. e herdav I had an interview with Mrs. HIenlry Goddrd IMeach, of tile
Natlial I,1;gi1e if
menlWtll
Voiters, but slit tells tle ttid they ttll take no nation.

however, tihrilgh lir I atlly" hte lh to get tle' ITxas 1.agui to take son
tlnl onllthe Mexican colltrit ,tlabor wiich I largely recruited there for the beetsugar Ields.

1824

LOBBY INVESTIGATION

11. One of my staff has had a long conference with an officer of the New York
State Dairymen's League, but we can not Induce them to take action, as they are
no longer interested in the Cuban market.
12. My office is now in the process of collecting data on the importation of
sugar-beet seed; on comparative investment yields in the stock of Cuban, Porto
Rican, and domestic companies, etc. As these studies are completed we shall
try to create publicity springboards for them.
13. The N. Jo. A. Service has been supplied with all the facts we know about
Mexican contract labor and we understand"that this data will be sent to their
Texas correspondent to form the basis for a story when the Mexican laborers
begin to come through there.
14. I have already had two conferences with Mr. Garcia, vice president of the
Cuban Chamber of Commerce in Now York, with a view to cooperating with
him in the development of an appropriate dinner or other demonstration to be
held here on May 20.
15. Through a friend of mine we have developed Senator Copeland's promise
of active interest at the proper time.
10. Last week I had a conference with Raymond Muel, research director of
the Foreign Poliy Association, and I found that he was sending to the printers
that afternoon the manuscript for an official bulletin on the Cuban political
situation; and by quick action supplied hihn with certain material for the inclusion
of at least one Paragraph on the sugar situation as a factor in the political situation. I am following up with him to see whether the Foreign Policy Association
will not devote a whole bIlletin to the Cuban situation. Confidentially, this
bulletin of the F. P. A. is probably going to be a bitter attack on President
Machado, but there was of course, no way of my forestalling that. Tie only
concession I could hope ?or was to get in this paragraph about the depression it
the cane fields.
17. I have delayed in trying to promote the idea of a Cuban Sunday to be
observed on May 10 (the day before the Cuban independence day) because my
contact with the Federal Council of Churches has been out of town. I expect to
see him tomorrow.
18. As I told you this morning, it would seem well to find out whether Mrs.
Talmadge, of Athens, Ga., who is running for the presidency of the D. A. R. on a
platform advocating defense, will use some of Crowder's material in this campaign.
I am writing you a special memorandum on this later to-day.
10. I have been In touch with Myron Weiss, an editor of Time, who is going to
Habana about .Niy 1, and am arrangin throu h you and Mr. Lakin to have him
brought into Intynate touch with the &uban situation.
There are various other lines of attack that we are sounding out but that have
not yet reached the stage where they can be given any definite shape. I find that
many who should be active friends of Cuba in her present crisis are, for one
reason or another, retarded by some domestic interest. The result is that things.
which should move rapidly consume a considerable amount of time, energy, and
footwork. However, I do believe that we have started machinery which is
going to develop into a considerable amount of favorable publicity in duo course.
Sincerely yours.
P. S.-May I point out the extreme Importance of getting in touch with Seflor
Perez when he passes through here the end of this month on his way back from
Geneva to Habana.

Senator WALSH of Montana. Likewise a report of April 22, 19290.

(The report is as follows:)
APImiL 22, 1029.
Mr. H. H. PiKB, Jr.,
New York, N. Y.
DSAR MR. PtK.: This will bring you up to date from April 9, when I last wroteyou about the progress of the publicity campaign. The numbers of the paragraphs in this letter carry on from those numbered in my letter of April 0.
20. The plan to get the Now York State chamber to ask the economists to
endorse the chamber's action on the Tariff Commission (see par. 2), has been
approved, and will go ahead shortly.
21. Liberty Magazine was not interested in the Crowder statement (see par. 3),
and therefore wrote Gneral Crowder on tho Idea of hiswriting -- e1
oen letter
to the American Legion. Mr. Mermov saw General Crowder In Washington on
Friday, and found that the General w'as not very enthualhstie about this idea.
1lowe'vtr, the Gencral has promised to send us a copy of the statement which hc

rh

LOBBY INVESTIGATION

1825

has already prepared, with a view to our seeing where we can place it to best

advantage.
22. After several conversations with Mr. John Barrett I got him to write
out a statement on the whole Pan-Amecrican situation. Thi we were prepared
to place with the Consolidated Press Service, but Mr. Barrett telephoned a

friend In Washington, who is said to be very close to the administration, and

read him parts of the statement. The result was that this friend urged him not
to make such a statement at this time. Learning this fact and the further
fact that Mr. Barrett was going to be the next day at the Foreign Trade Council
Convention in Baltimore, I sent Mermey down there and ho did an excellent job
in calling in some newspaper men and in getting Mr. Barrett to say in the form
of an Interview substantially what he had written for a signed statement. What
Mermoy actually did was to take the statement Barrett gave us, boil it down to
essentials, and distribute it among the newspaper men, with Barrots consent.
Subsecquently, two or three newspaper men actually did see Barrett. The result
was that the Journal of Commerce gave the Barrett story front-page position,
and the New York Times played it up In ita dispatch from Baltimore and the
Baltimore Evening Sun also carried it. The following day the Journal of Commerco had its leading editorial on the Barrett statement, and the Times again
referred to it in reporting the resolutions adopted by the council. I believe there
is good reason to feel that the getting out of this statement at that particular
time had considerable influence upon the temper of the resolutions passed by the
Foreign Trade Council, especially since it is Mermey's understanding that the
council had had no intention the previous day of passing resolutions of this
character. We are now following up to see how wide a distribution the Barrett
statement got in South America, and whether any repercussions can be stimulated down there. (See par. 4.)
23. Mr. Lakin is now back from Habana, and tells me that he presented to President Machado the idea of inviting newspaper men to Cuba (see par. 5), and that
the President was reluctant to do so in view of the attacks mae upon him in a
series of articles in the New York World. Of course, these attackks are really
all the more reason for getting American newspaper men down to Cuba, and Mr.
Lakin is still trying to persuade th President, but. no final decision has been
reached as yet.
24. Tie New York Times now advises me that it has decided not to send
Speers to Habana (se par. 0), as it Is going to get the stories it wants from "a
man who has just come up from Cuba and knows everything." I an now trying to learn the Indentity of this man.
25. The North American Newspaper Alliaico (see pur. 7) turned down both
the proposal that they seud b man to Cubai and that they take a story from
John Barrett. However, somehihng may..et be done with this syndicate.
20. Th American Expor-ters anti Imortet Aswolatlon adopted the resolut!ons proposed by their dirctos, and my office handled the publicity. The
story had some local play and wpas also picked up by-the Associated Press In Its
Washliogton dispatches aout the tariff situation.: A couple of (lays later the
Associatd Press dispatch from Habana spoke about the ipression made on the
Cubans by tits action of the American Exporters and Importers. (See par. 8.)
27. A s ndiar submission was prepared for Mr. Pike, ot,, to send to the Now
York State Chamber of Commierco, of which he Is a member. This submission
was conldered-by the ohanibers committee on foreign commissions and the
revenue lawai but I have not yet been advised as to what action was taken.

(See par. 9.)

28. S0 far as I know, the K. E.'A. Service (see par. 18) has not yet run a story
from Texas on Mexican contract labor.
of Commerce in -w York is goilg to do in
29. What the Cuban Chamen
observance of a Cuban Indpendencoe day I do ijot l0 , I ati still in touch
witlh Mr.G rcIa (see oar. 14, bt he ni moving very lowly.
30 The Fotigm V0 l Awoatio k has come out with its bulletin oil the

lpo~titcai sitQl~

nI ti6A. The two paragraphs in the introductioni to that

tiletin, which indicate that the sugar situation may have an Important bearing on political cotiitions, were fhe0 tult of my talk with Mr. Biuell. (See
lar. 16.) We aro nw preparing fOr Mr. Buell a great del of iateriad as a
basts for a btilletIn bDy the F. P. A. on the world-wide sugar situMtion.
1.I had ami ifterview with Mr. Renaud managing editor of the World, with
a view to seeing whether that pa~pr would send a man to Cuba. lie was not
Interested In d lng so, in view of the Articles which Octavio Seigle had written
for the World.
78214-30--Pr 5

1826

LOBBY INVESTIGATION

32. 1 have had interviews with both Mr. Cavort assistant secretary of the
Federal Council of Churches, and with Doctor Gulick, secretary of the council's
peace activities. As a result I have prepared some material for a ossible infor.
mation bulletin, which the council sends out weekly, and also for action by
Doctor Gulick's committee. I am encouraged to believe that we may get some
action out of this group, but I do not think that they will formally declare a
"'Cuban Sunday." (See par. 17.)
33. We did not get word to go ahead with Mrs. Talmadge (see par. 18) until
it was too late for the D. A. R. presidency, and therefore nothing can be done.
Anyway Mrs. Talmadge lost the election and thereby any news value.
34. We have developed the generous cooperation of the Munson Line In making plans for Myron Welss's trip to Habana. (See par. 19.)
38. Last Friday I had a long talk with Walter Bartlett, vice president of the
Cuban-American Sugar Co., who left for Cuba Saturday morning. I have
reported to you the position of his company and his willingness to cooperate
In every possible way in our publicity. He prepared his company's pamphlet
on Facts About the Sugar Tariff which Is considered one of the most-effective
presentations, and I have told hfm that copies of this pamphlet should be sent
to every Member of Congress and to all of the Washington correspondents. He
has told me to take this matter up with Mr. Lakin, and I have prepared a ten.
tative release to go with the pamphlets for the correspondents.
36. Mr. Mermey spent all of last Friday in Washington and re orts a most

satisfactory conference with Mr. Owens. They have developed an Idea for local
stories in several hundred American cities, If and when the House committee
comes out with a material Increase in the sugar duty. In every case the story
will lead off with the actual dollar cost of the sugar tariff to the citizens of that
town, and, wherever possible, this cost will be related, for comparative purposes,
right to some special item in the cost of their local government. Every such
story will then go on with certain canned material about the sugar situation.
37. Mr. Mermey and I have interviewed Mrs. Julian Heath, and can get
her cooperation in an intensive drive to organize the housewives of America,
if that should prove feasible. This, of course, can not be done until we know
exactly what tariff is proposed.
38. I had a talk with Senor Perez (see postscript to my letter of April 9),
the day of his arrival in New York from Geneva. He then promised to give me
a statement for publication the next day, but, upon reconsideration decided
that he should say nothing until he had seen the Cuban ambassador In WashIngton.
39. Briefs have been prepared for Senator Walcott, from Connecticut, and
for Senator Copeland, from New York. It Is understood that Senator Walcott
will share his material with Senator Blngham, of Connecticut, and we are told
that both of these men are definitely set against any increase In the tariff.
Permission has been tentatively received from Mr. Renaud, of the World,
to republish the cartoon entitled "The Holdup In the Kitchen," which was
published In the World on April 14, and which is the most effective, graphic
presentiitlon we have yet seen. This morning, over the telephone, you gave
me permission to proceed with the manufacture and distribution of mats of this
cartoon to 2,000 newspapers, at a cost of $300.
The week-end development in the news, of the utmost Importance, is the
release of what Secretary Stimson told the House Ways and Means Committee
in his plea against any restriction of Importations from the Philippines. The
Stimson Vsition must be attacked and overturned, and this is a matter which
is now commanding our first attention.
Our feeling very definitely is that until such a time as the House committee
reports a bill and thus gives the public a definite idea of what tariff is proposed,
publicity wili be largely wasted, and we are therefore conserving our ammunition
until a more opportune time. In other words, we are concentrating" at this
time on winning the- active support of such agencies as the American Exporters
and Importers, the Foreign Trade Council, and the Federal Council of Churches,
thus building up ammunition which can be used more effectively when we have
a definite target to shoot at. Mr. Mermey tells me that Mr. Owens concurs
in this strategy.
You will remember that one of the clippings which we have received was an
editorial from the Manufacturers Record in which the Cuban position on the sugar
tariff was bitterly attacked. When Mr. Merlfle, was in Baltimore for the foreign
trade convention, he called upon Mr. Clark, the associate editor of the Manufacturers Record, and he agreed to present, in an early issue, a letter from Mr.

1827

LOBBY INVESTIGATION

Owens, as an offset to the editorial. This letter Is in the course of preparation.

As I told you, the Manufacturers Record has a wide and most influential circulation throughout the South.
WILLIAM H. BALDWIN.
Sincerely yours,

Senator WALSH of Montana. Another report of May 23, 1920.

(The report referred to is as follows:)
H. H. Paxa,

MAY 23, 1929.

Jr. Esq.
kew York, N. Y.

DEAR MR. PIKE: Here Is a belated letter to bring you up to date from my last
report on April 22. 1 apologize for this long hiatis in my reports, but I believe
that you w I recognize that this office has been so busy In trying to make history
that there has been little time to record it.
From here on the paragraph numbers will pick up from the last numbered
paragraph In my report of April 22, namely, No. 39.
40. Several of the leading economists of the country have written Indorsing the
action of the New York State Chamber of Commerce on the Tariff Commission
(see No. 20), and the story will go out shortly.
41. Liberty Magazine printed-a full-page editorial in its Issue of May 11, In
which it came out strongly for the Cuban position. Mr. Butler, the editor, was
Invited to a luncheon and could not accept, but I am seeing what can be done In
following with a special article In that magazine. (See No. 21.)
42. The Barrett statement, which did such good service at the Foreign Trade
Council (see No. 22), was remade as an Interview and taken by Coniolidated
Press, which serves 100 papers.
43. At the eleventh hour President Machado did Invite some newspaper men
from the United States to cover the inauguration (see No. 23), but it was done
so late that the results can not be expected to be really worth while. I am now
taking up with Mr. Lakin the question of getting the Cuban ambassador to
invite Rldney Dutchor, head of the Washington office of N. E. A., to Cuba.
This was done after sounding out Dutcher and finding that he would be receptive.
This is confidential.
44. The New York Times has on its staff a Mr. Armstrong, who covered the
Cuban campaign of 1888 for the old New York Sun. I am trying to get the
bave met down there again on a"'Cuba
Times to send Mr. Armstrong, iopj
y
.tlei'rdecision (see -No. 24). So far
revisited" assignment.
!y
has just come up from Cuba
as I can find out, the
worked itso that a special
and knows every

feature writer f ~,lunched

Hugo Hartn
Cuba, and

45. Very,
Chambererce
member.
oluti
tariff,
have

rtew

ich ap

with me and
mtoI
ber of Commerce In
ay Times of May 19.

h ve.

New York State

submitted to the
r .n
June 6. This
.
againsii
so in the sugar
t
e~
-present rate. I
d(l
V
exp
this resolution
comes.
mber and have
eloping support
the e
w hih
after considerst
y
forte
which
kbta
--''.
Lion
of'n
prepared
406.S A
mI know,,
Itr ofCi
Now York (see
an sort of
rvance of Cuban
qg
No. 2get
t ati tht
ork State Chamber
Inenoo,,d
was tecnu
Invited
as
n
to.
Amb
rera
omm
bMv
settiethe
consul
special gu
A&
whih,
t ath
entative
general. O
of honor for w
p
c -.. tanged were Messrs.
clation. There were
tljll 1 W
Zabriskle and,;4
ouple of the New York
three speeches,
no control over the handling
papers,
but unfo
of 47.
thehe
]publicity.
-W-.a
S
Il..+,
;.'ji e v" pubisl
.
very shortly a special
Foreign
ct
has
chamber
...

.&.r

ptheeForeignaPoliayd

of whict

bulletin on sugar, for which ntbM6ti prepared much of the data and of which
I was given the manuscript for comment. (See No. 30.)

1828

LOBBY INVZSTIGATION

48. I have been advised that the research editor of the Federal Council of
Churches is preparing a special bulletin on the Cuban sugar situation, and I
have talked with Dr. Worth M. Tippy, an executive of the council who will
attend the Christian conference In Habana on June 20. He will make a state.
ment at the proper time, and I am hopeful that through him, as well as through
Dotor Oulick and Mr. Cavort, I can get the administrative committee of the
council to Issue a statement tits next meeting early in June. (see No. 82.)
49. Myron Weiss, associate editor of Time, got off to Cuba as per schedule,
and was given such a cordial welcome there that he made arrangements to
remain there over the inauguration, May 20. However he was called home
last week by an emergency in his office. I have seen him, and there is good
reason to believe that he will write some good stuff during the next few months.
He was deeply appreciative of the attentions paid to him, both by Americans
and by Cubans, and spoke particularly of his pleasure in meeting Mr. Hershey.
(See No. 34.)
50. The Cuban American Sugar Co.'s pamphlet, Facts About the Sugar Tariff,
was sent with a short story to every ono of the correspondents In Washington
and although I have seen no direct stories and do not expect any, I believe that
the correspondents have used that material from time to time in their dispatches.
Incidentally, my information is to the effect that practically without exception,

the Washlitgton correspondents are personally against the sugar tariff Increase.
(See No. 35.)

. 51. The plan to put out a special local story on the cost of the sugar tariff
to the citizens of every American town with a population of 10,000 or more is
going ahead. (ee No. 36.) These stories are now being written, and will be
mailed in the course of a day or two to some 900 newspapers.
52. The brief prepared for Senator Walcott, of Connecticut, was sent by him
through a friend to Cuba and appeared almost verbatim in one of the Habana
papers. (See No. 39.)
63. prepared a letter for you to send to Secretary Stimson on the Cuban
position in the alleged Cuban-Philip pine controversy. This letter, I believe,
has been acknowledged by Secretary 8timson to you.
54. The letter prepared for Mr. Junior Owens to be sent to the Manufacturers
Record was sent by him to that magazine, but has not yet made its appearance.
55. On a trip to Washington I saw Representative Near and cooperated with
Mrs. Jones, the United States Sugar Association's publicity representative in
Washington, in handling the story on his resolution callin for an investigation of
the boot sugar industry. On the same trip I saw Hugo Hartensteln, who intro.
duced me to Ambassador Ferrara, from whom I got a letter of introduction to
Doctor Bustamante. I then made arrangements to board the Habana Special,
where I presented my letter to Doctor Bustamante and got lis 0. K. to a state.
ment which I had prepared for him to give out upon his arrival in New York.
In the meantime I wired my office, which made arrangements with the Associated
Press and United Press to Meet Doctor Bustamanto at the railroad station, where
the statement was given to these press representatives. Later in the day I
arranged for Doctor Bustamanto to see various newspaper men, including a
man from the New York Times. The results were stories in several of the
New York newspapers and on the Assoliated Press wire; also an editorial or two.
56. The day following the luncheon I gave for Mr. Hartenstein to be interviewed by a New York Times special writer, I organized a larger luncheon for
the purpose of introducing him to some of the editorial writers in New York. The
papers represented by the chief editors or associate editors were: New Republic
Now York Evening Post Journal of Commerce, New York Times, Herald
Tribune, Brooklyn Daily Eagle. Forbes Magazine. Doctor Buell, of the Foreign
Policy Association, also attended.
57. Following the introduction of Representative Frear's resolution, I interviewed the heads of the National Child Labor Committee, the National Con.
summers' League, the American Association for Labor Legislation, and the Survey.
The net result Is that Mrs. Florence Kelly, of the Natlonal Consumers' League
is writing a special story on labor conditions in the beet fields for the survey,
issue of June 15.
58. For a long period, first through Mr. Lewis and then through Mr. Mermey,
of my office, we have been after -Frank Morrison, secretary of the American
Federation of Labor, to come out with a statement stating that organsied labor
was against protecting an industry which imported Mexican peons and exploited
child labor. These negotiations finally ended with a definite promise from Mr.
Morrison that he would prepare such a statement, and we know that he got in

LOBBY INVESTIGATION

1829

touch with the Department of Agriculture and the Children's Bureau of the
Department of Labor for information upon which to base his statement. During
the latter part of these negotiations the United States Sugar Association interests
were getting after William Green, president of the American Federation of Labor.
The net result was that Green and Morrison suddenly found that they were both
working toward the same end, and-decided to make organized labor's protest in
the form of a letter from Green to RepresentativeO FreAr. This letter was read
on the floor of the House by Mrs. Ruth Pratt last Friday afternoon, and I immediately telephoned all the New York papers and news photo syndicates to advise
them. The letter was given pretty good play here in New York, and was the
basis of a strong editorial in the New York World a few days later.
59. As I write, Mermey is again In Washington with two specific projects in
mind. One is to get the American Federation of Labor to declare that the
sugar tariff must be taken out of the status of log rolling and be dealt with as a
protection of the "uncivilized industry" which Green called the beet-sugar
Industry in his letter to Representative Frear. The other main project is one
about which I have advised you in confidence.
60. Walter Bartlett, vice president of the Cuban.American Sugar Co., returned
from Cuba May 14, and I lunched with him on the 15th, and prepared a statement which was distributed to the press, unfortunately on the day of the Cleve.
land disaster, of which I did not know until just after distribution had been
effected. The result was that the story did not get a very wide use in the news
columns, but I sent copies to the editorial writers of all the metropolitan papers
and the New York Evening Post on Saturday, May 18, had a good editoriali
based on Bartlett's statement.
61. We have now lined things up so that we are getting Important confidential
information in advance of developments and about the attitude of various
This Information naturally ean not be broadcast, but I am keeping
legislators.
you fully advised.
WILLIAM H. BALDWIN.
Sincerely yours,

Senator WALSH of Montana. Likewise a memorandum supple.

menting Mr. Bladwin's letter of May 23, 1929, of date May 28, to

Mr. Pike.

(The memorandum is as follows:)

MEMORANDUM

S3UPPLEMENTINO MR. BALDWIN'S L TER OF MAY 23 TO It. H.

PIKIt JR.S, RE WASHINGTON ACTIVITIES

I have been going to Washington for a couple of days every week, and no
doubt this system will continue indefinitely.
While a good many of my activities in Washington are what might be termed
intangible-that is to say, they do not indicate progress or lack of it-some
of the things which have been done can be outlined here.
1. National Catholie Welfare Conference has prepared a survey of the Mexican
labor situation in the United States which I have read and which I think will
inure to our benefit. The N, 0. W. C. had no intention of making this report
public, but after reading their draft cony, I convinced them it was something
the country would be interested in. Tis report will therefore be published by
the conference before July 1.
2. 1 saw Professor Page at the Institute of Economics, who has made an
exhaustive survey of the farm-tariff situation. This survey includes an analysis
of the effects of the proposed 3-cent tariff on sugar which analysis is most
favorable to our point of view. This book will not te ready for distribution
until August, prehaps, nor would Doctor Page care to release the section on
sugar through the American Bottlers or any other interested organization,
because his study then might be called partly by opposing interests. Doctor
Page did agree, however, to make his conclusions known to any Senator or
Congressman who might write him in a dignified way. When I return next
week I shall therefore pull the necessary wires so that such a request may be
made of Doctor Page.
3. When his conclusions are made public we shall make them available for
a number of the country's leading economists, and ask them to comment upon
them, since we are quite sure that such comment will also be favorable to our
cause.

1830

LOBBY INVESTIGATION

4. I spoke with Representative Dickinson, leader of the farm bloc, and he

assured me that the majority of the farm bloc Is unalterably opposed to the
proposed sugar tariff. These men will vote for a 2-cent tariff rather than for
a 2.40 tariff. His statement has no effect upon legislation, of course, but it
gives us a good indication of how the farmers are thinking.
5. On Fiiday, May 17, I spoko with Senator Capper, former leader of the
Senate farm bloc, ani he told m6 that ho Was opposed to the 3-cent tariff oven
though he did have a beet factory in one corner of his State. Mr. dapper
asked a number of questions about what the public is thinking on the sugar
tariff, which of course were answered in much detail. On Monday, May 20,
Mr. Capper released a statement to the press in which he publicly opposed the
proposed sugar tariff. It is impossible to say whether our interview helped
Influence such a statement. It happens that Junior Owens had spoken with
with Mr. Capper's associate fi the publishing business on the subject of the
sugar tariff some two months ago. I should say that a combination of happy
circumstances helped Mr. Capper make up his mind.
6. You will recall that I resurrected from the Ways and Means here a para.
graph on Mr. Lippitt's testimony to the effect that the United States can not
become a self-sufficient sugar nation under any conditions of reasonable tariff.
This statement was put into the Congressional Record by Mr. Frear and Mrs.
Pratt, and also quoted by the Foreign Policy Association in its bulletin on sugar.
I think thuis statement is as important as any other bit of testimony there is.
7. Do you know of my negotiations with Mr. Morrison, secretary of the
American Federation of Labor, and of the ultimate result-Presidnit Green's
letter?
8. David J. Lewis, of the American Bottlers, had an idea that Mr. Timberlake
could be disqualified from acting or voting on the sugar tariff because of a state.
ment which the gentleman from Colorado made on the floor of the House a few
weeks ago. It was a rather ambiguous statement, which could be interpreted as
meaning that Mr. Timberlake owned stocks in a sugar company. If this were
true, the rules of the House should have been enforced to prevent him from
acting on this tariff. Before going ahead on such a proposition however, I
thought it best to confirm our interpretation of Mr. Timberlake's statement,
whereupon I had a good friend of Mr. Timberlake's see him; and he absolutely
denied ever having owned a share of sugar stock in any company whatsoever.
9. Through Mrs. Norton's secretary I was able to get out a release signed by
Mrs. Norton, who is the Democratic Representative from Jersey City, connecting up the sugar tariff with Mother's Day. Next time I am in Washington I
shall see her again with a view to getting hei to make a speech.
10. Last week I suggested to the A. P. that there might be a good story in
the women's activities in Congress. (I had in mind the sugar stand of Mrs.
Pratt and Mrs. Norton.) The A. P. acted on this suggestion and carried a story
on it Thursday, May 23. I also got the A. P. business editor in Washington to
interview Frear.
11. From time to time I have spoken with A. P. and U. P. men, and am trying
to got across the idea that the sugar tariff is an industrial rather than an agricultural tariff. In the case of Paul Mallon, of the U. P., he wrote a story about
two Saturdays ago showing that the farm bloc, was opposed to the sugar tariff.
This came after my talk with him.
12. We are now beginning to work more on the American Bottlers' anglethe soft-drink industry representing the American consumer. It happens that

a number of legislators have be un to yell "foreign propaganda." It seems

advisable, therefore, to lay off of fto Cuban angle.
Senator WA4Ls of Montana. A further report of date June 4, 1920.
(The report referred to is as follows:)

Mr. H. H. PIun., JR.,

New York City.
DEAR MR. PiKB: For some three months I have been conducting a general
publicity campaign against the proposed sugar tariff increase, tinder anl agreement outlined in my letter to you of March 12, 1929, and accepted by you as of
March 18. The first two paragraphs of my letter read:
"Confirming our conversations about the matter of conducting a publicity
campaign in connection with the sugar tariff agitation, it is my understanding
that such a campaign would begin very shortly and would continue approximately
ninety days. Thus it would be both brief and intensive.

LOBBY INVESTIGATION

1831

"I agree to undertake the direction of such a campaign for a monthly retainer
of $1,500. Should it so develop that your group decided that further work be
done in sugar propaganda following this Intensive campaign, the matter of
adjusting my retainer to the long pull could be taken up."
The 90-day period will terminate June 17, but there Is every indication
that consideration by Congress of the sugar tariff will continue well into the
summer and- possibly into the autumn. Indeed, the fight is only just entering
its Senate phase where the possibility of "steam-rolling" (so efficiently accomplished by the Republican maLjority in the House) is remote. It would therefore
order.
seem that an agreement for the continuing of the publicity campaign was fit
When we were having our conversations preliminary to our present agreement Congress had not yet convened for the special session, and the official
position of its leaders was that its work would be completed by early, or mid
June. Mv retainer was fixed on the basis that the campaign would be "both
brief and intensive." Neither of us had been through a tariff fight before, and
neither of us could more than guess at the degree of "Intensity' which would
develop. A retainer of $1600 a month seemed fair, and, drawing on my experience with regular commercial accounts, Ifelt that in three months I could design,
assemble, and give momentum to a publicity "machine" which would run fairly
easily thereafter. Furthermore, I looked forward, if successful in the supposedly
brief tariff fight, to a continuing publicity program in behalf of Cuban sugar
interests. With these thoughts in mind I indicated to you in our conversatinsthat any long-term agreement that might eventuate could be made on the basis
of a reduced monthly retainer.
The experience of the last three months has been highly educational to both
of us, I believe. In the first place, we could not foresee the intensity of the fight
in the House. In the second place-and this particularly reflects the strain on
my office-I nearly realized that our part in the fight was not so much to shoot
ammunition supplied to us as it was to go out and manufacture various munitions
of war. The United States Sugar Association and the American Chamber of
Commerce in Cuba have been big guns, but their noise has become a bit too
familiar in congressional ears. The big job has been-and will continue to be-one of overcoming apathy and timidity in the recruiting of new friends. That
job makes a heavy strain on time and energy. Among the accomplishments in
this line of activity have been:
1. American Aiporters' and Importers' Association.-Finally passed strong
resolutions which are still referred to in tariff discussions in ne spapers throughout the country.
2. John Darrelt.-Was induced to prepare a statement and then to Issue it at
the Foreign Trade Council Convention in Baltimore. This statement was
widely used and was said to have strongly influenced the resolutions-favorable
to our position-which the council adopted at the close of its convention.
3. Foreign Policy Association.-I made contact with this grouP the day its
bulletin on the political situation in Cuba was going to press. Nevertheless, I
was able to get into the introduction to that bulletin two paragraphs on the
economic situation, and I induced Raymond L. Buell research director of the
F. P. A., to start Immediately on a special bulletin on duba and the Sugar Tariff.
My office supplied Doctor Buell with much of the statistical material and many
of the arguments used in the bulletin which was issued May 29 and Is reported
to have made a profound Impression in Washington. Furthermore, Doctor
Buell has been encouraged to write signed articles of a favorable nature for the
Herald-Tribune World, and Times.
4. Chamber o Commerce of the State of New York.-This Is the oldest and most
influential body of its kind in the world. It was at my suggestion that the chamber gave a special luncheon on May 20 in honor of Cuban independence day, and
I was asked to suggest appropriate guests of honor. On June 6 the chamber will
vote on a strong sugar tariff resolutiion offered by its committee on foreign commerce as the result of a brief which I prepared for submission by your father
and of talks which I had with the chairman of the committee.
5. American Federationof Labor.-Almost immediately after undertaking this
account I started to develop a contact with the labor group. Eventually we
obtained a promise from Frank Morrison, the secretary, that he would make a
public statement; and we helped him to get the material on labor conditions in
fe beet fields, which he wanted. At the last moment he had a talk with William
Green, the president, and turned over this material as basis for Green's very
strong letter to Representative Frear.

1832

LOBBY INVESTIGATION

6. "Time" Magaine.-Myron Weiss, as Associated editor, was induced to

make a trip to Cuba and arrangements were made for his proper expedition and
reception.
The result is that he has returned as a warm and able friend of our
position.
7. Federal Council of Churchee&-Contact has been made with four of the
principal executive officers of this group. A special research bulletin has been
promised and is now In preparation. Dr. Worth M. Tippy has promised to make
a public statement about June 20, and has aked me for material. There is a
chance that the Executive committee of the council will issue a formal statement.
8. Consumer story.-Following the adoption by the House of the 2.40 rate, my
office prepared and has distributed to more than 1,200 newspapers a special story
showing exactly how much the citizens of the town in which each paper is pub.
lished would have to pay merely for the privilege of buying sugar. The Wash.
ington correspondents are reported to say that this is the most effective piece of
publicity so far.
0. Hugo Hartenstefn.-The presence of Mr. Hartenstein, former president of
the American Chamber of Commerce in Cuba, in New York was made the
occasion for a special luncheon to introduce him and his story to a dozen editorial
writers from such papers as Herald-Tribune, Times Evening Post, Journal of
Commerce, Brooklyn Daily Eagle, New Republic, Forbes Magazine, ete.
10. Doctor Bustamante.-By special arrangement I boarded the Habana special
in Philadelphia, saw Doctor Bus amante, and got his 0. K. for a special statement
which the Associated Press and United Press took upon our arrival in New York.
11. MAaor General Wood.-After considerable research my office traced to the
Seattle P6st-Intelligencer and got from that paper the exact words of General
Wood's statement that the Philippines could easilyy produce 5,000,000 tons of
sugar." This important statement is being held for use at the proper time.
12. Aifred4 R. mith.-Contact has been made with Mrs. Moskowits, one of
Governor Smith's closest advisors, and at her suggestion I have prepared a special
brief for her and have assembled supporting documents. The plan iRfor "Al"
Smith to come out at the proper time with a statement saying that the American
people will not knowingly tax themselves further to increase the exploitation of
child labor in the beet fields. If he does this. I predict that there won't be
any further talk of a sugar tariff increase. This plan is highly confidential.
13. George Rolph.-Als confidential is the plan to "spring" a story that
George Rolph is "playing the sugar-beet crowd for u sucker and thus is proving
a most embarrassing friend to Mr. Hoover. We could have shot this at the tag
end of the House deliberations but have thought it advisable to hold it for the
Senate phase of the fight.
14. Senator Capper.-He has been sounded out and arrangements are being
made to prepare suitable articles for his farm papers.
I submit that the above list-which covers the outstanding accomplishments
but is by no means a complete report of activities-reflects a vast amount of
work and presents no mean record of achievement for the first two and a half
months. It means that my organization-quite irrespective of my own activities-has averaged at least 75 per cent of its time on this sugar tariff fight. This
organization costs me more than $1,600 a month to operate. Thus there is
little or nothing left to compensate me for the time and energy that I have put
into the fight, and I believe you will agree that I have not shirked my end of the
Job.
There is no way of telling how long this tariff fight will continue but it is
absolutely certain that it will remain intense and bitter up to the last moment.
I most assuredly want to continue in it after June 18 but frankly I feel that the
compensation to me and my office should be adjusted to reflect a little more
fairly both the time which we are putting into the fight and the definite accomplishments which we have to our credit. A retainer of $2,500 a month is fully
justified under the circumstances. Due to the uncertain duration of the fight,
this would be cancellable at any time on 30 days' notice and a reduced retainer
could be agreed upon, if and when the work reverts to a normal account and you
wish to continue with sufficient publicity so that the Cuban sugar interests can
conserve the results of this present fight.
Sincerely yours.
Senator RoBiNsoN of Indiana. Who is Mr. Mermey?
Mr. BALDWIN. Why, he is a former newspaper man who is now
employed by me in my office, associated ith me.

LOBBY INVESTIGATION

1838

of Indiana. You have confidence in Mr.

Senator ROBINSON
,Mermey?
Mr.BALDWIN. I have.

Senator ROBINSON of Indiana. You had him down hero represent.

ing you in Washington?
Mr. BALDWIN. At various times- yes.
Senator ROBINSON of Indiana. And making reports to you of the
Washington situation from time to time?
Mr. BALDWIN. When he was here; yes.
Senator RoBINsON of Indiana. Here is one letter that Mr. Mermey
writes to you, or an extract from a letter dated September 13, 1020:
Number 11 shows how precarious the tariff bill really is.

What do you mean by "Number 11"? What does he mean

by "Number 11"?
Mr. BALDWIN. I can not tell unless I have the context.
Senator RoBINsoN of Indiana. Well, I continue:
It is true that the tariff is studded with trading points so that "any Democrat"-

quoting Kiplinger-" can have any pet rate he wants."

Mr. BALDWIN. Oh, I take it that he was analyzing one of the
reports of the Kiplinger service.
Senator ROBINSON of Indiana. Well, is he speaking accurately?
Mr. " ALDWIN. He was giving the situation as he saw it.
Senaur RoBINSON of Indiana. From Washington?

Mr.

BALDWIN.

Yes.

Senator ROBINSON of Indiana. He was in Washington at that

time?
Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. I continue:
That Is the object of the manganese free listing, for example.

Mr. BALDWIN. Yes. Senator ROBINSON of Indiana. He is still quoting accurately, you
think?
Mr. BALDWIN. I don't know.
Senator ROBINSON of Indiana. You have confidence in Mr.Mermey?
Mr. BALDWIN. I have confidence in him.
Senator ROBINSON of Indiana. I continue:
If Walsh of Montana is a good boy, the Smoot-Reedites have reasoned, and
votes for our high tariffs, why we'll be good boys and put manganeso on the
dutiable list again.

You have every reason to believe that is true, what Mr.Mermey

writes?
Mr. BALDWIN. Not necessarily. That is a matter of opinion.
Senator RoBINSON of Indiana. I continue:
But Walsh Is going to remain a Democrat, while at the same time, trying to
help his constituency. He happens to have the U. S. Steel to attack and it is
easy to attack the Steel Trust, especially in view of its contract with Iussia for
manganese and the Shearer expose.
This is one of the letters that you received from Mermey, one of
your confidential reports from Mermey?
Mr. BALDWIN. Yes.

Senator OARAWAY. What was the United States steel contract with
Russia about manganese?

1834

LOBBY INVESTIGATION

Mr. BALDWIN. I haven't the slightest idea.

Senator CARAWAY. You never asked about that?

ov

Mr. BALDWIN. No.

Senator RoBINsoN of Indiana. You do not remember those things

at all? This was on September 13.
Mr. BALDWIN. That was quite aside from the sugar tariff.
Senator ROBINSON of Indiana. Where does Mr. Mermey get all
of this information about the Senate and about different members
of the Senate and just what their views are?
Mr. BALDWIN. That I do not know.
Senator RoBINsoN of Indiana. You don't know much about that?
Mr. BALDWIN. No; I do not. He is more competent to testify.
Senator RoBINsoN of Indiana. Mr. Mermey is?
Mr. BALDWIN. Yes, sir..
Senator ROBINSON of Indiana. You never discussed that with him?
Mr. BALDWIN. No, sir.
Senator ROBINSON of Indiana. You just took his reports and
assumed they were true because you had confidence in him, but did
not question him about the source of his information?
Mr. BALDWIN. I did not question him.
Senator RoBINSON of Indiana. Here is another letter from Mermey
to Baldwin dated September 17, four days later:
I saw Charles Michelson, publicity director of the Democratic National Com.

mittee, and laid three propositions before him:

1. Get a Senator, or Mrs. Norton, to ascertain women's opinion on the tariff.

2. Make a survey of the daily newspapers of the country to fiud out how many
are for and against the sugar raise.
3. Write to all agricultural deans in the country as a matter of seeking Information, to determine how many believe or disbelieve that a raise in the sugar
tariff will be beneficial to the continental industry.
He ruled out I and 2. He said women's clubs were controlled by cliques, con.
posed largely of wealthy women, and therefore Republican women. It would be
most difficult, anyway, to get any organzatlon to come out definitely, he said.
Re 2, he said Republican newspapers outnumber Democratic newspapers 5 to 1,
and therefore we would start under a handicap.
He thought 3 was a good idea and said lie would try to get a Senator to write
such letters. If the response is favorable it will be made public; otherwise, no
public.

Mr. BALDWIN. That sounds reasonable.

Senator RoBINsoN of Indiana. Was Mr. Michelson successful in
getting a Senator to write those letters?
Mr. BALDWIN. That I do not know.
Senator ROBINSON of Indiana. You have forgotten about that?
Mr. BALDWIN. I don't know that I was even advised.
Senator ROBINSON of Indiana. Mr. Mermey advised you on most
things, did he not? He says, for instance, still in this same report of
September 17: *
I am sending Michelson all our releases. Please send me a copy of Doctor
Wright's study for. him. Also, the Foreign Policy Bulletin on sugar and the
Federal Council Bulletin. He says he can make excellent use of them. Naturally, the Democratic committee provides a splendid springboard for our stuff.

You were in accord with that statement and that report, were you
not?
Mr. BALDWIN. Absolutely.
Senator ROBINSON of Indiana. Another, October 2, from Mr.
Mermey to you, referring to the fact that he had today seen Michelson, to use his language:

Inc

01

LOBBY INVESTIGATION

1835

Today I saw Michelson of the Democratic National Committee and turned

over to him Doctor Wright's 1929 sugar study, the sugar bulletin of the Federal
Council of Churches and the Mexican Labor Bulletin of the National Catholic
Welfare Council. Michelson will give our million-ton petition to a Senator for
inclusion it the record when and if we have such a petition.

Mr. BALDWIN. Yes, sir.

Mr. ROBINSON of Indiana. Was that petition given to a member
of the Senate?
Mr. BALDWIN. Not yet.
Senator RoBINSON of Indiana. Not yet?
Mr. BALDWIN. No, sir.
Senator ROBINSON of Indiana. Well, that was October 2.
Mr. BALDWIN. I know it.
Senator ROBINSON of Indiana. Do you expect it to be given to a
Senator?
Mr. BALDWIN. Probably.
Senator ROBINSON of Indiana. To whom are you looking now?
Mr. BALDWIN. I don't know.
Senator ROBINSON of Indiana. You have not made up your mind
on that yet?
Mr. BALDWIN. No, sir.
Senator ROBINSON of Indiana. Who is William Helm?
Mr. BALDWIN. I think he is a former newspaper man. I don't
know very much about him.
Senator ROBINSON of Indiana. Did he work for you or render
any services for you?
Mr. BALDWIN. He rendered one quite conspicuous service.
Senator RoBINSON of Indiana. What was that?
Mr. BALDWIN. He gave us a very good idea.
Senator ROBINSON of Indiana. What was the idea?
Mr. BALDWIN. That was the idea of breaking down the statistics
on the tariff into the burden on localities. It has produced two or
three news releases that have been widely used and made the basis
of numerous editorials.
Senator ROBINSON of Indiana. Did you pay him for that?
Mr. BALDWIN. I certainly did.

Senator

ROBINSON

of Indiana. How much?

Mr. BALDWIN. As I remember it, it was $150.

Senator RoINSON of Indiana. Well, after getting all of this
information you made your report to H. H. Pike, sugar brokers?

Mr. BALDWIN. Yes, sir.

Senator ROBINSON of Indiana. H. H. Pike, jr.?

Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. October 22, 1929, Mermey to
Baldwin: "Pike" -that refers to H. H. Pike, jr., doesn't it?
Mr. BALDWIN. I assume so.

Senator ROBINSON of Indiana (reading):

Pike may be interested to know that an effort is to be made to prevent Smoot

from voting on -sugar.

Do you know what that had reference to?

Mr.

BALDWIN.

Not beyond what it says there.

Senator ROBINSON of Indiana. How can you, outside the Senate,

prevent members of the Senate from voting on a question?
Mr. BALDWIN. That did not say we were going to.

1836

LOBBY INVESTIGATION

Senator RoBNsoN of Indiana. What power does the sugar lobby

wield anyway?

Mr. BALDWIN. I do not think it says that we are going to prevent

Senator Smoot from doing anything.
Senator ROBINSoN of Indiana.- I quote further:

You know the couple of hundred shares he owns.

What does Mr. Mormey mean there?

Mr. BALDWIN. I do not know the context.
Senator ROBINSON of Indiana. Neither do I, but this is to you, and
evidently your correspondent understood that you knew all about it.
Mr. BALDWIN. I probably did at the time.
Senator RoBiNSoN of Indiana. And you have forgotten?
Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. Reading further:
And perhaps I have told you of the rules In Jefferson's Manual which prevents
a Congressman from voting on a subject In which he has financial Interest.

Mr. BALDWIN. Undoubtedly from the context it is 200 shares of

some sugar company stock.

Senator ROBINSON of Indiana. "Something akin to the famous
Glassie case."
What is the famous Glassie case?

Mr.

BALDWIN.

I don't know, sir.

Senator ROBINSON of Indiana. Did you ever look it up?

Mr. BALDWIN. No, sir. .
Senator RoBINsoN of Indiana. What value were these confidential

reports to you?
Mr. BALDWIN. Considerable.
Senator ROBINSON of Indiana. But you have forgotten so much of
them.

Mr. BALDWIN. I haven't forgotten when I get enoughSenator ROBINSON of Indiana. You are. still working on this sub.
jeet, are you not?
Mr.

BALDWIN.

Yes, sir.

Senator ROBINSON of Indiana. On a low tariff for sugar?

Mr. BALDWIN. Yes, sir.
Senator RoBINsoN of Indiana. Continuing your activity?

Mr.

BALDWIN.

Yes, sir.

Senator ROBINSoN of Indiana. Is it not amazing that you have

forgotten so soon what definite references mean?
Mr. BALDWIN. I have not forgotten when I get enough to know
what it is about. There is so much correspondence that it is a little
unfairSenator ROJI1NSON of Indiana. Well, did you ever hear of the
Glassie case?
Mr. BALDWIN. No, sir.
Senator CARAWAY. Mr. Glassio was a member of the Tariff Commission, do you remember that, and the question of the report on
sugar was up and Glassie's wife owned stock in a sugar mill. You
never heard of those things?
Mr. BALDWIN. Oh, now I remember, but I did not connect it.
That was not one of our activities, so I did not have to know all about
that.

LOBBY INVESTIGATION

1837

Senator RoBiNsoN of Indiana. No; but Mr. Mermey was one of

your operatives, was he not?
Mr. BALDWIN. He was not going to do this, as far as I know.
Senator ROBINSON of Indiana. No; but he is giving you this report.
I am asking you what he meant. You were his principal.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana (reading):
Most confidentially, I have reason to believe that the People's Legislative
Service is preparing some data for some Senators on this subject.
Mr. BALDWIN. I see.
Senator ROBINSON of Indiana. For what Senators were they preparing data?
Mr. BALDWIN. That I do not know.
Senator ROBINSON of Indiana. You have forgotten that, too?
Mr. BALDWIN. I know what was said in the letter.
Senator ROBINSON of Indiana. Have you generally, in your mind,
anyof these Senators that you had reference to?
Mr. BALDWIN. No; I have not.
Senator ROBINSON of Indiana. You can not name one of them, is
that true?
Mr. BALDWIN. NO; I can not.
Senator ROBINSON of Indiana. Yet this was from your man down
here in Washington, making a careful survey of the situation at the
Capitol, and he reports to you as late as October 22.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. A scant two months or so ago and
still you don't remember? You do not seem to have any knowledge
of what this report means at all.
Mr. BALDWIN. What am I supposed to remember there? The
names of Senators that the People's Legislative Service is going to
furnish data to?
Senator ROBINSON of Indiana. "Most confidentially" he sas to
ouhis principal, "I have reason to believe that the People's L
lative Service is preparing some data for some Senators on this
subject."
Mr. BALDWIN. Yes.
Senator ROBINSON Of Indiana. Is that all you know about it?
Mr. BALDWIN. That is all I know about it.
Senator RoBinsoN of Indiana. Well, I continue:
It may interest you to know that the consumer's counsel which Senator aeorge
had voted Into the Senate tariff bill last week is an idea of Mr. Lewis.
Who is Mr. Lewis?
Mr. BALDWIN. I take it that is David John Lewis.
Senator ROBINsON of Indiana. Well, don't you know?
Mr. BALDWIN. I assume it is.
Senator ROBINSON of Indiana. And he is a former member of the
Tarift Commission?
Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. You had him employed-the sugar
interests had him employed?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. That is, your sugar interests had
him employed?

1838

LOBBY INVESTIGATION

Mr. BALDWIN. The group I was working for also retained him.
Senator ROBJNSo of Indiana. And this was his idea, and he says:
It may interest you to know that the consumers counsel which Senator George
had voted into the Senate tariff bill last week is an Idea of this Mr. Lewis-

Who is employed by your interests?

Mr. BALDWIN. Yes.

Senator ROBINSON of Indiana (reading):
He would like to be the counsel for a couple of years, just to get the office
started, but of course he is quite aware that the job won't be his.

This is the same Mr. Lewis, isn't it?

Mr. BALDWIN. Yes.

Senator ROBINSON of Indiana. Do you happen to know, Mr.

Baldwin, how much money Mr. Lewis got out of this sugar fund?
Mr. BALDWIN. I do not.
Senator RoBINsoN of Indiana. Would it surprise you to know that
he got approximately $5,000?

Mr.

BALDWIN.

Senator
$5,000?

No.

ROBINSON

of Indiana. That is a mere bagatelle, isn't it-

Mr. BALDWIN. I do not know what service he has rendered.

Senator ROBINSON of Indiana. Well hero is a letter of October 31,

not from Mr. Mermey to Mr. Baldwin, but from Mr. Baldwin to H. H.
Pike, jr. Let us test your memory on this confidential report. This is
marked "Confidential."
Mr. BALDWIN. What date was this?
Senator ROBINSON of Indiana. This is October 31. It is marked
"Confidential." It reads:
The following are among the Important things which have been done.
1. Mr. Mermey reestablished his contacts with all of his old press association
friends and through them met various of the leading correspondents. He has also
established a friendly basis with the headquarters of the Democratio National

Committee and with the offices of a number of Senators against the time when

sugar gets back into the news and we w-ant to work fast and easily.

Who were some of the Senators to whom he had established friendly

contacts?
Mr. BALDWIN. He can probably tell that better than I.
Senator ROBINSON of Indiana.. You are telling it. This is your
report to Mr. Pike who employed you.

Mr.

BALDWIN. Yes.
Senator ROBINSON of Indiana. And from whom you were getting

your money.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. Why do you say Mr. Mermey can

probably tell ine that?

Mr. BALDWIN. You are asking for names.

Senator ROBINSON of Indiana. Of course I am, and you must have

known the names, or you would not have written a report like this to
your principal, w6uld you?
Mr. BALDWIN. I wrote it on the basis of a report from him that he
had established relations with some of the offices.
Senator ROBINSON of Indiana. Well, who are they? Can you name
any of them?
Mr. BALDWIN. I can not.

LOBBY INVESTIGATION

1839

Senator ROBINSON of Indiana. Have you forgotten them? .

Mr. BALDWIN. I probably did not know them in the first place.
Senator ROBINSON of Indiana. Then why did you say these contacts were established if you did not know?
Mr. BALDWIN. Because, if Mr. Mermey said he had established
them, he had established them and I passed it on.
Senator ROBINSON of Indiana. Well, you gave this as a fact?
Mr. BALDWIN. I did.

Senator ROBINSON of Indiana. Not a question of whether Mr.

Mermoy remembers them or not. You said as a matter of fact, as a
conclusion of fact:
2. One of the first moves was to follow through stops already started to Interest
Senator Borah ii the bounty schedule. The purpose here to to bring out in a
striking way the cost to tho American consumer in subsidizing the sugar-beet
farmer Indirectly through a tariff increase. This matter Is cooking along;
whether it eventually will prove successful we can not say yet.

Did you ever talk with Senator Borah?

Mr. BALDWIN. I never have met him.
Senator ROBINSON of Indiana. How is your bounty scheme coming?
You say it is cooking along?
Mr. BALDWIN. I noticed a story the other day that Senator Borah
got out according to the report, a letter introducing the bounty
proposal.
Senator ROBINSON of Inidana. Then, would you conclude if
making a report to-day, if you were making one to your prinicpal,
that it was all cooked and finished?
Mr. BALDWIN. I would not say it was all cooked.
Senator ROBINSON of Indiana. You say here that it was cooking
along?
Mr. BALDWIN. Well, it will continue to cook along.
Senator ROBINSON of Indiana. And you think it is cooking along
better yet?
Senator CARAWAY. Now, you passed this along as a fact that your
lobby agencies gave Borah the idea. You want to stand back of
these statements, do you?
Mr. BALDWIN. I have forgotten how that started.
Senator ROBINSON of Indiana. Let me read his own report to his
principal in that respect:
One of the first moves was to follow through steps already started to interest
Senator Borah in the bounty scheme.

Mr. BALDWIN. Yes. I think we did start that. The bottlers in

their brief, back in January a year ago, as I remember it, suggested
a bounty as a way out.
Senator ROBINSON of Indiana. How did you follow through?
Mr. BALDWIN. I don't know the details of that. Mr. Mermey was
down here and he was doing the following through.
Senator ROBINSON of Indiana. And you say one of the first moves
was to follow through?
Mr. BALDWIN. Yes. I haven't done everything, Senator, you
know. It is an organization.
Senator ROBINSON of Indiana. Well, let us hurry along.
3. The material for a special feature ctory on the 25 proposals already made for
dealing with the sugar question was assembled and submitted to a writer for one

1840

LOBBY INVESTIGATION

of the largest feature syndicates. The story was written and received a wide
play among the newspapers of the country.

Who was the writer of the large feature syndicate?

Mr. BALDWIN. As I remember, the N. E. A. carried that story.
Senator RoBINSoN of Indiana. Well, who was the writer? It
was submitted to a writer for one of the largest feature syndicates.
The story was written and received a wide play.
Mr. BALDWIN. I think it was Rodney Dutcher.
Senator ROBINSON of Indiana (reading):

ou]

su

4. Contact was made with Mrs. Norton, Representative from New Jersey
and permission obtained to inspect the protests she has received against a higher
duty. This data may prove useful at the proper time.

Mr. BALDWIN. Yes.

Senator RoBINsON of Indiana (continuing reading):
5. A release prepared on the special Wright study for Mr. Hershey was dis.
tributed in Washington. It was given a good play by the Associated Press and
the special correspondents of several papers also picked it up.
6. One of our trick releases to papers in all cities of over 10,000 population
giving each a hometown slant, was prepared on the 44-point increase proposed
by the Senate Finance Committee. Our clippings show that it went over well as
news and inspired editorials in several instances.
7. Illustrations of our stalking of Senator Borah.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. Have you been stalking Senator
Borah?
Mr. BALDWIN. I don't know.
Senator RornNsoN of Indiana. What? This is your report.
Mr. BALDWIN. I know it, and as I have said before, I have not done
everything. You can not expect. a concrete answer out of me on
things that happen here in Washington.
Senator ROBINSON of Indiana. Well, I am assuming that your
Mr. Pike would expect a concrete answer out of you and an explanation of every single statement you have made here. Now, just assume for a moment that I am Mr. Pike, your principal, saying to you,
"What do you mean by this"; how would you answer? Talk confidentially to me, if you can, for a minute.
Mr. BALDWIN. In the first place, I think Mr. Pike has a little more
confidence in me than you have. We have worked together a little
longer perhaps.

Senator

CARAWAY.

Doubtless.

ar

ell

Doubtless.

Mr. BALDWIN. If he wanted to check up on something that I

could not answer, if I knew Mermey had done it, I would get in touch
with Mermey and get the answer.
Senator RoB7NsoN of Indiana. Well, i will go on.
7. Illustrative of our stalking of Senator Borah, a release was prepared on the
Senator's remarks in the Senate on September 18; into the story we move a
recapitulation of the figures in the Czarnikow-Rionda report. This release was
sent to every Senator as well as to all press associations and correspondents.
8. An attempt was made to get William Green, president of the American
Federation of Labor to expand at the Toronto meeting his letter to Frear last
May.
Is that Congressman Frear, of Wisconsin?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana (continuing reading):

LOBBY INVESTIGATION

1841

9. Michelson, publicity director of the Democratio National Committee, at

our suggestion, will try to get a Senator to write all deans of agricultural schools
for their opinion as to whether a tariff increase would really help American beetsugar farmers.

Was that done?

Mr. BALDWIN. That I don't know.

Senator ROBINSON of Indiana. You have forgotten that, too?

Mr. BALDWIN. No. I don't know whether it has been done or not.

Senator

ROBINSON

Senator

ROBINSON

of Indiana. Well you say he will do it.

Now

you talk about following through. Have you followed through?

Mr. BALDWIN. We have not t11owed through on that.
Senator ROBINSON of Indiana. Have you on these other matters?
Mr. BALDWIN. In some cases. In some cases we have not.
Senator ROBINSON of Indiana. You start your report with this
significant statement after the word "confidential," "the following
are among the important things which have been done."
Mr. BALDWIN. Yes.

of Indiana. Well, let us hurry along.

10. The suggestion has been made to Mrs. Norton that she query all women's

clubs.

Mrs. Norton has not yet given us an answer.

That was on October 31. Has she given you an answer since then?
Mr. BALDWIN. I don't think so.
Senator ROBINSON of Indiana. You think not?
Mr. BALDWIN. I think not.
Senator ROBINSON of Indiana. You did not follow through on
that?
Mr. BALDWIN. No. We have not followed through on that.
Senator ROBINSON of Indiana (reading):
11. At the request of Mr. OwensThat is Junior Owens?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana (reading):
At the request of Mr. Owens we prepared a suitable resolution-for the National
Retail Druggists Association to adopt. This was done at their convention in
Minneapolis.
Mr. BALDWIN. I think Mr. Mermey did.
Senator ROBINSON of Indiana. You prepared the resolution?
Mr. BALDWIN. I think Mr. Mermey did.
Senator ROBINSON of Indiana. That is to say, in your lobbying
activities, you prepared a resolution for the National Retail Druggists
Association to adopt?
Mr. BALDWIN. For submission to them.
Senator ROBINSON of Indiana. No. You say, "to adopt," and
they subsequently did adopt it. Is that true?
Mr. BAiDWIN. Yes.
Senator ROBINSON of Indiana. The resolution which you prepared?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana (continuing reading):
12. Mr. Mermey worked with Mr. Owens in the preparation of a special handbill and appeal to all bottlers Their purpose is to stimulate letters and wires of
protest from the wives of the bottlers and their employees.
.Mr. BALDWIN. Yes.
78214-30-pr 5-4

1842

LOBBY INVESTIGATION

Senator CARAWAY. May I ask, do you know as a matter of fact

that in some instances the bottlers sent wires in the name of women

without the women knowing about it?

Mr. BALDWIN. I do not know that*no.
Senator CARAWAY. One or two of dhe bottlers are going to be inter.
ested in it, because they have been traced.
Senator RoBiNsoN of Indiana. Can you identify the circular-a bill
that was published by them?
Mr. BALDWIN. I think so. That looks like it from the back.
Senator ROBINSON of Indiana. It does look like it to you
[indicating)?

Mr. BALDWIN. Yes, sir.

Senator ROBINsoN of Indiana. You would say that is it, then?

Mr. BALDWIN. I would say so;yes.

Senator ROBINsoN of Indiana. I quote from the bill, the headlines:

Employees, a call for cooperation. Help your company by helping yourselves.
Congress proposes to increase the tariff on sugar.
Then, quoting a little further on:
Urge your wife and your friends' wives to telegraph or write to-day-only a
short telegram or letter is necessary-to your two United States Senators. Urge
them to let the Senators know they are absolutely opposed to any increase In the
sugar tariff.
Then, again:
Your wives must tell their Senators they are against any increase In the tariff
on sugar. Your Senators must know that the women in their State are against
it.
Now, it makes no difference whether the wives are against it or not,
they must tell their Senators they are against it anyhow.
Mr. BALDWIN. They are not going to unless they want to, are they?
Senator RoBINsON of Indiana. Continuing further:
Don't feol that your Senators will not read your wives' telegrams or letters. In
fact, your Senators really want to hear from your wives. Your Senators want to
know how the women feel about the sugar tariff increase in order that they may
be guided in voting for or against it.
I would like to have this put in in its entirety, as an exhibit.
(The bill referred to is as follows:)
EMPLOYEES

A CALL FOR COOPERATION-HELP

YOURSELVES

YOUR COMPANY 1Y HELPING

Congress proposes to increase the tariff on sugar

This will boost the price of sugar and will afroc you and your company.
We have been fighting against the proposed Increase for many months. It is
now your turn to tell the United Sates Senators that your wives are absolutely
opposed to this attempt to raise your cost of living.
Urge your wife and your friends' wives to telegraph or write to-day--only a
short telegram or letter is necessary-to your two United States Senators. Urge
them
to
let the Senators know they are absolutely opposed to any increase in the
sugar
tariff.
Vf the
women protest to their Senators against the Increase, many of the Sena.
tors will veto against It. But if the women remain silent, if they do not telegraph
or write to-day, the Senators may vote to raise the price of sugar your wives buy,
and which your company uses in large amounts.
Your wives must tell their Senators they are against any increase In the tariff
on sugar. Your Senators must know that the women In their State are against It.
Don't feel that your Senators will not read your wives' telegrams or letters. In
fact, your Senators really want to hear from your wives. Your Senators want to

LOBBY INVESTIGATION

1843

know how the women feel about the sugar tariff increase in order that they may
be guided In voting for or against it.
We urgently hope you will go home to-day and impress upon your wives the
necessity of protesting immediately, by telegram or letter, to your United States
Senators. You have two Senators in Washington. Write the same telegram or
letter to each. Their names and addresses are:
Senate Offle Building, Waehington, 1D. 0,.
Senate O.ic Building, Waihington, b. 0,.

Senator RoBINsoN of Indiana. Now, Mr. Mermey worked with

Mr. Owens in the preparation of that handbill?
Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. That is part, therefore, of the
Baldwin publicity in the sugar lobby matter?
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. I continue:
13. In the course of buzzing around Washington, Mermey came across the
beet-sugar ferment dope.
What is the beet-sugar ferment dope?
Mr. BALDWIN. J understand that there was a rumor that there
was a certain simill amount of ferment in beet sugar which caused

trouble when it was used in canning or preserving fruits, vegetables,

and so forth.

Senator ROBINSON of Indiana. Well, we will get at that with Mr.

Mermey, I think, later.

Mr. BALDWIN. Or the beet-sugar crowd.

Senator RoBINSoN of Indiana. I continue that same paragraph,
No. 13:
It was new to us but after taking it up with you and with chemists in the
Department of Agriculture we came to the conclusion that we could not use it
to advantage.
Mr. BALDWIN. Yes. As I remember it, we found out that beet
sugar could be just as chemically pure as cane sugar.
Senator ROBINSON of Indiana. I continue:
14. The following from Mermev's daily report of September 20 is of interest:
"Ran into Hugo Hartenstein todav; he says the bottlers have done more inthe
sugar fight than anybody else." Hartenstein is permanent commissioner on
tariff matters for the United States Chamber of Commerce in Cuba.
15. Mr. Mermey has had several talks with William lard, who is one of
Hoover's "Medicine ball cabinet." Hard is both a correspoitdent and a broadcaster on politics. Hard now knows the bottlers' position and the background
on the refined differential. He is ready to spring a good story at the proper
time. Mermey has also told our story to Ludwell Denny, chief editorial writer
of the ScrIpps-Howard newspapers.
16. Dick Oulahan, correspondent for the New York Times, has taken material
prepared by Mermey on the joker in the transportation cost item Qf the flexible
provisions.
17. Mr. Mermey was instrumental in getting the National Catholic Councl
of Churches to print and distribute its study of Mexican labor in the beet fields.
18. On the basis of an answer sent him by Henry Wallace, editor of Wallace's
Farmer, Mermey got out an effective release showing that the farmers are by no
means unanimous In backing the sugar tariff increase.
19. What eight correspondents recently told Mr. Owens was "The best
release yet put out in the sugar fight" was a story written by Mermey for release
October 21. It brought out the fact that the increase in the price of supar since
the House acted in June was more than the proposed Senate increase and within
five points of what the House felt was neessary protection.

1844

LOBBY INVESTIGATION

20. Negotiations are now under way with Chamber of Commerce of the State
of New York to query 400 other chambers as to whether they have followed the
New York chamber's action last-spring in protesting the proposed sugar duty
increase.
21. We are in direct touch, both hero and in Washington, with the women's
committee now forming to register the protest of the women of the country.

tol

Did you organize that association of women?

Mr. BALDWIN. No; we didn't organize it.

Senator RoBINSoN of Indiana. Just kept in direct touch with it?

Mr. BALDWIN. Yes.

he

Senator RoBINsoN of Indiana. I continue:

22. Mermey has conceived the Idea of a "Million.ton protest" in which the
national confectioners and other trade associations which are heavy users of sugar
will join ina protest against anyincrease. He already has lined up over 900,000
tons and has arranged with Michelson to have it put into the Record through
a friendly Senator at the proper time.

That is Michelson, of the Democratic National Committee?

Mr. BALDWIN. Yes, sir.
Senator ROBINSON of Indiana. Who is the tiendly Senator?
Mr. BALDWIN. So far as I know, he has not been chosen.
Senator ROBINSON of Indiana. He has not yet been chosen?
Mr. BALDWIN. No.
Senator ROBINSON of Indiana. Another thing on which you are
without accurate information?
Mr. BALDWIN. Ho has not been choron.
Senator ROBINSON of Indiana. This is two months ago, you know.
Mr. BALDWIN. It has not been put in.
Senator ROBINSON of Indiana. Do you know when he is to be
chosen?
Mr. BALDWIN. At the proper time.
Senator ROBINSON of Indiana. When will be the proper time?
Mr. BALDWIN. Whenever we think that petition will be most
effective.
Senator ROBINSON of Indiana. I continue:

sa

23. We are now working on a tariff exhibit for the bottlers' convention in

Atlantic City, November 11-18.

In listing the above items as indicative of our activity during the last two

weeks I have purposely refrained from too specific mention of contacts made and
maintained with a number of Senators including Republicans Progressives and
Democrats. These relations have been in every Instance absolutely straight and

aboveboard and have been extremely useful t0 us In following intelligently the

"fever chart" of interest in sugar.

Now, what is the fover chart?
Mr. BALDWIN. Well, it was pretty high when the House Ways and
Means ConimitteeSenator tomNSoN of Indiana. Oh, high fever; high temperature?
Mr. BALDWIN. Yes, the news value in it. News went out of sugar
when McDonald was here, for a while.
Senator CARAWAY. You say here, "We have purposely refrained
from too specific mention of contacts."
That shows now that you do know with whom you talked, that is,
the Senators with whom you made your contacts, Republicans,
Progressives, and Democrats, but you didn't mention it. Now, who
are they?

If

$1
t
o

LOBBY INVESTIGATION

1845

Mr. BALDWIN. I have explained to you that this is an organization.

Mr. Mormey is working and I am workingSenator CARAWAY. But you say, "I have purposely refrained from
too specific mention of contacts.'

Mr.

BALDWIN.

Yes.

Senator CARAWAY. Now then, if you have purposely refrained, you

must know from what you have refrained.
Mr. BALDWIN. Not necessarily. If I had n6t refrained, I would
have found out from Mermey who they were and mentioned them.
Senator CARAWAY. Here is another one of your reports:
Senator Capper has been sounded out and arrangements are being made to
prepare suitable articles for his farm paper.

You didn't refrain from mentioning him.

Mr. BALDWIN. No.

Senator CARAwAY. What articles did he agree to print in his farm

papers?
Mr. BALDWIN. I am sure he did not agree to print in any until he
saw them.
Senator CARAWAY. You say:
He has been sounded out and arrangements are being made to prepare suitable
articles for his farm papers.
Mr. BALDWIN. Yes.
Senator CARAWAY. Now, what articles were prepared?
Mr. BALDWIN. So far as I know, we never followed through on that.

Senator CARAWAY. Oh, no. You say he has been sounded out. He
agreed to it.
Mr. BALDWIN. So far as I know we never prepared those articles.
Senator CARAWAY. But he agreed to it.
Mr. BALDWIN. I am sure he never agreed to publish anything until
he saw it.
Senator CARAWAY. Here is another line:
The retainer of $2,500 a month is fully justified under the circumstances.

What does that mean?

Mr. BALDWIN. Exactly what it says.
Senator CARAWAY. Well, what did it mean? That is the next item
under Capper agreeing to publish the articles.
Mr. BALDWIN. What was above it?
Senator CARAWAY. That was what was above it. Wait just a
minute. You don't connect the two?
Mr. BALDWIN. Not at all.
Senator CARAWAY. You don't know what it does mean?
Mr. BALDWIN. Were those the only two paragraphs in that letter?
Senator CARAWAY. No; I am just asking you. That was the next
paragraph. There were other things that went before.
Mr. BALDWIN. I don't see what you are driving at.
Senator CARAWAY. Oh, yes. Who was it that was getting the
$2 500 retained?
9r. BALDWIN. I. But you were reading from a letter that contamed a number of paragraphs.
Senator CARAWAY. I know, andTthose are the paragraphs in the
order in which they come. But I was trying to find out how you were
going to connect those two statements. Who is George Rolph?

1846

LOBBY INVESTIGATION

Mr. BALDWIN. I understand he is a western sugar man.

Senator CARAWAY. Well, you say here:

Also confidential is the plan to spring a story that George Roiph is playing the
sugar-beet crowd for a sucker.

Did you ever spring that?

Mr. BALDWIN. NO, sir.

Senator CARAWAY. That was another bright idea that died. It

continues, "and thus proving a most embarrassing friend to Mr.
Hoover."
Did you ever spring that?
Mr. BALDWIN. I said no. I said we didn't spring that story at all.
Senator CARAWAY (continuing):

We could have shot this at the tag end of the House deliberations, but have
thought it advisable to hold It for the Seiiate phase of the fight.

So this is a story to be sprung later?

Mr. BALDWIN. Perhaps- perhaps not.
el, that is what you promised.
Senator CARAWAY.

I don't

know whether you are going to do it or not. I have forgotten who

you said George Rolph is.
Mr. BALDWIN. I understand he is a western sugar man.
Senator CARAWAY. What do you mean by western sugar man?
Mr. BALDWIN. lie is a man interested in western sugar.
Senator CARAWAV. How were you going to show that George
was playing the sugar-beet crowd for a sticker? What was he doing?
Mr. BALDWIN. Frankly I have forgotten how that story worked
out.
Senator CARAWAY. This is your letter, you know?
Mr. BALDWIN. That is all right. When was that written, sir?
Senator CARAWAY. That letter was written June 4 of this year.
Mr. BALDWIN. Yes, sir.
Senator CAUAWAY. And it still is one of those things you have not
yet carried through, because you first thought you would spring it at
the tag end of the House deliberations, and then you thought it would
be better to keep it andi play it when sugar reached the Senate?
Mr. BALDWIN. Yes.
Senator CARAWAY. So, it is just ready to spring to-morrow.

What
is it?
Mr. BALDWIN. I don't know.
Senator CARAWAY. Well, you must be a very valuable man, if you
have a thing of that kind hold in reserve and are going to turn it loose
in the morning, and now you don't know what it is.
Mr. BALDWIN. I am not going to turn it loose in the morning.
Senator'CARAWAY. You said you were.

You said you wore going

to spring it when the sugar schedule reached the Senate, and that is in
the morning.
Mr. BALDWIN. Well, that came so suddenly, and your telegram
cane so suddenly. I have been very busy for the past 24 hours.
CARAWAY. The telegram affected your memory?
Senator
Mr. -BALDWIN. No; it hasn't.
Senator CARAWAY. Then, why do you say it that way?
Mr. BALDWIN. I say I have been quite busy in the last 24 hours.
Senator CARAWAY. You knew what you were going to do?
Mr. BALDWIN. I know in a general way.

t
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LOBBY INVESTIGATION

1847

Senator CARAWAY. What was it?

Mr. BALDWIN. I would have to pick up the details. I think we
know where we can probably find them.
Senator CARAWAY. Tell me now what was this plan to spring a
story that George Rolph is playing the sugar beet crowd'for a sucler.
What is that story? Is it to be sprung in the morning, if you don't
spring it to-day?
Mr. BALDWIN. It is not to be sprung in the morning. As I remember this thing-in the first place, you have got to base it on the fact
that any increase in the tariff on Cuban sugar is going to help materially the production in the insular possessions, Which will produce
more-and which in the long run is going to develop a very severe
competition for the sugar beetSenator CARAWAY. That wasn't the story, was it?

Mr. BALDWIN. That is the basis of the whole thing.

Senator CARAWAY. Well, you will always have to explain your

jokes, then, if that is what you call it.

Mr. BALDWIN. I do.
Senator CARAWAY. You go on, "and thus is proving a most embarrassing friend to Mr. Hoover."
How was he embarrassing Mr. Hoover?
Mr. BALDWIN. Well, if Mr. Rolph was making a sucker out of the
beet sugar crowd, and if he were a friend of Senator Hoover's, it might
be embarrassing.
Senator CARAWAY. Mr. Hoover isn't a Senator; he is the President.
Mr. BALDWIN. I know it.
Senator CARAWAY. Of course, you don't keep in touch with Washington affairs.
r. BALDWIN. No, sir.
Senator CAUAWAY. Mr. Mermey would have known bettor than
that. Does it strike you that a whole lot of you are playing both
the sugar crowds for suckers that Mr. Rolph isn't the only man
engaged in that enterprise? Lon't it strike you so?
Mr. BALDWIN. No; it doesn't.
Senator CARAWAY. Well, it looks to me like there are $2,500 a
a month at least of it.
Mr. BALDWIN. I thank you.
Senator ROBiNSON of Indiana. You write a letter, Mr. Baldwin,
to Mr. Pike under date of September, 1929. This is evidently another
report.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. You made these reports right along,
did you not, to your principal?
Mr. BALDWIN. Yes; from time to time.
Senator ROBINSON of Indiana. I read:
Quite apart from this production schedule Mermey Is able to do valuable

work in digging up Infornation from the news men and from the Senators and
in supplying both groups with suggestions for now points of attack and with

data.

lie IsI d direct tuch with Senators Borah, Harrison, H awes. Walcott,

Brock, and Capper. and with ltt-prescitatives Norton and Ramseyer.

Those were his direct contact Senators and Representatives; is

that it?
Mr. BALDWIN. Whatever is said there he reported to me and I
passed on.

1848

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. You say he is in direct touch with

those Senators?
Mr. BALDWIN. Yes.

Senator gOmiNSON of Indiana. What does that mean? I am not

now speaking of.money, or of what Mermey means. I mean what
did ou havereference to. This is your language, not Mermey's.
Mr. BALDWIN. Yes. I am reporting what he reported to me.
Senator RoBINsoN of Indiana. That is not the point at all. Please,
Mr. Witness. This is your report, not Mermey's. Mermey is not
concerned. Let us forget Mermey for the moment. This is your
report to Mr. Pike.
Mr. BALDWIN. Yes.
Senator ROBINSON of Indiana. And I quote your exact language:
Speaking of Mermey, he is in direct touch with Senators Borah, Harrison,
Hawes, Walcott, Brock, and Capper.

What do you mean when you say to Mr. Pike that he is in direct
touch with them?
Mr. BALDWIN. I mean that he reported to me that he was in direct
touch with them.
Senator RoBINsON of Indiana. What do you mean when you say
direct touch? What is that?
Mr. BALDWIN. He was in touch with their offices.
Senator RoBINsoN of Irqdiana. That is that he went to see them
every day?
Mr. BALDWIN. Of course not.
Senator CARAWAY. That their relations were confidential.
Mr. BALDWIN. He went to see them-Senator ROBINSON of Indiana. Well, nowMr. BALDWIN. How about this, Senator? He had established a
contact with the offices of those men, tho-eSenator, and whenever
there was something that came up that he thought would interest
them, he went to them.
Senator RoBINsoN of Indiana. Now, someone entirely outside of
your confidence and Mr. Pike's, m reading that language would as.
sume he had confidential relations with those Senators and Repre.
sentatives.
Mr. BALDWIN. I don't thiuk so.
Senator ROBINSON of Indiana. I think that is the ordinary meaning that would be given to the language you have used. Is that what
you mean to convey?
Mr. BALDWIN. 1do not. All I mean to convey is that he had
established a contact with those men with the offices of those men.
You had it in another report there where the men's names were not
mentioned.
Senator CARAWAY. And you said then you did not know who they
were.
Mr. BALDWIN. I did not know. I did not remember.
Senator ROBINSON of Indiana. Let us continue:
He has also made a good contact with Michelson of the Democratic National
Committee, who is taking one of Mermey's suggestions. Mrs. Norton has given
him permission to make use of such sugar protests as she has had.

Here is a letter. It is brief and I will read it. It is dated June

20, 1929, to Mr. William H. Baldwin, 122 East Forty-second Street,
New York City:

LOBBY INVESTIGATION

1849

DE:AR MR. BALDWIN: I Inclose a letter of June 13, from Mr. Staples to me and
some newspaper clippings about the Weiss episode. This venture was not
exactly profitable.
Very truly yours,
H. C. LAIN.

Mr. BALDWIN. H. C.,Lakin.

Senator ROBINSON of Indiana. H. C. Lakin; yes.

What was the Weiss episode?
Mr. BALDWIN. That was Myron Weiss. That was taken up
earlier this morning.
Senator ROBINSON of Indiana. Of Time?
Mr. BALDWIN. Yes.
Senator RoBINsoN of Indiana. What was the episode?
Mr. BALDWIN. I think he was using the word "episode" there,
because we had become interested in having Weiss go down there.
Senator ROBINsON of Indiana. Immediately after using the word
"episode," he uses the term "venture," and says it was not exactly
profitable. What does he mean by that?
Mr. BALDWIN. I don't think he felt that the magazine Time had
carried as much news about Cuba as he had hoped.
Senator ROBINSON of Indiana. Perhaps this will enlighten you.
He incloses to you a letter from the Hershey Corporation, Cuba,
June 13, addressed to Mr. Lakin, and signed by the general manager,
Staples. He says:
Mr. H. C. LAKIN,

% The Cuba Co., New York.

DEAR MR. LAKIN: I received your letter of June 10, with check for $130.80
Inclosed, for which I thank you, and I am returning herewith a receipt.
I was sorry not to have known that you were In Cuba for a few days the 1st
of June, and will look for you on your next trip in July. I may possibly be up
before then.
I do not think that Mrs. Weiss' article In the May 27 Time made very much
of a hit in Cuba from one or two respects.

I understand that Secretary Herrera

called Mrs. Weiss to the palace and asked her to suppress a portion of the article
especially where it referred to the President as "el gallo, dancing all night,"
etc. On the other hand I am attaching clipping from Excelsior.Pats which

was published on the first page.

herself.
With best regards, I am,

Yours very truly,

Also another clipping in reference to the lady

P. A. STAPLEs General Manager.

Do you understand that the President of Cuba objected to being

termed "el gao"?
Mr. BAJDWiN. From that, I assume he did.
Senator ROBINsoN of Indiana.. And to the reference to dancing
all night at the palace?
Mr. BALDWIN. I assume so.
Senator ROBINSON of Indiana. Was that part of the sugar lobby
activities, this palace dancing, and all that sort of thing?
Mr. BALDWIN. No.
Senator CARAWAY. But to suppress the news of it.
Senator RornNsoN of Indiana. Well, that is the part they wanted
suppressed, is that it?
Mr. BALDWIN. I image so, from that letter.
Senator ROBINSON of Indiana. Just one final question or two.
You have now gone into all the relations, keeping matters amicable
between Cuba and the United StatesMr. BALDWIN. Yes

1850

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. You were arranWng to have cartoons

published in these Latin-American newspapers, nflaming the sentiment against the United States. You decided what the strategy
would be and had gotten it from confidential sources in the event
of a possible war between the United States and Japan. You decided
what possessions would be defended and what would be abandoned in
case of war. You finally called on Doctor Bustamente of the World
Court, and had gotten a decision from him on the whole question,
and that has all been published, and yet you don't remember where
you got any of that information, do you?
Mr. BALDWIN. Any of what information?
Senator ROBINSON of Indiana. That I have just outlined, excepting
that Mr. Mermey told you those things.
Mr. BALDWIN. I think I have answered a considerable number of
those things.
Senator RoBINsoN of Indiana. That is all.
Senator CARAWAY. That is all. The committee will meet to.
morrow at 10 o'clock.
(Whereupon, at 1 o'clock p. m., the committee adjourned, to meet
again at 10 o'clock a. m., to-morrow, Wednesday, January 8, 1930.)

T:

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LOBBY INVESTIGATION
WEDNESDAY, JANUARY 8, 1980
UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON TUE JUDi01ARY,

Washington, D. 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock
a. m., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman presiding.
Present: Senators Caraway (chairman), Blaine, Robinson of
Indiana, and Walsh of Montana.
Present also: John G. Holland, Esq., counsel to the committee.
Senator CARAWAY. Mr. Pike, come around, please.
TESTIMONY OF H. H. PIKE, JR., 54 EAST NINETY-SECOND STREET,
NEW YORK
(The witness was duly sworn by Senator Caraway.)

Senator

CARAWAY.

Olive your name to the reporter.

Mr. PIKE. My name is H. H. Pike, jr.

Senator CARAWAY. Where do you live?

Mr. PIKE. 54 East Ninety-second Street, New York.

Senator

CARAWAY.

What is your occupation?

Senator

CARAWAY.

Ever since you left college?

Senator

CARAWAY.

Senator

CARAWAY.

You do not buy at all?

Senator

CARAWAY.

You simply sell on commission?

Senator

CARAWAY.

Mr. PIKE. My occupation is sugar broker.

Senator CARAWAY. How long have you been engaged in that
business, Mr. Pike.
Mr. PIKE. About 18 years.
Mr. PIKE. All but a year and a half.
Senator CARAWAY. Who are your associates in your firm?
Mr. PIKE. My father.
Senator CARAWAY. As sugar brokers, just tell us briefly what
business you do. You buy and sell granulated sugars?
granuMr. PIKE. No, sir. we do not buy and sell. We handlesugar
is
lated sugar on a brokerage basis. Our principal account in
the Hershey Corporation, manufacturers of refined sugar in Cuba.
Mr. PIKE. Yes, sir.
Mr. PIKE. No, sir.
Mr. PIKE. Yes, sir.

Do you sell their sugars on commission?

The Hershey Corporation is your principal

client?
Mr. PIKE. Yes, sir.
Senator CARAWAY. Do you handle all their sugars?
1851

1852

LOBBY INV3BTIOATION

Mr. PIKE. We do.

Senator CARAWAY. You sell to the jobbers throughout the country?

Mr. PIKE. Yes, sir.

Senator CARAWAY. The orders are filled directly from the refineries?
You just simply sell and the orders go to the refineries-the Hershey
Co.'s refinery, and they ship direct?
Mr. PIKE. No, sir. The refinery puts the sugar on board steamers
in Habana Harbor, and we do everything from that on until the final
accounting to Hershey.
Senator CARAWAY. What I am getting at, do you own warehouses?
Mr. PixE. No, sir.
Senator CARAWAY. The sugar then moves directly from the ship
to the customer to whom you sell it?
Mr. PIKE. No. We as agents of the Hershey Corporation bring
itlin cargo lots from Cuba and then it is warehoused at various points
in the United States, with us, as agents for their account.
Senator CARAWAY. Are you the exclusive agents, or have they
other sales agents?
Mr. PiK.. No. We are their exclusive agents.
Senator CARAWAY. Have you any interest in their business other
than merely acting as their brokerage agents?
Mr. PIKE. No, sir.

w
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la
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AT

Senator CARAWAY. You have no investment in it?

Mr. PIKE. No, sir.

Senator CARAWAY. Have they any investment in your concern?

Mr. PIKE. No, sir.

Senator CARAWAY. How long has this contract with Hershey been
in existence?
Mr. PIKE. Just short of two years.
Senator CARAWAY. What has been your firm's interest in this
propaganda that Hershey and the bottlers association have been
putting out with reference to the tariff?
Mr. PIKE. Well, we have been very much interested in it, due- to
the fact that the tariff which may be enacted will very seriously
affect H. H. Pike Co.'s business.
Senator CARAWAY. I was not really asking you for your reason
but how extensively have you been engaged in the propaganda
Have you been issuing circulars, or have you simply cooperated with
Baldwin?
Mr. PIKE. I have done some things myself, but comparatively
little.
Senator CARAWAY. What are the things you did yourself?
Mr. PIKE. I have written to my CongressmanSenator CARAWAY. Who is that?
Mr. PIKE. My Congresswoman, rather, Mrs. Ruth Pratt. I have
telegraphed to various Members of Congress-telegraphed and
written. I siin ly did that as any other citizen might do, but my
r. B aldwin.
real activit.v in -ths matter has been in connection wit
Senator CIARAWAY. When you wrote to your Congresswoman, did
you tell her what your financial interest in it was or did you write
merely as an American citizen?
Mr. PIKE. Well, as a matter of fact I saw Mrs. Pratt. I came
down here and saw her as well as writing and telegraphing her.

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LOBBY INVESTIGATION

1853

Senator CARAWAY. Did you tell her what your financial interest
was?
Mr. Pixe. I did. I described what our business was, and why I
was interested.

Senator

CARAWAY.

You told her you were the representative of

the Hershey Co.?

Mr. PIKE. I did.

Senator

CARAWAY.

Senator

CARAWAY.

And they had a refinery in Cuba and sugar

lands there?
Mr. PIKE. Yes.
Senator CARAWAY. Did she tell you what course of action she was
going to take in the matter?
Mr. PIKE. She did not. She indicated an interest in the issue,
and I told her that I was very anxious that she, as for that matter
every Member of Congress, should have the complete information as
to the sugar issue which, to my mind, vas one of very great national
importance, and where the interest of 120,000 000 people was certainly in the interest of keeping the sugar tariff down, and I asked her
if she would please study the matter and that I would be glad to
give her all the information I could if ehe cared to take up the cudgels.

Did she ever call upon you for any other

information?
Mr. PIKE. She did not.
Senator CARAWAY. You then became paymaster for the publicity
bureau of Baldwin? You paid the bills?
Mr. PIKE. Yes.
Senator CARAWAY. Where did you get the money?
Mr. PIKE. When-

Senator

CARAWAY.

Mr. PIKE. Where?

No, no. Just tell us where you got the money?

Senator CARAWAY. Yes.

Who furnished the money?

Mr. PIKE. The money has been furnished one-half by the Hershey
Corporation and the other halt has been promised by the Coca-Cola
Co. when the matter is settled and I can give a final accounting.
Senator CARAWAY. Have you put up any of your own money?
Mr. PIKE. Well, I have financed that half, but I do not expect,
except in very minor expenses, to put up any money myself.

Senator

CARAWAY.

You are to get it back from the Coca-Cola

people?
Mr. PIKE. Exactly.

Senator CARAWAY. How much has been paid to you by the Hershey

Co.?
Mr. PIKE. You have a statement as of a few weeks ago Since
that time we have had a little bit more. It is approximately $20,000.
It may be a few thousand more or less than that.

Senator

CARAWAY.

To whom did you pay that $20,000?

Mr. PIKE. I have paid that to Junior Owen as secretary of

the American Bottlers Association, as he expended it in this tariff

campaign.

Senator CARAWAY. Well, what I am getting at now, you made your

checks to Junior Owen?
Mr. PIKE. Yes.

Senator

CARAWAY.

Have you made them to anyone else?

1854

LOBBY INVFUTIGATION

Mr. PIKe. Yes.

Senator CARAWAY. Well, now to whom?

Mr. PIKE. Since June or Jul4 I have bean pay ing a thousand
dollars a month to Mr. Baldwin in addition to which, in the expense
account which you have, you will find some other minor expenses
which are for telephone calls and this and that, through my office.
Senator CALRAWAY. Now, who is to repay you for tWe $1,000 a
month that you are paying Baldwin in excess of his $1,500 a month
direct?
Mr. PIn. It is all one fund, and it will work just as I have indi.
cated.
Senator CARAWAY. The Coca-Cola people then owe your firm
approximately $20,000?
Mr. PIK. A little less than that.
Senator CARAWAY. A little less than that, but approximately that?
Mr. PIKE. Approximately 15, I think, or something like that, and
they will owe us more before this thing is through, I suppose.

Senator

CARAWAVY.

How long is tlie contract to continue, do you

know?
Mr. PIKE. There is no time limit on it.

Senator

CARAWAY.

As long as the tariff bill is in Congress?

Mr. PIKE. Well, there is no time limit. I am sure that I would

expect that they would go on until the matter is closed. As a matter
of fact, our agreement with them has no limit, which is tl.e total
amount.
Senator CAUAwAY. What is that?
Mr. IPii p. And they have agreed to put up, up to $25,000.
Senator CARAWAY. Apiece?
Mr. PIKE. Yes; each one.
Senator CARAWAY. Now, has anybody else put up any money
with you for this matter?
Mr. PIKE. They have not.
Senator CARAWAY. Is there any agreement that anybody else shall?
Mr. PIKE. There is not.
Senator CARAWAY. Do you know of anyone else who is contributing
to this fund?
Mr. PIKE. Nobody else is, to our fund. Of course, the American
Bottlers, if you are considering it"together--they have some funds of
their own.
Senator CARAWAY.- Well, I am trying to find out the amount that
is to go through your hands.
Mr. PIKE. 1o. Nobody else.
Senator CARAWAY. There are only two people to contribute to the
fund that you are handling?
Mr. PIKE. That is all that we have received. That is all that we
have in any way promised, although it was our original idea that we
might solicit funds from others.
Senator CARAWAY. What other people did you have in mind?
Mr. PIKE. Nobody in particular, but we did think of anybody who
was interested in the sugar tariff.
Senator CARAWAY. Have you solicited any funds?
Mr. PIKE. We have not.

Senator

CARAWAY.

Do you contemplate doing so?

LOBBY INVESTIGATION

1855

Mr. PIKIc. We do not at the moment, but I think there might be a

possibility that we would.
Senator WALSH of Montana. Mr. Pike, what was your own personal
financial interest in this latterr?
Mr. P K. Senator Walsh, we have been in the Cuban businessmy father has-for 40 or 60 years, and our business has been largely
confined to the Cuban business. That is an interest in general, because conditions in Cuba have been so bad recently, due to the sugar
situation, the extreme crisis which is on there, due to low prices and
suffering, that business in Cuba has been tremendously restricted.
In particular, our interest is in the Hershey account which we handle
naturally, at a profit, and should a bill pass Congress such as the bill
which has already passed the House, the Hershey Cororation would
have to go out of the business of refining sugar in Cuba, which of
course would mean a very serious blow to my firm.
Senator WALSH of Montana. Well let us see about that. What
difference does it make to you how high the tariff is?
Mr. PIxx. As you put ihe tariff up you make an already tremendously profitable business behind a tariff wall, still more profitable.
If you put the tariff wall high enoughSenator WALSH of Montana. What difference does it make to you
whether the existing beet-sugar factories in the United States make a
profit or do not mae a profit?
Mr. PIKi. That is what I am telling you. If you put the tariff
wall high enough you are going to increase production, not of the beet
factories, necessarily, but production back of that tariff wall to a
point where Cuba's production of sugar will be reduced to the absolute minimum.
Senator WALSH of Montana. I understand perfectly now.
Mr. PiKB. And when you reduce the Cuban production of sugar
you reduce the opportunity of my firm to do a sugar business, because
we are doing a Cuban sugar business.
Senator WALSH of Montana. I understand now. That is, as far as
the present factories are concerned, it is a matter of no consequence
to you at all whether the tariff is high or whether it is low but what
you are afraid of is that the business will expand in tle United
States?

Mr. PzIne. No, sir. I know that it will not expand in the United
States. It will expand in the island dependencies. It will expand in
the Philippines, Porto Rico, and Hawaii, but the United States business has been running along for the past seven years with a tariff
one-half cent higher, according to our own Government figures, than
is necessary, and it has not expanded. Mr. LippittSenator WALSH Of Montana. So, you are not alarmed about any

further expansion in continental United States? What you are

afraid of is expansion in the island possessions?
Mr. PKp.. Yes; that is true.
Senator WALSH of Montana. That is your interest in the thing?
Mr. PiK1. And furthermore, if you will look up the records you
will find that a. man who is thoroughly conversant with the beet situation, Mr. Lippitt, is on record as having said that the beet growing
in the United States can not expand materially, and I do not think
there is anybody better informed than Mr. Lippitt on that subject.

1856

LOBBY IMVSTIGATON

Senator WALSH of Montana. So that all you are troubled about is

expansion in the island possessions.
Mr. PIKz. I am naturally troubled about any expansion which is
going to hurt the Cuban production.
Senator WALsH of Montana. Exactly, and you do not contemplate
any expansion in continental United States, and accordingly what
you are afraid of is expansion in the island possessions?
Mr. PiKe. That is approximately it. Naturally, Senator if you
put the tariff to an unreasonable point, you get eventually the tariff
to the point where you could grow beets in any place in the United
States, or cane In some other place a wholly uneconomic industry.
Senator WALSH of Montana. You are not particularly concerned
about expansionjin Hawaii, are you?
Mr. PiKE. I am not particularly interested in Hawaii or any other
particular country,
Senator WALSH of Montana. No, no. I want to know why you
are opposing this raise in the duty on sugar, and you spoke about
continental United States, and your information is that upon ahy
reasonable tariff, even the tariff proposed by the House, there would
not be any such expansion in continental United States as ought to
give you any particular concern. You are, however, concerned
about expansion in the island possessions. Now I want to direct
your attention to that, and I want to know from you how much
concern you feel about expansion in Hawaii?
Mr. P1KB. Senator, I am not concerned as to whether Hawaii
increases or not. I believe, if you make it more and more profitable
the tendency will be and has been in the past for Hawaii and all the
rest of them to increase materially, but in this thing I have a dual
capacity. In the first place, I have my own pocketbook, and I
want to see my own business continue; and in the second place I
am an American citizen, and I hate to see the American people
taxed 350Senator WALSH of Montana. I want to see how your pocketbook
is affected.
Mr. PKB. Well, I am an American citizen and my pocketbook
is affected in this way that the cost to the American people of the
tariff bill which now has been passed by the House is somewhere
between $350,000 000 and $375,000,000 a year. Now that cost is
the cost which is being paid by all of us, and the advantage of that
cost is going, in approximately the proportion of one-fifth-a little
less than one-fifth, I belive--to the connntal-Uited States
producers. I, as an American and as a believer in proper protection,
am willing that they should get protection, but, why we should be
taxed three hundred and fifty-odd million dollars to increase the
profits of the islaiids and also to increase the profits of our domestic
producers, 50 per cent of whom have testified herd that they are
already making enormous profits, I do not quite see. That is my
interest.
Senator WALSH of Montana. Mr. Pike, you have made a long
argument in answer to a very simple question. We understand
perfectly well that the duty put upon sugar increases the price of
sugar to the consumer in the United States, and you are one of the
consumers, are you not?
Mr. PK. Ys, sir.
Senator WALSH of Montana. So, you are interested that way?

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LOBBY INVESTIGATION

1857

Mr. PIKE. Yes. Both of us are.

Senator WALSH of Montana. You are interested in that way Just

the same as every other citizen of the United States is Interested?
Mr. PIKe. Yes, sir; but I also have this difference, that I happen
to have a business connectionSenator WALSH of Montana. Exactly. Now, let us leave out those
considerations that are addressed to all citizens of the United States.
Let us leave those out.
Mr. PIKE. Those have been left out in the consideration of this
bill.
Senator WALSH of Montana. I am trying to find out what your

interest is outside of the interest of the ordinary individual consumer

of the United States, and I want to call your attention now to what
you told us a minute ago, and that is that you are concerned about the
expansion of the business outside of Cuba.
Mr. PIKE. Yes, sir.

Senator WALSH of Montana. In the United States and in Hawaii

and in the Philippine Islands and in Porto Rico, possibly, and I want
to know from you whether you have any information of any likelihood
of expansion in Hawaii.
Mr. PIKE. I have never been in the Hawaiian Islands. I have
never made a study of Hawaii particularly.
Senator WALSH of Montana. Well, I have been. Don't you know
the capacity for expansion-that there is no further possibility for
expansion in Hawah'?
Mr. PIKe. No, sir; I do not.
Senator WALSH of Montana. Have you any information about the

matter one way or the other?

M1r.

PIKE.

Yes, I have.

Senator WALSH of Montana. What is that?

.M1r. PIKE. It is this that in 1922 there was a similar increase in
the sugar tariff, and It was then said that the islands could not
increase, th0 general feeling was that we would put the tariff up, and
that would help our continental American farmers. As a matter of
fact, at this moment they are making a few thousand tons, more or
lesq, I don't know which it is, than they were in 1021 and 1022.
Senator WALSH of Montana. Don t talk about the American
farmer. Excuse me. I want you to confine yourself to Hawaii.
.\r. PIKE. I am. I am getting to it. You will note, if you look
up the figures, that the Hawaiian Islands have increased very
materially since 1022.

Senator

WALSH

of Montana. How much?

Mr. PIKE. I haven't the figures in my head. I presume they are

available right in this building.
Senator WALSH of Montana. The real truth about the matter is
that you are concerned about the expansion of the industry in the
Philippines?
Mr. PIKE. I think that the Philippines is unquestionably the place
where the industry can expand most. General Leonard Wood said
that they could make 5,000,000 tons, which is almost our total
consumption.
Senator WALSH of Montana. That would be taken care of if we
gave independence to the Philippines, would it not?
?8214---0--wT 5--6

1858

LOBBY INVESTIGATION

we were considering giving independMr. PIKE. I did not know that

discussion.
ence to the Philippines in this
Senator WALSH of Montana. Didn't you? Haven't you been following the proceedings in Congress during the current session?
Mr. PIKE. That might happen next year or it might happen 20
years from now, but this bill is going into effect in the next few months.
Senator WALSH of MOntana. Oh, yes; but I asked you whether the
situation would not be taken care of, as far as the Philippines are concerned, by giving them their independence?
Mr. PIKE. I think some of their tariff schedules might be reconsidered when we gave them their independence.
Senator WALSH of Montana. Well, anyway, whatever duty is put
upon sugar will naturally increase the price of sugar in the United
States, will it not?
Mr. PIKE. Of course.
Senator WALSH of Montana. And that will give yott an opportunity
to increase your prices?
Mr. PIKE. No, sir.
Senator WALSH of Montana. Why not?
Mr. PIKE. Because our price is a cost and freight price.
Senator WALSH of Montana. Why of course but if the duty imnposed upon sugar operates to increase the price of sugar by the amount
of the tariff, you will be in exactly the same situation that you are now,
won't you?
Mr. PIKE. No, sir.
Senator WALSH of Montana. Why?
Mr. PIKE. Let me give you an illustration. The price of Cuban
sugar to-day is approximately 2 cents. The tariff is 1.76 on raws.
Therefore, to-day's value of duty paid sugar is approximately 3.77.
Now, if this morning you increase the duty to 2.40, which is the raw
su ar rate passed by the House
enator WALSH of Montana. 64 cents higher.

Mr. PIKE. Yes. In theory the price this afternoon on Cuban sugar,
which is what I am interested in, would still be 2 cents. The price
that the American buyer would be paying for the duty paid sugar
would be $4.40.
Senator WALSH of Montana. Exactly.

Mr. PIKE. I would still be getting my 2 cents for Cuban sugar.

Senator WALSH of Montana. Excuse me, but if the increase of the
tariff, to the extent of 64 cents per 100 pounds, increases the price of
sugar in the American market to the extent of 64 cents, you will get
that price for it, won't you?
Mr. PIKE. And I will pay it out in duty.
Senator WALSH of Montana. Of course, so that your profits will be
.
just exactly what your profits now are.
Mr. PIKE. The Cuban producer is not afraid that he is going to
pay the duty, because he knows that he does not pay it. The
American consumer is the man who pays the duty, the poor man in
the United States is the man that pays any increase that you put
on; and the effect on the Cuban producer is this, that when you raise
the duty above the ordinary difference in cost of production, and it
is already one-half cent above that, when you, raise it still higher
you make it a bonanza producing sugar in certain places in the
United States, that is for the Great Western Sugar Co,, for instance.

LOBBY INVESTIGATION

1859

You also make it a bonanza making sugar in our island dependencies,

and they are naturally going- to increase, and when they increase
they are going to run Cuba out of business.
Senator WALSH Of Montana. Exactly. If they did not increase
it would not make a bit of difference to-you, would it? You would
make just exactly the same profit that you now make?
Mr. Pxix. Precisely.
Senator WALSH of Montana. So, all you are troubled about is the
increase in production in continental United States?
Mr. PIcie. That is what I am getting to. I am simply telling you
that I was interested my principal, the corporation for whom I am
agent, the Hershey Corporation, were very vitally interested also.
They were particularly interested because there was talk of not
onlySenator WALSH of Montana. Now Mr. Pike, we understand that
perfectly well. We understand the Aershe Co.'s interest in Cuban
sugar, and of course the interest in the tariff, I am not asking you
about that. I want you to tell what you did and with whom you
were associated and what your arrangement was and that kind of
thing,
Mr. PIKE. Very well. That is what I am trying to do, sir. In
addition, one of our principal customers for Hershey sugar is the
Coca-Cola Co. The Coca-Cola Co., as you know, are large buyers
of sugar, and we sell them quite a quantity of sugar. Their interest
in the matter was quite parallel to ours because they also did not
want to see an increase in the sugar tarif. I had several talks with
them, and when I was in Cuba, I think the early part of February
we happened to have a luncheon at which Mr. Hershey, and one of
the officers of the Coca-Cola Co., were present, and we talked over
this matter of the sugar tariff, and as a result of that we made up a
memorandum to the effect that we would do something about it.
None of us, the three I mentioned, knew anything particularly
about what could be done in such a cause, because we had never done
anything of the kind before, but we decided that the sugar case was
such a clear case that the great thing to do was to get the facts
before.the public, and we therefore decided to go into a publicity
campaign, or do anything else that we could to prevent an increase
in the sugar tariff, which we considered would be entirely unjust.
We therefore, or rather the agreed to put up $25,000 each or a
total of $50,000, which would be used for this purpose. Neither of
them had an office in New York, Whichiw asparticulaly capable of
handling such a matter, and they turned to me--as a matter of fact,
I had suggested this to them-and they asked me if I would handle
the matter which I proceeded to do.
Senator WALSH of Montana. Now, we have arrived at the point
where I asked the question. All of this was introductory. I asked
you what you did, and what kind of an arrangement you made, and
how you carried it out.
Mr. Piius. That is what I did, and that was the arrangement I
made, and I believe you have a copy of that arrangement before you
now.
Senator WALSH of Montana. Yes. Well, how did you proceed to
carry it out?

LOBBY INVESTIGATION

Mr. PIKE. I then proceeded to study the matter and try to find
the best way of getting publicity, get our case against an increase in
the sugar tariff, before the American people and before Congress. A
number of suggestions were made as to how we could do it. We felt
originally that it was necessary to find some sort of an organization
which was a proper organization for sustained news. We did not feel
that we could come out and get out news in the name of the CocaCola Co. or in the name of the Hershey CorporationSenator WALSU of Montana. Why not?
Mr. PIKE. Because I do not believe that statements from them
would be-it is not a suitable medium for news. People do not want
a series of statements from a corporation which is selling an article.
It might be misinterPreted in an attempt to make an advertising
campaign for the products of those corporations, out of this tariff
campaign. There was nothing further from their minds than that.
Prior to that arrangement there were two associations who were
fighting the tariff, each of whom were considered as possibilities to
work with. One was the United States Sugar Association, the otherrather there were three-also the bottlers and the confectioners.
Those three concerns had protested prior to the date I am talking
about, against an increase in the sugar tariff, at the hearing before
the Ways and Moans Committee. On study, we felt that the association which paralleled our interests and which was most likely to
work on this matter was the bottlers, in which of course there was a
parallel interest, and we wore members of that association. Therefore
I came down to Washington and I saw Mr. Junior OwensSenator WALSH of Montana. Is your firm a member of that association?
Mr. PIKE. The Hershey Corporation is. My firm is not.
Senator WALSH of Montana. And the Coca-Cola Co.?
Mr. PIKV. Yes, sir. I came down to Washington and I saw Mr.
Junior Owens, who I had met previously at the Ways and Means
Committee hearings as ho was here making a protest himself. I
saw him and I talkeA it over with him, and we agreed that we would
look around for a suitable publicity man or agency. We considered
a number of agencies and a number of individuals, and we came to
the conclusion that Mr. William H. Baldwin of New York, was in our
opinion the best man to use, and we used him very largely because
we felt that here was a man who had beenSenator WALSH of Montana. Oh, of course, as an American citizen.

Mr- PIKE. .That is it exactly, and as an American citizen, paying

the bill for this increase. I do not count.
Senator WALSH of Montana. You are in exactly the same situation
as every other American citizen.
Mr. PIKE. I know. We do not count.. Yes, sir.
Senator ROBISON of I tdiana. What do you mean by that, that it
does not count?
Mr. PIKn. Well, I was just referring to the fact that I was not
allowed to state my interest as an American citizen.

Senator ROBINSON of Indiana. You have certainly stated your

interest here and you have had more time to do it than any other
witness who has been on the stand, and we have listened to you more
patiently tha'n", other witness.

LOBBY INVESTIGATION

1861

Mr. PIK . I thank you very much.

Senator RoBiNsoN of Indiana. Even when the answer to the question was not relevant at all.

Mr. PIKE. Oh, I think it was relevant.

Senator ROBINSON of Indiana. Not responsive to the question.

Mr. Pixv. I thought it was relevant.
Senator ROBINSON of Indiana. Well it was not at all. I have not
heard you answer the Senator's question in the slightest degree as to

what difference it makes to you that the amount of sugar you sell in

your brokerage business, whether the tariff is high or low. Please do

not go into another explanation. I do not want to interrupt the
Senator. I just wanted to tell you, in answer to tlh suggestion that
you say the American citizen does not count. Aft'or all, you know
that the American citizen runs the Government. He can change it
when he wants to, and frequently he does.
Senator CARAWAY. Oh you forgot that these gentlemen were
running the Government?
Mr. Pixv. I can give you. an answer-

Senator ROBINSON of Indiana. I don't care for an answer. Please

don't volunteer anything, for you take too much time. Go ahead,
Senator Walsh.
Senator WALSHof Montana. Mr. Pike, won't you tell us in just
the briefest possible compass, about this arrangement in which you
were involved?
Mr. PIKE. Certainly. Last fall there was considerable talk of the
possibility of an increase in the sugar tariff, and that naturally was a
matter ofvery great concern to me. It was also a matterSenator WALSH of Montana. Now, I did not ask you about how
much concern it was to you. I asked you to tell us about the organization and the arrangement of which you were a part. Now,
about your reasons again: I did not inquire at all. I asked you what
you did. You made some arrangement with Mr. Owens. What was
the arrangement you made with Mr. Owens?
Mr.

PIKE.

I made an arrangement with Mr. Owens, as I think I

just said, that he would look up and I would try to find a suitable man.

Senator WALSH of Montana. Well, you did eventually arrange

with Mr. Baldwin?

Mr. PIKE. Yes.

Senator

WALSH

of Montana. What was the arrangement concern-

ing payment, and how was the money to be raised and how was it to
be handled?
Mr. PIKE. Mr. Baldwin wrote me a letter in which he said what
he would do and for what price. I brought Mr. Baldwin down and
introduced him to Mr. Junior Owens and Mr. Junior Owens took him
at that figure. Shall I go right ahead with that?
Senator WALSH of Montana. Yes.
Mr. PIKE. That was on a three months arrangement. Three

months later, when the time limit was over, Mr. Baldwin came to
me-Senator WALSI of Montana. Before you reach that, what was the

arrangement concerning where the money was coming from to pay

Mr. Baldwin, and how it was to be paid to him and what you were to
have to do with it?

1862

LOBBY INVMSTIGATION

Mr. PIKE. Mr. Baldwin's arrangement was with the bottlers.

Senator WALSH of Montana. Yes. He made it with Mr. Owens in

your presence?

Mr. PIkE. Exactly.

I arranged with Mr. Owens that I would

furnish the funds for financing this campaign.

Senator WALSH of Montana. And those funds were to come
fromMr. PIKE. From me.

Senator WALSH of Montana. From you, but really from Hershey

and the Coca-Cola Co.?
Mr. PIKE. Precisely. I was a clearing house for them.
Senator WALSV of Montana. $25,000 being furnished by each?
Mr. PIKE. Up to that amount.
Senator WALSH of Montana. All right.
Mr. PIKE. Shall I go on?
Senator WALSH of Montana. Yes.

Mr. PIKE. At the termination of these three months Mr. Baldwin

came to me and told me that the work involved had been rather
reater than he had anticipated; it had overburdened his office; that
is expenses were almost as great as the amount he was getting. I
took the matter up with Junior Owens and we decided that we would
let the thing run along. The next time Mr. Harrison Jones-Senator WALSH of Montana. Just a minute. Seeing that Junior
Owens or the Bottlers Association were not putting up any money at
all, what difference did it make to him? Why should you take it up
with him?
Mr. PIKE. Well, it did not make any financial difference to him,
because whatever he paid I paid him, but at the same time, he was
running the campaign and he and I were discussing various things
together from time to time.

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Senator WALSH of Montana. Allright.

Mr. PIKE. I think I had Just said that shortly after that Mr.
Harrison Jones of the Coca-Cola Co. was in New York, and I dis.
cussed this matter with him. I told him of Mr. Baldwin's request and
what Junior Owens and I had talked over.
Senator WALSH of Montana. Anyway you took it up with Mr.
Jones and he assented. Isn't that the substance of the thing?
Mr. PIKE. That is it.
Senator WALSH of Montana. Now,. about your own participation
in this matter what particular service did you yourself render in
connection withthis-natter?
Mr. PIKE. I am sorry to say I am afraid I have not performed a
very great service, except as a clearing house for the fund, and getting
the thing started and making suggestions.
Senator WALSH of Montana. You did come down hero to Washington, did you not?
Mr. PIKE. I did dome down here to Washington, and I was at all
times available to talk over matters with Mr. Owens.
Senator WALSH of Montana. You went around and saw a great
many people in Washington, did you not?
Mr. PIKE. No, I did not.
Senator WALSH of Montana. I have before me a report that you
made which would indicate that you have covered the ground pretty
fairly well. I have here a memorandum covering information
secured on a trip to Washington, November 26, 1028.

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LOBBY INVESTIGATION

6
1863

Mr. PIKE. Yes.

Senator WALSH of Montana. That is your memorandum, of course?
Mr. PIKE. Yes, it is. At least I presume so. I have not seen it.
Senator WALSH of Montana. Well, it is so marked. For what purpose was this memorandum made?
Mr. PIKE. That was a memorandum which I made after the trip
that I made to Washington and before any of the matters that we
have been discussing had started,
Senator WALSH of Montana. Oh, yes. You were early on the job,
immediately after the election of 1928 you made a trip to Washington
and interviewed a large number of people here with respect to the

sugar tariff.

Mr. PIKE. I would not sa I interviewed a large number of people.

I wanted to see what the chances were of something happening on
sugar, which I figured I was perfectly entitled to do.
Senator WALSH Of Montana. There is no queatioq about that. Nobody doubts that. Of course, any citizen in the United States has a
right to interest himself in these matters if he cares to do so.
Mr. PIKE. Yes. Thank you.
Senator WALSH of Montana. There is no question about that.
Your forehandedness is what attracted my notice, but, what I want
to know is for what purpose you prepared this memorandum.
Mr. PIKE. Just a memorandum that I could refer to. I have an
unfortunate habit of quite often making up a memorandum of that
sort which I sometimes want to refer to afterwards. I think you wil
find there I have not seen that memorandum-I do not think as a
matter of fact that I have referred to it since I wrote it, but, I came
down and I wanted to find out from the Tariff Commission whether
there was an thing beingSenator WALSH of Montana. We will come to that directly.
Mr. PIKE. Oh, very well.
Senator WALSH Of Montana. But you are quite sure that you did
not prepare this for the use of anyone else?
Mr. PIKe. No; I did not.
Senator WALSH of Montana. It was only for your own convenience?
Mr. PIKE. Absolutely although when I say that-I might have
shown that to somebody else. I would feel myself perfectly at
liberty to show it to anybody I wanted to.
Senator WALSH of Montana. No doubt.
Mr. PIK . I do i_-think I showed it to anybody, but perhaps I
had better say I do not know, because I may have shown it.
Senator WALSH of Montana. I see your name at the head in
leadpencil "Pike." Likewise the memorandum "Read and destroy."
Will you tell us whose handwriting that is?
Mr. PIKE. It is not mine. I don't know whose that is. So far as
I know there is nothing confidential in the memorandum.
Senator WALSH of Montana. You do not know who put that
memorandum there?
Mr. PIKE. I don't happen to know that handwriting; no, sir.
Senator WALSH of Montana. This shows that you called on Mr.
Marvin, chairman of the Tariff Commission.
Mr. PIKE. Yes.

1864

LOBBY

VESTIOATION

Senator WALSH of Montana. And on Mr. Gutterson, secretary of

the National Republican Committee?

Mr. PIKE. Yes, sir,

Senator WALSH of Montana. And Colonel Tilson, the House leader?
Mr. PIKE. Yes, sir.
Senator WALSH of Montana. And Mr. Cohen, Representative
from New York?
Mr. PIKE. Yes, sir.
Senator WALSH of Montana. And Mr. Timberlake, Representative

from Colorado?

Mr. PIKE. I think I failed to see him. I don't think I ever talked
to Mr. Timberlake.
Senator WALSH of Montana. Quito sot
Mr. PIKE. Then I called at his office, and it was closed, as I remember.
Senator WALSH of Montana. You were not able to find him?
Mr. PIKE. No, sir.
Senator WALSH of Montana. And Dr. Julius Klein, of the Department of Commerce?
Mr. PIKE. Yes, sir; but I did not see him.
Senator WALSH of Montana. And Doctor Ferrara, the Cuban
-ambassador?
Mr. PIKE. Yes, sir.
Senator WALSH of Montana. And the memorandum is that the
next time you came you were to see Smoot, Longworth, Timberlake,
and Dennis; also Ed Barrett of the Southern Dames (Inc.), and his
buyer, Mr. Hartfield, 60 M Street, Northeast, Washington; and
Ogden Mills and Francis Aberstates and Mr. Logan.
Mr. PIKE. Yes, sir. As a matter of fact I did not do that, and
some of those names there are names entirely not connected with
sugar. For instance, one of them happened to be a sugar buyer
that I thought I might mterest in buyvin sugar from us.
Senator WALsH of Montana. Who is Mr. Woodruff; Bob Woodruff?
Mr. PIKE. He is president of the Coca-Cola Co.
Senator WALSH of Montana. I notice a letter from you to Staples
of date February 1, 1929, in which you say:
I seni you a rather long cable last night with reference to publicity. I find
that I have gotten into this thing rather deeply.
Bob Woodruff is after me every time he comes up here. The day before
yesterday I saw him at noon. He then got me down to breakfast yesterday
morning where he had his advertising man W. C. D'Arcy, Mr. Horsey, export
vice president, Ralph Hayes, publicity vice president of the Chatham & Phenix
National Bank. We went over the matter in some detail and ended up this way:
Mr. D'Arcy has a personal method of approach to Hoover and is going to see
that Hoover gets full but concise data on the sugar subject. It is his belef that
Hoover will oppose the sugar matter and see that it doesn't go through in view
of the Latin American complications that would most certainly arise. Re thinks
this point should be stressed.
They believe that'as much publicity as ossible should be secured In order
that those in Congress and Mr. Hoover wil have something to fall back on if
they act contrary to the wishes of the domestic producers.
Mr. Woodruff apparently is leaving It to me to-see that there is some organizing
of this publicity work and he has sald that if the United States Sugar Association would take the matter up he would be willing to subscribe funds to help
the thing along. On what scale I do not know.
What was that personal method of approach that Mr. D'Aroy had?
Mr. PIKE. I don't know, sir.

S1

LOBBY INVESTIGATION

1865

Senator WALSH of Montana. How did you come to make the

statement?
Mr. PinC. I don't remember exactly how I came to make the
statement, but I obviously did and somebody possibly in that crowd
told me that that was the case, and I presume it was the case.
Senator WALSH of Montana. Your memory has failed you about

that?
Mr. PIce. No. My memory has not failed me at all. I do not
rememberSenator WALSH Of Montana. You made the positive statement at
that time that Mr. D'Aray has a personal method of approach to
Hoover, and of course, you must have had some information about
that matter or you would not have made the statement.
Mr. PIKE. Well, yes but somebody told me that that was the.
case. You asked me if I knew what that approach was. I do not
know, and I never did know.
Senator WALSH of Montana. Do you know who told you?
Mr. PIKE. I presume one of those gentlemen there mentioned told
me. I think it is entirely proper that Mr. D'Aroy should put tbh'
facts in this case before Mr. Hoover.
Senator ROBINSON of Indiana. If you do now know, why did you
say that he had a personal approach to Hoover, if in a shot time
afterwards you have forgotten entirely?
Mr. PIE. No; I have not sir.
Senator ROBINSON of Indiana. Just a moment-how somebody.

concerning whom you have .written, was going to approach the

President of the United States? It was important enough then for
you to write about it, and send this information to your correspondent.
That was back last February. Now, inside of a year you have forgotten entirely what that approach was, or now suggest that you
never even knew what the method of approach was. I ask you the
same question that I asked your friend Mr. Lakin, "Do you think it
is fair to bandy the President's name around like that"?
Mr. PIKE. I certainly do not.
Senator RoBINsoN of Indiana. With such slight information as
you seem to have that within less than a year afterwards you can not
tell anything about it?
Mr. PIKE. I can tell everything that I knew then.

Senator RoBINsoN of Indiana. Well, what did you know then?

Mr. PIxE. We had this little meeting at breakfast. You can count
how many people there were there-six or eight. We talked about
"What are we going to do to prevent this wicked increase inthe sugar
tariff." And one of those people said to me, "I think Mr. D'Arcy
can put these sugar facts before President Hoover," which is a perfectly proper thing for him to do, and I do not remember which of
of those men told me that, but thpy never told me how he was going
toput it there, and I do not say that in the memorandum there.
Senator

ROBINSo

of Indiana. Just a moment.

You say Mr.

D'Arcy has a personal method of approach to Hoover and is going

to see that Hoover gets full and concise data on the sugar subject.
Now, that looks to the average manMr. PIKE (interposing). That looks so to you.
Senator RoBINO

of Indiana (continuing). That looks to the

average man, I would think, that there was some backstairs method
of approach.

LOBBY INVESTIGATION
PIKE. No. It would not mean that to a business man at all.
Senator ROBINSON of Indiana. Now, in less than a year you say
you don't know what the method was at all, or anything about it,
and yet you were writing to Mr. Staples of Central Hershey, in Cuba,
giving him this information and of course, he could tell it to anyone
desired. Now, I ask you if you think that is a fair method of pro-

Mr.

cedure?
Mr. PIKE. I think it is very fair.

Senator

ROBINSON

of Indiana. Bandying the President's name

around when you to-day say you do not know what the method was
or 0hat you were talking about then.
Mr. PIKE. I did not know, but if I had a method of putting it

before President Hoover I should do so and I would tell you so, and
.1 would be very proud of having the abiity.
Senator ROBINSON of Indiana. Then, why don't you tell me what
it was ? What was the method?
Mr. PIKE. I do not know and I did not know at the time, and I do
not say in the memorandum that I did know.
Senator ROBINSON of Indiana. Then you ought to have kept quiet

about anything you knew nothing about. Isn't that true, when you
are using the name of the President of the United States in this lobbying capacity of yours?
Mr. PIKe.

No, sir.

Senator ROBINSON of Indiana. Because this is the purest kind of

-lobbying activity, isn't it? That is all you were doing in all of your
actions? You were lobbying to keep .the duty lower on sugar.
Mr. PIKE. I certainly was interested in keeping the tariff low on
sugar.
Senator ROBINSON of Indiana. Yes; and you were not too good to
use the name of the President of the United States in your lobbying
activities, and here, in this very communication, you have written
to Cuba about a backstairs entrance that someone is alleged to have.
I think that is the usualMr. PIKE. But, you are suggesting something which I should
think Mr. Ho ver would very much resent, that anybody putting
something before Mr. Hoover is doing something improper. Mr.
Hoover-is there for any of us to put anything before, and hero is
Mr. D'Aroy trying to put something before him and I would iike
to put something before him now, and I think I have aright to. I
do not happen to know Mr. Hoover, but that is my misfortune.
Senator ROBINSON of Indiana. Listen Mr. Pike. I don't know
whether Mr. Hoover has any resentment with reference to this
matter or not.
Mr. PIKE. I am sure he could not have.
Senator ROBINSON of Indiana. Wait a moment. I know if I were
in his place I would resent it, and I would resent what you have
done here and I would resent your writing to a foreign country, or
even this country-Mr. PiKE (interposing). This is to an American citizen.
Senator RoniNsoN of Indiana. Wait a moment.
Senator WALSH of Montana. Don't interrupt the Senator.
Mr. PIKe. I beg your pardon.
Senator ROBINSON of Indiana. And I would resent your writing
and sending these confidential messages or nonconfidential messages

LOBBY INVESTIGATION

1867

to anybody with reference to a personal method of approach to

Hoover. There is one method of approach to the President of the
United States that I know of, and that is to go down to the White
House and see him openly, and it does not require that you write,
in going to see him that way, about a personal method of approach
to Hoover to someone-about someone who has a personal method
of approach. That is my notion about it. Maybe yours is different.
Mr. PiZ. My notion is this, sir-Senator ROBINSON of Indiana. And therefore I say, if you do not
know any more about this method of approach than you now admit
you know, then, you have obviously wronged the present occupant
of the White House.
Mr. PIKE. I feel that you have wronged him in that you are
suggesting-Senator ROBINSON of Indiana. Oh, please don't lecture the committee.
Mr. PIKE. In suggesting that there is such a thing. I very much
regret that there is such a thing suggested here, and certainly I made
no suggestion that it is conceivably possible to reach President
Hoover in any other way that the proper way.
Senator ROBINSON of Indiana. Then, why didn't you say that Mr.
D'Aroy is going down to see the President at the White House?
Why did you suggest that Mr. D'Arcy had a personal method of
approach? You see nothing wrong about that?
Mr. PIKE. I do not.
Senator ROBINSON of Indiana. You see nothing wrong about any
of your methods of handling this whole proposition, do you?
Mr. PIKE. No; I do not.
Senator ROBINSON of Indiana. You will before you get through
on the stand, I think.
Mr. PIKE. Perhaps.
Senator BLAINE. You have observed during the sessions of Congress that' many Members of Congress on the floor of either House
often represent what the position of the President is on a great many
projects when they want to promote or oppose a certain project?

Mr. PIKE. No. I believe that is not done. I did not do it here.
Senator BLAINE. Oh, yes; it is done very frequently.

Mr. PIKE. It is?

Senator BLAINE. Very frequently.

Mr. PIKE. Perhaps it is. I am not very familiar with those

matters.
Senator BLAINE. And the public is not informed as to the method
of approach of these Members of Congress, who, at least in their
zeal to accomplish their purpose, represent the President's position
on various propositions. You hadn t observed that that was quite
characteristic during the session of Congress with many Members?
Mr. PIKE. It might be. I am not familiar with such matters, sir.
Senator BLAINE. I was just making a contrast on this manner of
approach to the President.
Mr. PIKE. Yes, sir.
Senator WALSH of Montana. Mr. Pike, I want to say a word with
respect to this matter. You will observe, I suppose, that each member of this committee is attracted to this particular language in this
particular letter. Do you not?

1868

LOBBY INVESTIGATION

Mr. PIKe. Yes.

Senator WALSH of Montana. They note the particular expression

here:

Mr. D'Aroy has a personal method of approach to Hoover and Is going to

see that Hoover gets full but concise data on the sugar.

That means, does it not, that Mr. D'Aroy could be heard by the
President when, perhaps, you could not be?
Mr. PIKE. Possibly.
Senator WALSH of Montana. That is really what it means, isn't it?
Mr. PIKE. Yes.
Senator WALSH of Montana. That is to say that there must be
some peculiar relation between. the President and Mr. D'Aroy by
which he would be able to get your case before the President when
someone else would not who was less favorably situated?
Mr. PIKE. Well, I know that in businessSenator WALSH of Montana. Well, now, if you agree to my stittement you can say yes, and if you do not agree with it you can say no.
Mr. PIKE. I don't think that statement is fair to President
HooverSenator WALSH of Montana. Wait a minute, now. Never mind
whether it is fair to President Hoover or unfair to President Hoover.
Mr: PIKE. But that is the point that has been raised. We are
talking about whether it is fair to bandy his name. I never bandied
his name.
Senator WALSH of Montana. That is a controversy between you,
Mr. Pike, and Senator Robinson which I do not care to go into at
this time.
Mr. PIKE. I see.
Senator WALSH of Montana. I am asking you whether your language does not indicate that Mr. D'Arcy has, by reason of so me relation he sustains to the President of the United States, whatever it
may be the ability to get your case before the President of the
United Atates, whereas you or someone else could not. That is what
this means, isn't it?
Mr. PKE. No, it doesn't.
Senator WALSH of Montana. Well, now, what does it mean?
Mr. PIKE. It means this, sir; that possibly Mr. D'Aroy knew the
President. I don't know whether he did or not. Possibly some
friend of Mr. D'Arcy knew the President.
Senator WALSH of Montana. Yes.
i Mr. PIKE. In most relationships, your case is heard better, whether
it be business or any other, if you can get to your person, where the
person has confidence in you, than where you just come in off the
street.
Senator WALSH of Montana. Exactly.
Mr. PIKE. And there is absolutely nothing improper in it.
Senator WALSH of Montana. I didn't ask you about it being proper
or improper.
Mr. PIKE. I just volunteered that.
Senator WALSH of Montana. I asked you if this language does not
mean that by reason of some relationship Mr. D'Arcy is able to get
your case before the President when perhaps you personally would
not be able.

LOBBY INVESTIGATION

1869

Mr. PiKE. I think that it means that Mr. D'AroySenator WALSH of Montana. You can answer my question by sayingyou agree with me or do not agree with me.
Mr. PIKE. I think that the question, sir1 is loaded. I don't think
a straight answer of yes or no to the questionSenator WALSH of Montana. Very well, if you don't care to
answer me.,
Senator CARAWAY. Mr. Pike, you know nobody is trying to trap
you. Everybody knows you can talk about the President. I have
done that on several occasions, and I am going to do it again this
week.
Mr. PIKE. Good.
Senator CARAWAY. But, just answer the questions. Nobody wanta
to trapyou. You have a right to your opinion. No one is criticizing
you. But just make your answers responsive to the questions,
because we want to get through here some time
Mr. PIKE. I am presuming you are trying to get the truth of this
case, and I am trying to give it to you but hen the truth is not given
by a "Yno
answer, I would assume that you woull not
prefer to have it that way.
Senator CARAWAY. Well, at least make it so we will live to the
end of your testimony.
Mr. PIKE. I hope to live that long myself.
Senator CARAWAY. Well, you won't do it if you keep on as you are.
Senator WALSH of Montana. I want to call your attention to a letter
of date April 17, to Mr. Sibley, which reads:
We are now a little late on the Mrs. Talmadge matter, as the D. A. R. is now
meeting in Washington.
What was the Mrs. Talmadge matter?
Mr. PIKE. We have done a lot of things in this campaign and I
know you are going to accuse me of having a bad memory, but my
recollection is that Mrs. Talmadge was a candidate for the office of
president of the D. A. R., which is a women's organization-

Senator CARAWAY. We know that.

Mr. PIKE. You do?

Senator CARAWAY. We know that is a women's organization.
Mr. PIKE. In connection with our publicity we felt we might be
able to 1 et them to make some sort of a statement on sugar, because
it is a women's organization, and the women are the people who buy
the sugar, and we were anxious to do that.
Senator WALSH of Montana. Does it mean that you were trying to
get a resolution from the D. A. R.?
Mr. PIKE. I think it was something like that. It was publicity;
to get somebody else to make a statement on sugar. The exact
nature of it I do not recall.
Senator WALSH of Montana. Whether 't was to be a personal
statement from Mrs. Talmadge or a resolution by the D. A. R. you
do not know?i
Mr. PIKE. [ don't recall, but I can probably look it up.
Senator WALSH of Montana. In this same letter you say:
We got some excellent publicity to.day. Mr. Baldwin got John Barrett to
make a statement at the Trade Council Convention in Baltimore to the effect
that our Pan American relations were being ruined by high tariff, specifically
referring to the sugar item. I think this as good stuff as anything we have got yet.

1870

LOBBY INVESTIGATION

Have you got a copy of the statement made by Mr. Barrett?

Mr. PIrE. I don't think go. I probably could get it. It is in the
press. You could look up. the files of that date.
Senator WALSH of Montana. Your language is that Mr. Baldwin
got John Barrett to make a statement. How did he get him?
Mr. PIKE. He went to him, saw him, and made the suggestion.
Mr. Barrett had already been interested in the matter, so that that
statement of getting him to make it is probably a little strong. It is
coloqulal language.
Senator WALSH of Montana. It does not express your idea ac.
curately?
Mr. PIKE. He suggested it to him and got him to do it. Just
whether Mr. Barrett would have made a statement or not if Baldwin
had not seen him I do not know, but Mr. Barrett was very much
interested in this subject.
Senator WALSH of Montana. But you report to Sibley that Baldwin
got him to do it.
Mr. PIKE. He went to see him, and as a result of that interview,
it was done; yes.
Senator WALSH of Montana. Was there any money consideration
there?
Mr. PIKE. None whatever. I might say we have never paid
money for any statements that anybody has made
Senator WALSH of Montana. I wouldn't think so in this case.
I ask the questionMr. PiKE. And I think Mr. Barrett would resent that question.
Senator WALSH of Montana. I asked the question in order to
exonerate Mr. Barrett from the inference that would reasonably be
drawn from your letter.
Mr. PIKE. I don't think that many people would have drawn that
inference, sir,
Senator WALSH of Montana. I have a memorandum here in the
files entitled, "Arrangements to be made before sugar hearings of
the Senate Finance Committee."
You drafted that, didn't you?
Mr. PIKo. May I see it?
Senator WALSH of Montana. Certainly.
Mr. PIKE. Yes; I think those are my memorandums.
Senator WALSH of Montana. I will as that these be incorporated
in the record without reading.
Senator CARAWAY. Very well.
(The memoranda are as follows:)
ARRANGEMENTS TO B8 MADE BEFORE SUGAR HEARINGS OF THE SENATE FINANCE

COMMTrTE
1. Secure representatives of various interests who will go and testify.
2. Outline to each what special point he is to make.

8. Make up batting order.

4. Prime favorable committee member on questions to be asked.
5. Had these people better go down in a body?

LOBBY INVESTIGATION
United States Sugar Association.
Steamship lines.
Bottlers.
Bowman hotels.
American Car and Foundry.
New York Chamber of Commerce.
H. H. Pike & Co. (Inc.).
International Electric.
Frederick Snare.
International Telephone & Telegraph.
American Exporters & Importers.
Foreign Policy Association.
Chase National Bank.
National City Bank.
Eugene V. Stetson (Guaranty Trust).
All America Cables.

1871

One big economist.

Some housewife.
Peoples Legislative League (Lewis).
Child Labor (Ethel Bedlent Gilbert).
Protective Qommittee for Americant
Stockholders In Cuba.
American Federation of Labor.
National Catholic Welfare Council.
Chambers of Commerce Brooklyn, ete.
Mangus W. Alexander.
Barton's Weekly.
General Crowder.
Bohack.
National Manufacturers Association.
National Commander of the Spanisb
War Vete.ans.

SENATE FINANCE COMMITTEE

Capper versus sugar tariff. Has one mill in his State, but doesn't see why
farmers should be taxed on sugar.
Reed (Pennsylvania): Is thinking In terms of pig iron. Hasn't thought about
sugar. Very likely go along aecorling to interests of his State. Would undoubtedly trade to Pennsylvania interest.
ShortrIdge (California): Not Influential. Likely speak for California Interests.
Whatever they'll want he'll want. C. &. H. will certainly tell Shortridge what to
do.
Edge: Will have to be shown good and sufficient reasons why there should be
any interest or change in the sugar tariff before he'll vote for it. Likelyto head a
fight in the f. c. against proposed increase. (May be representing NX financial
interests).
Couzens: Interested in Mexican labor situation, and in agitation by DU Free
Press, whiel regarded as his mouthpiece, over proposition of turning convict labor
into beet fields In Michigan. Believe as Free Press thinks, he thinks. Unknown
quantity.
Keyes (Now Hampshire): Hasn't gone into subject. Sick of whole tariff situation. Made up mind not to commit himself, or study, anything. Opposed to
spcsial session. Old guard conservative. Would listen to Moses. Would not
object to throwing over entire tariff bill.
Watson: Administration spokesman.
(Still to see Sackett, Deneen, Greene, Bingham.)
(Confidential memorandum)
WASHINGTON, D. C., Val 18, 18*9.
Senator Greene, Vermont advises us confidentially that he would like to see
the sugar schedule stay as R is In the present law.. However, officially, his attitude Is that of waiting to hear both sides. He hears nothing from Vermont
about sugar as yet. He has noted with interest the statement of President Green
of American Federation of Labor. Vermont dairy interests are well taken care
of in the new tariff bill, he points out. He thinks the President does not support
the proposed sugar duty increase. If and when the export debenture plan of
farm relief is attached tb the tariff bill, and sticks there, Greene says he expects
the President would veto that measure.
Deneen, Illinois, is not considering tariff matter yet and don't care to talk
much about them until after the bill comes over from the House. He says he
has seen nothing from Illinois about sugar yet, but frankly he looks for opposition to sugar increase from Chicago and other industrial parts of the State.
Deneen, tob, has noted President Green's statement. Deneen tells us that he Is
having prepared a file of communications from Illinois on the tariff situation and
will check these communications against the tariff bill, when it comes over read
up on the hearings on these subjects, get information from Government and
other exports on those subjects, and go into the Finance Committee prepared to
consider and act upon matters as they come up. Deneen tells us that he has
given no particular thought to the sugar situation. But he Is interested in the
metal schedule.

1872

LOBBY INVESTIGATION

A candidate for reelection, with Mrs. McCormick out against him, he is a

fatalist in politics, he says and ought to be a Presbyterian in religion although
he is not, Nevertheless he is watching his step, according to our information.
After the farm-relief fight, he tells us, he expects there will be a big fight over the
tariff bill, with Republican insurgents joining with Democrats in the Senate.
He thinks the debenture plan w[ll-be offered as a tariff bill amendment and that
if it prevails at the Capit6l the President may veto it, However, he fears failure
to enact tariff legislation would work to injure the Republican Party.
Senator Bingham, Connecticut is a Ne* England protectionist, but that seetion does not favor too high duties on commodities it has to consume. An in.

La
on

on

crease of sugar rates Would be unpopular in the industrial State of Connecticut,

the Senator thinks. However, he has heard nothing there on the subject up to
this time. He is referring to communications to tariff to the Connecticut Association of Manufacturers for comment. Bingham is a Hoover man and may be
expected to stand with the administration on almost everything. He hears the
Prident opposes the sugar increases. However the Senator realizes that in
tariff legislation it is sometimes necessary to "trade."
Senator Sackett, Kentucky, out of town, but it is our Information h6 Is gatherIng data re tariff. He, too, has heard nothing from his State about sugar. He Is a
Republican protectionist, though not to an "unreasonable extent." We are
informed that he favors protection for the domestic sugar industry, but has been
told that a 3-cent rate Is too high; that if free sugar from the Philippines con.
tinues it will tend to prevent the domestic price from becoming too high. Sackett
understands that the President opposes the sugar schedule. He Is an administration man and has been much concerned about Federal patronage in his State
of late.

Senator WALSH of Montana. I have a letter from you to Mr.

Hershey, of date June 19, 1929. I ask this be incorporated in the

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record Without reading.

Senator CARAWAY. Very well.

(The letter referred to is as follows:)

We are in the midst of our efforts concerning the Committee of Finance Hearings which will be held on the 24th.
I have been over this matter with Mr. Baldwin and Mr. Harrison Jones, of the
Coca-Cola Co., and am having another meeting late this afternoon with them andfy
Bob Woodruff and Mr. Harold Hirsch.mth
Our conclusion is that the main thing is to stage a good program with good
people testifying, and not too many. Better a few good ones than to spoil It
with a few weak sisters. We hope to have Green of the American Federation of
Labor as our star witness and Baldwin now has a man in Washington working
on this and other witnesses.
We have been having rather a poor thno with the United States Sugar Association who seem to be flirting with the sliding scale Idea and apparently are not
planning to do anything much on the 24th. Our views are very different. We
reel that the sliding scale is a smoke screen-that It Is being put out to divert
attention from the real issue, and while we are all looking at and talking about
this trick idea-about which we could all talk ourselves to death and still know
very little-the tariff program will be put over.

An odd thing happened the day before yesterday. Mr. Shattuck in conference
with Hunlo (sic) Owens of the bottlers, told him that ho had heard nothing about
the Department of Commerce emissary who was going the rounds and tried to
gt the sugar interests together on some program. However, when Junior
wens Interviewed this man he apparently was I very close touch with ShaituCk.
This rather tends to hurt our confidence in these people when we are supposed to
be working with them and they fall to tell us the truth about people with whom
thqy are working.
e are now making up a poster which the bottlers will probably distribute to
all their trucks to be posted up on all places where soft drinks arc sold. I think
this should have considerable publicity value.
Senator WALSH of Montana. I will read the following paragraph

from the letter in question:,

Our conclusion is that the main thing is to stage a good program with -good
people testifying, and not too many. Bettor a few good ones than to spoil It
with a few weak sisters. We hope to have Green of the American -Federation of

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LOBBY INVESTIGATION

1873

Labor as our star witness and Baldwin now has a man In Washington working

on this and other witnesses.

Did you get Mr. Green to testify?

Mr. PIKE. No; I think before that time Mr. Green had indicated
his interest by a letter which he wrote and which Mrs. Pratt read
on the floor of the souse.

Senator WALSH of Montana. What did you mean by speaking of

Mr. Green as "our star witness."
Mr. PIKI. If we could get him to go and be a witness before the
Ways and Means Committee, I think he would be a star witness,
and he would certainly be on our side, because he is committed.
Labor does not want an increase in the sugar tariff. Labor has come
out absolutely on it.
Senator WALSH of Montana. And if Mr. Green had testified he
would be your witness?
Mr. PIKe. I presume so, but I am sure we could not influence Mr.
Green in any way shape or form.
Senator CARAWAY. Whom did Mr. Baldwin have down here lining
up the witnesses? You said Mr. Baldwin had someone here in Washington.
Mr. PIKE. Did I say that? It must have been Mr. Mermey, if
he did.

Senator

CARAWAY.

Who?

Mr. PIKE. Mr. Mermey--M-e-r-m-e-y.

Senator WALSH of Montana. Another letter from you of datU
June 20 1929, which I ask to be incorporated in the record.
(The letter is as follows:)
It has been our feeling that we want to spring whatever we do exactly the right

way and with complete unity and cooperation between the various people teatifying. Yesterday I got in touch with Mr. Snyder and he told me that he was

planning to testify at the hearing. Unfortunately we hav e not been in very close
liaison with him and he has not given us the benefit of any information that he
may have, but I told him last night exactly what we plan to do so far as the plan

had been developed.

I can not get In touch with him to.dqy and an therefore

writing you this letter so that you will know what we are working toward.

It is our feeling that the refined differential item which has not yet been

referred to so far as I know by anybody except In the briefs that were submitted,
and have never been referred to publicly, should be sprung as a tariff joker by

some one not financially interested ix the importation of foreign refined.

Mr.

Lewis has been selected for this important service because of his complete familiar.
ity with all phases of the sugar tariff situation which ho developed as a member
of the original United States Tariff Commission.

Senator WALSH of Montana. I read the following from that letter:

It Is our feeling that the refined differential item, which has not yet been

referred to so far as I know by anybody except In the briefs that were submitted

and have never been referred to publicly, should be sprung as a tariff joker by
some one not financially interested in tie Importation of-foreign refined. Mr.
Lewis has been selected for this important service---

Who is Mr. Lewis?

Mr. PIKE. That is Mr. David John Lewis.
Senator WAL,,H of Montana (continuing):
because of his complete familiarity with all phases of the sugar tariff situation
which he developed as a member of the original United States Tariff Commission.

Mr. Lewis was not in Congress?

Mr. PIKe. No; he is not.
78214.-30-

5-7

1874

LOBBY INVESTIGATION

Senator WALSH of Montana. How was he to spring this tariff

joker?
Mr. PIKE. Anybody can appear before these various committees
simply by applyig, and he would apply for time, and then would
speak on this subject. We wanted him to do so because Mr. Lewis
has a tremendous fund of knowledge.
Senator WALSH of Montana. Mr. Pike, we are talking about this
joker that was to qo in the bill.
Mr. PIKE. The joker is in the bill, sir. It was not to go in. We
are not tr ing to introduce a joker in the bill. The joker is in the
House bill now.
Senator BLAINE. Mr. Lewis had pointed that fact out?

anc

Mr. PIKE. No. We knew it was there.

Senator BLAnmr. I beg your pardon?

Mr. PIKE. We knew it was there. It is very clear it was a joker.
It is a joke on us.
Senator BLAINE. Mr. Lewis formerly was of the Tariff Commission?
Mr. PIKE. Yes, sir.

Senator BLAINE. He now contends that there is a joker in the

sugar schedule?
Mr. PIKE. He does.
Senator BLAINE. That is my understanding.

Mr. PIKE. I didn't know that. That is probably the matter I

speak of there.
Senator WALSH of Montana. Mr. Pike, I am amazed at the
difference of opinion between- you and myself concerning what your
language means. I read your letter. This is from you to Mr.
Hershey.

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Mr. PIKE. Yes, sir.

Senator WALSH of Montana. I read:

It has beoot our feeling that we want to spring whatever we do exactly the
right way and with complete unity and cooperation between the various people
testifying. Yesterday I got in touch with Mr.Snyder and he told me that he
was planning to testify at the hearing. Unfortunately we have not been in very
close liaison with him and he has not given us the benefit of any Infonation that
ho may have, but I told him last higlht exactly what we plan to do so far as the
plan hat then developed. I can not get in touch with him to-day and am there.
fore writing you this letter so that you will know what we are working toward.

whi

fra

It ic our feeling that the refined differential item, which has not yet been re-

ferred to so far as I know by anybody except in the briefs that were submitted
and have never been referred to publicly, should be sprung as a tariff joker by

someone not financially interested in the Importation of foreign refined.

We all understand a tariff joker-I don't know what you understand by it-we all understand a joker to be a provision that is
introduced into" a bill surreptitiously, apparently harmless, but yet
accomplishing an end that the general public would not appreciate.
Is that your understanding of a tariff joker?
Mr. PIKE. That is precisely it. That is precisely what was put in
that bill. The only exception would be that you say "surreptitiously. As a matter of faet, it went in, so far as I know, without
any discussion. It was not discussed on the floorSenator WALSH Of Montana. But, Mr. Pike, I want to interrupt
you there.
Mr. PIKE. Yes, sir.

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LOBBY INVESTIGATION

1875

Senator WALSH of Montana. I call your attention to your word

"should."
Mr. PiE. Where does that apear? I don't recall it.
Senator WALSH of Montana. The language is:

It Is our feeling that the refined differential item which has not yet been
referred to so far as I know by anybody except in the briefs that were submitted
and have never been referred to publicly, should be sprung as a tariff Joker.

Mr. PIKE. I see what you mean.

Senator WALSH of Montana. It should be sprung?
Mr. PIKE. Yes.

Senator WALSH of Montana. Of course, you were to spring it, then,

weren't you? I
Mr. PIKE. Certainly.
Senator WALSH of Montana. Now, what was this sugar joke that
you intended to spring?
Mr. PIKE. The joker was that in the House bill, the bill is different
from the 1922 bill in that after 940 the rate per degree of sugar is
increased very materially, making a difference in 100 per cent sugar,
which is refinedSenator WALSH of Montana. We all understand that, Mr. Pike.
Mr. PIKE (continuing). Of an extra 50 cents. That, in effect, is
not a tariff. It is an exclusion of imported refined sugar, because
there isn't that much money in making the refined sugar here or anywhere else. That is what we refer to as a joker.
Senator BLAINE. Was that joker to be inserted by the people you
represent?
Mr. PIKE. No, no. It is in the bill now. We are objecting to it.
Senator BLAINE. Pardon the interruption. The present tariff on
sugar is 2.20, as I understand it.
Mr. PIKE. 2.20.
Senator BLAINE. And they increase it to 2.40?
Mr. PIKE. Perhaps you had better talk about the Cuban duty,
which is the only duty applicable.
The present
2.40. duty is 1.70 and a
fraction, which the House bill increased to
Senator BLAINE. Isn't the present duty, the general duty, 2.20?
Mr. PIKE. Yes; less 20 per cent to Cuba.
Senator BLAINE. And increased to 2.40?
Mr. PIKE. No; it is increased to 3 cents.
Senator BLAINE. Yes; increased to 3 cents. Now, isn't it Mr.
Lewis's contention that there is an increase in that.duty, a covered-up
protective duty, a concealment with respect to what the actual duty
is, so that it constituted a joker? That is my understanding of Mr.
Lewis's position.
Mr. PIxE. Well, I imaginA that is it. But, as a matter of fact, I
have never discussed this with Mr. Lewis, so when you ask me to say
what his idea is, I don't know.
Senator BLAINE. But I am carrying this on. Mr. Lewis so contends,
that there is a cbncealed joker in the sugar schedule.
Mr. PIKE. I see.

Senator BLAINE. And I am quite in agreement with Mr. Lewis

on that. Now, the joker to which you refer in this letter-is it a
joker that you were going to have inserted, or does it refer to a joker
that exists in the present tariff schedule that you expected to expose?
Mr. PIKE. Yes; the latter.

1876

LOBBY IN VESTIGATION

Senator BLAINE. That is what I was getting at.

Senator WALSH of Montana. Just a minute-Mr. PIKE, As to that word "should"---Senator WALSH of Montana. You have answered his question.
Mr. PIKE. I was going to answer yours as to that word "should."t
I think that was your last question.
.
Senator WALSH of Montana. That is what I was going to ask about.
You are writing to Mr. Hershey, and you tell him that the joker
should be sprung at an appropriate moment.
Mr. PIKE. Yes, sir.
Senator WALSH of Montana. Now, you may explain the use of the
word "should."
Mr. PIKE. The use of the word "should" is that here is a bill with
a joker in it which is a joker that would put Mr. Hershey out of the
refining business in Cuba. There are two Ways that that could be
referred to. We could simply say that we object to this paragraph,
or we can come out and say, which is the truth, "Here is a joker.#
Now, what I waz indicating to him there was that we wanted to get
that joker out of the bill when it was finally passed, and in my opinion
the best way to get that out is to spring it, as I say there when somebody will listen to you and therefore spring it at a time that is proper.
Senator WALSH of Montana. That is springing your objection to
the joker, isn't it?
Mr. PIKE. Yes; exactly.
Senator WALSH of Montana. Exactly. But you don't say so here.
You don't say, "Our objection to the joker should be sprung at an
appropriate moment."
Mr. PIKE. Senator, in all this correspondence you must remember
I was writing to somebody who knew the story. I was not writing
these letters for an outsider to read. These letters were between
people who were thoroughly familiar with it, and Mr. Hershey knew
exactly what I meant when I wrote that letter.
Senator CARAWAY. Pardon me. You said it should be sprung.
You meant that the public should have their attention called to it?
Mr. PiKE. Yes.

Senator WALSH of Montana. You are rather unfortunate in your

choice of language to express your ideas, Mr. Pike.
Mr. PIKE. I think, Senator, most correspondence of that kind
presupposes a knowledge on the part of the partner that you are
writing to. Because I was writing to a close business associate here,
and I did not express my language so that a third party will exactly
understand it. I am careless, if you will. We all are.
Senator BLAINE. Mr. Pike, I think I know what the joker was
and is. You unfortunately used language which implies you were to
insert the joker, instead of using language to the effect that you were
to expose the joker that is concealed in the tariff schedule.
Mr. PIKE. Yes, sir.
Senator BLAINE. That seems to be the situation.
Mr. PIKE. Yes, sir.
Senator BLAINE. I want the facts brought out in this matter, and
if your communication does not state the facts I want them stated.
I know very well or at least I am convinced, that there is a joker in
the tariff schedule, and was at the time to which you refer in that
letter. I know Mr. Lewis so contends, and I think he is absolutely

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LOBBY INVESTIGATION

1877

correct in that position. Now, you have used language that indicates that you were to put the joker in there. My understanding is
that what you meant was you were to expose that joker at the proper
time, when you could get a hearing.
Mr. PIKE. Precisely; and this joker is one that was particularly
interesting to us.
1
.
Senator CARAWAY. All right. We have .ot together on that now.
Senator ROBINSON of Indiana. Mr. Pike, who composes the
Bottlers' Association which Junior Owens is secretary of?
Mr. PIKE. Junior Owens is the secretary. I think you have all the
figures before you. They have 800 or 1,200 members, or something.
Senator ROBINSON of Indiana. Yes; scattered all over the country.
Mr. PIKE. Yes.
Senator ROINSON of Indiana. Did I understand you to say that
the Coca-Cola Co. is one of the members of the organization?
Mr. PIKE. So I understand.
Senator RoBINsoN of Indiana. And the Hershey Co.?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. Has the Hershey Co. a branch in
Cuba, or is that a separate company?
Mr. PIKE. The Hershey Corporation is an American corporation,
with a sugar mill in Cuba.
Senator RoINsoN of Indiana. Where is its home office, if you
know?
Mr. PIKE. I think, Hershey, Pa. Yes; it must be.
Senator ROBINSON of Indiana. That is enough. You have answered the question, That is sufficient. I understand the Hershey
Co. is also a member of the bottlers' organization?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. And also the Coca-Cola Co. is a
member of the bottlers' organization?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. And those two members of the
bottlers' organization have financed this campaign, as you call it,
against an increase in the sugar tariff?
Mr. PIKE. They have financed it since sometime in March or
April. Prior to that they did not, and the campaign was financed by
some fund that the bottlers' had.
Senator ROBINSON of Indiana. In other words, two of the con
stituent members of the bottlers' organization have financed the
whole campaign in the name of the bottlers' organization?
Mr. PIKE. No, sir. They started it, and spent some money in the
campaign before these two arte came i and assisted.
Senator ROBINSON of Indiana. Well, they have at least financed
all of the Baldwin expense?
Mr. PIKE. Oh, yes.
Senator ROBINSON of Indiana. Those two companies?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. And they were not supposed to
have their names known. Isn't that true?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. And you were keeping that from
the public?

1878

LOBBY INVESTIGATION

Mr. PIKE. Well, as a matter of fact-

Senator ROBINSON of Indiana. Now, wait a minute. Just answer

that yes or no.
Mr. PIKE. No.
Senator ROBINSON of Indiana. You either did keep it from the
public or you did not. Which was it?
Mr. PIKE. No.
Senator RoBimsOW of Indiana. You say no. Very well.
Mr. PIKE. Wo didn't announce it to the public.
Senator ROBINSON of Indiana. That is enough. You have answered the question. As I understand it, the Hershey Co. and the
Coca-Cola Co. were financing this lobbying activity of yours up to the
point of $25,000 each?
Mr. PIKE. Right.
Senator ROBINSON of Indiana. Not to exceed $50,000. That is
correct, is it not?
Mr. PIKE. It is.
Senator ROmNSON of Indiana. Then, you arranged with the
Baldwin publicity concern to handle this so-called publicity?
Mr. PIKE. I looked up various publicity concernsSenator ROBINSON of Indiana. I know, but you made an arrangement with Baldwin, did you not?
Mr. PIKE. No, sir.
Senator ROBINSON of Indiana. Doesn't your correspondence show
you did?
Mr. PIKE. No, sir. Mr. Baldwin made a proposition to meSenator ROBINSON of Indiana. Which you broughtMr. PIKE. I took him to Junior Ownes, and Junior Ownes employed
him.
Senator ROBINSON of Indiana. But it was all done through your
recommendation, was it not?
Mr. PIKE. It was on my recommendation; yes, sir.
Senator RoBINsoN of Indiana. The Baldwin Co. presumably were
working for the bottlers.
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. As a matter of fact, they were
working under your direction, were they not?
Mr. PIKE. No, sir.
Senator ROBINSON of Indiana. First, Junior Ownos, of the bottlers,
would pay them?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. And then he would draw on you
for the amount lie paid them?
Mr. PIKE. Yes, sir.
Senator RoBiNsox of Indiana. In turn, you drew on Hershey and
the Coca-Cola Co. for tho money which you gave Junior.Ownos to
pay the publicity people in New York?
Mr. PIKE. In effect, that is so.
Senator ROBIXSON of Indiana. So, it went back and forth, and criss
crossed, but finally the money got to them, its origin having been the
Coca-Cola Co.Mr. PIKE. If you will think of thisSenator RoBNsON of Indiana. Wait a minute. The Coca-Cola
Co. and the Hershey Co., with you as the clearing agent. That is it?
Mr. PIKE. That is the story; yes.

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LOBBY INVESTIGATION

1879

Senator ROBINSON of Indiana. Well, you say confidently that you

did not keep these things from the public?
Mr. PIK& I do.
Senator ROBINSON of Indiana. And you answer it that wany? Let
me read a letter of yours, or rather a letter from John Sibley to
H. H. Pike, dated April 20, 1929-Sibley; what relation does he
bear to the Coca-Cola Co.?
Mr. PIKE. I think-I don't know exactly. He is in a law firm. I
think they are counsel for them.
Senator RoINSoN of Indiana. He speaks for the Coca-Cola Co.
in his correspondence with you, does he not?
Mr. PIKE. Oh, I think so.
Senator ROBINSON of Indiana. You understand it so.
Mr. PIKE. Quite so; yes.
Senator ROBINSON ofIndiana. I read:
I have your letter of the 16th. Mr. WoodruffThat is the president of the company?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana (reading):
Would not want to cause any person inconvenience, but we both believe that
it Is bettor for the Coca-Cola Co. to stay out of any active participation in the
matter until it is over with, if possible.
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana (reading):
However, if this delay does cause any inconvenience to you, we would want to
come In now. Please let us know about this. We have nothing in mind except
the best Interests of the cause from every angle.
Now, I have here a copy of your letter of the 24th instant, which
purports to be a response to Mr. Sibley:
I have yours of the 20th, and note that Mr. Woodruff prefers to stay out of
active participation in the publicity matter until it is over. This is perfectly
satisfactory to us, and we will carry the amount until our present contracts run
out.
Now, isn't that a definite means of keeping the public uninformed
about the participation of Coca-Cola?
Mr. PIKE. I don't think so, sir.
Senator RonINsox of Indiana. Well, why would they want to stay
out and not have their part in it known?
Mr. PIKE. I think I have already said something which indicates a
very good reason. This activity was being (lone through the bot.
tlersSenator ROBINSON of Indiana. Well, I know. Through the botters, but the bottlers did not pay the bills?
Mr. PIKE. No; they didn't pay all the bills.
Senator WALSH of Montana. My understanding about the matter,
Senator, from the statement already made by the witness, is that the
Coca-Cola Co. was a little hit delicate about being under the lmplication of using this campaign as a means of advertising their products.
They advertise quite extensively, as you know, but they were a little
delicate about having this considered an advertising scheme. Wasn't
that your statement?
Mr. PIKE. That is part of it. The other part is that I think most
newspaper people or publicity people would tell you that a trade-

1880

i.OBBY INVESTIGATION

mark name, such as Coca-Cola, is not a suitable medium for sustained

news. People see the Coca-Cola Co.-Senator RoBIqsoN of Indiana. Well, is H. H. Pike a good medium
for sustained news?
Mr. PIKE. I don't think so.

Senator ROBINSON of Indiana. H. H. Pike paid the bills, but he got

the money from Coca-Cola and from Hershey.
Mr. PIKE. But we were doing this in'the name of the bottlers, who

were Interested. The bottlers were interested, and it was proper we

do it With the bottlers, but if we came out and said, "Here is the CocaCola Co., or Hershey, or Pike doing this," everybody says, "That is
all right for one statement, but you are trying to sell Coca-Cola, or you
are trying to sell Hershey products, or you are trying to make yourself
a big sugar broker, get new accounts, advertise through the tariff"
and we didn't want to hurt the cause, because we don't want this tariff
tolo up. It is unjust to the American People.
senator RoBINsoN of Indiana. Mr. Pike, just a moment. I can't
get that angle of it from your correspondence at all.
Mr. PIKE. It is all there. It is all written out. You have got it.
Senator RoBiNsoN of Indiana. It is all here and I want you to be
familiar with it if you can. I am asking you r an interpretation of
this correspondence.
Mr. PIKE. I have given it to you sir.
Senator ROBINSON of Indiana. Wo. My own interpretation, I
think, is better up to date than yours is on what we have gone into
so far, because I am trying to give it the interpretation you would
give ordinary language, and you are giving it an extraordinary
interpretation.
Mr. Pike, as I understand it, the bottlers furnished no money the
bottlers' organization furnished no money for these Baldwin activities,
as I understand from all your correpondence here. I don't like to
take the time to read it, but I could convince even you of that fact,
if I took the time to read your correspondence.
Mr. PIKE. They were already in the campaign, and we finally--Senator ROBINSON of Indiana. Just wait until I am through.
Senator CARAWAY. Just wait, Mr. Pike.
Senator RomNsoN of Indiana. The Baldwin activities were all
financed by the Coca-Cola Co. and-the Hershey Co.?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. They paid the whole bill, you acting
as the clearing house?
Mr. PiKE. Absolutely; yes.
Senator RoBINsoN of Indiana. But you held out to the public that
this activity was financed by the bottlers?
Mr. PIKe. Yes, sir.
Senator ROBINSON of Indiana. When, as a matter of fact, Junior
Owens himself hs testified on the stand that he knew little about the
arrangements that had been made by you. All he knew was that he
sent to you for the amount of money required to finance Baldwin
and you sent him a check for that amount and then he in turn paid
Baldwin, that you &had
gotten the money from these correspondents
of yours, Hershey Co. and the Coca-aola Co., who were not in the
picture 4t all. It was all done through the H. H. Pike agency. Now,

it
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1881

LOBBY INVESTIGATION

it develops oven further, Mr. Witness, that you paid, presumably

for your two correspondents, Hershey and Coca-CoaMr. PIK. Not presumab!,. I have said so.
Senator ROBINSON of Indiana. For your two principals you even
paid an additional amount to Bladwin?
Mr. PIKE. Yes, sir.

Senator ROBINSON of Indiana. Without even taking the trouble to

tell Junior Owens about it though they were supposedly working for
Junior Owens and his bottlers' organization.
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. Then, you were running the show;
weren't you?
Mr. PIKE. No, sir.
Senator ROBINSON of Indiana. Is it customary for you to take
your moneyMr. PIKE. Iwas paying the moneySenator ROBINso of Indiana. And pay somebody else's servants?
Mr. PIKE. I was paying the money. I have said so, but I wasn't
running it.
Senator ROBINSON of Indiana. Is it customary for you to change
the terms of contracts without telling the man for whom the concern
is supposed to be working? That is what you did in this instance.
Mr. PIKE. But you yourself have just pointed out we were paying
the bill anyw&.y.
Senator ROmNsoN of Indiana. But answer the question.

Did

you or did you not pay this money without informing Junior Owens?
Mr. PIKE. I have said I did.
Senator ROBINSON of Indiana. Then, you kept the whole scheme
from the general public, did you not?
Mr. PIEz. No, sir.

Senator CARAWAY. Will you let me ask a question?

Senator ROBINSON of Indiana. Yes. Go ahead.
Senator CARAWAY. Mr. Pike, of course, the real reason you did
not want to tell the public the Coca-Cola Co. and the Hershey Co.
was paying it was because you thought the people would say they
had a financial interest in it, and you thought it would be better
publicity to let them think it came from disinterested people?
Mr. PIKE. No; because the bottlers are not disinterested. They
are tremendously interested. You have the figures there. They are
interested to the extent of millions of dollars.
Senator CAR.AWAY. I will just agree with you, then' you didn't
have, any motive. Everybody who has come here who has been
running this sort of publicity campaign has tried to let on it was
public interest. People might trace a financial interest and the
source, and therefore-it would be more useful to you if it seemed to
be in the public interest.
Mr. PIKE. This wasn't that because it was the bottlers, and they
are a trade organization workig for their own pocketbooks, and
they were running the campaign.
Senator ROBINSON of Indiana. Just wait a moment. Here is

your letter of April 0, to Robert W. Woodruff.

of it:

I quote a section

I would not say that you and Mr. Hershey had underwritten the matter and
as soon as I met with success with one, I would of course mention the three as
being contributors. I would say that we were working through the bottlers, as

1882

LOBBY INVESTIGATION

but that we
they were the most interested and active consumers' association
would
were working with and through any other agency which we could find which
success.
some
of
give us promise

rat
icit

You were, then, working through consumers as far as possible, and

trying to hide the interest of Hershey and Coca-Cola, who wanted
low-priced sugar for their products?
Mr. PIKE. I would like to hear more of that letter if I am going to
answer, because I don't think you have got all the context there.
Senator ROBINSON of Indiana. Well, I will read one from P. A.
Staples, Central Hershey Co.-first, I would like to have this letter
of April , 1929, put into the record inits entirety.
(The letter in question is as follows:)

Uni

Referring to mnemorandumn made tip in Cuba under dato of February 13, 1029,
providing for a publicity campaign, the last clause says thiat an effort will be made
to secure the assistance In this campaign of a few others such as National Biscuit,
eto.
Curtis Bros., Postum, Wrigley,
task,
so
down
cuttils
willing to immediately start on
lYam very
This is left to me to do.
because the amount had been
first,
so,
do
to
hesitated
but I have
materially, and, second, because I was a little doubtful as to what I could say to
these individuals as to whom the other backers were.
another
It is my belief that our campaign will have to be continued for at least
the
approach
to
authority
your
like
would
I
three months, possibly longer, and
people mentioned and perhaps a few others of the more substantial kind to outline
what we are doing and to say that I have solicited funds so far from two consumers, naming them If necessary; and that they have contributed considerably,
not say that you
and that I would appreciate a subscription from them. I would
and Mr. Hershey had underwritten the matter, and as soon as I met with success
with one, I would, of course, mention the three as being contributors. I would
say that we were working through the bottlers, as they were the most Interested
through
and active consumers' association, but that we were working with and of
some
any other agency which we could find which would give us promise

success.

I have not felt like going out on this campaign without your renewed approval,
and would appreciate any suggestions you may care to give me as to how the
matter could best be taken up.
P. S.-I have written a similar letter to Mr. Hershey.

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here is a letter from Mr.

Senator ROBINSON of Indiana. Now,
Staples to Pike, dated March 6. I quote a portion of it.:
to
We feel here strongly that the only organization in view of the conditions,
as far
work through the bottlers association and have the entire publicity fight,
as our end is concerned, appear to be coming from the consumers standpoint
rather than from the standpoint of our sqgar interests here in Cuba.

Mr. PIKE. Yes, sir.

to have that letter

Senator ROBINSON of Indiana. I would like
inserted in the record.
(The letter referred to is as follows:)
Mr. Hershey has received your letter of March 2 in reference to the publicity
campaign, and has asked me to acknowledge same for him.
We both feel that the scheme as outlined by you, which confirmed your telephone message to us of March 2, sounds very feasible and is the bes. way to
go ahead.
Mr. Hershey has asked me to confirm to you his agreement to pay the portion of the expense which you estimate would run-from $10,000 to $20,000 assuming that Mr. Woodruff, of course, would stand 50 per cent of the total. on the
We are most anxious to hear of the results of your visit to Washington
5th, and hope that something satisfactory was worked out with you and Mr.
Woodruff's man.
We feel here strongly that the only organization in view of the conditions, to
work through the bottiers association and have the entire publicity fight, as far
as your end is concerned, appear to be coming from the consumers standpoint

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LOBBY INVEBTIWATION

1888

rather than from the standpoint of our sugar interests here in Cuba. If publicity Is handled from the consumers' standpoint only, as it would appear by

coming through the bottlers' association, then it can in no way conflict with
anything which the Cuban Government may be trying to work out with the
United States Government, either directly or indirectly.
Senator ROBINSON of Indiana. Now, that was your position too,
wasn't it?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. Then, you did not answer frankly
Senator Caraway's question a moment ago, did you, when you said
you were not trying to hido the participation of these two enormous
concerns behind the skirts of the consumers?
Mr. PIKE. But who are these concerns? They are consumers.
Senator RoBINso of Indiana. Of course they are.
Mr. PIKE. What I said was we are not announcing it., which is an
entirely different thing. We are proud of this thing, anti we want to
the wodd should know alout it.
perfectly
anl we are of
get.Senator
it over, ROBINSON
Indiana.willing
But. you weren't, willing to havo the
world know about it. You took every precaution possible to hide it

from the world.

Mr. PIKe. No; we were not hidin-g it. It was simply 6 t ftthoso
things whet, If we went out and said, "We are the Coco-Cola Co., or
we are the Hershey Co., and we make this statement, and we make
that statement," and we came to you and asked you, "Senator, I am
from the Coct-Cola Co., and I want you to do this." You would
say, "Why that is old stuff. You lave had your say. You are
Coca-Cola."
to advertise
trying
Senator
ROBINSON
of Indiana. Well, enough of that. You didn't
even toll the man for whom Baldwin was working that you were paying him a thousand dollars more, did you?
Mr. PIKE. No.
Senator RoBINso. of Indiana. Is that the way you were candid
with the public on everything else?
Mr. PIKE,. That wasn't the public's business.
Senator RoBI.sox of Indiana. None of this is the public's business,
from your viewpoint, is it?
Mr. PIKE. It certainly is.
Senator RoBINsox of Indiana. From your viewpoint it isn't., because you concealed every activity you had, and tried to conceal it
three ways, back and'forth.
Mr. PIKE. No. You have got that all wrong, Senator.
Senator Ronixso,- of Indiana. Baldwin was right there in New
York where you could reach him every moment, w'as he not?

Mr. PIKE. Yes, sir.

Senator ROBINSON of Indiana. And yet you had Jonior Owens here
in Washington bill you in Now York for the amount he was intending
to pay Baldwin, knowing very little himself about the contract, and
then you sent a check from Mew York back to Junior Owens.
Mr. PiKp. Yes, sir.

Senator ROBINSON of Indiana. And then Junior Owens relayed that

chock, or the same amount of money, back to your man Baldwin, your
friend in New York, and in the meantime, in the beginning, you got
that money all from two sources and did not tell the public anything
about it. You had it appear they were working for the bottlers'
association.

1884

LORBY INVESTIGATION

Mr. PiKiE. Senator, if you will look at our statement there you will
see that we were paying out money from three different sources.
Senator RoINmsON of Indiana. Let us not discuss that any further.
Mr. PIKE. This is part of that. You say that our financial structure was wrong and was an attempt to deceiveSenator RommsoN of Indiana. I am not discussing your financial
structure at all.
Mr. PIKE. Well, the way we paid out this money.
Senator ROBINSON of Indiana. The way you went about it, and the
fact that vou did not tell Owens you had altered the contract with
Baldwin, and that you were using Hershey's money and Coca-Cola's
money- to alter that, when poor Junior Owens thought they were
working for him and did not even know the contract had been altered.
Mr. PIKE. They were working for him-Senator RobiNsox of Indiana. Lot us not discuss it any further.
Mr. PIKE. But you have made a representation there.
Senator RoBIsoN of Indiana. But that is true, isn't it?
Mr. PIKE. We have Baldwin paying out money, Junior Owens
paying out- money, and Pike paying out money. The way we did it
sounds coinplicated, but if you tried to work out some other way, you
have got to have checks going back and forth to cover those threo.
Senator CARAWAY. Baldwin got the money, and that ends it. All
you got out of it was the receipt. We will go ahead.
Senator ROBINSON of Indiana. How much have you paid out to
date in this campaign, as you call it?
Mr. PIKE. We have paid out the amount that shows on that sheet.
Senator ROBINsON of Indiana. Do you know how much it is?
Mr. PIKE. Around $30,000 and since that we have paid out
another month's expenses which are running a little less than $3,000,
so that you can add $3,000 to that figure, and you have approximately
got the amount our books show to date.
Senator ROBINSON of Indiana. You have paid approximately
$32,000?
Mr. PIKE. About that.
Senator ROBINSON of Indiana. Or, to be exact, $32,494.56. Has all
that money been paid to Junior Owen except this bonus, as it has been
termed; which you paid Baldwin?
Mr. PIKE. No, sir; you will find some other expenses, which are
minor, which have come through my office.a
Senator ROmNSON of Indiana. Most of this money has been paid
to Junior Owens?
Mr. PIKe. Yes, sir.
Senator RoBmIsom of Indiana. And he, in turn, has paid Baldwin?
Mr. PIKe. Corm'ect.
Senator ROBINSON of Indiana. How long do you expect to continue
this campaign, as you call it?
Mr. PIKE. How'long do you think it will take for Congress to pass
the measure is the answer.
Senator RoIniusox of Indiana. I think that answers the question.
You moan to continue these activities that you have been engaged in
and that Baldwin has been engaged in until the tariff bill has been
passed by the Congress. Is thatthe idea?
Mr. PIKE. That is my expectation. Of course, it has taken so
long we are running pretty near our limit there.

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LOBBY INVESTIGATION

1885

Senator ROBINSON of Indiana. Now, I would like to ask you

whether you approve what has been done in your name by Baldwin?
Mr. PixB. I do.
Senator RoBINsON of Indiana. Everything that has been done?
Mr. PIKE. That is very broad, but I do approve it, yes.
Senator ROBINSON of Indiana. You approve, then, his taking up
with his correspondents generally the defenses of the United States
and the manner in which this country would pursue its strategy in
case of war with Japan and what possessions, if any would be
defended, and which would be given up immediately? You approve
of that, do you, in the interest of getting a lower tariff? And you
approve of the animosity being stirred up in Latin American countries
against America? Do you approve of that?-.
Mr. PIKE. May I make a statement on that subject?
Senator RoBINsoN of Indiana. Just answer yes or no. You do or
you do not. This is all in the record. Mr. Baldwin testified to this
yesterday, and what he did not testify to is in the record in the way
of correspondence. I am asking, assuming what I have said is true,
and assuming what I have said is in the record is part of the activities
of Mr. Baldwin and his agency, do you approve that?
Mr. PIKE. SenatorSenator ROBINSON of Indiana. Answer this yes or no.
Mr. PIKE. In the record you have Mr. Baldwin's statement of

it--

Senator ROBINSON of Indiana. No no, noMr. PIKE. And the idea originally was mine-Senator ROBINSON of Indiana. No, no.
Mr. PIKE..And if I am going to approve it, I think I should have
the opportunity of saying what the idea was.
Senator RoBINsoN of Indiana. Read the question.
Senator CAJAWAY. Wait. He knows the question. Mr. Pike can
say yes or no, and then ifhe wants to qualify it, he can qualify it.
Do you approve the activities? You can say "Yes, with this exception.
Mr. PIKE. If I answer it, I can qualifyy it?

Senator

ROBINSON

of Indiana. lor gracious sake, not a speech,

though.
Senator CARAWAY. You expressed the hope a whilo ago that you
would live long enough to finish your testimony. I know neither
of us will do it unless you answer the question.
Senator ROBINSON of Indiana. I think we had better have the
question read. (Whereupon the preceding question was read by the reporter, as
follows:)
Just answer yes or no. You do or you do not. This is all Inthe record. Mr.
Baldwin testified to this yesterday, and what he did not testify to Is in the record
in the way of correspondence. I am asking, assuming what I have, said Is true,
and assuming what-1 have said is In the record l part of the activities of Mr.
Baldwin and his asenoy, do you approve of that?
Senator ROBINSON of Indiana. Assuming all I have said is true,
do you approve of it?
Mr. PIKE. That is too big an assumption. You want me to state
whether I have stopped beating my wife. If you will let me make a
very concise explanation.

1886

LOBBY INVESTIGATION

Senator RoBINsox of Indiana. You can answer yes or no.

Mr. PIKE. I can't answer it, because you have a question there

that is some question.

Senator ROBINsON of Indiana. It has been suggested, Mr. Witness,

that you can qualify your answer, after you have answered it by yes

dos

Mr. PIKE. And you are not going to cut me off the minute I begin
to qualify it?
Senator ROBINSON of Indiana. You haven't been cut off. No one

hb
str

or no.

can cut you off. That is impossible. Lot us go ahead. Now, how
do you answer it, with your qualification?
Mr. PIKE. Yes; I do approve.
Senator ROBINSON of Indiana. Now, qualify.
Mr. PIKE. If you will remember, in the last war it was found that
sugar was a very important commodity, and molasses, which is a
by-product, was also very ifil)ortant. in the last war it was exceedingly difficult for England to get her supply of sugar, and also France,
from shorter distancesSenator CARAWAY. Will you pardon me?
Mr. PIKE. Then we will Iave to in any warSenator ROBINsON of Indiana. Senator Caraway doubtless thinks
that is not a qualification.
Senator CARAWAY. That is an argument for national defense.
Mr. PIKE. No, sir; because it emphasizes what was said by Mr.
Baldwin.
Senator CARAWAY. Just wait a minute. You mean that national
defense would justify what you were doing, because that is part of
the national defense?
Mr. PIKE. Yes. Very well. And the Philippine Islands are six or
seven thousand miles away. Cuba is 90. Now, in addition, I want
to say that in so far as the question whether we could hold the
Philippines or not, I haven't the faintest idea, but any man in the
street knows that to defend a lane six or seven thousand miles long
in case of war is something that is darned near impossible. England
couldn't do it for far shorter distances in the past war.
Senator RoBINsON of Indiana. That is not the question at all.
Mr. PIKE. To put that point before the American people I say I
am
back of Mr. Baldwin, and I say*that point should go before the
American
Aonaror people.
-oINSON of Indiana. That is not the question at all,
Mr. Witness, which you must perfectly well know, if you have average
intelligence.
Senator CARAWAY. That is the qualification to his answer.
Mr. PIKE. I have finished my qualification.
Senator ROBINSON of Indiana. The question was, assuming that
all Mr. Baldwin alleged to know is true, assuming that his knowledge
of what American strategyMr. PIKE. Oh, I can not assume what Mr. Baldwin knows is true.
I don't know what he knows.
Senator ROBINSON of Indiana. Won't you keep quiet until i ask
the question?
Mr. PIKE. I am trying to get your question into one I think I can
answer.

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LOBBY INVESTIGATION

1887

Senator ROBINSON of Indiana. Now, we all know you think that

is clever-

Mr. PIKE. No; I don't think it is clever at all.

Senator CARAWAY. Mr. Pike, Just answer the question. We have

wasted a lot of time. Wait until he asks you a question, and if you
don't know what it means, say so.
Senator ROBINSON of Indiana, I say, assuming that what he says
he knows he does know, do you think it i proper for him to be writing
about it all over the world to different people, stating what the
strategy of America would be in such a situation? Is that your idea
of a proper method of procedure in an effort to keep the tariff low
on sugar?
Mr. PIKE. I know of nothing that indicates he wrote to people all
over the world. I know of only one letter that ho wrote, which was a
memorandum. I have forgotten whether it was to meSenator ROBINSON of Indiana. Well, you think that is proper,
I suppose?
Mr. PIKE. No; not if ho writes all over the world.
Senator RoBINsON of Indiana. Well, if he wrote one letter?
Mr. PIKE. If he had done something else, I would have to know

what it was before-I could answer. What he did I think is proper.

Senator ROBINSON of Indiana. You believe it is proper?
Mr. PIKE. Yes.

Senator CARAWAY. It stands unqualified now, does it not? Without

qualification.

Senator ROBNINSON if Indiana. Are you acquainted with Mrs.

Gladys Moon Jones?
Mr. PIK. I have met her yes.
ROBINSON of InAiana. Did you meet her in this tariff
Senator
lobbying activity?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. You considered her an ally in your

cause?
Mr. PxxE. She was working the publicity for a concern that was
also interested in low tariff.
Senator ROBINSON of Indiana. I have a letter here that purports
to be from you, dated April 24, 1029, to Mrs. Gladys Moon Jones, and
quote therefrom:
It was a pleasure for ine to meet you yesterday, even though it was just a
short, hurried call. I had to rush along in ordcr not to be lIte for ily appointment

with Mrs. Pratt.

That is Congresswoman Pratt, of New York?

Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. I continue:
I had a very interesting talk with her, and I amt sure sie will line up on our
side and will probably do something for us in an active way. If you have any
suggestion as to what we might specifically ask her to do, I would be very glad
to-near from you.

Mr. PIKE. Yes, sir.

Senator ROBINSON of Indiana. You had no idea as to what she

could specifically do, yourself, is that it?

Mr. iKe.

Certainly; oppose the sugar tariff.

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. What if anything did Mrs. Jones

sayn reply to that letter?
r. Pnu . I don't think she replied to it.
Senator RoINSON of Indiana. Did she have any specific suggestions
to make to you as to what Mrs. Pratt should do?
Mr. PIKE. No.
Senator WALSH of Montana. Did you meet Mrs. Pratt?
Mr. Pjxv. I did.
Senator WALSH of Montana. You had a talk with her about this
matter?

spee
pemi
Se
cone
M
Si
app.
mat
posil
M

Senator WALSH of Montana. Satisfactory?

Mr. PixE. No; because she never did anything-well, yes; she
did do something.
what she did. I am
Never
Montana.
WALSH
Senatorabout
talkmind
satisfactory?
theoftalk.
Was the
speaking
Mr. IKE. Certainly. We discussed the sugar matter, and it is

I doi
Se
Weil
Ididair

always satisfactory to me to be able to put the sugar matter before

anybody.
Senator WALSH of Montana. Was any arrangement made abont
her future activity?
Mr. PIKE. Not at all. I can't imagine that you could make any
arrangement with her.
Senator WALSH of Montana. Did you endeavor to get her to make
a speech on this subject in the House?
Mr. PIKE. I asked he if she would lend us her support, and I outlined what the issue was, and I told her thatSenator WALSH of Montana. Now, Mr. Pike. I asked you. a
simple question. Did you arrange with her that she was to make a
speech in the House on the subject?

hea'
Sc
you
X1,
Se
X
Se
there
X
S
fivr
that

Mr. PIKE. Yes, sir.

Mr. PIKE.

I did not.

Sam

Senator ROBINSON of Indiana. Well, you evidently wrote to Mrs.

Pratt after you had visited her?
Mr. PIKE. I did.
Senator RoBINSON of Indiana. I quote from your letter of the
24th to Mrs. Ruth Pratt, House of Representatives:

Sh
Wha
to du
V
S

I thank'you very much for the timo you spared iho yesterday, and may I con.
gratulato the new chairman of the House. I read in this morning's Times that.
it was the Chairman I was talking with yesterday afternoon.

S
Shol
tion

What did you mean by that statement?

Mr. PIKE. I saw her in the morning, and that same afternoon the
chairman asked her to take the Chair, as a matter of courtesy, and
there was a little block in the New York papers about her doing so.
Senator ROBINSON of Indiana. I see; chahman of the House.
I continue:

min
of
out-

I am seeing Mr. William H. Baldwin this afternoon and he will arrange within

time. He will be able to make some concrete suggestions as to what you might

the next week to be fi Washington, and I hope you will allow him a few moments
do on this sugar matter.

What concrete suggestion was he to make as to. what she might dot
in this sugar matter?
Mr. PIKE. I don't know that I had discussed that with Mr. Baldwin, but there are a number of things she might do, such as making a.

IX

Tho

X
S
didi
the

LOBBY INVESTIGATION

188

speech on the floor, or making a statement to Mr. Baldwin, with his

permission to get it out release it to the press.
Senator ROINSON of Indiana. Well is that what you meant by
concrete suggestion as to what she might do on this sugar matter?
Mr. PIKE. Yes; something of that sort.
Senator ROBINSON of Indiana. You, in your memorandum of
apparently no date, seemed to be well informed, assuming the information contained in the memorandum is correct as to the various
positions of the United States Senators on the Finance Committee.

Mr. PIKE. Yes, sir.

Senator RoINSON of Indiana. Where did you get that information?

Mr. PIKE. That came from various sources. As a matter of fact,
I don't recall exactly where that came from.
Senator ROmNSON of Indiana. You seemed to know that some
members of the committee have no influence, and others had influence.
I am wondering where you get that information. For instance, how
did you know-I quote from your memorandumMr. PIKE. I don't think I state that as my knowledge. That is
healsay.
Senator ROBINSON of Indiana. Well, it is your memorandum, and
you said you wore in the habit of making memoranda.
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. For your own information.
Mr. PIKE. Yes.
Senator ROBIXSON of Indiana. And at least on one of these copies
there is this legend, "Read and destroy," or something to that effect.
Mr. PIKE. It wasn't of very much value, was it?
Senator RoBIxsoN of Indiana. You didn't know where that came
fioi. hlero is another, so I assume this is at least as important as
that. You mention among othem on the Senate Finance Committee,

Senator Shortridge of California. You say:

$hortridge (California) not influential.

Whatever they'll want, ho'll want.

to (to.

Likely speak for California Interests.

C. & H. will certainly tell Shortridge what

Whore did you got that information?

Senator CARAWAY. Who is "0. & H."
Senator Rom.soN of Indiana. How did you learn that Senator
Shortidge is not influential? From whom did you got this information?
.Mr. PIKE. Senator, you are reading a private memorandum of
mine there, which is a menioranduin that was probably a compilation
of various items that I had picked up. Now, when you read that
outSenator ROBINSON of Indiana. It sounds strange, doesn't it?
Mr. PIKE. It sounds strange, certainly.
Senator CARAWAY. You didn't want it told?
Mr. PIKE. It is one of those things. I am not a bit ashamed of it.
Senator ROBINSON of Indiana. Where did you get the information?
That is what I am trying to find out.
Mr. PIKE. That came from Washington here.
Senator RoBINSON of Indiana. From what I understand, you
didn't do much in this matter. You were back in New York payig
the bills, and you were sorry you didn't do much?
Mr. PIKE. U S.
T8214-30-PTS-8

1890

LOBBY INVESTIGATION

Senator RoBINsoN of Indiana. But you did find time enough to

prepare thio memorandum?
Mr. PiKk. Yes.
Senator RoBNSON of Indiana. As to just exactly where each man
on the Finance Committee stood?
Mr. PIKE. Yes.

Senator ROBINSON of Indiana. Now, where did you get that

information?
Mr. PIKE. As I say, I can't tell you exactly where that came from.
Senator CARAWAY. Will you pardon me just one minute? Mr.
Pike, you have made a very favorable impression on me. Don't
have a failure of memory right here. Get out with a better record
than anybody else by remembering most of your sources of informa
tion. Just tell the Senator who told you Senator Shortridge was
not the most influential member of the committee.
Mr. PIKE. I think I would have to refer that to Mr. Mermey,
who was here in Washington, I think at that time, although you
tell me that memorandum is undated tiere.
Senator ROBINSON of Indian. Let us pass Senator Shortridge.
I mention that because vou seemed to know he is not influential and
you seem to know who is influential and who is not. I would like to
know though, who "C. & H." is. You say, "C. & H. will certainly
tell Shortridge what to do."
Mr. PIKE. C. & H. is the California & Hawaiian Sugar Co., which
would be the greatest beneficiary under the House bill if that bill
were to be passed.
.
Senator ROBINSON of Indiana. Then, they would certainly tell
.te
.
Shortridge what to do?
Mr. PIKE. I think so. I think that is a fair guess.
Senator ROBINSON of Indiana. You don't tell us here you think so.
You say, "They certainly will tell Shortridge what to do."
Mr. PIKE. Well, I should think they might.
Senator ROBINSON of Indiana. In other words, he would be influ.
enced entirely by this sugar company out there. That is what you
mean to say here?
Mr. PIKE. That is what the words say. Of course, Senator Shortridge nay or may not do what they suggest to him.
Senator ROBINSON of Indiana. I continue:

M
S
S
Me
N
fron
S
A
ver
9
h
size
is in
S
iron
S
thin
h
wr'
E
ad
the

W1

Capper versus sugar tariff. Has one mil in his State, but doesn't see why
farmers should be taxed on sugar.

Was that the result of a personal interview with Senator Capper?

Mr. PIKE. My impression is Mr. Mermey went to see Senator
C nator CARAVAY. Did Mr. Mermey tell you that? Let us shorten
this.
Mr. PIKE. Yes..
Senator CARAWAY. All right. That ends that.
Senator ROBINSON of Indiana. Here is Reed, of Pennsylvania:
Is thinking In ternis of pig iron. Hasn't thought about sugar. Very likely
1 o along according to Interests of his State. Would undoubtedly trade to
ennsylvania interests.
Where did you get that information, that he would undoubtedly
trade to Pennsylvania interests? These are rather strange statements
you are making here, Mr. Witness.

est

sio,
ms

fr

LOBBY INVESTIGATION

1891

Mr. PIKE. I don't think that is such a strange statement, Senator.

Senator ROBINSON of Indiana. Maybe Senator Reed would think
so. Would you call him a trader, that he would trade off interests?
Senator CARAWAY. Where did you get that information? Did Mr.
Mermoy tell you that too?
Mr. PIKE. I don't believe so. I am not quite sure where that came
from.
Senator CARAWAY. That is very important.
Mr. PIKE. I am going to disappoint you again, Senator, and I am
very sorry'
Senator CARAWAY. I know. Your memory is failing again.
Mr. PIKE. That is something which I think most anybody might
size up. Here you have a situation in Congress where Pennsylvania
is interested in pig iron-

Senator

CARAWAY.

If you don't know who told you-

Mr. PIKE. There are a great many States that do not produce pig
ironSenator CARAWAY. That is your own opinion, then, and not something that someone told you?
Mr. PIKE. I should think it was probably about right, too.

Senator

CARAWAY.

But it is your opinion?

Mr. PIKE. I don't think you would need any deep information to
write that paragraph.
Senator RoBiNso. of Indiana. You say:
Edge: Will have to be shown good and sufficient reasons why there should be
any Interest or change In the sugar tariff before he'll vote for it. Likely to head
fight in tho F. 0. against proposed increase. (May be representing NX financial

Interests.)
You say "may be representing NX financial interests." Who is
the "NX financial interests"?
Mr. PIKE. What is that?
Senator RoBINsoN of Indiana. "NX financial interests."
Senator BLAINE. That is probably a typographical error.
Senator CARAWAY. I don't think so. I think that is some initial.
Who is "NX"?
Senator ROBINSON of Indiana. Who is "NX"?
Mr. PIKE. I don't know.

Senator

CARAWAY.

Your memory has failed again?

Mr. PIKE. I am terribly sorry.

Senator CARAWAY. I am too.
Senator ROBINSON of Indiana. You can not think what that refers
to?
Senator BLAINE. Has it reference to anyone, or any special interest? The letters, capital N, capital X?
Mr. PIKE. No. I frankly don't know what that is. My impression is that that paragraph came from Mr. Mormey, and I think you
ma ask him about it.
enator CAR*WAY. But he will have a bad memory when we ask
him about it.
Senator RomNsow of Indiana. You don't know where you got
that information, do you?
Mr. PIKE. I do not know, no; except I am quite sure that it came
from Mr. Mermey.

1892

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. The next is Senator Couzens:

Interested in Mexican labor situation, and in agitation by D. U. Free Press,
which regarded as his mouthpiece, over proposition of turning convict labor Into
beet fields in Michigan. Believe as Free Press thinks, he thinks. Unknown
quantity.

The initians "D. U. Free Press" means, no doubt, Detroit Free

Press?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. You have got the idea that he
believes as the Detroit Free Press thinks. You did collect some
information, then, didn't you, Mr. Pike?
Mr. PIKE. We certainl made an effort in that direction,
Senator ROBINSON of Indiana. In this feeble effort you confessed
to makingMr. PIKE. I didn't say our effort was feeble.

Senator RomNsoN of Indiana. I understood your personal effort

was feeble. You probably didn't use the word "feeble," but I understood you to say you had not done as much as you should have done.

Mr. PIE. I am telling you as I go along, as bost I can, where that

stuff came from. I am telling you most of it I did not collect. I am

quoting there. I wasn't in Washington.
Senator ROBINSON of Indiana. You didn't hesitate to reduce it to
writing, though.
Mr. PIKE. Well, why should I?

Senator ROBINSON of Indiana. As your own memoranda.

Mr. PIKE. Why not, Senator? I mean I am keeping my people,
who are vitally interested in this tariff, informed, and I get some
piece of gossip or something which may indicate the trend, and I give
it to them.
Senator RoBINsoN of Indiana. You think it is perfectly discreet
and perfectly proper to make these statements with reference to
these members of the Finance Committee, without verifying them
at. all?
Mr. PIKE. Absolutely. But I tell you what I wouldn't do, Senator.
I wouldn't take confidential reports like that, and reports mentioning
the President's name, as has been done here, and broadcast them to
the world where they have only been in private files and on personal
opinions as to what this or that person thinks.
Senator ROBINSON of Indiana. They have been broadcast all
around. Your reports no doubt have, too.
Mr, PIKE. No, the haven't. My report hasn't been broadcast
until this moment. They are being broadcast now.
Senator ROBINSON of Indiana. All the information we have Is that
you were working together and holding conferences together, and if
we weren't trying to get through with the sugar end of this lobby
investigation, I could convince you.
Senator CARAWAY. I think his statement that he didn't intend to

to co:
cons
entir

Sent

IN
I th
whe:
S
kno
to h
S
I
S

N
true
tha
wall

but
TV
on
tar
du
dur

Or
dw
mu

to
to
all
rea
all

tell the public about any of this is absolutely correct.

Senator ROBINSON of Indiana. Yes; he didn't. The next is
Keyes,
of New Hampshire. Iwant
will pass
that.
SenatorCARAWAY.
to pass
Keyes.
Senator RoAWNY ofI don't
Indna. Some
of them
are lengthy and I was

is

going to pass a number of them, but I am perfectly willing to go into

every one. Hero is what you say about Keyes:

su,
A.

thi

is

LOBBY INVESTIOATION19

1893

Hasn't gone into subject. Sick of whole tariff situation. Made up mind not
to commit himself, or study, anything. Opposed to special session. Old guard
Would not object to throwing over
conservative. Would listen to Mome.
entire tariff bill.

Senator CARAWAY. You say he would listen to Moses. Was that

Senator Moses? Did that refer to Senator Moses?
Mr. PIKE. I don't know, sir. I don't know whether it did or not.
I think in that again, that Mr. Mermey could enlighten you as to
where it came from.
Senator ROBINSON of Indiana. But you write it down as if you did
know.

Mr. PIKE. I write it down. I am giving my people information as

to how this thing is progressing.

Senator RoBiNsoN of Indiana. You gave out these statementsMr. PIKE. Gossip and everything I could get.
Senator RoINsoN of Indiana. As genuine information.

Mr. PIKE. No, I did not. I gave it out as gossip, not as what is

true. And, as a matter of fact, there is, in that very thing, a thing
that is very true, that the country is sick of this thing, and they don't
want an increase in the sugar tariff.
Senator RoBINsoN of Indiana. I know you want to make a speech,
but please confine yourself to the question.
Mr. PIKE. I have been here for two days, and I have been working
on this for months, and I know the country is against putting up the
tariff on sugar.
Senator ARA.WAY. You just confine yourself to writing memorandums and we will read them. We get so much more out of it that
Sr. PIKE. All right.
Senator RoBINsoN of Indiana. Here is a statement about Senator
Greene
Senator CARAWAY. I wish you would call attention to that,
"Watson: Administration spokesman." Where did you get that?
Mr. PIKE. I think this committee might correct these memorandums and make up better ones, and I would appreciate that very
much.
Senator CARAWAY. No. Where did you get that information?
Mr. PIKE. So far as I know, that came from Mr. Mermey.
Senator RoBINsoN of Indiana. That is all you say with reference
to Watson, "Administration spokesman." We will pass that and go
to Senator Greene of Vermont. I am just wondering where you got
all this detailed information about Senator Greene of Vermont.
Mr. PIKE. Again I wish you would ask Mr. Mermey.
Senator BLAINE. I think, Mr. Chairman, since the committee has
read the memorandum on some, it ought to read them all.
Senator ROBINSON of Indiana. Let us read the memorandum on
all then, if the chairman has time.
Senator CARAWAY. All right; read them quickly.
Senator RoBINsoN of Indiana. The memorandum on Senator Greene
is as follows:
Senator Greene, Vermont, advises us confidentially that he would like to see
the sugar schedule stay as It is In the present law. However, offiially, his attitude
i that of waiting to hear both sides. He hears nothing from Vermont about
sugar as yet. He has noted with interest the statement of President Green of
A. F. of L. Vermont dairy interests are well taken care of In the new tariff bill,

1804

LOBBY INVESTIGATION

he points out. He thinks the President does not support the proposed sugar
duty increase. If and when the export debenture plan of farm relief is attached
to the tariff bill, and sticks there, Greene says he expects the President would
veto that measure.

Where did you get that information? Did you talk to Senator
Greene?
Mr. PIKE. I did not.
Senator ROBINSON of Indiana. Do you know where you got the

information?
Mr. PIKE. I think that probably came from Mr. Mermey.
Senator ROBINSON of Indiana. You approve of what Mr. Mermey

did?

Mr. PIKE. That is again a broad question,

Senator ROBINSON of Indiana. You have made that statement
generallySenator CARAWAY. No, no. Mr. Mermey has not been on the
witness stand.
Senator ROBINSON of Indiana. I am sorry. That is my mistake.
Mr. Mermey was Mr. Baldwin's righthand man down here?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. And you approve of what the Baldwin agency did generally?
Mr. PIKE. Oh, certainly; yes.
Senator ROBINsON of Indiana. And this was collected, you think,
by the Baldwin agency and Mr. Mermey?
Mr. PIKE. Yes.
Senator ROBINSON of Indiana. Is this part of the publicity campaign?
.
Mr. PIKE. It is now becoming so. It never was.
Senator ROmNSON of Indiana. That was not what you paid Baldwin to do, then? You employed Baldwin as publicity expert, as I

understand?

Mr. PIKE. But Mr. Baldwin couldn't just go out and write things
and have them published all overSenator ROBIMsON of Indiana. Was this going to be written?
Was this going to be published?
Mr. PIKE. No.
Senat6r ROmiNSON of Indiana. Why was he collecting something
he was not going to write about?
Mr. PIKE. IXhen you start collecting material, you collect, and
you don't know what you are going to get, and some of it is suitable
material. The interest of that would be that any one of these
Senators, if you knew how they stood, you could go to them and say,
"Senator Robinson, I would liko you to make a statement on this
subject"
Senator CARAWAY. All right. Lot us go ahead.
Senator ROBINSQN of Indiana. Let us proceed with Deneen of
Illinois:
Deneen, Illinois: Is not considering tariff matters yet and don't care to talk
much about them until after the bill comes over from the House. He says he
has seen nothing front Illinois about sugar yet, but frankly he looks for opposition
to sugar increase from Chicago and other industrial parts of the State. Deneen,
too, has noted President Green's statement. Deneen tells us that he is having
prepared a file of communications from Illinois on the tariff situation and will
check these communications against the tariff bill, when it comes over, read

up on
other
consic
given

A
in po
not.

the f

bills
think

it pr
to cx

y
you

IN

S
dutIc

he II
co111
omi
suga

sonic

V
don
S
0
has

tho

prW
too
tie
Pre
beeti

S
quc
lice

feec

se

LOBBY INVESTIGATION

1895

up on the bearings on these subjects, get information from the Government and
other experts on those subjects, and go into the Finance Committee prepared to
consider and act upon matters as they come up. Deneen tells us that he has
given no particular thought to the sugar situation. But he is interested in the
metal schedule.
A candidate for reelection, with Mrs. McCormick against him, he is a fatalist
in politics, he says, and ought to be a Presbyterian In religion, although he is
not. Nevertheless ho is watching his step according to our information. After
the farm relief fight he tells us he expects here will be a big fight over the tariff
bill, with republican Insurgents joining with democrats in the Senate. He
thinks the debenture plan will be offered as a tariff bill amendment And that if
It prevails at the Capitl, the President may veto it. However, lie fears failure
to exact tariff legislation would work to injure the republican party.

You ire getting a detailed report on Senator Deenon, apparently?

Mr. PIKcE. It seems to be.
Senator RoBiNso. of Indiana. You don't remember exactly where
you got, all that information, either?
Mr. PIKE. No. I think undoubtedly it came from Mr. Mermey.
Senator RoBiNso,

of Indiana. Senator Bingham of Connecticut:

Is a Now England protectionist, but that section does not favor too high
duties on conmnmodities It has to consume. An increase of sugar rates would be
unpopular In the industrial State of Connecticut, the Sonator thinks. However,
he has heard nothing there on the subject up to this time. lie is referring to
communications re tariff to the Connecticut Association of Man1ufacturers for
comment. Biugham Is a Hoover man and may be expected to stand with the
administration on "almost anything." lie hears the President opposes the
sugar increases. However the Senator realizes that in tariff legislation it Is
sometimes necessary to "trade."

Where did you get that information, from the same source?
don't remember exactly?

You

Mr. PIKE. Probably from the same source.

Senator ROBINSON of Indiana. Senator Sackett, of Kentucky:

Out of town, but it Is our information he Is gathering data ro tariff. He, too,
has heard nothing from his Stato about sugar. H1o is a republican protectionist,
though tiot to an "unreasonable extent." Wo are informed that he favors
protection for the domestic sugar Industry, but has been told that a 3-cent rate is
too high; that if free sugar from the PhilipPlies continues it will tend to prevent
the domestic price from becoming too high. Sackett understands that the
President opposes the sugar schedule. lie Is an administration man and has
been much concerned about Federal patronugo in his State of late.

Senator CARAWAY. If you will notice, part of that statement is in

quotations. Evidently you had that source.

Senator RomBNso.s of Indiana. Yes. You say, "He is a Republican protectionist, though not to an 'unreasonable extent'."
Mr. PixE. Senator, right here I would like to state that I regret
that these memoranda should be read out and made public.

Senator CARAWAY. I fully appreciate that.

fMr. PIKE. Where they come out of our private files. I am perfectly willing to give them to you for the course of your lobby investigation as to whether we have done anything improper, but to bandy

these men's names and the President's name, as this committee

seems to do I think is most unfortunate.
Senator CARAWAY. I do, too, for you.
Mr. PixK. Not for me; no.
Senator CARAWAY. It will be heard from.

Senator BLAINE. Mr. Pike, why did you overlook all of the Demo-

cratic members of the Finance Committee?

Mr. PIKE. Why did we overlook them?

1896

LOBBY INVESTIGATION

Senator BLAINE. Yes;- you don't seem to have any memorandums

regarding them.

Mr. PIKE. I presume that memorandum was simply on a few mem-

bers. Furthermore, most of the Democrats are with us, and it isn't
necessary to do very much about them.
Senator

CAIIAWAY.

If you talked to Senator Ransdell and Senator

Broussard
mistaken. about that, you would find out you are tremendously

Senator ROBINso N of Indiana. You made a good impression a while

ago on Senator Caraway. He said so himself. You want to be
careful or you will lose that good impression you made.
Mr. PIKE. I don't care about making an impression.
Senator RoBIsON of Indiana. You say you do not like this way of
bandying names.
Mr. PIKE. I do not; no.

Senator ROBINSON of Indiana. That is what I am objecting to.

You are bandying the names of these men all over the country.
Mr. PIKE. Am I bandying names when I put in my private confidential file, which goes to nobody except people with whom I am
.
.
closely associated, memoranda such as these?
Senator ROBINSON of Indiana. We do object to it, and it ought not
be done under any circumstances.
Mr. PIKE. Do you mean to say you can't discuss people's views?
Senator ROBINSON of Indiana. I mean to say these activities of

yours ought to be abandoned and should not be permitted in the

country.
Mr. PIKE. You and I disagree on that.
Senator ROBINSON of Indiana. Our idea is to turn the spotlight

of publicity on all lobbyists so that the people of the country may

know just exactly what is being done to attempt to influence legislation.

Mr. PIKE. There we are right together. We want the spotlight
on our publicity campaign.
Senator RoBINSoN of Indiana. No, you don't. All your correspondence shows you don't.
Mr. PIKE. And we want the people to know what we have done
about this sugar schedule, and ali we have done.
Senator ROBINSoN of Indiana. I don't think you are proud of it.
Mr. PIKE. Well, I am.
Senator ROBINSo. of Indiana. Then, you are easily eased with
reference to your pride and the subject of our pride, if you are proud
of what has been done with reference to this lobbying.
I have a letter of H. H. Pike to R. W. Woodruff, July 30, 1029:
This sliding scale*seems to have been adopted by Senator Smoot as a pet
hobby and this morning's papers state that he is going to see this through oven
though there is an enormous protest against it. This may lead Junior Owenson account of his social relations with the Smoot family-to want a soft pedal on
the matter of the sliding sale. We believe that Harrison Jones in connection
with the talk that you suggested for him might get Owens in line to protest,
naturally basing his protest principally, if not entirely, on point one, that a
sliding scale wil[ increase the cost of sugar to the consumer.
Always. to the consumer. That is the inference you are trying to
give out.
Mr. PIKE. And it was the consumers' organization which was doing
it.

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LOBBY INVESTIGATION

1897

Senator ROBINSON of Indiana. That is why you didn't want Coca

Cola and Hershey to be known in the deal at all?
Mr., PIKe. No, it has nothing to do with it. Coca Cola is one of the
largest consumers in the country.
Senator ROBINSON of Indiana. Precisely, and then if it was purely
a question of consumption, they should have been out in front on the
prOposition, but because they are large purchasers of sugar, you
deliberately kept the facts from the American people.
Mr. PIKE:. I didn't do anything of the kind.
Senator ROBINSON of Indiana. You didn't tell them about it.
Mr. Pixi. I don't tell everything.
Senator ROBINSON of Indiana. Yu didn't tell anybody
Mr. Pixie. I have told you why we didn't do it. There was no

necessity for us to publish that.

Senator CARAWAY. I want to ask you a question there.

Do you

know Mr. Perdun?

Mr. PiIe. No; I don't know Mr. Perdun.

Senator CARAWAY. Did you have any communication with him?
Mr. Pixi. Never.
Senator CARawAY. Did you get any sliding scale information from

him?

Mr. PIKe. No.

Senator CARAWAY. All rht.
Senator ROBINSON of Indiana. Now, Mr. Pike, on July 9, 1929, you

wrote to R. W. Woodruff-

Mr. PixKE. Yes, sir.

Senator ROBiNSON of Indiana. Who is president of the Coca-Cola

Co.

Mr. PIKE. He is.

Senator ROBINSON of Indiana. You wrote as follows:

As you undoubtedly know from John Sibley, we met in Washington and had a
pow-wow before we talked with Owens.
We ended up more or less reassured as to Owens' backing, and we think he
sees the point; that the campaign must not let up now but rather must we continue
with more pressure so far as we are able to bring it to bear.
It was a little disconcerting to find that his friendship with young Smoot was
such that he feels like tempering his stand for social reasons. Particularly is
this a little disconcerting when we find that he swapped ideas with Smoot on
the poster idea. To our mind what we are going to do next is a matter of secrecy
between us partners. The thing about which there is no secrecy is the reason
for our objection to an increase in tariff schedule and that we are telling the world
even including Smoot.
With regard to the poster It is a matter of extreme regret to Mr. Hershey and
ourselves, and of course to Mr. Baldwin that this scheme about which Harrison,
Jones and yourself were so enthusiastic seems now to have been thrown in the
scrap heap: John Sibley went over with us the reasons for this, and as we are
working this thing in partnership with you, we will only do those things together
which have your approval. 8ibley outlined the fact that he had no objection
to the poster idea-In fact was keen for It-but the reason why the poster seemed
so likely of success was that it wis to be put out through your organization as a
means of getting distributed and of positive results. We lknow of no other way
that this idea can be used without the majority of the printed matter going into
the gutter instead of into the hands of the public.
John Sibley's reasons for throwing over this practically sure-fire idea, which
to our minds means victory of the campaign, were that it might be traced to
your company which would have a boomerang effect and undo any good that the
posters d[d. I do not know whether you share this view or not but it would
seem to me that you are more or less in the open anyway. So Iar as my own

1898

LOBBY INVESTIGATION

knowledge is concerned, you have subscribed nothing to this campaign and there.
fore you have an ilibi, but as a matter of fact the Bottlers' activities might be
attributed to you just as the posters might and the publication of their book
certainly puts them in the open as to where they stand.

S
a .c

You mention your partners in the letter. Who were "our partners"?
Mr. PIKE. Junior Owens, inyself, the Hershey Co., the Coca-Cola
Co., Mr. Baldwin.
Senator CARAWAY. I think you are entirely mistaken about that,
because you were not going to tell Owens anything else, because he

ruff

Mr. PIKE. NO; that is not a fair statement, Senator.

Senator ROBINSON of Indiana. You mention in this letter Harrison

t
T

was leaking.

Jones. He is Coca-Cola?

Mr. PIKE. He is executive vice president of the Coca-Cola Co.

Senator

ROBINSON

of Indiana. You say there, "So far as my own

knowledge is concerned, you have subscribed nothing to this campaign

and therefore you have an alibi." In other words, you were prepared
to tell the world that Coca-Cola had subscribed nothing to this campaign, because they had not, and it was understood between you
and them that they.would not pay you anything until the campaign
was over, you carrying it in the meantime, and then they would pay
it all. That is true, is it not?
.
Mr. PIKE. That is part of the truth.

of Indiana. What part of it isn't true?

Mr. PIKE. Don't let me interrupt you.
Senator ROBINSON of Indiana. You were prepared to mislead the
Senator

ac

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g

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we

Hai
I
him
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est

1.

ROBINSON

public, if it not been for this lobbying investigation, by making it

appear that the Coca-Cola Company was not in this campaign at all
with any financial assistance, because you say, "So far as my own
knowledge is concerned, you have subscribed nothing to this campaign
and therefore you have an alibi." Now, you were writing to the
president of the Coca-Cola Co. when you made that statement?
Mr. PIKE. Yes, sir.
Senator ROBINSON of Indiana. How do you reconcile that statement with your desire to be frank and candid and all that sort of
thing? .
Mr. PIKE. I think that my statements have already answered that
point. We were not using the Coca-Cola Co.'s name. You know it.
We have said so. This poster idea was one which was to get out a
poster with a handbill, which would be distributed throughout the
country, with a memorandum attached to it, which people could
tear oft and send in to their Congressmen and to their Senators.

Senator CARAVAY. Will you pardon me? That is not responsive to

the question.
Mr. PIKE. I don't
- think you know what the poster idea is. It is
not explained.

Senator

B
Junti

CARAWAY.

Yes, I do. It is to be distributed through the

bottlers.
Mr. PIKE. Then it goes ahoad and says this can not be done by
anybody else.
Senator CAIRAWAY. It was to be distributed through the sales
agencies of the Coop-Cola and other people.
Mr. PIKE. Yes.

unt

LOBBY INVESTIGATION

1899

Senator CARAWAY. We have gone over the correspondence, wasted

a lot of time on it.
Mr. PIKE. And on the 19th of July, 1029, you write to Mr. Woodruff again:
Baldwin returned yesterday from Washington where he had talked with
Junior Owens and with Pat Harrison. His report of his interview with the
Senator is toO involved to be compressed into a letter but the upshot of it is that
Baldwin feels that Harrison wants to play a lone hand and cot the glory. The
glory can go hang so long as we get the results, and we must therefore work out
some scheme whereby we can support Harrison's effective efforts without seeming
to do so. This has, of course, a direct bearing on the final decision as to the
posters.
This is the president of Coca-Cola, your letter, your language.
Mr. PIKE. You mean "without seeming to do so"?
Senator ROBINSON of Indiana. For emphasis, I quote again, "And
we must therefore work out some scheme whereby we can support
Harrison's effective efforts without seeming to do so."
In other words, you would support him, but you wouldn't support
him?
Mr. PIKe. No. We certainly will support any Senator who will
not favor an increase in the sugar tariff, in which we are vitally interested, and so are the American people.
Senator ROBINSON of Indiana. I think we understand. That is
ill. I think we understand each other, Mr. Pike.
Senator CARAWAY. We will meet to-morrow at 10 o'clock.
(Whereupon, at 12.30 o'clock p. m., the committee adjourned
until 10 o'clock a. in., to-morrow, Thursday, January 9, 1930.)

-a'

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LOBBY INVESTIGATION
THUER

DAY,

JANUARY 9, 1980

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITEE ON THE JUDIOIAlY,

Wahington, D. 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock
a. in., in room 212, Senate Office Building, Senator Thaddeus H.
Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Blame, and Walsh of
Montana.
Present also: John G. Holland Esq, counsel to the committee.
Senator CARAWAY. We will call Mr. Mermey.
Senator BLAINE. Mr. Chariman, I desire first to make a statement in
the record. Yesterday I referred to the joker in the sugar schedule.
The reference should have been to the flexible provision of the tariff
bill with reference to the transportation clause which had a special
applicability to sugar in which there is a joker that would have given
a certain concealed protection to the sugar interests if the transportation schedule with the original flexible clause as recommended by the
committee was preserved in the bill. So that the mistake was merely
with reference to the schedule and not with reference to the fact of
there being a joker. Mr. Pike may want to discuss that at some
future time before the committee. I am not concerned about that,
but in justice to the committee I felt I ought to make that correction.
I might also state that the joker still remains in the bill, but ineffective
if the coalition 's proposal on the flexible tariff is retained finally in
the conference report.
TESTIMONY OF MAURIOE MERMEY

(T e witness was duly sworn by Senator Caraway.)

Senator CAHAWAY. Give the stenographer your name, residence,

and occupation.
Mr. Mknt%.MY. Maurice Moroney, Now York City, publicity man.
Senator CAIRAWAY. With whom are you employed?

Mr. MuMity. William H1. Baldwin.

Sen-tor CARAWAY. How long have you been with him?

Mr. Mm. y. Since Juno 15, 1928.
Senator GAHAWAY. What was your occupation prior to that?
Mr. MIMEY. Newspaper man.
Senator CAtAWAY. Where?

Mr. MEigMEY. In Now York and Chicago and Miami; Utica, N. Y."
Syracuse, N. Y.; Paris, France.
Senator CAAWAY. Which papers were you with, please, sir?

1901

1902

LOBBY INVESTIGATION

Mr. MERMiEy. Well, I was with the Utica Daily Press, the Syracuse

Telegram, which has now been merged into the Syracuse Journal, the
Miami Tribune, which is now out of existence, I think, the Paris
Herald in Paris, and the United Press.
Senator CARAWAY. What was your position; were you a cor.

respondent?
Mr. MIRMEY. Where?
Senator CARAWAY. When you were with the papers?

Mr.

Repre
spoker
with t
Mr. I
becom
she th

Mr. MERMrY. No. With all of these papers, with the exception
of the United Press, I was merely a reporter in the various places.
With the United Piess I was in New York for about six months,
I believe, just merely attached to the New York staff. I went to
Chicago
as Chicago
of the
Knight
was subse.
within
a yearservice.
as cable Ieditor
of the
quentiy called
back tomanager
New York
Knight service.
Senator CARAWAY. You wont with Mr. Baldwin in 1928?
Mr. MEiRMEY. Yes; in 1928.
Senator CARAWAY. That is a publicity bureau?
Mr. Mm.mMY. Yes,
Senator CARAWAY. What were your duties, Mr. Mermoy?

rather
Sen
Mr.
Sehi
Mr.
Sen
Mr.
Sen
the in
Mr
Sen
Mr.
Sen

of various clients' activities, and then transforming them into what

we thought might be news, and might appeal to the papers as news.
I believe that sums it up fairly well.

Sen
Mr
Sen

Mr. ME RMEY. Well, preparing news releases, trying to find news

Senator CARAWAY. You were assigned to this sugar tariff fight?

Mr. ME MEY. Yes.
Senator CARAWAY. How long were you engaged in that particular

effort.?
Mr. MERMEY. Right from the beginning until now. That is, front
March 18.
Senator CARAWAY. March 18 of this year?
Mr. MER.MWEY. No, last year, 192g.
Senator CAnAWAv. Last year, of course.

time here in Washington?

And were you at the

Mr. MERMEY. Oh, no; in New York.

Mr

Now,
Mr

the v
Sen
.MIr
the"

initte

so1c
Se

New

Senator CARAWAY. You were here some of the time?

Mr. MERMEY. Yes, I came down quite frequently until Labor Day

.Mr
Sethe in

Senator OARAWAY. Mhat were you doing?

Mr. MEnRME. I was primarily attached to Mr. Owens. We were

and
peop

of 1929. From Labor Day until Thanksgiving Day, 1920, I was here
continuously. That is with my family,

getting out news releases, trying to get suggestions that might be

developed into news stories which might be developed into good
publicity, also trying to get information, I would say, on various
things going on at that time that might be helpful to our principals.
senator CARAWAY. Were you interviewing members of Congress?
Mr. MERMtI,.

Yes; I interviewed Representatives Freer and

Dickinson. I saw Senator Borah twice, I think; I saw Senator

Capper twice. I saw Senator Walcott. I saw Senator Brock about
three minutes. I think perhaps there are one or two others I do
not recall at the moment, but as they come to my mind I will tell
them to you.
Senator CARAWAY. Did you see any House Members?

Mr
the v
tinct
Sc
and-

have

pictt
Sc
them
M
any
with

LOBBY INVESTIGATION

1903

Mr. MeRMEY. Yes; I say I saw Representative Dickinson. I saw

Representative Freer. I never saw Mrs. Norton, although I have

spoken to here over the telephone, and I did write one letter to her,
wlth the idea of lining up Women's Clubs throughout the country.
Mr. Baldwin, incidentally, answered he did not know what had
become of that. I can say that Mrs. Norton wrote me a letter saying
she thought it would be to much for her activities; that she would
rather merely represent her district.
Senator CARAWAY. Have you got a letter from her to that effect?
Mr. MERMY. I have one, but not with me.
Senator CARAWAY. You were here yesterday?
Mr. MERMEY. Oh, yes.
Senator CARAWAY. You heard, Mr. Pike?
Mr. MERMEY. Yes.

Senator CARAWAY. And you heard him attribute to you most of

the information he had?
.Mr. MERMEY. Well, of course-yes, I heard him say that.

Senator

CARAWAY.

Is that substantially correct?

Mr. MERmEY. It is correct that I wrote that thing.

Senator CARAWAY. What thing?

Mr. MPRuqPY. It is not correct that I gathered all the information.
Senator CARAWAY. What thing do you refer to?
Mr. EMEEYI,. I beg your pardon.
Senator CARAWAY. You say it is correct you wrote "that thing."
Now, what thing?
Mr. M' MEY. I think, if Your ara referring to the memorandum on
the various SenatorsSenator CARAWA. You wrote that?
Mr. MERmEY. I typed that, and might I say in connection with
the "N. X.", which seemed to perplex Mr. Pike and perplex the committee, that that means New York. Having been in the press, I
sonietinius shorten words, and "N. X." is the call letter for New York.
Senator CARAWAY. So that Senator Edge would be responsible to
New York influence?
Mr. MERMEY. I don't recall the reference.
Senator CARAWAY. Well, that is what it was. Where did you get
the information?
Mr. MERM1EY. I must have spoken to any number of people, also
the various principals with whom we were working, that is, Mr. Pike
and Mr. Baldwin and Mr. Owens must have spoken to a great many
people. It was merely a collation which I typed. I remember dis.
.inctlv having seen Senator Capper on it myself.
Senator CARAWAY. So, the pen pictures were the product of you
and Mr. Owens, largely?
Mr. MEnmEY. Oh, I wouldn't say that at all. I say that this must
have come from many other people. They may have been composite

pictures given by various people.

Senator CARAWAY. You don't remember from whom you got

them?
Mr. MERM Y. No; I haven't any recollection. I have spoken to
any number of people since I started the fight, and I don't remember
with whom I spoke in connection with that.

1904

LOBBY INVESTIGATION

Senator WALSH of Montana. Mrs. Norton simply declined to accede

to your request, didn't she?
Mr. MEnMY. Yes; she explainedSenator WALSH of Montana. Never mind about what she explained,
She declined?
Mr. MEUMBY. She declined, absolutely.
Senator WALSH of Montana. I would rather have her letter of her
explanation.
Mr. MERMEY. I will try to get it for you. I am quite sure I have it.
Senator WALSH of Montana. In this memorandum occurs the fol.
lowing, "Through Mrs. Norton's secretary I was able to get out a
release signed by Mrs. Norton"-Mr.

MEZMEY.

Well, Mrs. Norton's secretary-

Senator WALSh of Montana. Now, wait.

Mr. MERMEY. Beg pardon.

Senator WALSH of Montana. Did you ever get a release signed by

Mrs. Norton?
Mrs. MerMsY. I believe I did. Oh, just a moment. I don't
know whether I did. I did get a release with Mrs. Norton's name on
it, yes.
Senator WALSH of Montana. From whom did you get it?
Mr. MERMEY. From her secretary.

Senator WALSH of Montana. Purporting to be something Mrs.

Norton said?

Mr. MERME.Y. Purporting to be her views; yes.

S
Pur
M
to r
don
had
S
enti
X
whC
At
8
qu
Slid

IN
81
men
rec

aug

tha
kno

Senator WALSH of Montana. And purporting to bear her signature?

Mr. MERMEY. Purporting to bear her signature yes.
Senator WALSH of Montana. Did you ever taik to Mrs. Norton
about it?
Mr. MERMEY. I never did myself, no. I spoke to her secretary.
I say I have never seen Mrs. Norton personally.
Senator WALSU of Montana. You have never seen Mrs. Norton?

slid:
S
whe

Senator WALSH of Montana. Well, you know Mrs. Norton made a

speech against the increase in sugar tariff, don't you?
Mr. MnEmY. Yes; I know that.

Fin
Am
ma

Mr. MERMEY. No, I never have.

Senator WALSH of Montana. Here is your letter of September 11,

1020. You wrote a letter to Mrs. Norton, who was in Asbury Park
until October 14. and you say, "We hope to get some information
from her."
Mr. MEn&trY. That is the Women's Clubs.
Senator WALSH of Montana. That is the letter you refer to, isn't
it?
Mr. MEnIMJY.. No; the letter I refer to is one that I wrote to her,

but the letter I spoke about before is her answer to me.

Senator WALSH of Montana. Our attention is called to two reports
from you on the sliding scale. You prepared those, did you not?
Mr. ME MEY. I don't know about that; no, sir.

Senator WALSH of Montana. Won't you look at them?

Mr. MJmMEy. I might have prepared the second one.

I can ox-

plain about the Doctor Townsend thing. I know nothing whatsoever

about the Purdon thing. I had never seen Doctor Purdon until I
saw him in this room. I don't know that sliding scale.

oyev

gre
sea
if t
wol
bas
bas

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on,
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not

Ih
tha
yo,

LOBBY INVESTIGATION

1905

Senator WALSH of Montana. That is the document referring to Mr.

Purdon, you did not prepare?
Mr. MkwMBY. I know nothing whatsoever about that. I am trying
to recall whether I had anything whatsoever to do about that, but I
don't recall ever having anything whatsoever to do about it. But I
had never soon Doctor Purdon uiotil I met him to-day.
Senator WALSH of Montana. Well, you did prepare the second one
entitled, "Report on Sliding Scale"?
Mr. M~eMIY. I will tell you, I had spoken at one time to a person
whom I later learned to be a sugar expert for the Tariff Commission.
At the time I was speaking to him rdid not know he was a sugar
expert for the Tariff CommissionSenator WALSH of Montana. Well, lot us got the answer to the
question first. You prepared the report here entitled "Report on
Sliding Scale"?
Mr. MERMEY. I would think so; yes.

Senator WALSH of Montana. Now, if you want to make any state-

ment.
Mr. MERMEY. I was going to say, I had spoken at one time, I don't
recall the exact date at all; to a person who later turned out to be a
sugar expert for the Tariff Comnission. I did not know at the time
that I was speaking to him that he was a sugar expert, nor did he
know who I was.
Senator CARAWAY. Where did you see him?

Mr. MEiRMEY. I was interested in learning something about the

sliding scale.
Senator CARAWAY. That is not what I asked you.

where did you see him?

I asked you

Mr. MERMEY. I am quite sure it was in this room.

Senator WALSH of Montana. In this room?
Mr. MERMEY. Yes.
Senator WALSH of Montana. When did you see him in this room?

Mr.

MERtMEY.

It might have been during the hearings of the

Finance Committee. I think the hearings wore hold-in this room.

Am I mistaken on that? At any rate, I was trying to get some information about the sliding scale, about which I knew nothing whatsoever, and somebody had told ine apparently, that this person know a
great deal about sugar, and I asked him something about the sliding
scale. The information that I recall very distinctly is his saying that
if the sliding scale were based on the prices of the previous day we
would then have, or virtually have about 300 tariffs a year, or if
based'on the weekly prices, we would have 52 tariffs on sugar, or if
based on the monthl.V price, 12 tariffs.
As I recall, there was some information about base lines, and so
on, and so forth. This gentleman afterwards asked me who I was,
and he said he was a sugar expert for the Tariff Commission, and he
asked who I was. I told-him who I was and I told him I did not know
I was speaking to an expert of the Tariff Commission. He told me
he did not know'he was speaking to a publicity man and he asked me
not to make any news stories out of that, andI said I wouldn't, and
I haven't. I haven't read that thing in full. I don't know whether
that part represents what he told me.
Senator WALSH of Montana. You didn't know who the man was
you were talking to?
78214-4-w--' 5.--

1906

LOBBY INVESTIGATION

Mr. MEiMEY. I must have known who he was at the time. I have
no recollection whatsoever of that name. I did know the person in
question had a beard, and I found out this morning the person in
question is Doctor Townsend.
Senator WALSH of Montana. Can you tell us who introduced you
to Doctor Townsend?
Mr. MEnMEY. I don't think anybody introduced us. It was just
a spontaneous conversation.
Senator WALSH of Montana. You just sat down alongside this man?
Mr. MgnmEY. I probably sought him out.
Senator WALSH of Montana. How did you come to seek him out?
Mr. MEnMhEY. Somebody must have told me he knew a great deal
about sugar.
Senator WALSH of MontAna. Who was it told you so?
Mr. MErMEY. I have no recollection about that at all.
Senator WALSH of Montana. No recollection about that?
Mr. Mi&RxEY. No, sir.
Senator WALSH of Montana. You talked to a man whose name you
didn't know?
Mr. MEnMEY. I didn't know his name'at the time.
Senator WALSH of Montana. When later did you learn his name?
Mr. MERMrY. This morning.
Senator WALSH of Montana. This morning?
Y. Yes. I met him this morning.
Mr. MflMm
Senator WALSH of Montana. Then, ip to this morning you simply
know that the man you talked to was an expert of the Tariff Commission on sugar?
Mr. MEUMPuY. And I knew his description.
Senator WALSH of Montana. Yes; you recalled the facial features
of tko man, but you don't recall who introduced you to him or told
you rather, that he was an export.
Mr. MEIRMEY. That is correct.
Senator WALSH of Montana. And his name you did not discover
until this morning?
Mr. MERMEY. That is correct.
Senator CARAWAY. When he introduced you to him, didn't he tell
you who he was?
Mr. MERMEY. I am sorry. I didn't say I was introduced. I said
it was probably a spontaneous conversation.
Senator CARAWAY. You just said someone introduced you.
Mr. MERMEY. No. I am sorry. I think I said it was a spontaneous conversation. I probably sought him out.
Senator WALSH of Montane. When was it you had this conversation?
Mr. MEIimpy. I think it was sometime during the hearings of the
Finance Cominitteo. It may have been before. I am quite sure it
was about that time.
Senator WALSH of Montana. The hearings before the Finance Committee commenced sometime in the month of June.
Mr. MEnRMi.Y. I don't recall exactly. I think it was Juno 24, or
thereabouts.
Senator WALSH of Montana. Soyou are quite sure you didn't know
anything about him prior to that time?

1r
land
I kne
I did
know
rand
Colin
MOM
date.
convc
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Mr
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Son
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Mr
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Mr
Sen
accus

LOBBY INVESTIOATION7

190}7

Mr. MEBMEY. I have no recollection whatsoever, sir. Mr. 1i61.

land called me up yesterday afternoon and tried to find out. whethou
I knew that the sugar oxIrt's nanie was Doctor Townsend. I said
I did not, and I told him at that. time that it would be important to
know the date of that momorandun. If the diate of that memo.
randuin corresponds with sometime during the hearings of the Finanee
Committee or was later than that hearing, then uoidoibtedly that
memorandum was a report of my conversation with him, but Ifthat
date is prior to that time, that, mnenorandum is not a report of my

conversation with him and I don't recall it.

Senator WALSH of -ontana. As a matter of fact, you reported

immediately having had this talk with Doctor Thompson, didn't you?
Mr. MiRmtMY. I am quite sure I must have; yes, sitr.
Senator WALSH of Montana. And you told Mr. Pike you had this
conversation with Doctor Thompsont
Mr. Mj:RMEY. I wouldn't say Doctor Thominson. I didn't recall
the namo.
Senator WALSH of Montana. Let me call your attention to a letter
of May 29 to Mr. Pike. The letter goes on and theii there is a post.
script, and then a postscript as follows:
I am also Inclosing several copies of a highly confidential menmorandum regard-

ing sliding scale.

Mr. MEnm.Ey. I don't recall it, sir.

Senator WALSH of Montana. What was that?
Mr. MEJIMFY. I don't recall it.
Senator WALSH of Montana. That doesn't refresh your recolle.tion'about it?
Mr. MEIimEY. No, sir.
Senator WALSH of Montana. Did you transit any more than one
confidential report on sliding scales?
Mr. MkmuMmky. I haven't any recollection of that, sir.
Senator WALsH of Montana. Well, I will continue.
Mr. M nstEy. Yes, sir.
Senator WALSH of Montana (reading):
entitled
The authority for the information on the enclosed memorandu
"Report on Sliding Scale" is Mr. Thompson, sugar expert, United States l'atriff
Commission.

Does that aid your failing memory somewhat?

Mr. Mi.mL:-N. No, sir. I am sorry, sir. When the nname, Mr.
Thompson, was mentioned in the hearings when Mr. Baldwin te.4tifled,
that made no impression on my mind whatsoever. I could not recall
that name.
Senator WALSH of Montana. Does that letter which you wrote
May 29, 1920, transmitting to Mr. Pike this report. on sliting scales
in which you say, "The authority for the information on the inlosed
memorandum entitled "Report on Sliding Scale" is Mr. Thompson,
sugar expert, United States 'ariff Commission "Mr.M nstEy. I 'amvery sorry, sir, it does not.
Senator WALSH of Montana. lefresh your memory?
Mr. MERMEY. I wish I could recall it, but unfortunately I do not.
Senator CARAWAY. Just a minute. You being a newspaper man,
accustomed to interviewing people, couldn't forget that.

1)908

LOBBY INiVESTIOATION

Mr. MERMY. As I say, the only contact I do recallSenator CARAWAY. Just a minute. That don't help your stand.

ing-

Mr. Mrnuy. I am vory sorry.

Senator

CARAWAY.

We are not accepting that statement.

body knows you do know.

Mr. M rMBY. I am sorry.

Senator

I appreciate that fully.

Every-

I do not.

Oh, well.
Mr. MvnMF.Y. I am very sorry.
Senator CARAWAY. There is no use. I know you do.
CARAWAY.

Senator WALSH of Montana. Here is your statement in writing of

date May 20, 1029, in which you say that "the authority for the
information of the inclosed memorandum entitled 'Report on Sliding
SBale' i Mr. Thompson, sugar export, United States Tariff Commis.
sion."
It is perfectly obi ious, is it not Mr. Mermey, that you did know
prior to a day or two ago when Mr. Pike spoke about the matter,
yu did know Mr. Thompson gave you this information?
Mr. MEnUtEY. I am sorry, sir, I did not know. I did not know
I)octor Townsend's name at all until I was introduced to him this
morning.
That is to saySenator WALSH of Montana. Did you write it?
Mr. MEnmEv. It is quite apparent I did. I must have gotten the
information somewhere.
Senator WALSH of Montana. So when you state you.did not know
Doctor Thompson's name until this morning, you are in error about
I'hat?
Mr. MEnMEY. What I meant to say about that is the name had
completely escaped my memory. Undoubtedly I got the information
somewhere. I must have.
Senator WALSH. We are not talking about getting the information,
You got the information undoubtedly, but you know on May 20,
1929, that you got that information from Townsend, didn't you?
Mr. MNEny. That would be apparent; yes, a.
Senator WALSH of Montana. And so yot wore in error in stating
tiat the first time you knew about the identity of the man who gave
yoi" the information was when Mr. Pliko spoke about the matter?
Mir. MIn m . I am sorry I didn't understand the question. The
idea I meant to put across was that the name had slipped my memory,
tt apparently, of course, I must have known his name at the time.
Senator WALSH of Montana. Now that it appears quite plainly
that vou knew at that time not only the fact that he was an oxpert of
the 'ariff Commission but you knew also that his name was Doctor
Townsend, do you feof quite confident in your recollection that you
just met him casually here in this room?
Mr. MEruMBY. I know definitely I had never seen him before.
Senator WALSH of Montana. That was not my question.
Mr. MEnMNy. Yes, air, I am; yes, sir.
Senator WALSH of Montana. Do you feel now like relying upon
your recollection that the way you met him was casually in this room,
and somebody
Mr. MpnstEy. Oh absolutely.
Senator WALSH o? Montana. Whose name you do not know, suggested to you that this man knew something about sugar?

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LOBBY INVESTIGATION

Mr. MERBMY. Absolutely. I know very definitely I had never

seen Doctor Townsend until I saw him at the meeting of the Finance
Committee.
Senator WALSH of Montana. I was not talking about whether you
had seen him before or not. I am talking about whether you tre.
perfectly sure now that you mot him simply casually in the waiy"
you spoke of; he was pointed out to you by somebody whose name"
you don't know, in this room, and that under those circumstances you
went up and engaged him in conversation about this sliding scale?
Mr. ME:.mFY. I think that is true, sir.

Senator WALSH.of Montana. Notwithstanding your memory failed'

with respect to his name, you are quite sure it has not failed with
respect to these other particulars?
Mr. MEBMEY. I am quite sure of that, sir.
Senator WALsH of Montana. This other highly confidential report,
apparently your report, marked "Report on Sliding Scale" catite
into Mr. Pike's hands by a letter from you of date May 29, 1929?
Mr. MERMIY. Yes.

Senator WALSH of Montana. Mr. Pike was inNew York at that

time, was he not?
Mr. MEnRMI. I would assume so$ yes, sir.
Senator WALSH of Montana. And exactly the same day, May 29,
1929 Mr Baldwin says inta letter to Mr. Owens, "I am incloshig a
highly confidential memorandum on sliding scales."
You don't know anything about that?
Mr. MEnmtY. Is that the Purdon memorandum?
Senator WALSH of Montana. What is that?
Mr. MERMEY. Is that the Purdon memorandum?
Senator WALSH of Montana. The Purdon memorandum; yes.
Mr. ME MEY. I am sorry. I know nothing Pbout that at all.

had heard Mr. Purdon's name several times.

Senator WALSH of Montana. And you don't know, perhaps, how
the copy of your letter and Mr. Baldwin's letter to Junior Owens nnd
the two reports happened to be together in the files?
Mr. MERMBY. No; I didn't file that at all.

I would assume---

Senator WALSH of Montana. It would suggest that the two are

ve!y intimately associated?
Mr. MEjtNI;Y. It might. It might also suggest that the people
who filed them, wanted to keep the material on sliding scale togethi-r.
Senator WALSH of Montana. Do you know Mr. Purdon?
Mr. MuiRY. No, sir. I saw him in this room two days ago diing
Mr. Baldwin's testimony for the first time, but did not know his nautte
until this morning.
Senator VALSH of Montana. In your letter to Mr. Baldwin of dale
September 10, reporting your activities down here, you say: "No
point in ascertaining sugar tonnage sunk by U-boats during the war,
because all naval experts agree in case of war in the Pacific Japn
would take Philippine Islands and Guam without a struggle.'
What naval expert gave you that information?
Mr. MigRNv. I went to the Navy Department, I told them I

was trying to get informationSenator CARAWAY. That wasn't what you were asked. You were
asked the name of the person.

1910

LOBBY INVESTIGATION

Mr. Mli-mnrw. Pardon me. The persons in the Navy Department

gavo me some 20 or 25 books to read on this subject in which I was
interested. I thereupon looked up the indices of the various books
and picked out some. was interested in and took some excerpts of the
itatenal that was printed. I remember the name of Hector Bide.
water, for example.
Senator WALSH of Montana. Then, the answer to the question is

that you got the information from boojo.?

h
Mr. MEtRy. No, sir. That is i 'rt the answer. The other
thing I would say is that somebody ift th Navy Department there
merely made a casual mention! that is generally agreed that in case
of war the United Statety0 not defendthe Philippines and Guam-w
ilippines I recall,
t believe it is Ouan.
Senator WAstft'.(Montaa. You can't recall who that was?
Mr. mLMErV. Idldn't lnow hit name. I recall he was a lieutenant.
I know he was a lieutena t. I do recall where the conversation took
place.
Senator WALSH of Montana. Did you know at the time who he
Was(
Mr. MEaMy. I did know he was connected with the press section
of the Navy Department, but that is all.
Senator WALSH of Montana. You did not know his name?
Mr. MEnMEY. I didn't ask his name.
Senator WALsH of Montana. You wouldnot oven be able to identify
him by appearance, as you did Doctor Townsend?
Mr. MiUMEy. I might, because I spent quite a little time with
him, because he was showing me a map of the various line-ups of the
islands as a result of the Washington Arms Conference.
Senator WALSH of Montana. Didn't you tell him you were a
publicity man?
Mr. MvumFMY. Yes, sir. I told him I was also with the bottlers'
as.4ociation. I told him I was seeking this information to find out
what effect the hot housing of sugar in the Philipines, or, rather
I should say the increasing production in the hilippines, would
have on national defense.
Senator WALSH of Montana. You continue: "I am told confidentially that we would make no attempt to save the Philippines in
tino of war with Japan."
Mr. MF.nMEv. I am referring to that lieutenant. He said he
wouldn't like to have such material published under his name.
Senator CARAWAY. That is interesting. He was giving you infernation to publish that he did not want to be known as the authority
for?
Mr. MEnMEv. As a matter of fact, I didn't publish it. As a
titatter of fact, I was very much against getting that information,
and when he told me that Admiral Seiboldt, had made a speech on
the subject that year or the year previous, and he tried to get the
particular speech for me-he didn't find it that day and asked me
to come back--I never did go back.
Senator CARAWAY. In whose office was this?
Mr. M :nM1.:y. In the press section of the Navy Department.
Senator CARAWAY. What date was this?
Mr. MmFRM . I don't recall the date.

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LOBBY INVESTIOATIO11

Senator

CARAWAY.

1911

Some naval officer gave you information and

said it was confidential, when you told him. you were a publicity
agent and looking for material for publicity?

Mr. MER~UMY. I think perhaps "confidential" in the sense that

he did not want to have his name associated with it.

Senator CARAWAY. He wanted to give information out that he

did not want to be responsible for?

Mr. MEnRMY. I am sorry, but I can not speak for him.

Senator CARAWAY. Well, you undertook to speak for him.

was his name?

Mr. MER~AmnY. I don't know his name.

What

I am tolling you exactly

where it was. I don't know the gentleman's name. I think I did

know it at one time.
Senator CARAWAY. I think you know it now.
Mr. MERMEY. I don't know.

press department-

I called up the young lady in the

Senator CARAWAY. I am not asking that.

Mr. MERMEY. She referred me to tiis lieutenant.
Senator CARAWAY. You didn't visit him before, until you went

down there?

Mr. MERMEY. 1 beg your pardon?

Senator CARAWAY. You were in the office at the naval building

were you not?

Mr. MERMEY. Oh, yes. That is, in the press office; yes.
Senator WALSH of Montana. Just another matter. I read from

your letter of September 17, 1929, to Baldwin:

This is important: While scurrying around the Department of Commerce

for statistics on sugar consumption in drug stores, I learned from te assistant
chief of the chemical division that it had been found, by scientific tests, that
beet sugar seems to contain a small amount of ferment which makes beet sugar
bad for use in elixirs, tonics, etc. Undoubtedly this same ferment makes it bad
for canning. The amount of ferment In beet sugar seems to be very small.
But it strikes me that if we can get this information made public we can stir up
again the prejudice against beet sugar, thus aiding our tariff fight and also aiding
the Cuban sugar manufacturers-all cane sugar. It is my idea that * * I
bottlers certainly can not be identified with such * * * (lines omitted from
carbon copy) Delahanty (the assistant chief) spoke and then plant it by devious
means,

How successfully did you get that out by devious means?

Mr. MERMEY. We never got it out, for the simple reason that
further investigation proved that what Mr. Delahanty told me at
the time did not stand up with the facts. I subsequently learned

that beet sugar could be made as pure as cane sugar. That is, it
could be refined as pure.
Senator WALSH of Montana. Who is Delahanty?
Mr. MEnmEy. Mr. Delahanty is the assistant chief in the Department of Commerce. I went to him seeking su. information-I beg
your pardon. I didn't go to him seeking that particular information.
I learned it while I was there. I went to him attempting to find out

how much sugar is used in the drug industry.

Senator WALSH of Montana. Who was it gave you this information

about the ferment in the beet sugar?

Mr. MEnmzy. Mr. Delahanty. He had heard it quite some time

ago from another person. The other person's name I do not know,
except the person is connected with the H. K. Mulford Co. Might I
say the person he told me he got it from-I recall now-is a gentleman

1912

LOBBY INVESTIGATIONq

by the name of Karo Knox, of the If. K. Mulford Co., of Philadelphia.

I wrote Mr. Knox and he told ine that ho had only heard that himself several yeans ago. I then went to the Departmnent of Agriculture
and tried to find out something about it, and they did not scent to
think there was anything in it, and Mr. Pike di(ln't seem to think
there was anything in it, and I think the nutritional chemist of the
bottlers' association said sle had heard such information, that beet
sutgar could be niido as pure as cane sugar and it- was only necessary
for the person with any product to speclv what. qualityvhe wanted.
Senator WAL.S of Montana. Was this lidea of disseminating this
information, which you uibse(uiently found to be incorrect, by devious
means, was that your idea, or Defahanty's?
Mr. Mftnt~m:. 6h, no; that was mine.
Senator WALSH of Montana. Just what devious means had you in
mind?
Mr. 1\fvtt.Nt:y. Perhaps the word is not a happy choice. What I
would mean to say there-Senator VALSIH of Montana. That seems to be. an unfortunate thing
with a good many of you newspaper men who have been on the stand.
We always expect you to b quite exact ill the use of language.
Mr. Mmm.imt.v. Yes, but it must h) remembered that these are
typewritten at the. rate of 60 or 70 words it miinute, and we haven't
any copy readers to read over our letters. The devious means there
would mean somebody else would have to come out with such informnation, but not the bottlers.
Senator WALSH of Montana. In your letter of September 23 to Mr.
Baldwin you say, "I understand conlidentially that the insurgent bloc
of 14 Senators is dead against. sugar."
What was your confidential source of information?
Mr. MA.its-uy. Mr. Lewis was, 'Mr. David J. Lewis. I think ho
told me that.
Senator WALSII of Montana. And he told you it in confidence?
Mr. M s. tmw. I ehlieve so; yes, sir.
Senator WALuH of Montana. You continue:

if this turn out to 1)e tho ease, there certainly can 't be anything to worry about.

Also confidential, this bloc Issupposed to have worked out a bounty plan for sugar.

Wheie did you get that information?

Mr. Mrn.miv. Also front M\fr. Leois. Incidentally, I had spoken
to Senator Iorah about the bounty plan.
Senator WALsH of Montana. You say further:
Mamnifestly, the Insurgents doi't hope to got thlis Iouty through, but, they are

b
f

Si

going to propose this, I unldersltaInd, merely to help themselves politically.

Who gave you. that information?

Mr. MhEjqIIsy. I wouldn't. assume to say. It might have been Mr.
owis, it might have been somebody else in the people's legislative
service.
Senator WALSu of Montana. Another particular in which your
memory fails?
M'r. I :r.:v. No; I say it might have been Mr. Lewis.
Senator WALSU of Montana. Oil, it might have been Mr. Lewis.
It might have been me, for that matter.
Mr. MEmt.Y. I am sorry, sir. I didn't see you.

h
h
I

LOBBY INVESTIGATION

1913

Senator WALSl of Montana. It might have been me if you had

seen me. It might have been anybody. It doesn't hell) the, situation to say it might have been Mr. Lewis. Of course it might have
been. We can understand that perfectly well, but what is the fact
about the matter?
Mr. MERwtm.. You misunderstand, sir. I think, as I recall it, that
Mr. Lewis did tell me that ho did not think that the bounty plan
which ho understood the insurgent crowd had in mind could possibly
be put through.
Senator WALSH of Montana. That is good, so far.
Mr. MEmMEY. I am quite sure.
Senator WALSH of Montana. That is good so far, but I am asking
you particularly about those statements herein that you understand
that they did not Intend that this bounty plan go through, but it is
just proposed to help them politically.
Mr. MERMi:Y. Oh I am sorry, sir. That undoubtedly is my own
construction of the thing.
Senator WALSH of Montana. But you say "I understand."
Mr. MERMEY. I may have said that in many things. Undoubtedly
that is my own construction of the thing. I am certain of that.
Senator WALSH of Montana. You still entertain that thought?
Mr. MERMEY. With respect to the insurgents?
Senator WALSH of Montana. Yes; that they are going to propose
this bounty, not that they expect to get it through at all, but to help
themselves politically.
Mr. MERMEY. Absolutely not. I have the highest regard for the
group.
Senator WALSH of Montana. When did you change your mind
about that?
Mr. MEIRIEY. I undoubtedly changed it right after that. I am
certain I have always had the highest regard for the group.
Senator WALSH of Montana. Except on this particular occasion?
Mr. MERMEY. Even on that occasion I had. That might have

been an understanding of mino,.but an incorrect one.

Senator CARAWAY. I am curious to know how you are going to

leave yourself in that position that youehad the highest admiration
for these people and thought they were sincere, and yet thought that
they were doing this merely for political effect.
Mr. MERMEY. Well, I don't know as I can conciliate the two. It
sounds perfectly ridiculous, but it is the fact.
Senator CARAWAY. Well, it is veiy ridiculous.
Mr. MERMEY. Yes; it sounds ridiculous, 1 am perfectly willing to
admit that.
Senator BLAINE. You say you are getting this confidentially.
Where (lid you got it confidentially?
Mr. MEnsmpv. Well, I think, very frankly, the word "confidentially" in all the reports I have seen hero is oine of thte most abused
words in the English language. I think the word confidentiala"
has about the same relation to those reports it a robe or hood might
have in a fraternal meeting, just to put on a little hocus-pocus, and
give it a greater atmosphere of importance.
Senator BLAINE. Your iden, was to let these people think you had
found out something. You wanted to tip it off to them confidentially,
to show how valuable your services were?

1914

LoBBY INVESTIOATION

Mr. MEnuME. I couldn't dispute that statement at all. That

undoubtedly is true, i part, but I do think we did work pretty hard.
Senator BLAINE. TO show you wore earning your money?
Senator CARAWAY. You found out a long while ago that the way
to get something repeated is to communicate it confidentially?
Mr. MERMEY. I certainly have. As a matter of fact, that'is indeed
the truth. I think you people can spot a report very much quicker
if the word "confidential " is in it, than otherwise.
Senator CARAWAY. And we know just what prompted it, too.
Senator BLAINE. Well, Mr. Merney, speaking of myself, I am
classed with the insurgent group. There wasn't any necessity for
anyone to report confidentially what my position would be on this
question.
Air. MAERMEY. Undoubtedly. I thought I understood you to be
quite sympathetic with the case against high sugar.
Senator CARAWAY. IS that a confidential report you are making
now?
Mr. Mn.Y. It certainly wouldn't he, saying it here.
Senator BLAINE. What do you mean by sympatheticc"?
the
Mr. MERMEY. Well, as a matter of fact, I think that under
circumstances, in the case of sugar, the economic facts of the case are
such that I don't quite see how a Senator could vote for a higher
sugar tariff. I can see that lie might do it on the basis of sentiment
or the basis of region, but I don't see how they could do it on the
basis of the economic facts of the case, and I think that you look at
the economic facts of the case. I am certain you do.
Senator CARAWAY. Then? I would like to know what you mean by
his voting for it on the basis of reason.
Mr. MEniMEY. Did I say reason? I think I said region and sontiment.
Senator CARAWAY. Oh, I beg your pardon.
Senator BLAINE. You expected some of the insurgent group to
legislate on the basis of sentiment, did you?
Mr. MEmm:Y. I trust not, sir.
Senator BLAINE. Well, you said that they might be influenced by
sentiment.
Mr. MER.mEY. I was not referring to the insurgent group. I was
referrifig to the entire Senate. I think there might be various sontiments engendered, as a result of this hearing, or as a result of anything, that might influence one Senator or another to vote one way
or another.
Senator BLA XE. Mr. Mermey, do you know the Interocean Syndicate?
Mr. MERMEY. No, sir; I do not.
Senator BLAINE. You don't know what it is?
Mr. IMEE
t Y. No, except I understand it is a publicity organization.
Senator BLAINi. I understand your position in this matter was
publicity agent for the Bottlers Association?
Mr. MERUty. Well, working for Mr. Baldwin, and attached to
the Bottlers Association. I might say in that, connection, if the committee will permit me, there seems to be a good deal of talk as to
whether Mr. Owens was running the campaign or Mr. Pike was.

Senator

BLAINE.

Well, now-

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LOBBY INVESTIGATION

1915

Mr. I\F;ivjEy. I am sorry. I just wanted to get that statomen" in

the record, if you would permit me.
Senator BILAIMR. Did you have any contact with the. Interocefin
Syndicate?
Mr. MunMBy. No, not to my knowledge.
Senator BLAINI.. Did you have any knowledge of articles they
were distributing?
Mr. MEInM1.rvy. The only thing I know about the Interocean wa it
statement Ml. Holland made to nin that he had see'n some. of the
clippings which this syndicate had received, and those.o clippings
seemed to be mainly from small-town papers, which indicated tht
they had a mat service.
Senator BLIAINE. You didn't endeavor to hire the services of the
Interocean Syndicate?
Mr. MrNlMxy. Oh, no. We are a publicity orgaamizntiion ourselves.
Senator BLAINE. Did you know Mr. E. M. Nolan of the Inter.
ocean?
Mr. [mIW. No. I might have met him. If he was in Wosh.
ington I might have met him.
Senator WALSH of Mfontana. In a letter from Mr. Baldwin to M'r.
Pike, dated September 20, 1929, referring to yourself, he says:
lie is In direct touch wilh Senators Borah, Harrison, Hawse, W1lcott, Brock,
and Capper, and with Representatives Norton and Raimseyer.
Mr. MEr.Y. That is a misstatement, sir-, absolutely. I have is
much direct touch with the Senators mentioned there' as with you
or anybody els.o, and that direct touch is through the front door.
Senator WALSi of Montana. So that statement made by Mr.
Baldwin is just manufactured out of the whole cloth, and there
wasn't the slightest truth in it?
Mr. MEatmy. There certainly isn't the slightest, truth in it, if 'the
instruments he meant to put across is as I get it and as you get it
there. There certainly isn't.
Senator VALSH of Montana. 110 continues:
lie has also made a good contact with MilCelsoni of the I)c-a'*eratic Naiiand
Comnmitteo, who is taking up one of Mr. Mernwy's :',!ggestuiis.

Mr. MEiMI.v. Yes, sir. I saw Mr. Michelson.

Senator VALsH of Montana. What is there to that?
Mr. MrM-Y. I saw 'Mr. Michelson three or four tis', perhaps;.
The first tine I saw him I told him who I wa.s, and what I
was doing-

Senator

CAUAWAY.

That is not what he asked von.

Mr. M~nm.av. It is true. I had seen Mlr. Mlichelsoni.

Senator CARAWAY. But the ideaMr. Mm rm:y. Well, the idea in question. Let. ine see, There
were three. The idea in question was the idea of writing to the
various deansSenator WALSII of Montana. Just wait a minnie. This says, "lIe
has also made u good contact with Michelson of the l)eioocratic
National Committee.."
Mr. MXt\r. E. Yes.
Senator VALSHl of Montana. Anybody could walk into the. roolas
of the l)emocratie National Conmnittee.
Mi. M rMtF. That is exactly true, and that is how I got there.

1916

LOBBY INVESTIGATION

Senator WALSH of Montana. That is what you did?

Mr. Miimt-v. Exactly, sir.
Senator WVALSUI of Montana. And that is all the good contact you

made?

Do
Univ

for th

Mr. MEttMtpy. Oh, absolutely. I did not mean to inferSenator WALsH of Montana. How does Mr. Baldwin come to tell
about the good contact that you had made with Mr. Michelson?
Mr. Mfmttipv. I am sorry. I can not speak for Mr. Baldwin's
lottets. I might say I merely went in the front door of Mr. Michel.
son's office; told him who I was, told hint what I was doing. He said
"I certainly would be interested to receive your releases." I told
him a few of the ideas I had, and lie turned a few of them down.
One I know of on the sugar tariff he took tip.
Senator WALSH of Montana. What was the one suggestion of
youts Mr. Michelson took tip?
Mr. MFn:\Evy. I don't say Ie took it up. I thought he would.

and f
Gerii
logo 0
in An
So
so
mon.,
Dc
Se
one C
Dc
8o

on sugar would be beneficial to the farmers as a whole. I thought he

might, take that tip. I saw him twice Senator WALSH of Montana. So that the statement of Mr. Bald.

ingsc

suggestions is equally inaccurate, and not in conformity with ihe

facts?
Mr. MEnMEy. It is inaccurate in part. Mr. Michelson did say he
would try to interest a Senator in that. That is as close as he came
to it.
Senator WALSH of Montana. What Senator?
Mr. MERM.Y. No; he made no mention of any Senator.
Senator WALSH of Montana. You said he wouldMr. MEnMY. He would try to interest a Senator.
.Senator WALSH of Montana. Tryr to interest the Senator?

Dc
I did
that
Seon t1
he gc

That was the suggestion 4f writing to the deans of agricultural

colleges to find out whether in their opinion an increase in the duty
win makes that Mr. Michelson is taking ip one of Mr. Mermey's

Mr. MEnMEY. A Senator; yes, sir.

Senator WALSH of Montana. That is all.

TESTIMONY OF DR. 0. 0. TOWNSEND

(The witness was duly sworn by Senator Caraway.)
Senator CARAWAY. Will you give to the stenographer your name,
residence, and occupation?
Doctor Tows.CEND. C. 0. Townsend Washington, D. C., chief of
the sugar division, United States iarid Commission.
Senator CARAWAY. How long have you been with the Tariff Conmission?
Doctor TOWRSEND. About six and a half years.
Senator CAUAWAY. What was your occupation prior to going to
ther?
.
)octor "I'owxsxD. Before that, for something over 20 years, I
had had charge of the sugar investigations in the l)epartniont of
Agriculture, Bureau of Plait Industry.
Senator CARAWAY. What was your occupation before becoming

collected with the Government?

)ootor TowNsm:c..
I was a teacher of natural sciences,
$enator CAnAWAY. At what places?

Do
se

SoI
saw

Dc
So

Dc
thiat

matt

So
D
So

Th,

8l1di,,

Ev

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So
infor
D.
So
D(

Se
that

Dc

not
Se

have
l),D
all o
lectic

LOBBY INVESTIGATION

1917

Doctor TowNsI:ND. The last place was out here at the Maryland
University. At that time it was the Maryland Agricultural College,
for three years, and. prior to that I was one year in Now York City,
and for two yeatr prior to that I studied abroad, in Leipsic University,
Geriiany, and for about five years before that I was teaching in a collogo in Georgia, and before that I was teaching in St. John's College
in Annapolis, for about three years.
Senator CARtAWAY. I don't care to ask any (ustions.
Senator WALSH! of Montana. Mr. Townsend, you heard the test.
niony of Mr. Mormoy here this morning?
Yes, sir.
Doctor TowxsEt~.
Senator WALSH of Montana. Do you remember having met him on
one occasion?
Doctor TowxsF,.i). I have no recollection of it.
Senator WALsH of Montana. Xo reCOlleCtiOni of it at all?
Doctor ToV SiNSJ). No, sir.
Senator WALSH of M01ontana. You were in attendance on the hem.;ings of the Finance Committee?

Doctor IowNsKND. Yes, sir; during the hearing on sugar only.

Senator WALSH of Montana. Did you recognize the man when you

saw him on the stand this morning?

Doctor TowNsED. I spoke to hint before he cane on the stamd.
I did not recognize hin when 1 saw him. No, sir. I did not know
that I had ever seen hint before.
Senator WALSH of ,Montana. lie seems to have prepared a report.
scale, purporting to give information which ho alleges
on the sliding
you.
he got fromu
Doctor Towxsp-,EN. In part, as I undet.tand it.
Senator WALSH of Montana. What is that?
Doctor Towxss .. ). I understood him to say that he got a part of
thiatinformation. Possibly some others got a part. But, that doesn't
matter.
Senator WALSH of Montana. lie writes under (late of ,May 29-.
Doctor TowsND. Yes, sit.
Senator WALSH of Montana. As follows:
c "Reorl on
Tho aut horliv for t.he lnfurinafloi coninhited In the atilel Cttif('I
Sliding Scae" Is Mr. Thompson, sugar expert, Uiited Statcs lfariE (uinins.tion.

Evidently lie was mistaken about your name.

Doctor TpOwxst.D. Ile might have been.
Se.nator WALSH of Montana. But he says the authority for the
information is lr.Thompson, and so forth.
Doctor TowNsE.ND. Yes.
Senator WALSH of Montana. Not in part, but all of it.
Doctor TowNsI:xN). All right.
Sellator WVALS1 Of Montana. I hvo you hd1111a1 o)port Unity to look
that over?
Doctor Tow.s.ExD. I just read it over once this niorning. I hld
not. S(en it before.
Senator WVAIAIu of Monltana. Is that information such as
have emanateh from yoll?.

eight

l)oetor 'l'ow. s ... Why, in part. Xo( all of it. I do not recall
all of it. Soine of it might have been, but some of it I have no reeollection of, and1so1me of it I would not. have given, because I did tict.

1918

LOBBY INVESTIOATION

For instance, I think thoro is one paragraph

which make, a statement that the Tariff Commission is in favor of a
higher duty, or something of that description. I would know nothing
about that. I would not make such a statement as that.
Senator WALsh1 of Montana. What you mean is that notwithstanding any statement that ho may have made to the effect that he
got, all of this information from you, the fact about the matter is that
i could not have gotten some of it from you?

P
of C

smino of it. That is one of the items I could not have given to anybody, because I did not know.

par

have emanated from you that was confidential in character?

Doctor TowNSE.,ND. None. We have no confidential information
in iegard to the sliding scale in the Tariff Commission.
Senator WALSH of NMIontana. Would you have had any hesitancy
in talking about the sliding scale to anybody who talked with you
about, it.?
Doctor TowNs, -E-1.No, sir. There is no information in regard to
the sliding seale in the Tar-iff Conimission, as far as I know, that would
lot, have been siven to anybody upon request through the proper
channels. Thai is to say, through the Tariff Commission.
Se1ftor WALSl1 of Montana. But as I understand it, there is no
claim that this caine from the Tariff Conmission upon the ordinary
reqvest front tie Tariff Commission?
Doctor Towx'sKxD. No, sir.

hoc
am

know that il, un s true.

con

Doctor TowsvmiD. Yes. Thero could not anyone havo gotten

Senator WALSH of Montana. Is there anything in this that could

the

mt
va
yo

.,1011tor WALhl5 of ,Montana. But the statement is that the gentleman caie up and introduced himself to you and told you who he was
a11l interrogated you about the sliding scale, and in that way he got
this information tron you. What have you to say about that?
l)octor TowNsi-xro. I spoke with a groat, many people. A good
imay peopl eanw, up and talked with me. Some of them I know and
sln)I1 of thom I did not know. But, I talked freely about the sliding cale, be(autsle we have nothing, as I say, that is of a confidentiI nature, that we would not give out, and therefore there was no
Senator WALSH of Montana. If this gentleman came up and
talked with you about the sliding scale there was no reason why you

yo
as%

dic

s51loid not talk with him about it?

I)octor TowNsD. None in the world.

Senator WVAL8sJ of Montana. That is all.

Senlltor CARAWAY. That is all. Thank you, sir.

Senator CARIAWAY. Is Mr. Purdon in the committee room?
around, please.

th
Como

TESTIMONY OF 'R. L. PURDON, SPECIALIST IN SUGAR. CONFER.

TIONERY, AND EDIBLE NUTS, BUREAU OF FOREIGN AND

DOMESTIC COMMERCE, WASHINGTON, D. 0.
(The witness was duly sworn by Senator Caraway.)

Senator CARAWAY. (ivO your name, residence, and occupation to

tho reporter.

Mr. PURDON. R. L. Purdon; 3621 S Street, NW., Washington,

D. 0. Specialist in sugar, confectionery, and edible nuts, in the
Bureau of Foreign and Domestic Commerce.

as
I

vC

LOBBY INVESTIGATION

1919

Senator CARAWAY. How long have you been with the Department

of Commerce, Mr. Purdon?

Mr. Puunow. Since 1024, Senator.

Senator CARAWAY. What was your occupation prior to becoming
connected with the department.
Mr. PUnDON. I was an army officer, sir.
Senator CARAWAY. In the regular establishment?
Mr. PUnDON. In the regular establishment.
Senator CARAWAY. You came directly from the Army to the Department of Commerce?
Mr. PURDON. Yes, si.

Senator

CARAWAY.

become an expert?

army officer, did it?

What study had you given to these questions to

That did not fall within any of your duties as an

Mr. PURDON. No, sir. I had taken a course n Foreign Service,

fitting me for the work in the Bureau of Foreign and Domestic Comnierce, at Georgetown University, and most of my experience with
these commodities was gained after I had entered the department.

Senator

CARAWAY.

After you became an expert, then you got the

information. Is that it? (No response.)

Who assigned you to the giving out of information and studying
plans for the sliding scale in the present tariff bill that is pending?
Mr. PURDON. Senator Smoot asked mo to help hi and help the
various sugar interests who were trying to work up various kinds of
sliding scales.
Senator CARAWAY. If you will pardon me, that is not what I asked
you. I said who assigned you to that duty? Did anybody assign
you to it or did you merely respond to a request of Senator Smoot?
Mr. PuRDoN. That is all, sir. I do not remember any definite
assignment.
Senator CARAWAY. Well, whoever is the head of this department,
did he know you were engaged in that?
Mr. PUtDON. Yes, sr.
Senator CARAWAY. Did he ask you to do it?
Mr. PUmoN. ie did not ask ine to do it. The Senator asked me.
Senator CARAWAY. I would rather you would just answer the
questions and we will get along so much faster.
Mr. PunnoN. Well, I would say "yes."
Senator CARAWAY. 11o did?
Mr. PUnDoN. Yes, sir.
Senator CARAWAY. Is that the customary thing, to assign one of
the heads of a bureau to collaborate in legislation?
Mr. Punnow. I think it is, sir.
Senator CARAWAY. Is this your only experience of that kind?
Mr. PumnoN. This is my only experience, Senator.
Senator CARAWAY. You say Senator Smoot asked you, or did ho
ask your chief to have you assigned?
Mr. PUnDON." Well, the Senator asked me directly, and asked me to
convey that request to my superiors in the department, which I did.
I do not know whether or not the Senator supplemented that with a
verbal or written request or not.
Senator Caraway. How much time did you devote to this question?
Mr. PURDON. Several months.
Senator CARAWAY. With whom did you labor?
~(-

~*'1

1920

LOBBY INVESTIGATION

Mr. PURDON. With anyone in the sugar business.

Senator CARAWAY. I know, but they have got names.

Give me

the names of the people,

Mr. PURDON. Wei, sir, on the side of the domestic producers I
conversed at different tinies among others, with Mr. Stephen A. Lovo,
president of tlhe Domestic ot Sugar Association.
Senator CARAWAY. What was your discussion with l.im?

Mr. lunwox. It had to do with various ideas for sliding scales.

Senator CAR^wAA. Then with whom else did you talky?
Mr. Ptino.,. With Mr. W. L. Petrikin of the Great Western
Sufiar Co.
Senator CARAWAY. On the samo question?
L*.
o th
Mr. PUJDON. On the same question; also with Mr..Lippitt, of the
Great Western Sugar Co., on the same question; with Mr. Fried,
whom I believe is with the Great Western Sugar Co., on the same
question; with Mr. Austin, secretary of the association.
Senator CARAWAY. On the same question?
Mir. PUmDoN. On tile same questionn. With Mr. Crawford, of some
Michigan sugar company, and possibly four or five others, Senator,
whose nates I can not recall.
Senator CARAWAY. None of those were Senators. Those wore all
either directly interested or lobbyists for sugar?
Mr. PunoN. None of those were Senators; no, sir.
Senator CARAWAY. You said sonic other Senators.
Mr. Pcuvmox. No. I said "some others, Senator," addressing
you.
Senator CARAWAY. 011, I beg your pardon. Did you discuss it
with any other Senators except Senator Smoot?
Xr. PURDON. With three Senators. on the Finance Committee, at
their request.
Senator CARAWAY. Who were they?
M\r. PunDoX. Senators Watson, Shortridge, and Harrison.

Mr.

tali
S
you
yXo
S
Ln'
w

tie

yo
sat

Senator CARAWAY. Any illeeillers of the House?

ir. l'Putox. No, sir--pardon me.

Senator CARAWAY. Now, with whom else did you discuss it?
Mr. 1.UnnoN. I gave you an incorrect answer to your question.
I would like to correct it.
Senator CARAWAY. Oh, yes.
Mr. 1 UHDON. I diseussel it w.tli Representatives Longworth and
Tilson, Hawley and Snlell.
Senator CARAWAY. You diseissed it with the Speaker, the majority
leader, thet, eltairman of the Ways and Neans Committee, and the
cilailrman1 of the Rules (.ojnuulittee?
Mr. PunnoN. Tes, sir; if that. is their dlesignations.
Senator CAAWAY. Well, that is a Repuh)liean1ou.4e, isn't it?
Mr. IPunnox\. I presume, o.
.
Senator CARAWAY. W\ ell, niow, whom" else di(f you discuss it with?
Mr. IPunnox. With Mr. Lakin and Mr. Shattuck and Mr. Lester
Johnson, who was working with them.

it,
a1

Mr. Punoox. Mr. Lakin is, I understand, an attorney employed

to

Senator CARAWAY. Who is Mr. Lakin?

by-Senator CARAWAY.

ho was an attorney?

No, no.

Xr. Lakin-you never understood

or
q%

til
WC
Oil

LOBBY INVESTIGATION

1921

Mr. PURDON. I beg your pardon. I was thinking of Mr. Shattuck.

Mr. Lakin, I understand, is representing the Cuban interests in the
tariff.
Senator CAHAWA. The head of the Cuban lobbyists. You say
you discussed it with Mr. Shattuck?
Mr. PuIIox. Yes, sir.

Senator

CAIRAWAY.

Senator

CARAWAY.

Who is lie?

Mr. PURDoN. I understand he was a counsel employed by Mr.

Lakin and interested with him in the same way.
Senator CAUAWAY. Where did you get the information that he
was eoiiasel?
Mr. Putwox. I either read it in the newspapers or somebody told
ie, sit.
Senator CARAWAY. Do you know who told you that?
Mr. PurDoN. No; I do not remember, sir. I just know as a
nmiatlter of commtion knowledge.
Sen tor CARAWAY. How much time did you devote to this with
Mr. Lakin?
Mr. PunDON. I think I saw Mr. Lakin possibly two or three times.
Senator CARAWAY. How much tino did you devote to Mr. Shattuck in connection with this?
Mr. P RDON. Well, perhaps four or five times.

Not over four or five times?

Mr. 1'UIDox. That is when I was with him personally.

Senator CARAWAVAY. Of course, if you were not with lm personally
you were not with him at all, were you?
Mr. Pu,DON. Well, sometimes we would have telephone conversations, Senator.
Senator CARAWAY. Well, did you read his testimony?
Mr. PUaDON. Did I, sir?
Senator CAHAWAY Yes sir; before this committee?
Mr. PunDox. I do not believe I have read it all.
Senator CARAWAY. It. would be interesting, because if you believed
it, you not only stayed with him all day but slept with him1 at night.,
and that you ad he were inseparable for about a year, on this question.
Mr. PuiDON. If any such statement was made it was a great
exaggeration, Senator.
Senator OARAWAY. You say you did not see him more than four
or five times?
Mr. PutnoN,. I would say so, approxinately.
Senator CARAWAY. Whalt were doing with Mr. Shattuck? What
question were you discussing?
Mr. PutDo.. We were discussing sliding scales, sir.
Senator CAHAWAY. In what way?

Mr. PunDoN. Well, there would be oecasiona ly, every now fnd
then, someone would got a now idea about a sliding scale, and thov
would call for me and I would go over and see them, and we would
sit down and try to work it out and arrange the statistical details
on that scale under the various headings wht'eh were required.

Senator CARtWAY. To see how it could be applied to the sugar

tariff?
Mr. Punnox. Yes, sir.
Senator CARAWAY. And that was all?
78214. -30-r 5-10

1922

LOBBY INVESTIGATION

Th
chi

Mr. PURIDO. That is all.

Senator CARAWAY. The political side of it was never discussed?
Mr. PURDoX. Oh, the political side of it was discussed in passing,

tac
to
Su!
Sir

on various occasions.
Senator CAUAWAY. What information did you supply on the
political side of it?
Mr. PURDOX. I did not supply any information on the political
side of it.
Senator CARAWAY. Why should it have been discussed with you?
Did you know anything about it?
M\r. PURDoN. No, sir.
Senator CARAWAY. Were you speaking for anybody?
Mr. PURDON. Except Senator Smoot, no, sir.
Senator CARAWAY. Well, do you say you spoke for Senktor Smoot?

Mr. PURDON. Yes, sir.

Senator

CARAWAY.

An

In what way did you represent Senator Smoot?

Mr. PURDON. Purely for the purpose of working out the statistical

details of the sliding scale.

Senator CARAWAY. You said on the political side of it you spoke
for Senator Smoot.
Mr. PURDON. Oh, I beg your pardon, sir. I made an incorrect
statement. I spoke for nobody on the political side of the thing.

Senator

CARAWAY.

All right, Senator.

Senator WALSH of Montana. Mr. Purdon, I have hero a report

that was transmitted to Mr. Baldwin, who was the head of the
pul)licity campaign for Mr. Lakin, and those associated with him,
or ratlicr with the Bottlers Association and Mr. Hershey. Did you
have any relations of any kind with either the Bottlers Association
or the Hershey Co?
Mr. PuRf.svx. I had no relations at all, Senator, except for one
conversation with Mr. Junior Owen.
Senator WALSH of Montana. This report coming into Mr. Baldwin's hands gives information alleged to have come from you. Has
your attention been called to this report?
Mr. PunnoN. I have hoard it referred to hero yesterday and to-day.
Senator WALsH of Montana. Let me read it. It starts out "R. L.
Purdon, chief of the sugar staff, foodstuff division, Department of
Coerce, has been asked by the White House and Senator Smoot
to work out a practical sliding scale." Is that correct?
Mr. Punnox. No, sir.
Senator WALSH of Montana. Well Mr. Purdon, from various
sources in the testimony here, as well as from the newspapers, it is to
be gathered that the White House requested Information from one
or more of the departments, in relation to the sliding scale. What
can you tell us about that?
Mr. PUuDON. Mr. Newton at various times has been interested in
this, and asked for information and its progress and what scales were
being developed, etc. That is all there is to the White House angle,
ss far as I know, Senator.
Senator WALSH of Montana. Just what contact did you have with
Mr. Newton in relation to the subject?
Mr. PURDON. Well, I saw Mr. Newton possibly half a dozen times
during this period in which I was working on the sliding scale. He
was interested in the progress of the development of the sliding scale.

si
fi
1)
t
ts
in

w
in

iv
!
t
t

I
y
y

LOBBY INVESTIOATION1

1923

There had been a request from Senator Smoot, transmitted through

channels, to all departments, I understood, one of which came to our
department, and which.1, in charge of the sugar section and in contact for several years with all the people in the sugar trade, was asked
to try to work out a general reconciliation of some of "thevarious and

sundry proposals which had been submitted, I understood, to Senator

Sioot by various interests in the sugar trade.
Senator WALsH of Montana. Well, I was speaking about Mr.
Newton, not about Senator Smoot.
Mr. PuRDow. Well, I believe these requests were forwarded to the
department through Mr. Newton.
Senator WALSH of Montana. A request from Senator Smoot was
transmitted through the White House, to the Department of Commerce?
Mr. PURDON. Well, that was my understanding, Senator. I
understood that Mr. Newton and Senator Smoot were working
together.
Senator AVALsH of Montana. I gathered from what you told us
earlier that Senator Smoot either waited upon you personally or called
you up and talked with you about the matter.
Mr. PURON. Well, he did.
Senator WALSH of Montana. Then the request did not come to
you from Senator Smoot through the White House.
Mr. PUDON. There are two parts to this, Senator.
Senator WALSH of Montana. Make it clear, please.
Mr. Punno.. In the first instance I had heard a great deal about
sliding scales from everybody in the sugar trade, casually, without
any particular sliding scale being mentioned. I was asked about it
by Senator Smoot, at exactly what date I can not recall. At some
stago after the hearing before the Ways and Means Committee of
the House, a request came to the department, tib it went to all departments, I understand, from Mr. Newton, to try to work out a reconciliation of these various proposals of sliding scale, and see whether they
were practicable. I tried to do that for the Department of Commerce, and turned in my produotto Mr.'NeWton.
Senator VALSu of Montana. Well, it was quite directly reported
in the press was it not, that the White House had called for information from the various departments, concerning the sliding scale and
the practicabilityof working out some sort of a sliding scale?
Mr. Pue)oN. It might have been, Senator. I do not know as to
thatr-as to press accounts.
Senator BLAitm. You know the position Mr. Newton holds in the
White House?
Mr. Puewos. I understand he is legislative secretary at the White
House; yes sir.
Senator WALSH of Montana. Well, anyway, Mr. Newton did ask
you for information about th slidin, scale and requested you to give
your attentloi to it and see if a sliding scale could be worked out?
Mr. PunnoN. Yes sir
Senator WALBIO Montana. So that this first statement, then, is
practically correct: 1R. L. Purdon, chief of the sugar section, foodstuffs division, Department of Commerce haa been asked by the
White House and Senator Smoot to wori out a practical sliding
scale." That Is substantially correct, isn't it?

LOBBY INVESTIOATION

Mr. PURD6N. Well, I would say it is, although the two requests

were quite different. That was not related to the subsequent conversation with the people in the trade at that time.

Senator WALSH of Montana. I did not get that.

Mr. PURDON. I say there were two parts of it. Mr. Newton asked
for a sliding scale to he worked out. We did that. Then Senator
Smoot asked me to talk to all the different people in the trade later
on, and as a separate proposition with which Mr. Newton had nothing
to do, as far as I know although Ie was interested in it.
Senator WALSH of Montana. You worked out a sliding scale at the
request of Mr. Newton before you had the contact with Senator
Smoot?
Mr. Purno. Well, before the Senator asked me to work with
the representatives of the sugar trade; yes, sir.
Senator WALSH of Montana. Did you propose a sliding scale, to the
White House?
Mr. PURDON. Did I propose one?
Senator WALSH of Montana. Yes. Did you work out a tentative
sliding scale for them?

Mr. PUrIN. I worked out five or six, sir.

Senator WALSH of Montana. Five or six different sliding scales?

Mr. PURDOX. Yes.
Senator WALSH of Montana. On different lines?
Mr. PURDO. Yes sir; on different angles.
Senator WAlSH Of Montana. Those various projects thus worked
out afterwards became the subject of conferences between these
conflicting interests?
Mr. PURDON. No, sir; not to my knowledge. I do not believe
these particular scales were the subject of conferences between these
other interests. They were all making up sliding scales of their own.
Senator WALSH of Montana. Of their own?
Mr. PURDOS. Yes, sir.
Senator WALSH of Montana. What became of those sliding scales
that you worked out?
Mr. PURDON. Well, I still have them here, Senator.
Senator CARAWAY. They did not slide much, then?
Mr. PURDON. NO, sir.
Senator OARAWAY. Would not Mr. Shattuck take them?
Mr. PURDOX. Mr. Shattuck had two or three of his own, Senator.
Senator CARAWAY. That he liked better than yours?
Mr. PumON. I don't know.
Senator CARAWAY. Well he would not take yours?
Mr. PURDON. Well I did not ask him to take them ar
Senator WALSH of Montana. What I would like to kNow is whether
your sliding scales or copies of them were given to these contending
interests?
Mr. PURDON. Copies of the first ones were shown to Mr. Lakin
and Mr. Shattuck on the one hand and Mr. Petrikin and Mr. Love
on the other hand, at the time that the House leaders were interested
in it, and at their request, so that we might secure from them the
opinion of practical sugar men as to their workability.
Senator WALSH of Montana. Exactly.
Mr. PURDON. After that I do not bblieve that the particular scales
that I worked up figured in the discussions at all.

LOBBY INVESTIGATION

1925

Senator WALSH of Montana. Those simply went to the White

House?
Mr. PURDON. Well, they went through the White House to Senator

Smoot, sir, I think. I do not know what became of them, although

I have copies here.
Senator WALSH of Montana. The report continues:

R. L. Purdon, chief of the sugar section, foodstuffs division, Department of

Commerce, has been asked by the Wlhite House and Senator Smoot to work out a
practical sliding scale. His name must not be mentioned in connection with the
following information which he has given.

What was the reason for that?

Mr. PURDON. Well I am sure I don't know, Senator.
Senator WALSH of Montana. I wish you would look over this
report, if you will, please?
Mr. PURDON. Yes, sir.
Senator WALsH of Montana. Is that information such as would be

likely to emanate from you?

Mr. PURDON. I imagine so, Senator. It sounds like the ordinary
discussion of the prnciples of the sliding scale.
Senator WALSH of Montana. Is there anything in this that you see
that is confidential in character?
Mr. PURDoN. Not a bit in the world.
Senator WALSH of Montana. If I were to talk with you about the
sliding scale you would be likely to say pretty much the same thing
to me?
Mr. PURDON. Exactly that.
Senator WALSH of Montana. Or any other man making a proper

inquiry?

Mr. PuRDoN. I believe so, Senator; yes, sir.

Senator WALSH of Montana. It appears from that that Mr.

Garner had a sliding scale.
Mr. PiDO.

He had the first one that was published, sir; the first

-one that came out.

Senator WALSH of

Senator CARAw4I
Senator CA A#*)
.another ouestio.2
,.,

~
A.

J, .4 That is all.
2~
I want to ask him

1926

LOBBY INVESTIGATION

me as his opponents In other sugar lobbies hostile to his have given me theirs.
I never at any time agreed to send out any story about it on Mr. Mermey's side
of the argument nor on any other partisan side of it, nor have I, In fact, at any
time sent out any such story. If In Mr. Baldwin's statement there is the implf.
cation that I became In any way the spokesman of his lobby, it is an unmitigated
falsehood wholly disproved by i my writings. I would greatly appreciate it if
you would put these facts in the record.
VILLIAm HARD.

Now, you had a talk with Mr. Hard?

Mr. MEIBIEY. Yes, sir. I had about three talks with Mr. Hard.
Mr. Hard was writing at one time, an article on the subject of lobbies
and counterlobbies. iie had gotten a good deal of information from
Mr. Austin, he told me. At any rate, he called the office of the American Bottlers of Carbonated Boevrages and asked for Mr. Owen. Mr.
Owen was out of the city at the time. I answered the phone. I
would do that. I told him I was willing to give hun any information
on the subject that he might want, and he asked me to come over to
his office.
Senator CARAWAY. He was writing an article on lobbying, you say.?
Mr. MPRMEY. Lobbies and Counterlobble,, I think was the title.
Senator CARAWAY. And he decided Mr. Owen was the best source
of information on that?
Mr. M aMnY. Oh, I beg your pardon. I think he had gotten a
good deal of information from Mr. Austin, of the United States Beet
Sugar Association, and he was trying to find out from Mr. Owen what
sort of an organization the Amercan Bottlers of Carbonated Beverages
was. As a matter of fact, he later told me he did not know whether
it was an organization formed primarily for the purpose of fighting
the sugar tariff or whether it had been in existence for some tune.
I gave him such facts on that subject as seemed pertinent, or anything
he asked me about.
While talking to him, he naturally asked me what the bottlers stood
for in connection with the fight, and I explained the various points.
I also discussed with him the refining differential, something that he
said he knew nothing about. He took up a copy of the bill as passed
by the House of Representatives, and I showed him just how as I
saw it, the refining differential operated. During the course of that
conversation I told him that Senator Smoot, as he know, had issued a
statement condemning the activities of the Cuban interesLq and socalled soda-pop lobby, and had not.said anything at all about the
beet-ugar lobby. I told him that in the statement which Senator
Smoot issued he said that there was a 16 per cent tariff on soft drinks,
and has been for some time. I told him that when Mr. Owens read
that, he was very much surprised, because he had never heard there
was a tariff on soft drinks. Mr. Hard thought there might be a
splendid story some timo,.in the idea of tairfe levied against certain
products and the people interested in those products know nothing
whatsoever about such tariffs. He said he intended to write such a
story. Ho said ho might also at some time, if he saw fit, write an
article on the subject of the refining differential, or perhaps on jokers.
He did not know whether he would, but he thought he was quite
certain he would write an article on the charging of tariff on artces
about which business people knew nothing, and which apparently
affected them more or less. At no time did Mr. Hard say definitely
that he would write an article on the subject of the soft-drink indus-

h
t

r
a

LOBBY INVESTIGATION

1927

try's stand on the sugar tariff. I do not know whether it is implied

in Mr. Baldwin's correspondence or not, but it was never implied

in my correspondence. I had spoken with Mr. Hard at other
times, but not at all pertaining to the sugar tariff.
Senator CA11AWAY. The letter of Mr. Baldwin, as I now recall,
intimated that you said that Mr. Hard was ready to take the air.
Mr. MEnMEY. Yes. Mr. Hard said that he intended to give a
radio talk on the subject that I am just discussing, namely, tariffs
about which business people might not know, and which affected
their business.
Senator CARAWAY. You say he called on you; he called up?
Mr. MERMPEY. He telephoned the office of the American Bottlers
of Carbonated Beverages.
Senator CARAWAY. Now, that is rather interesting. He says:
Mr. Mermey called on me at his request to give me his data regarding sugar.
He gave it to me as his opponents In other sugar lobbies hostile to his have
given me theirs. I never at any time agreed to send out any story about it
on Mr. Mermoy's side of the argument nor on any other partisan side of it,
nor have L

That is his statement.

Mr. MEnRMEy. The latter part of that is absolutely true. He never
did agree, as I said.
Senator CARAWAY. Is it true that you called on him?
Mr. MERMEY. I did. te telephoned our office and asked me if I
would come down, and I called at his office in the La Salle Blilding.
Senator CARAWAY. He says that the facts are that Mr. Mermey
called on him at his request.
Mr. MERMEY. I beg your pardon. Mr. Hard has the facts incorrect.
Senator CARAWAY. All right. You were writing an article, as
appears in this record somewhere, for the American Mercury on propaganda. Did you ever finish that?
Mr. IRMEY. NO. As it hap pens, my wife was ill virtually the
entire time she was here, which made it impossible for me to get
additional information. That was one of the things about which I
spoke to Mr. Hard in various other correspondence.
Senator CARAWAY. It is still coming?

Mr. ME11MEY. Oh, no. I am sorry. I could not possibly do it.

It would require a great deal of information down here, which I
could not possibly get, not being hero permanently. I had written
the American Mercury, and they thought it would make a splendid
article. Other people have written on the subject, sineo then.
Senator CARAWAY. There were a lot of bright ideas given yesterday
that died. This is one of them?
Mr. MRnMiY. Yes. Undoubtedly a good many ideas did not die.
It is just the law of averages. Some of them die and some of them
do not.
Senator CARAWAY. The best ones had bad luck and died?
Mr. MEnMEi. I suppose. May I make just one statement?
Senator CARAWAY. Yes, sir.

Mr. MERMEY. If it would appear from any of my correspondence

which is incorporated in the record that the slightest reflection whatsoever is cast upon the integrity or the independence of judgment of
any newspaper man, I want personally to apologize to that news.

1928

LOBBY INVESTIGATION

paper man right here and now, because there certainly is none
intended. I know that newspaper men are such that nobody can
influence their judgment.
Senator CARAWAY. Why do you have to defend them?
Mr. M nMEwY Simply because I wan-tthe record on that clear, sir.

I know myself there are places where it would appear from my cor.
respondence that a reflection mi ght be cast and I did not want it cast.
Now, with reference to the United Press, I might say that I have
been with them at one time, and I think they loan over backwards
in not trying to take any stuff of mine except what they felt was
absolutely news; and also in the case of the United States Beet Sugar
Association; that is the United Press articles in the case of the United
States Beet Sugar organization, because Mr. Sam Fried, their publicity man, ha-also been a United Press man at one time. I have
seen 30,000 or 35,000 clippings on the sugar tariff, and I know that
they have not carried anything except what could be unqualifiedly
called news.
Senator WALSH of Montana. Would you like to make the same
apology concerning reflections cast upon United States Senators?.
Mr. MEnu.Y. Oh, I am sorry if there has been any such reflection
cast. I have the highest regard for them.
Senator WALSH of-Montana. Some of your correspondence would
indicate that.

Mr. MERMBY. As I say, I am very sorry now.

Sonitor CARAWAY. I presume everybody will be happy now.
Mr. MERMEY. Thank you, sir.
Senator CARAWAY. The committee will meet to-morrow morning

at 10 o'clock.
(Whereupon, at 12 o'clock m. the committee adjourned until
to-morrow, Friday, January 10, 1M30, at 10 o'clock a. in.)

Of
th

ex

thi
Sir

LOBBY INVESTIGATION
Friday, january 10, 1930
UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY,

Washington, D. 0.
The subcommittee met, pursuant to adjournment, at 10 o'clock

a. m., in room 212, Senate Office Building, Senator Thaddeus H.

Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Blaine, and Walsh of
Montana.
Also present: John G. Holland, Esq., counsel to the committee.
Senator CARAWAY. Mrs. Jones, come around, please.

TESTIMONY OF MRS. GLADYS MOON ONES, WASHINGTON, D. C.

(The witness was duly sworn by Senator Caraway.)
Senator CARAWAY. Give the reporter your name and residence.
Mrs. JONES. Gladys Moon Jones, 1310 Thirty-fourth Street,
Washington D. C.
Senator dARAWAY. What is your occupation?
Mrs. JONES. I have a publicity bureau.
Senator CARAWAY. You are hi the employ of what particular one
of these branches of lobbyists, please, ma'am?
Mrs. JONES. I have had the United States Sugar Association and
the American Chamber of Commerce of Cuba.
Senator CARAWAY. What do they pay you?
Mrs. JONES. The United States Sugar Association has paid me
my personal salary, $230 a week.
Senator CARAWAY. And what else?
Mrs. JONES. And they pay the expenses of the office, the running
expenses, when it concerns sugar.
Senator CARAWAY. And what does that amount to?
Mrs. JONES. Well, all of last year, 1929, from March 4 on-I
think you have it in the record. It averaged about $700 a week.
Since then it has been somewhat less.
Senator CARAWAY. What is it now?
Mrs. JONES. The last one I noticed was $400.
Senator CARAWAY. $400 a week?
Mrs. JONES. Yes.
Senator CARAWAY. That is your expense?
Mrs. JONES. Not altogether. That is all the salaries.
Senator CARAWAY. That is your salary and everything?
Mrs. JONES. Yes, sir.

Senator CARAWAY. What do you do with this so-called expense

money?

1929

1930

LOBBY INVESTIGATION

Mrs. JONES. It goes for paper ad envelopes, mimeographing, and

any thing that is necessary in putting out publicity.
Senator CARAWAY. Suppose you furnish us an itemized statement
of your expenses.
Mrs. JoNEs. You have it, I think, haven't you?
Senator CARAWAY. I don't think so.
Mrs. JONES. Mr. Lakin gave it all to you..
Senator CARAWAY. Well, I will let you furnish it to us.
Mrs. JONES. All right. It is in my files down here.
Senator CARAWAY. How long have you been with the Cuban sugar

people?
Mrs. JONES. Since March 4.
Senator CARAWAY. This last year?
Mrs. JONES. 1929.

Senator CARAWAY. What were you doing for those people, Mrs.
Jones?
Mrs. JONES. Anything that had to do with mobilizing public
opinion for them.
Senator

CARAWAY.

How did you go about it?

Mrs. JONES. I put out special releases to correspondents. I looked

into different bureaus, agriculture and commerce for statistics, and
mobilized statistics and put it out through pamphlets or mimeograph
sheets to editors, mailed directly to editors. I also wrote stories on
a weekly sheet that went to weekly newspapers throughout the country.
Senator CARAWAY. Have you got copies of those documents that
you put out?
Mrs. JONES. Oh, yes.

Senator CARAWAY. Will you file with the committee copies of

them, please?
Mrs. JONES. Do you mean copies of everything we have put out?
Senator CARAWAY. Well, these douuments-these learned documents that you sent out.
Mrs. JONES. Of course there are lots and lots of them. There are
files full of them. You want a copy of every one?
Senator

CARAWAY.

Senator

CARAWAY.

Yes. All right. Did you succeed in. having

Senator

CARAWAY.

Can you give us some estimate of the number

No, no; if there are that many. I did not

know there were that man

Mrs. JONES. I will furnish you samples.

many of them published in the newspapers?

Mrs. JONES. We certainly did.

of papers that carried your releases?

Mrs. JONES. Well, it would depend on the different ways we put
them out. If we put them out to correspondents, they were never
carried-I think in only one case was the story carried as we put it
out. The boys always rewrote them or included them in a general
story. When we sent them to editors, the clipping bureaus returned
them very often as we put them out. On the country news letter I
should say about one-fourth of the editors who got them used them.

Senator

CARAWAY.

Just as you put them out?

Mrs. JONES. Just as we put them out.

Senator CARAWAY. They were all, of course, in the interest of a

lower tariff on sugar or to maintain the present tariff?

Mrs. JONES. Yes.

LOBBY INVESTIGATION

1931

Senator CARAWAY. That was the purpose of them?

Mrs. JoNEs. Yes, sir.

Senator CARAWAY. And that was the kind of material that they
carried?
Mrs. JONES. Yes, sir.
Senator CARAWAY. Now, what did you do for the Cuban Chamber
of Commerce?
Mrs. JONES. I handled stories on the fruits and vegetables. Any
story that was sent to me by any member of the American Chamber
of Commerce of Cuba. Of course, there are some 250 members.
I pa 0t
out stories for Fleischmann 's yeast, for Ford automobiles-a lot
of things that had nothing to do with the tariff.
Senator CARAWAY. You say you put out propaganda for the
Yeast Co.?
Mrs. JONES. No. That was not yeast propaganda. It was simply
"Eat more yeast."
Senator CARAWAY. "Eat more yeast and drink less liquor and grow
fat"?
Mrs. JONES. Yes; and Ford automobiles.

Senator CARAWAY. Advocating the use of Fords instead of large

cars?
Mrs. JONES. Or anything that any member of the Chamber of
Commerce of Cuba was interested in saying, I ran.
Senator CARAWAY. Any enterprise in which he had an interest.
Mrs. JONES. Certainly.
Senator CARAWAY. You advertised that?
Mrs. JONES. Yes.

Senator CARAWAY. Without knowing whether it was good or bad?

Mrs. JONES. Oh, I rewrote the story. I never used the stories that
they wrote.
Senator CARAWAY. Well, you used the substance of them?
Mrs. JONES. Certainly.
Senator CARAWAY. It would be interesting to know just briefly
what did you say about Ford cars, that had not been said before?
Mrs. JONES. I can not remember offhand, but I always try to make
it interesting and accurate.
Senator CARAWAY. It was to use more Fords?
Mrs. JONES. Yes. It had nothing to do With tariff; lots of aviation,
too.
* Senator CARAWAY. Was one of the members interested in aviation?
Mrs. JONES. Certainly, and in the International Airways and
that sort of thing.
Senator CARAWAY: Then that was a special employment, was it?
Mrs. JONES. Yes, sir. That is another thing entirely separate.
Of course, it did dovetail in with the general goodwill toward Cuba
very often, but sometimes it did not.

senator CARAWAY. You know, what is curious about it, I did

not know they made Ford cars in Cuba.

Mrs. JONES. They do. They have an office down there. Their
man is a member of the American Chamber of Commerce in Cuba.
That chamber of commerce represents a billion and a half American
dollars invested in Cuba. It is not only sugar, but everthing.
In fact, the sugar people do not belong to the American Chamber
of Commerce in Cuba. I think somebody testified to that.

1932

LOBBY INVESTIGATION

Senator CARAWAY. The Ford Motor Co.-some member of this

was an agent for the Ford car?

Mrs. JONES. Undoubtedly. The Ford people in Habana.

Senator CARAWAY. That was just a sales organization?
Mrs.JONES. Certainly. Of course, all the Habana papers received
our service, too, and they were interested in that.

Senator CARAWAY. And the airways; were you paid especially for

that?
Mrs.

JONES.

I was not paid especially.

can Chamber of Commerce of Cuba.

I was paid by the Ameri-

Senator CARAWAY. I have forgotten how much you said they paid

you.

Mrs. JONES. Well, I have never said. They paid me on a 6-months'

contract, divided up into monthly salary and expenses, it was

$1,333.33 a month.
Senator CARAWAY. The 33 cents was for airways, and the other

was for yeast and Fords?

(No response.)

Senator CARAWAY. How long is than contract to run?

Mrs. JONES. The contract terminated on December 1.

Senator CARAWAY. Were they not satisfied with the service?

Mrs. JONES. They were satisfied with the service

I have a letter from Mr. Hartenstein.

that, when he terminated it.

they said.

You might lke to have

I think that perhaps they were satis-

fied, but I think they had a hard time collecting the money, and
I think some of them were frightened at the lobby investigation.
That is my personal opinion.
Senator CARAWAY. And you lost a client on that account?
Mrs. JONES. I don't know that I did.

Senator CARAWAY. That would excuse this bitter release that you

got out, that you lost a part of your business.

Mrs. JONES. Oh, not at all. I would like to put that letter in the
record, that Mr. Hartenstein wrote.
Senator CAnAWAY. All right. You may do that.
(The letter referred to is as follows:)
TnRALL ELECTRIC Co.,

labana, Cuba, January2, 1030.

MY DI tAMrs. Jo. *-s: Thank you very much for your letter of December 30.
Also please accept my appreciation for your no-charge courtesies in connection
with your reports.
I can not tell you how much I regret tho lack of "permanenc.y" in connection
with the "permanent" committee, but there is an old saying which reads "money
makes the mare go," and I assume that this Istrue in our instance.
Undoubtedly, there are some among us who were not really happy over the
lobbying situation, but none of us who were interested itthe United States-Cuba
situation from a purely ethical, fair and square, reciprocal motive had ought to
fear from the investigating committee. As a matter of fact, we had every reason
to welcome an expose of our activities, since our program was strictly educational,

so that "he who runs might ride."

Another thought which occurs to me Is centered on the patriotic angle of

our activities as American citizens. While there is no denying the fact that those
of us who live in Cuba would be benefited by favorable action in the matter of tle
sugar tariff by maintaining the present or a lower tariff schedule on sugar, never.
theless, I can conscientiously say that our real Incentive In carrying on our WashIngton office was that of forcing our legislators, through the thinking public, to
give Cuba, our sister Republic, a square deal which, unfortunately, for reasons.
beyond my ken, she has not always had at the hands of our Oovernment.
I believe that your feeling In the matter was and is akin to my own.

LOBBY INVESTIGATION

1933

I am convinced of the ability and possibilities of the All States News Bureau in
swaying public sentiment into the proper channels so that our Congress may really
know the wishles of the people and prevent the consumnmation of enactments which
will only discredit our Government in the eves of Latin America and probably in
the eyes of other nations also. If you see fit to carry on the propaganda initiated
by our permanent committee under your capable management and under the
auspices of the All States News Bureau, you will have the satisfaction of knowing
that you are carrying on a good work, worthy of the commendation of all rightthinking Americans. Accept my very best wishes and any personal services which
I may render you in connection with he cause.
Your personal congratulations are very much appreciated and shall be delivered to Mrs. Ilartenstein. I trust that we may avail ourselves of the opportunity to look in on you some time when the opportunity is afforded.
With every good wish for the new year and kindest regards to you and to Mr.

Jones, I am,

Sincerely yours,

Illuo HARTENST8IN.
Mrs. GLADYS MooNc JoNEs,
Washington, D. C.
P. S.-Please send me a receipted invoice for my remittance for the month of
November as final liquidation of our account. I desire this to close my commnittee entries for submission to the chamber. Thanks.

Mrs. JONES. He sets forth-he hired me, and he sets forth in this
]otter his reasons for terminating the contract.

Senator.OArAWAY. Did you write a letter--I want to show it to

you-this is a copy of a letter that you wrote to Mr. Lakin?
Mrs. JONES. Yes. I wrote it, bit I want to ask you what right
have you to have it?
Senator CARAWAY. Well, we seem to have it.
Mrs. JONES. Well, how did you get it? By what right have you
my personal letter in your hands?

Senator

CARAWAY.

We will argue that some other time.

Mrs. JONES. Well, I would like to.

Senator CARAWAY. We will appoint some date for argument and

set it down for a special hearing.

Mrs. JONEs. Then don't forget about it.

Senator CARAWAY. This letter is to Mr. H. C. Lakin, 441 Lexington Avenue, New York City:
DFEAlt MR. LAKIN: I have been hearing from all sides of the splendid appearance you made before the Senators. You certainly have covered ill of us with
glory. Even the so-called contact man, a former "lerald-Tribune nman, belongag to tie Domestic Beet Sugar Association, came into my office to tell me
what a good man we had before the committee.
I had a most gratifyingly successful time before the New York Advertising
Women. Thev were extremnelv intelligent, and some of them ind worked on
different aspects of the tariff bill. Though I was only stipposed to talk about
20 minutes, their barrage of questions kept me on m." feet for one hour and a
half. A New York Times woman sat beside me and asked for material for a
features tory. Both business and professional women and advertising women
asked what they might do individually and aS groups. These speeches I find
brought our cause a good deal of publicity. I received also two congratulatory
telegrams from Cuba, copies of which I ataph.
I also inclose a few clippings which may be interesting.

Which Senators
were so charmed with Mr. Lakin, that had covered
with lory?_
everybody
rs. ONES. ou yourself said that-that was the first time-you
commented on his honesty.
Senator CARAWAY. Yes.

telling the truth.

Mrs. JONES. Oh, yes.

That is the time we thought he was

You see the date of the letter.

1934

LOBBY INVESTIGATION

Senator CARAWAY. Yes. I see.

Now, who was the contact man,

the former Hearld-Tribune man, that was so charmed?

Mrs. JONEs. Tie contact man?

ot
oth
Ih

Senator CARAWAY. Yes.

Mrs. JONES. For the beet sugar people?

Senator CAnAwAY. Yes.
Mrs. JONES. I don't know. I suppose one of the boys in the beet

wO

Mrs. JONES. I don't remember.

Senator CARAWAY. You don't remember?

He

sugar office. They are all good friends.

Senator CARAWAY. Well, which one was this one?
Mrs. Jones. No, sir.

Senator CAAWAY.- Well, who was this lady that wanted you to

furnish her information so that she could get out a feature story?

Mrs. JONES. A New York Times woman. I have forgotten her

name.

Senator CARAWAY. Possibly she did not have any.

Mrs. JONES. I have got it in my files. I sent her the material.

Senator CAnAWAY. Did she publish it?

Mrs. JONES. I think she did; yes, sir. One of the clippings I sent

was the New York Times.

Senator WALSH of Montana. Mrs. Jones, had you been operating
your business prior to your association with the sugar people?
Mrs. JoNEs. No, sir. I have been in Washington three years, and
I was with the News Service for a year. I wrote for the Ladies Home
Journal last year. I did this from March 4, 1029. I did not have a
publicity bureau before then. I started It--it is fair to say that I
started it on this one client., the United States Sugar Association.
That is the way all publicity bureaus usually start.
Senator WALSH of Montana. And the other clients that you have
or have had, you have acquired since that time?
Mrs. JoNEs. Yes,-sir.
Senator CARAWAY. You were in the newspaper business, though?
Mrs. JONES. Off and on, yes; some in Chicago. I have always

written some, you see.

Senator WALSH of Montana. Have you any other clients besides

these?
Mrs. JONES. Yes, sir; I have.

Senator IVALSH of Montana. Are they in any way related to the

tariff legislation?

Mrs. JoNEs. No. I should not say that they were. I explained

"
how the American Chamber of Commerce of Cuba was.
Senator WALSH of Montana. I was asking in addition to that.
Mrs. JONES. 11l, I don't know. Things might come up. I am
doing some work for Nellie Taylor Ross, of the National Democratic
Committee. As yet there has been no tariff slant on it, but I can not
say that there wotild not be, in the way of politics, but it certainly
has nothing to do with sugar.
Senator WALSH of Montana. Have you had any assistance in your

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work?

Mrs. JoNEs. Oh, yes; much.

Senator WALsn of Montana. How much of a force have you?

Mrs. JONES. I have three girls in my office now.

Senator WALSH of Montana. Are they writers or just amanuenses?

pap
I

LOBBY INVESTIGATION

1935

Mrs. JONES. One of them is a writer, a research secretary, and the

other one is a secretary. The other is a~typist. From time to time
I have had people outside.
Senator WALSH of Montana. Who are they?
Mrs. JONES. I have no one outside now.
Senator WALSH of Montana. But I mean the women who were
working with you, other than the typists.
Mrs. JONES. You want the names?
Senator WALSH of Montana. Yes.
Mrs. JONES. Miss Barbara Giles is my research secretary. Miss
Helen Critohett is my personal secretary, who handles both my office
and my social work, and lives with me.
Senator WALSH of Montana. Are their salaries paid out out of
yours?
Mrs. JONES. Yes. They are a part of the general budget. They
are not paid out of my personal salary; no, .sir.
Senator WALSH of Montana. Their salaries go into the general
expenses of your office?
Mrs. JONES. Yes, sir. When I have another client that is not
concerned in this work, their salaries are paid by me. That is, when
they are not doing United States sugar work. I have outside work.
Senator WALSH of Montana. You spoke about others being engaged by you occasionally.
Mrs. JONES. Yes. I had Miss Mary Carpenter hero who is correspondent for La Princais. She writes in Spanish. She handles
the %Spanishclipping bureau. Every morning she goes over the
clippings that come from the Spanish newspapers, and notices what
is in them, and what they say. These were not stories that I had
released, but they were stories to keep me in touch with anything
that any Spanish country had to say.
Senator WALSH of Montana. Well, what was the object in pursuing
a study of these South American papers?
Mrs. JONES. I think it is very important, because our Nation is a
citizen of the world, and if something is said in Brazil, or any statistics quoted, that has to do with international commerce, I think it
is very important. My job, as publicity agent for those people, was
to mobilize statistics and arguments, and put them out so that I
could mobilize public opinion, and it is all very necessary.
Senator WALSH of Montana. But I was trying to follow this
particular matter of clippings from the Spanish or South American
paers.
Irs. JONES. For a long time I ran every week a release called
Cuban Press Opinion, and I just put it out. That is all I said,
Cuban Press Opinion, and then paragraphs from the different editorials and different papers; and it was used.
Senator WALSH of Montana. I could understand that very well
but I was curious to know about Brazil and the Argentine, and
Chile, and Ecquador.
Mrs. JONES. Of course, all the Spanish countries hang together.
What affects one affects the other.
Senator WALSH of Montana. You did not examine the German
papers, of course?
Mrs. JONES. Oh, yes. I keep very closely in touch. Personally
I am very much interested in international good morals, and I keep
in touch with everything.

1936

LOBBY INVESTIGATION

Senator WALSH of Montana. But that was quite aside from your
employment.
Mrs. JONES. No, I don'f think so.

I think that the whole world

is watching our treatment of Cuba. We talk about small republics

and their right -to live, and I think that any editorial comment in
France or anywhere else in the world is very important.
Senator WALSH of Montana. How do you keep yourself advised
about French and German opinion?
Mrs. JONES. With connections I have with people interested in
the League of Nations and that sort of thing.
Senator WALSH of Montana. You do not employ any special
translator, however?
Mrs. JONES. No. It had nothing to do with the sugar proposition.
Senator WALSH of Montana. Wait a minute. You do not employ
an special translator to examine German or French papers, as you.
di the Spanish or South American pa rs?
Mrs. JONES. YOU must remember that they were paying my
expenses.
Senator WALSH of Montana. Please answer my question.
Mrs. JONES. No, I did not. I could not do that, within the terms
of my contract.
Senator WALSH of Montana. Now, if you care to say anything.
irs. JONES. I say that the.United States Sugar Association was
paying the expenses-was paying this girl's salary, and it would not
be within my power to hire a girl to keep in touch with Frnce when
t
they were not interested in France.
Senator WALSH of Montana. So that I understand you, you felt
justified in employing a Spanish translator?

kac
eff

Senator WALSH of Montana. To translate comments of South

American papers?
Mrs. JONES. No, no. Any Spanish papers. I felt justified in collecting from all the sources I could anything that would help me.
Senator WALSH of Montana. Oh, yes; but you went to some extent
to collect South American sentiment?
Mrs. JONES. Certainly. That was within my contract. That is
what.I was doing.
Senator WALSH of Montana. Exactly, and I am trying to find out
why you collected South American sentiment. I understood you to
sa that whatever affects one of these Spanish countries affects the
other?
Mrs. JoNEs. I will tell you why. The American Chamber of Commerce of Cuba-the members of that are people like the Electric
Bond & Share. Co., who have different interlocking interests in all
Spanish countries. Their interest in Cuba-the man that is representing them in Cuba is going from Cuba to Brazil.
Senator WALSH of Montana. Let us come directly to it. Some
testimony here of quite conclusive character is to the effect that an
effort was made to cultivate hostile sentiment.

thi

Mrs. Jo,%Es. Certainly.

Mrs. JoNjes. No, no.

Senator WALSH of Montana. In the South and Central American
republics, arising out of a desire or disposition to impose additional
duties upon Cuba.

not

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sta
tor
wit
ha.
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tha
h

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self
in
ab

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LOBBY INVESTIGATION

1987

Mrs. JONES. You are referring to Mr. Lakin. That had nothing
to do with what I did, whatever.
Senator WALSH of Montana. Wait a minute, please. I want to
know from you whether your clipping bureau was not organized and
your Spaish interpreter employed with a view to finding out how
effective that propaganda was.
Mrs. JONES. Not at all; not from my standpoint. Mr. Lakin had
nothing to do with me employig this girl. She is a personal friend of
mine. I employed her because I wanted to keep in touch with the
statistics that they put out. I wanted to know what their agrioultural department said and that sort of thing. HIe had nothing to do
with it at all, except that he did not object to its being done, but I
had no purpose whatever in doing anything that was against the
building up of goodwill between all of these countries, and I know
that is true.
Senator WALSH of Montana. But you were eager to find out
whether some ill-will subsisted.
Mrs. JONES. Certainly. Aren't you?
Senator WALSH of Montana. I have not been employing extra
help for that purpose.
Mrs. JONES. Maybe you should You certainly do not cut yourself off from finding out what is going on in the world.
Senator WALSH of Montana. I suppose we all have some curiosity
in that matter. Now, about the help that you have. You told us
about one lady. I have forgotten her name.
Mrs. JONES. Mar Carpenter.
Senator WALSH of Montana. Yes. Who is Miss Carpenter?
Mrs. JONES. I told you a minute ago she is correspondent for La
Princais. That is a New York Spanish paper.
Senator WALSH of Montana. Did she do any work in addition to
this clipping proposition?
Mrs. JONES. From time to time she brought up small stories for
this country letter that goes out to the smaller newspapers throughout
the country; what we called all the time as "good-will stories"
between the South American countries and this country. Being
correspondent of La Princais she was in touch with numbers of
things. It was her business to keep her eyes open about this, and she
brought me tips on different things, the dissemination of which would
have the general effect of building up good-will toward Cuba.
Senator WALSH of Montana. Did she write any?
Mrs. JONES. Oh, yes. She wrote these small stories. She never
wrote a release that I put out to correspondents or any of that sort
of thing, but these human interest stories or good-will stories, she
wrote several of them.
Senator WALSH of Montana. For publication where?
Mrs. JONES. For publication in this letter that I put out weekly
to the smaller newspapers throughout the country.
Senator WALSH of Montana. Anything further that came from
her?
Mrs. JONES. No. I can not remember anything further.
Senator WALSH of Montana. Did she write any stories for the
South American or Cuban papers?
Mrs. JONES. Not under my direction.
78214--" 6-11

1988

LOBBY INVESTIGATION

Senator WALSH of Montana. As far as you know, she did not?

Mrs. JONES. As far as I know, she never did. She wrote for La
Princais in New York. I do not know what she wrote under that.
Nothing under my direction whatever.
Senator WALSH of Montana. What amount was she paid?
Mrs. JONES. $25 a week. Of course, she had nothing else to do
but bring up these clipping every morning. That is, this Spanish
clipping bureau was not a clipping bureau that I started or that the
sugar people started or anything. It is a Spanish clipping bureau
that serves everybody. It has nothing to do with our organization
whatever. We subscribe to it.
Senator WALSH of Montana. Could you furnish a sample of the
stories that she wrote, which you sent out to the country papers?
Mrs. JONES. Oh, yes.

Senator WALSH of Montana. I wish you would do that.

Mrs. JONES. Yes, sir.

WASH of Montana. Now, who else besides
Miss Carpenter
didSenator
you
employ?
..
rs. JONES.Who
n we first started up and things
were very livel

I had numbers of people who would furnish first drafts of stones. W

is impossible for one person to do it all when we were working hard.
Senator WALSH of Montana. Could you give us a list of those?
Mrs. JONES. I don't know. Have you got the letters there, Mr.

Holland? I discontinued them from time to time, and I can not

remember.
Senator WALSH of Montana. Let me ask you specifically from the
information we have here.

Mrs. JONES. I employed them only by the week or by the piece.

Senator WALSH of Montana. You had Mr. J. E. Jones, did you not?

Mrs. JONES. Mr. J. E. Jones is a publicity man here whose services

to me were very valuable in the begining.
Senator WALSH of Montana. What was the nature of his service?
Mrs. JONES. Well, he took care of this country news letter for two
or three weeks. While I was very busy putting out special releases to
correspondents, and through persona contact, working with newspaper people. I mean by 'personal contact" this visiting with them
or ta.lkng over the situation with any man who happened to drop into
myofflce. There are five offices on the other side of this sugar fence
in this town, and the newspaper menl would come to my office. They
would come to me and say "I am writing a sugar story. I have been
to all of the other offices." Maybe those people oidy went where
the; could get statistics or a slant on the other side.
Senator WALSH of Montana. Is Mr. Jones related to you in any
way?
Mrs. JONES. No, not at all.

Senator WALSH of Montana. What is his organization?

Mrs. JONES. I 4o not know for sure. He has something which he

calls the Industries News Service. I don't know. It has been a good
while. In the beginning I had lots of advice from that man, and I
heard he was one of the best publicity men in town, and I went to see
him, naturally. I wanted to know the best ways of doing this thing.
Senator WALSH of Montana. Did he do an writing, as well?
Mrs. JONES. I say he handled my country letter for several weeks,
and I don't know that he himself did any writing. He rewrote some

LOBBY INVESTIGATION

1939

or hensuggested
I think,
of
my stories,
the end. but I did the
all then,
the writing
alwaysnow
doneand
I have
writing.
Senator WALSH of Montana. In a general way, he runs one of these
publicity organizations?
Mrs. JONES. Yes, sir.

Senator WALSH of Montana. Did he do anything with respect to

this sugar question that you know of, on his own account?
Mrs. JONES. No. I don't know whether he did or not. I rather
doubt it. I do not know.
Senator WALSH of Montana. What salary did he get?
Mrs. JONES. For the weeks in the beginning that I employed him,
I paid him $100 a week, which included his services and his advice..
Senator WALSH of Montana. How long did that arrangement
continue?
Mrs. JONES. I don't know. You have it there in the files. It was
discontinued a long time ago. I should say it was discontinued in
June, perhaps. I am not sure.
Senator WALSH of Montana. And you had a Mr. Helm on your
pay roll for a while?
Mrs. JONES. For three weeks, I think; three or four.
Senator WALSH of Montana. Who was Mr. Helm?
Mrs. JONES. I don't know. I do not know how to say what he is.
He is just an old newspaper man who does various things.
Senator WALSH of Montana. Does what?
Mrs. JONES. He does various things. At that time he had a news
service, and I paid him only for his advice and handling some spot
news breaks. He wrote first drafts on two or three stories that broke
suddenly. He was used to doing that sort of thing, and when I got
in a jam the first four or five weeks I went to him. His office was
across the street, and I called on him. I don't know just exactly
what he does. I think he has discontinued his office.
Senator WALSH of Montana. What pay did he get?
Mrs. JONES. I don't know. Did it start out at $100 a week?
You have it there. It is in the very beginning.
Senator WALSH of Montana. $50.
Mrs. JONES. $50.
Senator WALSH of Montana. Week ending March 10 is mentioned

here.

Mrs. JONES. March 19, $50?

Senator WALSH of Montana. Yes.
Mrs. JONES. That is probably it, then.
Senator WALSH of Montana. Perhaps your letters will give us
more definite information about Mr. Helm. I have here a letter
from you to Mr. Francis, as follows:
Fortunately William Helm Is willing to cooperate with me In sugar tariff

publicity.

This is February -13, 1929. 1 thought, Mrs. Jones, that you did
not commence until March.
Mrs. JONES. Well, I did not go on contract until March 4. I
signed a contract on March 4, but I did about $3,000 worth of work
on this thlng before they started paying me for it.
Senator WALSH of Montana. When did you actually begin work?
Mrs. JoNzs.- March 4-oh, actually-I mean I was working on itnow let me think. From the time they suggested to me, which was

1940

LOBBY INVESTIGATION

probably late in January or February-a friend of mine suggested

to me that it might be a good idea and naturally I thought it might be
a good idea. I went to work seeing how it could be worked out.
Just at that time I had finished a series of articles for the Ladies Home
Journal and I was looking for something else to do, and I decided that
it might be a good idea. That is when I went and saw Mr. Jones,
because I heard he was a good publicity man. I. saw Mr. Helm
because I heard the same thing about him. I saw numbers of people,
and that is when I took it up with Mary Carpenter and everybody,
and commenced working'on it. I was interested in it, but I was not
paid except from the date of March 4.
Senator WALSH of Montana. But what arrangement did you have
with the sugar people prior to that time?
Mr. JoNis. None at all, except that I have a friend-that is, my
husband has a friend who was connected with Mr. Shattuck's office
or law firm at that time. We saw them often. They were in the
Army together." We saw them frequently, when he came to Washington and it was just talked about. There was no definite relation.
ship whatever.
Senator WALSH of Montana. You went on and did this work and
incurred this expense?
%Irs.JONES. I incurred no expense. I was not doing anything. I
simply talked.
Senator WALSH of Montana. Well, you did associate Mr. Helm
with you, did you not?
Mrs. JONES. I did not pay him.
Senator WALSH of Montana. But you must have had some arrangement with him.
Mrs. JONES. I simply said to him "I may get a contract-a publicity contract. If I get the publicity contract would you be willing?"
k
I never paid a cent of money to him.
Senator WALSH of Montana. And as I understand, you did $3,000
worth of work?
Mrs. JONES. I mean counting my time. I did not spend any
money.
Senator WALSH of Montana. You say:
Fortunately William Helm Is willing to cooperate with me in sugar tariff publicity. He was from some time In 1923 dntil In 1925 publicity representative for
the domestic sugar interests and knows them from A to Z.
That is to say, during that time he was on the other side of the
question.
Mrs. JONES. No, sir. A long time before that, didn't I say?
Senator WALSH of Montana. Some time in 1023 until 1025.
Mrs. JONES. Well that is a good while ago; 1925 to 1929.
Senator WALSH of Montana. Anyway, from 1923 to 1925 apparently
he was on the other side of the question.
Mrs. JONES. So he said.
domestic sugai
Senator WALSH of Montana. Representing the
interests?
Mrs. JONES. That is what he said.
Senator WALSH of Montana. So, presumably he knew a good deal
about the inside of their workings?
Mrs. JONES. He said he did.

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1941

LOBBY INVESTIGATION

Senator WALSH of Montana. Was that a consideration in engaging

him?
Mrs. JONES. Well, I don't see why it wouldn't be.

think it is?
Senator WALSH of Montana. You continue:

Don't you

Ho has recently been approached by the American bottlers of soft drinks to

start a campaign against the sugar tariff, but has made no contract with them.
I inclose his news story released when the domestic producers first began their
current campaign.
As you know, Hawaii, the beets, Colorado, Louisiana, and Porto Rico all
have their publicity bureaus here. Normally they are at each others throats,
but are now united against the Cubans. Mr.
pelm
has all the ropes in his hands
to set the New York World on to this sugar lobby in Washington. And I will
use all my voltage on the editorial writers and special correspondents to see that
the stories go out as outlined in my first letter.

How long did Mr. Helm continue to associtae with you?

Mrs. JONES. I think three weeks. I could not get along with Mr.
Helm.
Senator WALSH 'of Montana. Now, who is Helen Critchett?

Mrs. JONES. That is my personal secretary. She lives with me.

She handles all my work.
Senator WALSH of Montana. And Miss Barbara Giles is the other
helper you spoke of?
Mrs. JONES. Yes, sir.

Senator WALSH of Montana. Mr. Barbee I see was also associated

with you, Who is Mr. Barbee?
Mrs. JONES. He is a free-lance writer in town.

He wrote first

drafts of a good many stories. There were some days we put out two
stories, and when I had to have some help he kept writing stories.
He is a good writer, and he has a way of putting lots of words out.,
and I had him do it for me.
Senator WALSH of Montana. How long was he with you?
Mrs. JONES. Off and on, every time I got in a jam I called him up.
He has not been with me for several months.
Senator WALSH of Montana. I see you reported, by letter of May

24, 1929, to Mrs. Francis as follows:

We are enclosing advance copy of Barbee's Sunday feature. He says that they
have cut his best propaganda paragraph. However, please protect him by keep.
Ing his relationship with us pretty confidential.

In the first place, can you tell us who "they" are, that thus

cavalierly treated Mr. Barbee?

Mrs. JONES. I suppose the editors. I did not pay him for writing
that feature at all, you understand. I never did. I paid him for
small stories that he wrote for me.
Senator WALSH of Montana. What editors?
Mrs. JONES. I don't know. Doesn't it say there? He writes for
various papers.
Senator WALSH of Montana. What is the meaning of this expres-

sion in your letter:

Please protect him by keeping his relationship with us pretty confidential.

Mrs. JONES. If he wanted to write a feature story and believed

what he was writing-I did not pay him for writing the feature story.
Iwrite
did not tell him not to write it. Naturally I was glad to have him

it. That was all.

1942

LOBBY INVESTIOATION

Senator WALSH of Montana. What i wanted to know was-

Mrs. JONES. Well, I did not think it was fair to him to turn around
and say that he was doing some things on the side for me, through
which he probably got some of the ideas that made him decide to
write the feature story.
Senator WALSH of Montana. Well, why not?
Mrs. JONES. I don't know. That was his idea.
Senator WALSH of Montana. Why not?
Mrs. JONES. I don't know. That was his idea.
Senator WALSH of Montana. His idea, that he did not want it
known?
Mrs. JoNEs. Yes.
Senator WALSH of Montana. He made that suggestion to you?
Mrs. JONES. Yes.
Senator WALSH of Montana. And you transmitted it?

Mrs. JONES. Well, certainly. I did not pay him for writing the
feature story. He was not writing the feature story for me.
Senator CARAWAY. I am curious to know why he should care if
anybody knew that he did write some stories for you.
Mrs. JONES. Because somebody might assume that because he was
writing little stones for me to get out m my country news letter, he
was writing this feature for me. Can't you see? But he was not.
Senator CARAWAY. No; I can't see such a thing.
Mrs. JONES. Well, that is it.
Senator WALSH of Montana. Was Mr. Barbee's story put out as
issuing from your office?
Mrs. JONES. Do you mean this feature story?
Senator WALSH of Montana. Yes.
Mrs. JONES. No. I should say not. I have just said it had nothing
to do with what he did for me.
Senator CARAWAY. Why was he reporting to you that they out
his best paragraph?
Mrs. JONES. Well, just naturally he said he was writing it. It had
nothing to do with what I wanted him to do.
Senator CARAWAY. Pardon me. That is not what I asked you.
Why was he telling you that they cut out his best propaganda paragraph?
Mrs. JONES. Just because he believed in what he was doing.
Senator CARAWAY. Well, it was a work of love?
Mrs.

JONES.

Well, there are a lot of people that are actually

idealistic enough to work for a principle.

Senatory CARAWAY. Yes, but they don't want that to be known.
Mrs. JONES. Well it is not because they don't want it to be known
but it is because nobody else will believe it.
Senator CARAWAY. I thought you said he asked to keep it a secret.
Mrs. JONEs. Nobody will believe that you are working for a principle. Everybody believes that I am doing this for money.
Senator CARAWAY. Well, I naturally inferred that.
Mrs. JONES. I was doing a whole lot that I did not get paid for.
Senator WALSH of Montana. What compensation did Mr. Barbee
get for the service he rendered?
Mrs. JONES. I said that when I got in a jam I called on him. Some
weeks therefore he would do a good deal. Then I think I paid him.

I th,

wha
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S
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N
sor

LOBBY INVESTIGATIO'94

1948

I think fifty or seventy-five dollars, according to how much space,what copies he put on my desk. Other weeks I might not call him in
at all, so I can t say. It is all down there.
Senator WALSH of Montana. Your books will show?
Mrs. JONES. It is there. You have it in your hands.
Senator WALSH of Montana. Another one who seems to have been
working with you was Mr. De Medina.
Mrs. JONES. Yes.

Senator WALSH of Montana. Do you recall him?

Mrs. JONES. Yes.

Senator WALSH of Montana. Who is he?

Mrs. JONES. He is the son of the Bolivian minister. You know,

Senator Walsh, you are going to cast a lot of shadows over these boys
and they did nothing wrong and I say to you that perhaps you would
like to argue the question with me that Senator Caraway side-stepped
a minute ago.
Senator CArAWAY. I will let him do that then.
Mrs. JONES. I maintain that you have no right, under the fourth
amendment of the Constitution, to have these things in your hands
at all.
Senator WALSH of Montana. Mention of that is made in your release this morning. I will take that up in a maute.
Mrs. JONES. I want to take it up with someone. I am interested
in the principles of these things.
WALSH of Montana. How long did Mr. De Medina work
forSenator
you?
JoNES. I don't know. He worked from time to time. He did
Mr.

not do any regular work for me, did he?

Senator WALSH of Montana. Well, I do not
Mrs. JoNES. I mean, for several weeks he appears on that budget
that you have there, and the weeks that he appeared on the budget
means that he also laid on my desk copy, which I either did not use
or did use, according to whether I had any cues for using it.
Senator WALSH of Montana. The same letter refers to Miss Eleanor
Hard. How much did Miss Hard got paid?
Mrs. JONES. Eleanor Hard did two errands for me in New York.
She went to see two people in New York. I sent her a check for probably $10. Doesn't it say $10?
Senator WALSH of Montana. It says you may be required to send
her that much. That was for errands that she did for you?
Mrs. JONES. Something that I asked her to get, or to go and see
somebody and get some statistics.
Senator WALSH of Montana. Did Hard do any writing for you?
Mrs. JONES. None at all. One of these errands I asked her to go
and get a picture. That was all, from somebody. I have forgotten..
Senator CARAWAY. May I ask you a question? Did you think
that if You had her on the payroll it might influence her father or
mother?a

Mrs. JONES. I don't think her father or mother are capable of

being influenced at all.
Senator CARAWAY. That is not what I asked you.
Mrs. JONES. No. She is a friend of mine. Her mother is a
sorority sister of mine. I have known them for years.

194

LOBBY INVESTIGATION

Senator CARAWAY. Well you have some other sorority sisters, you

do not give them all $10,

do you?

Mrs. JONES. I say you are wasting so much time and so much of
the taxpayers' money here asking me silly questions like that, and
then you tell me that I am paid too much for trying to tell the country
that Cuba--Senator CARAWAY. No, no..
Mrs. JONES. Now, I want to ask you a question. Do you know
that Cuba has, over a period of five earg, paid one quarter of the
entire customs duties collected by this country? Did you know
that?
Senator CARAWAY. No, I do not know that.
Mrs. JONES. It is a good idea for you to keep in touch with my
office. You would know that. If you come to my office, you
would find it out. That is my business.
Senator CARAWAY. Pardon me just a minute. Why don't you put
me on your mailing list?
Mrs. JONES. I id, and what did you do? You very pridefully
said, "I throw them in the wastebasket."
Senator CARAWAY. Yes-Mrs. JONES. Look what you were throwing in the wastebasket.
Senator CARAWAY. I did not know it was from you, though.
Mrs. JONES. Now, do you know that Cuba is our second largest export market for the textile industry,and that the textile industry-

Senator

CARAWAY.

I will get it.

The next time you write, mark it personal and

.

Mrs. JONES. I certainly will.

Senator BLAINE. Mrs. Jones, I assumed that the consumers paid

the taxes.

Senator CARAWAY. Oh, no. Cuba pays the tax.

Mrs. JONES. No. I say for instance Cuba spends 80 cents out of
every dollar in this country, and if Cuba can not sell her products in
this country she will not have that 80 cents in her pocketbook. It
is not a tax. You can not buy unless you sell and get money to buy

with.

Senator
tax.

BLAINE.

Oh, I understood that you said that Cuba paid the

Do you think the textile industry needs high protection? It needs export markets. That is what it needs.
Senator BLAiNe. I thought you said Cuba paid one quarter of the
customs duties.
Senator CARAWAY. That is what she said.
Senator BLAINE. The customs duties.
Mrs. JONES. I meant on Cuban products. That is a way of saying
it. On the Cuban products, Cuba has to pay it. That is one way of
saying it.
Senator BLAINVI. Of the duties collected, one fourth of them are
imposed upon Cuban.products?
Mrs. JoNEs. Yes, sir; more than Japan and Germany and England
and Canada combined-that little island of Cuba.
Senator BLAINE. But, I thought it was the American people who
paid the tax.
Mrs. JONES. It is at first, until it is absorbed. Talk to some economist about that. You know how it works out as well as I do.
Mrs.

JONES.

the
1

dep
pa

put
tha
of t
this
pre
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LOBBY INVESTIGATION

1945

Senator BLAINE. But when the American people absorb the sugar,
they pay the tax.
Mrs. JONES. Yes. When the tariff goes up, you don't know. It
depends on who manipulates it, what happens-whether the consumer
pays it or the countrY

Senator BLAINE. Well, I do not know how the consumer and the
public generally considers, of course, but I think their knowledge is
that they pay every penny of the tariff, because it is added to the cost

of the commodity.

Mrs. JONES. Well, suppose you get your propaganda across on that

this morning. It is a long story.

Senator WALSH of Montana. Let us confine our attention for the
present to what you are doing. I see that Mr. William E. Shea was
also either on your pay roll or considered. What is the fact about
that?
Mrs. JONES. Yes, he was, too.

Senator WAISH of Montana. Who is Mr. Shea?

Mrs. JONES. Mr. Shea is a research secretary for Mark Sullivan.
Senator WALSH of Montana. I see by your letter of June 24, 1929,
you say: "Please advise"-no, this is a letter from Mr. Francis to
you:
Please advise what Mr. William E. Shea is doing and what his connections are

and to that apparently you replied as follows, or Miss Critchett,

your secretary, replies:
You ask about William Shea. He is writing for Mark Sullivan and happens
to know a great deal about Cuba and the Cuban situation. He has spent several
years in Cuba, his wife is a Cuban, and his brother-in-law connected with the
Cuban Embassy. Mrs. Jones first came in contact with him when he wrote her
a favorable comment on her work and showed a particular interest when she called
him up. Naturally, Mr. Shea's newspaper experience in Washington and interest
in Cuban affairs is very valuable. Mr. Shattuck has met Mr. Shea and knows of
his work and connections.

Which was the controlling consideration in the employment of

Mr. Shea, his Cuban connections, or his connection with Mr. Sullivan?
Mrs. JONES. His Cuban connections. The controlling interest I
had was the social contact which that man could do for me, with
people who knew the Cuban angle.
Senator WALSH of Montana. Mrs. Jones, I was merely asking you
which was the controlling consideration, Mr. Shea's Cuban connections or his connections with Mr. Sullivan.
Mrs. JONES. His Cuban connections.

Senator WALSH of Montana. Did his connections with Mr. Sullivan

enter into the matter?
Mrs. JONES. It did not. It only meant he was a man whose brain

could be trusted. He had a good position.

Senator WALSH of Montana. Can you tell us how much you paid
Mr. Shea?
Mrs. JONES. No,I could not. What is down there?
Senator WALSH of Montana. It does not show.
Mrs. JONES. It is in the budget list along about June or July.
Senator WALSH of Montana. The budget shows $50 a week.
Mrs. JONES. Yes, sir.

Senator WALSH of Montana. Do you remember how long he was

with you?

1946

LOBBY INVESTIGATION

Mrs. Joriss. No, only for several weeks. Some of the things he
did for that $50 a week was to introduce me to different people from
Cuba and South America, and things of that sort.
Senator WALSH Of Montana. You spoke about five organizations
here.
Mrs. JoNes. Yea.

Senator WALSH of Montana. On the other side of the matter.

Will you tell us what those are?
Mrs. JoNEs. You just read them in a letter there. They were the
United States. Beet Sugar Association, the Domestic Beet Sugar
Association, the Philippine people, the Hawaiian people and the
Louisiana people. When I first started I thought those Ave offices
wore on the other side. Since then of course I have found out that
they have the Interocean Syndicate in Chicago and people in New
York and all over, but at that time I knew that I had those five companics to combat.
Senator WALSH of Montana. I see a reference in the letter of
March 18 by you to Mr. Shattuck, referring to Mr. Drew Pearson
and Mr. Harner. Were either of those gentlemen on your pay roll?
Mrs. JoNEs. No, sir.
Senator WALSH of Montana. You say in your letter:
You wil remember that I am sending Drew Pearson material from time to time

for five more articles on the tariff which he must do for the Nation. That is a
medium through which we can give our most drastic opinions.

would like for me to transmit to him I shall be glad to have.

Anything you

Mr. Pearson called on you, I think, like the rest of the newspaper
men?
Mrs. JONES. No, sir. I called on Mr. Pearson. I think it is ve
unfair to the newspaper men to pick out one of them. I could looc
around here and see men who have come into my office, men whom I
have called up. It is unfair to pick out any one or two. He told me
he had to write five article for the Nation.
Senator WALSH of Montana. Why is it unfair to speak about news.
paper men who called at your office to see you?
Mrs. JON ES. It is unfair to take any one of them. It is unfair
because public opinion-because of the way you have conducted this
so-called investigation makes public opinion attach a shadow to
anybody whose name is mentioned in a letter. That is one of your
games, you see to hit through these letters at. your political
opponents, and anyLody whose name is mentioned inside this committee
room, naturally the public, who does not know anything about the
issues, because there are not enough people to toll themSenator CA.RAWAY. It is the poor ignorant public. They have no
way of knowing except what you tell them?
Mrs. JoNEs. And what you tell them, and naturally Senator
Walsh, who is supposed to have the best legal brain in the Senate
[applause), what-he tells them is worth more than what I tell them.
If he reads out a name in a letter, it means a whole lot more to public
opinion that what I would say.
Senator WALsH of Montana. Anyway, to get back to the case of
Mr. Pearson. Mr. Pearson gpt some material from you apparently,
which he utilized in an article in the Nation?
-Mrs. JONES.

I don't know how he utilized it.

He simply told me

he had to write five articles for the Natioh on the tariff. I said I had

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LOBBY INVESTIGATION

1947.

this, and I had that.. That is all I did. I did it to hundreds, and I
intend to go on doing it to hundreds.
Senator WALSH Of Montana. So far as I can see, there wasn't the
slightest objection to it, Mrs. Jones.
Mrs. JONES. Thank you. Be sure and get that.
Senator WALSH of Montana. There is another paragraph in this
letter that attracts my notice. You conclude:
In spite of the loyalty of Mr. Harner to the Associated Pre, you will note by
the inclosed clippings that the beets also used the Associated Press.

Mrs. JONES. They said so, didn't they?

Senator WALSH of Montana. What was there in the clippings that
indicated to you that the bets-I suppose that means the Beet Sugar
Association-what was there that indicated they were using the
Associated Press?
Mrs. JONES. Well, I can't say here. I would have to see a copy.
But they did use it. I think some of them testified on this stand that
they used it, since you have been investigating. You know they have,
and that is not the only thing.
Senator WALSH of Montana. I *as not thinking of disputing it,
Mrs. Jones. I was merely asking what you knew about it.
Mrs. JONES. I evidently inclosed a clipping in which there was some
beet-sugar propaganda, and I am so used to seeing it, that I recognized it.
Senator WALSH of Montana. That means that in an Associated
Press dispatch there was some material which you assumed came
from the beet-sugar people?
Mrs. JONES. Yes, sir; I judge that is what it means.
Senator WALSH of Montana. Would you be able to detect in an
Associated Press dispatch anything that came from you?
Mrs. JONES. I would, if it were more or less in my words. I know
certain statistics we haxve put out have come back over and over
again in exactly our words.
Senator WALSH of Montana. So that if I gather you right now,
both sides were able to get their material from time to time into the
Associated Press dispatches?
Mrs. JONES. Yes, sir. They couldn't write a sugar story, you
know, without getting their statistics, sir.
Senator WALSH of Montana. You mentioned those five offices, Mrs.
Jones, representing what might be regarded as the other side of the
question, all eager to have an increase in the duty on sugar. Do you
remember whether any of them have been omitted by the committee?
Mrs. JONES. Well, you haven't had the Philippines, have you?
You had Hawaii, and you had-of course, they are so interlocked that
when you get one you get them all. But you have had them up
here; yes, sir.
Senator WALSH of Montana. We have had here representatives of
each one of these five associations you speak of.
Mrs. JONES. Yes, sir.
Senator WALSH of Montana. Are you able to furnish the committee
any information in addition to what has been elicited concerning the
activities of any of them?
Mrs. JONES. Yes, Sir.
Senator WALSH of Montana. Can you indicate what it is?

1948

LOBBY INVESTIGATION

Mrs. JONES. Well, I know the way they have worked their pub-

Sen

Senator WALSH of Montana. Will you tell us about that?

Mrs. JONES. No, sir; I won't. I think you should ask them.

whi

licity.

Senator WALSH of Montana. Exactly. What representative of

any one of these would give us the information you think we ought to
have?
Mrs. JONES. Well, I think if you would call up the Interocean
Syndicate. You have called the publicly people for the Bottlers,
you have called me. I have been doing publicity for the United States
gugar. I think you should call their publicity eople.
Senator WALSH of Montana. You think we should call the rpre.
sentatives of the Inferocean Syndicate?
Mrs. JONES. Yes; I do.
Senator WALSH Of Montana. What else?
Mrs. JONES. Well, I think you ought to call Mr. Mayer of New
York.
Senator WALSH of Montana. Mr. Mayer?
Mrs. JONES. Publicity man.
Senator CARAWAY.

I beg your pardon.

Cu

pos

get
wit
the

Has he been interested

in the tariff?
Senator WALSH of Montana. He has been mentioned, I remember.
I don't recall just exactly what the connection was in which his name
appeared.
Mrs. JONES. He did publicity in New York for them. I don't
know whether he is now or not.
Senator WALSH of Montana. Anythingfurther?
Mrs. JONES. Plenty further; yes, sir; but, I say, I will not say it
here.
Senator WALSH of Montana. What is that?
Mrs. JONES. I don't think that is a fair question to me.

You didn't

ask him all about what I did. You asked us. You are putting me in
the position of accusing them.
Senator WALSH of Montana. No, no. I was inquiring from you
where we could go to get any further information concerning what any
one of these five organizations have been doing.
Mlrs. JONES. All right. I said look into their publicity scheme.se
Senator WALSH of Montana. That is, the Interocean Syndicate,
and Mayer?
n
Mrs. JONES. And Mayer, and all the subcontracts therefrom.
Senator WALSH of Montana. Anything further?
Mrs. JONES. Well, I think it is fair to bring out that they elect

their lobbyists to the Senate.

Senator WALSH of Montana. I don't quito follow that.
Mrs. JoxEs. No? WellSenator WALSH' Of Montana. What does that mean?
Mrs. JONES. It means that Timberlake who said on the floor of the
House that he was a beet grower and comes from Colorado, in the
heart of the great Western Sugar Co. district, was chairman of the
subcommittee on sugar, and it means that Senator Smoot was chairman of the subcommittee on sugar and chairman of the Finance
Committee. It means that Senator Waterman, who was the Great
Western Sugar Co. counsel for a number of years, was elected to the

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LOBBY INVESTIGATION

1949

Senate from Colorado, and that sort of thing, and it means that the
Cuban peopleSenator WALSH of Montana. But, Mrs. Jones, those are matters
which we already know.
Mrs. JONES. Well, of course you know them.
Senator WALSH of Montana. This committee is here for the purpose of getting information not generally known.
Mrs. JONES. I assumed it was, but there is a lot of things you got
out of the Cuban side that you already knew, for the purpose of
getting it into the newspapers.
Senator WALSH of Montana. What would you have us inquire into
with respect to the election of Mr. Timberlake and the election of
Senator Waterman and the appointment of Senator Smoot?
Mrs. JONES. I don't know. You would go at it in your own way.
Senator WALSH of Montana. Very well. Is there anything further?
Mrs. JONES. No.

Senator WALSH of Montana. Then, I want to ask you about this

release of this morning..
(The release in question is as follows:)
Tills STATEMENT IS NOT ISSUED FOR ANY GROUP OR ORGANIZATION BUT IS THB
STATEMENT OF U ADY8 MOON JONES, CITIZEN
(For release only when called as wllness before the Lobby Committee]

Apparently the two chief purposes of the so-called Lobby Investigating Com.
inittee have been to create political difficulties for Piesident Hoover and to
whitewash the 25 years' activiies inWashington of the domestic sugar interests.
The committee has placed great emphasis on the amount of money spent to
turn the light of publicity upon economic questions in connection with the tariff
bill. What shall be said of the expense to the Nation's taxpayers of the coininittee's propaganda scheme conducted under the guise of an investigation for
the good of the people? The committee is not only guilty of playing politics by
strllig through the witnesses at any political opponent whose name may have
been mentioned inprivate letters but it took these files of personal correspondence
of private offices in violation of the spirit of the Fourth Amendment which sets
forth the "right of the people to be secure in their persons, houses, papers."
The conduct of the investigation has degenerated also into a mockery of the
first article of the Bill of Rights. The committee could have performed a real
public service, but has succeeded only in warning vicious lobbies to be more
secretive. Instead of wasting time ridiculing those who wrote unguardedly and
kept their letters the committee might look into the activities of those whose
years of lobbying experience have caused them to replace fireproof filing cases
with modern incinerators.
The fight of American investors in Cuba to got the tariff on sugar down to the
point recommended as just by the Tariff Commission is Identical with the interests
of the American consumer. The domestic sugar lobby in 1024 was powerful
enough to prevent action on the Tariff Commission s recommendation of a
decrease in the duty on raw Cuban sugar from 1.76 cents per pound to 1.23
cents. Failure to act on this recommendation has cost the American public
$75,000,000 yearly.
It e proposed increased rate becomes law the public will pay $65,000,000
more yearly.
Perhaps the Lobby Committee is looking for an excuse to capitulate to the
political powerful' domestic sugar interests. The American interests operating
in Cuba control no definite sections of voting strength while the domestic industry
is able to maneuver its congressional representation into chairmanships that
write the sugar schedule. This may explain, too, why the United States is
willing to lose millions of dollars in export trade to Cuba to protect a domestic
industry worth only $250,000,000.

1950

LOBBY IVESTIOATION

Senator WALSH of Montana. This release is headed:

This statement is not Issued for any group or organization, but is the statement
of Oladvs Moon Jones, citizen, for release only when called as a witness before
the Lobby Committee.

pa,

you

It proceeds:
Apparently the two chief purposes of the so-called Lobby Investigating Com.

while

m tteo has been to create political difficulties for President Hoover and to white.
wash the 25 years' activities in Washington of the domestic sugar Interests.

Does this charge of the purpose of the investigating committee to

create political difficulties for President Hoover embrace Senator
Robinson as well?
Mrs. JoNEs. Well, Senator Robinson, of course, said it was a great
disgrace to bandy the name of Hoover.
Senator WALSH of Montana. Your charge here, Mrs. JonesMrs.

JONES.

I say that the general effect-

Senator WALSH of Montana. Just wait a minute. Your charge is

that the two chief purposes of the so-called 1lobby Investigating Commntteo has been to create political diffict. .: for President Hoover.
I said apparently.
Senator WALSH of Montana. Just a minute.
Mrs.

JONES.

I want to know

whether you include Senator Robinson, or whether you exclude him

from that charge.
Mrs. JONES. I said apparently the two chief purposes of the
committee, which means tie general effect in public opinion..
Senator WALSH of Montana. Will you answer the question? Do
you make that chare~ against Senator Robinson as well as the other
four who sit at tho table?
Mrs. JoNES. I never separate them. I said the committee.
Senator WALSH of Montana. Yes, but what I want to know is

not

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prop

Mrs. JONES. I said the committee. He is on the committee.

Senator WALSH of Montana. So, you charge Senator Robinson

Mrs. JONES. I do not. There is one of your cases in inferring

things. That is propaganda.
Senator WALSH of Montana. You. interrupted me. You include

Senator Robinson in this charge--just a minute. You may answer

whether you do or not. You include Senator Robinson in this charge
of having a purpose to create political difioulties for President Hoover?
Mrs. JONES. That is the answer you want me to make.
Senator WALSH of Montana.

or no.

No, no. I want you to say yes

Mrs. JONES. I refuse to answer it. You want me to answer it so

that the newspapers will publish it.

Senator WAsH "of Montana. Very well. You refuse to answer it?
Mrs. JONES. I refuse to answer it.

thro,
men
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Senator WALSH of Montana. Very well. We are quite content to

leave it that way.
The release continues:

Jula cc
unc
spir

interests.

in t

and to whitewash the 25 years' activities In Washington of the domestic sugar

Mrs. JONES. Do you want to know what I mean by that?

the
nth

LOBBY INVESTIGATION

1951

Senator WALSH of Montana. No.

Mrs. JONES. No. See. You want nothing about that in the newspapers. That is the reason.
Senator WALSH of Montana. I didn't invite any comment from

you at all. I want you, however, to explain what you mean by

whitewashing the domestic sugar interests,

Mrs. JONES. All right. You got Mr. Shattuck up here-and I am

not holding any brie-for Mr. Shattuck- and you asked what he did
with all his time in Washington. Mr. Petrikin you got up here.
What did you say to him about what he does with his time in Washington? That is the slant. This whole thing is for public opinion,
as eveiqthing I have done is to mobilize public opinion. That is
what I mean. I referred to the long drawn-out time you have taken
on the Cuban side, and the general effect of the whole committee,
regardless of its parts has been in the minds of the public.
Senator WALSH of Montana. Do you know that the three members of the committee who sit at the table are all with you on your
contention?
Mrs. JONES. Yes. That is why I can't see. I am used to seeing
the Democrats all with me and shift aroundSenator WALSH of Montana. You know that all three of the com-

mitteemen sitting at the table are against an increase in the duty on

sugar?
Mrs. JONES. Yes, sir; but I say the economic issuesSenator WALSH of Montana. Never mind about the reasons.
Mrs. JONES. I say the economic issues can be broughtSenator WALSH of Montana. Just a minute, Mrs. Jones. You

are not permitted before this committee to do anything except answer

the questions propounded.
Mrs.

JONES.

No; and I am not permitted to do anything outside,

either, under the first amendment.

Senator WALSH of Montana. You say further:

What shall be said of the expense to the Nation's taxpayers of the committee'a
propaganda scheme conducted under the guise of an investigation for the good
.of the people? The committee Is not only guilty of playing politics by striking
through the witnesses at any political opponent whose name may have been
mentioned in private letters but it took these files of personal correspondence of
private offices In violation of the spirit of the fourth amendment which sets
forth the "right of the people to be secure In their persons, houses, papers."

Mrs. JONES. And papers.

Senator WALSH of Montana. Did anybody break into your office

and take away your papers?

Mrs. JONES. I said before that, in spirit.

Senator WALSH of Montana. Just a minute. Answer the question.

Mrs. JONES. Yes; in spirit, he broke into my office.
Senator WALSH of Montana. Just what did he do?
Mrs. JONES. He came in there very self-importantly and Said, "I

am on the Senate Judiciary Committee," and you are on the Senate

Judiciary Committee, and as I said before, in public opinion, whatever
a committee does is right, because it is a committee of Senators, and

under fear we gave up our papers, and that is a violation of the

spirit of the first amendment. He went into one office. The man
in the office was not there. Two clerks were there, girls. He took
the papers and was going through them when the man came back
into his office. That is what he did. That is breaking in.

1952

LOBBY INVESTIGATION

Senator

CARAWAY.

Let me ask you a question there. Did you

have anything in your files you did not want made public?
Mrs. ONES. No, no.

Senator CARAWAY. Then, what are you complaining about. We

are giving you publicity.
Mrs. JONES. That is all the more reason why I don't want you to

have them. There is nothing in there but personal stuff.

Senator

CARAWAY.

Oh, no.

It all has to do with the tariff, trying

to get the women's clubs, and all that.

Mrs. Jo Es. That is all right.

Senator CARAWAY. Then, you shouldn't object.

Mrs. JONES. But I object to people coming inwithout a warrant,

ongeneral principles.

Senator CARAWAY. We are not issuing any warrants, you know.

Mrs. JONES. You can't.

Senator CARAWAY. We have no authority to issue any warrants.
Mrs. JONES. No.
Senator WALSH of Montana. There is another statement here I
wish to call your attention to:
Instead of wasting time ridiculing those who wrote unguardedly and kept
their letters the committee might look into the activities of those whose years
of lobbying experience have caused them to replace fireproof filing cases with
modern incinerators.
Mrs. JONES. I heard a man, the head of a sugar company say,

laughing at the committee, that for years he had carried on a correspondence where the rule was they should keep letters only 48 hours.
Senator CARAWAY. Who is that man, please?
Mrs. JONES. I will not say who that man is.
Senator

CAUAWAY.

You remember his name?

Mrs. JONES. I certainly do.

Senator WALSH of Montana. So that we understand the matter

now, you have information to the effect that some of those who are
carrying on the agitation in favor of an increased duty on sugar
have been in the habit and have pursued the custom of burning their
correspondence?
.
Mrs. JONES. I have; yes, sir.

Senator WALSH of Montana. But you will refuse to give that

information to the committee?
Mrs. JONES. You will have to find that out through them.
Senator WALSH of Moitfana. Through then?
Mrs. JONES. Ask them if they keep their fl. Call them up and
ask them. You had them here on the stand. You didn't ask them
those things.
Senator WALSa of Montana. Did we ask you whether you burned
your files?
Mrs.JONES. Why don't you? You don't have to. They are all

there.
Senator WALSH of Montana. It hadn't occurred to me that you
did so. The committeewould---would be obliged to you if you would give
them information that
Mrs.

JONES.

I can't give information that-

Senator WALSH of Montana. That would enable them to find out

the truth about this charge which you have thus cast broadcast all
over the country. But, of course

LOBBY INVESTIGATION

1953

Mrs. JONES. I say if a personal friend says to me something at a

dinner party, do you think I will come up here and tell it to you?
Senator AAWAY. Let me ask you what good the informationMrs. JONES. The information is all right. You don't have to
attach a name to it.
Senator CARAWAY. That is the difficulty, informing us that people
do a certain thing is true, but you won't tell who told t, or who knows
it.
Mrs. JONES. You don't have to believe it.
Senator WALSH of Montana. You conclude:

Perhaps the lobby committee is looking for an excuse to capitulate to the

politically powerful domestic sugar interests.
Just what do you mean by the committee capitulating?
Mrs. JONES. I mean in 1924 the politically powerful domestic sugar
lobby kept the report of the Tariff Commission on sugar lying on the
desk of President Hoover for a year and had to be subpoenaed, I
think I am right about this, by a Senate committee before it was given
out.
Senator WALSH of Montana. And you are afraid
Mrs. JONES. I am afraid'that will happen again.

Senator WALSH of Montana. You are afraid this committee will

not report promptly on the sugar lobby?
Mrs. JONES. No; they will report promptly enoughSenator WALSH of Montana. Wait a minute.
Mrs. JONES. No, it isn't that. I am afraid that men who are
economically on the side of low tariff will not get up and fight for it,
because they are afraid of losing votes. The Cuban men have no
vote, you see, have no bloc of votes.
Senator WALSH of.Montana. You are not talking about the men
who vote for it or against it? You are talking about this lobby committee. You say you expect this lobby committee to capitulate.
Mrs. JONES. You might not change your vote, but you might get
up and fight for us. In fact, after you have raised all this public
opinion against us, you have not done us any good.
Senator WALSH of Montana. Just what do you mean by the lobby
committee capitulating?
Mrs. JONES. That is what I said. Somebody capitulated on this
Tariff Commission report.
Senator WALSH of Montana. What do you expect the lobby
committee will do or will not do?
Mrs. JONES. I expect you will not get up on the floor of the Senate
and make a fight for low tariff.
Senator WALSH of Montana. The lobby committee isn't intended
to do anything of the kind.
Mrs. JONEB. You are a Senator.
Senator WALSH of Montana. Oh, yes; but you are not talking about
the Senators. 'You are talking about the lobby committee.
Mrs. Josns. B3ut you can't get out of it, you are a Senator.
Senator WALSH of Montana. But it i the lobby committee you say
is capitulating.
Mrs. JONES. But the lobby committee are Senators.
7821"-.0--P

-- 12,

1954

LOBBY INVESTIGATION

Senator WALSH of Montana. What you apprehend is that the

Senators will not get up on the floor and attack an increase in the duty
on sugar?
Mrs. JONES. They will not fight the powerful domestic interests.
Senator WALSH of Montana. Is that what you mean?
Mrs. JONES. I mean just what I said, in the words I said it.
Senator WALSH of Montana. I am trying to find out what your
words mean.
Senator BLAINE. You are prophgesyig.

lo.

body does that. That is one of the chief things in Washington.

Senator CARAWAY. I have been reading about it for nearly a month
now.

m
in

Mrs. JONES. That is all right. Lots of people prophey.

Every-

th
pr
g

Mrs. JONES. Sure. All the newspapers, and the dinner parties

and everything-they are all prophesying.

Senator WALSH of Montana. Now, Mrs. Jones, do you want that
statement to stand?

Mrs. JONES. What did I say? Read it to me.

Senator WALSH of Montana. You said, "Perhaps the lobby committee is looking'for an excuse."
Mrs. JONES. Perhaps; yes,

ir.

Senator WALSH of Montana. Wait a minute.

Perhaps the lobby committee Is looking for an excuse to capitulate to the
politically powerful domestic sugar interests.

th

Mrs. JONES. That is all right.

Senator WALSH of Montana. You are quite willing that that should
stand?
Mrs. JONES. Yes, sir.

I have; in the history of the powerful

domestic interests, this Tariff Commission scandal and all the things
that these Cuban investors have done to American industries in Cuba.
They have over three times as many American dollars invested in
Cuba as the American interests, but they do not control an define
block of voting power in this country, and all through the history of
sugar they have gotten a low deal, because of these politically powerful
domestic interests.

th
th

Senator CARAWAY. You referred again to the report of the Tariff

Commission. Who kept that from being made public?

Mrs. JONES. That is all in the Congressional Record,

La Follette's speech.
Senator CARAWAY. You referred to his speech?

.
in Senator

Mrs. JONES. Yes, sir. If anyone wants to know about it, they can

read his speech on the floor of the Senate.

Senator WALSH of Montana. In that case, as you understand it,
who was it that capitulated, the Tariff Commission or the President
of the United States?
Mrs. JONES. Both of them.

Senator WALSH of Montana. Both of them, and the Tariff Commission and the President, both of them capitulated by withholding
the action and the report fo an indefinite time?"

at
P
Y
y

Mrs. JONES. And various other things mentioned in his speech.

Ly

LOBBY INVESTIGATION

1955

Senator WALSH of Montana. And you think that this lobby

committee
Mrs. JONES. I am afraidSenator WALSH of Montana. Wait a minute. You think this
lobby committee will do the same thin ?
Mrs. JONES. I was afraid. Why s wouldn't I be? I said I saw
the Democratic National Committee shift around, on their economic
principles.
Senator WALSH of Montana. Now, Mrs. Jones, doesn't this language of yours clearly indicate that your judgment is that this committee will either not make any report reflecting Upon the beet-sugar

interests or else that they wil make a whitewashing report?

Mrs. JONES. I said the general effect apparently was that.

Senator WALSH of Montana. No, no. I asked you whether that

isn't the meaning. Is it, or is it not?

Mrs. JONES. That is not the meaning at all. I said apparently.

Senator WALSH of Montana. Very well.

Mrs. JONES. I said I am afraid----

Senator WALSH of Montana. What you really mean by this is that

you think that the members of this committeeMrs. JONES. No,no.

Senator WALSH of Montana. - will not stand up on the floor of

an increase in the duty?

the Senate and argue against
.
Mrs. JONES. I said-

Senator WALSH of Montana. Oh, answer me. Is that what you

mean?
Mrs. JONES. I think you go against my rights as a witness when
you try to answer your own questions.

Senator WALSH of Montana. I do not answer my own questions.

I am asking you to answer my questions.
Senator CARAWAY. Mrs. Jones, if you please answer the questions,
then you can make any explanation you wish.
Mrs. JONES. J want to answer the questions, but I can't answer
them. If he says, "You think this, that and the other thing," he is
answering them, I am not answering.
Senator CARAWAY. Now wait. We have been patient with you.
There is a time when you should regard your own oath, because you
swore you would answer the questions. You can answer them and
make your explanation afterwards.

Mrs. JotES. I can't tell.

I can't answer when you put the words

in my mouth and say, "Is that true or not true?"

Senator CARAWAY. Well, this is either true or not true.

Mrs. JONES. I'said it in the words that I said it. I am willing to

answer any questions, and all.
Senator CARAWAY Oh no. You don't need to make any explanation. You have already shown your willingness. You said
you have information that you wanted concealed. We will accord
you that privilee.
Mrs. JoNEs. I gave you the information.
Senator CARAWAY. We are going to accord you the privilege of
concealing information. You say you have got it and you won't
give it.
Mrs. JONES. I gave you the information.

1956

LOBBY INVESTIGATION

Senator CARAWAY. You said you knew a man who destroyed his
files, and you won't give us the information.
Mrs. JONES. I gave you the information that he destroyed his

files.

Senator CARAWAY. Who is he?

Mrs. JONES. That is immaterial.
Senator CARAWAY. No; it isn't immaterial. You simply want to
come here and make a charge against somebody and won't give out
who it is. I think when you charge somebody with something you
should say who it is.
Senator WALSH of Montana. She charges this committee with not
pursuing information against the other interests, and then she says
she has information and will not give it to the committee.
Mrs. JONES. I am willing to give it to the committee in private,
but not for the newspapers.
Senator WALSH of Montana. Well, we will go back.to the question
I asked. I understood you to say that this language in your release,
to which I called your attention, means that you believed that the
members of this committee will not stand up on the floor and argue
against an increase in the duty. I understood that that was what you
said this meant.
Mrs. JONES. It means I am afraid-Senator WALSH of Montana. Just a minute. Am I correct in that
or not.
Mrs. JONES. You are not, because it means I am afraid they will
not.
Senator WALSH of Montana. No. I want you again to tell us
what this language means, so far as this committee is concerned.
Mrs. JONES. It means that in the light of the past history of all
this sugar tariff, and the history of what the domestic lobby has been
able to get through, that I am afraid it will happen again.
Senator WALSH of Montana. What will'happen again, so far as this
committee is concerned?
Mrs. JONES. That because of their power everybody else will sit
down and do nothing.
Senator WALSH Of Montana. That is, the committee will not do
anything?
JONES. And because of the general effect on public opinion

be
in.

th
.

pe
im
c
w

r8,

that the committee has allowed to go out all over the country against
the Cuban people-agamst the American peopleSenator WALSH of Montana. You are afraid that is going to happen?
Mrs. JONES. That is what I mean.
Senator WALSH of Montana. What is going to happen or not happen
isof no consequence as far as this committee s concerned. You say,
iPerhaps the lobby committee is looking for an excuse to capitulate
Mrs. JONES. I eiid perhaps, because I was afraid so, and I am afraid
that the public opinion that you have created--Senator WALSH of Montana. How do you think this lobby committee will capitulate?
Mrs. JONES. I told you before.
Senator WALSH of Montana. How?
Mrs. JONES. Not fight.
Senator WALSH of Montana. That is, not talk on the floor against
an increase?

or

LOBBY INVESTIGATION

1957

Mrs. JONES. Yes, sir.

Senator WALSH of Montana. That is what you mean by that?

Mrs. JONES. Yes, sir.

Senator WALSH of Montana. Well, perhaps you will be disappointed, then.

Mrs. JONES. I hope so.
Senator BLAINE. Were you in the gallery of the Senate yesterday?
Mrs. JONES. What?

Senator BLAINE. Were you in the Senate gallery yesterday?

Mrs. JONES. No; but I had my secretary there.
Senator BLAiNE. You did not observe the colloquy that took place
between the Senator who was supporting the increase in the sugar
tariff and a member of this committee who was opposing any increase
in the sugar tariff?
Mrs. JONES. I heard about it, but I didn't see it.
Senator BLAINE. You heard about it?
Mrs. JONES. Yes, sir.

Senator BLAINE. Did you write this release before that colloquy
took place?
Mrs. JONES. Yes, sir; I wrote this release yesterday morning.
Senator BLAINE. So you did not know about that colloquy in the
Senate when you wrote this release?
Mrs. JONES. No, sir; I did not.

Senator BLAINE. In view of that circumstance, do you still insist

that your statement is correct, or even desirable as a prophecy?
Mrs. JONES. I haven't read the record, except I heard what happened in the Senate yesterday afternoon, that there was a long,
impassioned speech for h*her tariff.
Senator BLAINE. And tat speech was interrupted by a member of
this committee a great many times, pointed questions were asked
colloquy occurred, in which practically all of the issues involved
were covered by those questions that were asked by a member of this
committee.
Mrs. JONES. Oh, was it?
Senator BLAINE. In view of thatMrs. JONES. No; I see--

Senator BLAINE. In view of that, do you now feel that your statement in the release was justified?
Mrs. JONES. And when I wrote the statement I very much hoped
I was wrong.
Senator BLAINE. Do you now feel that statement was justifiable,
in view of what I have said?
Mrs. JONES. No; not if that is true.
Senator BLAINE. Well, the record will disclose whether it is true
or not.
Mrs. JONES. I will read it right away.
Senator WALSH Of Montana. Among others to whom you furnished information wvas Mrs. Pratt a member of the House.
Mrs. JONES. Certainly, I furnished statistics for Mrs. Pratt.
Senator WALSH of Montana. Did you furnish material in a similar
way to other members of the House?
Mrs. JONES. Yes, sir; I did.
Senator WALSH of MKntana. Can you tell us to whom?

1958

LOBBY INVIESTIGATION

Mrs. JONES. I did to Congressman Frear, and numbers of friendly

people over there in the House during the House fight. Everybody
who was friendly to our side I helped mobilize the statistics for.
Senator WALSH Of Montana. Was that all you did for Mrs. Pratt?
Mrs. JONES. Give her material; Ye sir.
Senator WALSH of Montana. Anything further?
Mrs. JONES.
I took her down different things to support her con.
vivtions
on sugar.
Senator WALSH of Montana. Perhaps the letters will give us the
information. I have a letter from General Crowder to you under
date of May 14, 1929, as follows:
I have kept track of the papers as well as I could without seeing that Mrs.
Ruth Pratt had sprung a bomb. If she did, It was Intended to be in osir favor and
doubtless will work out that way, and I am depending on you to keep me advised
of any unusual developments.

Just wilt does that "bomb" mean?

Mrs. JONES. I don't know, probably her speech in the House.
Senator WALSH of Montana. Under date of May 16, General
Crowder writes again:
I am glad you got the interview with Mrs. Pratt. I hope It was satisfactory.

I notice you say nothing about Mrs. Pratt's bombshell, so I suppose it did not

materialize.

of

to

or
Be]
th

do
di

That made me think the word had some peculiar meaning.

Mrs. JoN s. She. said to me, "I have a notion to make a speech."
I said, "Fine," and that is what I am thinking about, evidently.
Senator WALSH of Montana. Apparently you wrote to General
Crowder, or talked with him about a bomb or bombshell that Mrs.
Pratt was to explode.
Mrs. JONES. Yes.

Senator WALSH of Montana. You wrote to General Crowder under

date of May 20, "Herewith a famous speech. When you know more
about it, you will think so too."
Apparently the speech was enclosed. Is that correct?

Mrs. JONES. I suppose it was. I don't know. Does it say?

Senator WALSH of Montana. Would you mind telling us what

further information on the matter would enlighten General Crowder?

Mrs. JONES. Certainly. Mrs. Pratt, coming from a consumer's
district entirely, was interested i it,and she said to me one dayt
I said, Fine." I said, i
"I have a notion to mako a speech.
have some good statistics," and I took those statistics down. She
said, "My grounds for being against the sugar schedule are we can
not furnish enough sugar in this country, and the climatic conditions
are against raising enough in this country." and so on. I said, "I
have some good statistics on it,) and I took them down with a notation on each one of the views she had of why she was against it.
Wasn't that all right?
Senator WALSH of Montana. Quite so.
MRS. JONES. All right.
Senator WALSH of Montana. You likewise reported to Mr. Francis,
under date of May 20 "Herewith a famous speech. When you know
more about it, you will think so too." .
Mrs. JONES. That is the same thing. I furnished her some

statistics.

Pi
0

LOBBY INVESTIGATION

1959

Senator WALSH of Montana. I find here a copy of the speech of

Mrs. Pratt in the House of May 20, 1929. Do you recognize that?
Mrs. JONES. Yes, sir.
Senator WALsH of Montana. There is with this a typewritten copy
of the speech.
Mrs. JONES. Yes, sir.
Senator WALSH of Montana. Do you know where that was pre.
pared?
Mrs. JONES. Yes, sir. I prepared it.
Senator WAIsu of Montana. You prepared it?
Mrs. JONES. That is part of the statistics I prepared for her.
Senator WALSH of Montana. The document I hold in my hand you
prepared?
.

Mrs.

JONES.

Mrs.

JONES.

I said I prepared the statistics for her. I took down

to her all the things to support her reasons that she had stated to me
orally that she had against higher tariffs, and I certainly wrote out in
sentences just like that, and it was a lot of statistics. She went
through it and cut out and rearranged it as she wanted it.
Senator WALsa of Montana. I am asking you if you wrote the
document I hold in my hand?
I don t know. Let me see it. Yes, sir. Well, I

didn't write it myself; no.

Senator WALSH of Montana. Who did?

Mrs. JONES. I mean this is the outcome of our conferences on sugar.
Senator WALSH of Montana. Who actually prepared it?
Mrs. JONES. I suppose my secretary helped me to write it out.

Mrs. Pratt and I met and we went over all the statistics, and she
chose this thing and that thing and the other.
Senator WALSH of Montana. What I want to know is whose language is this?
Mrs. JONES. Well it is hers and mine, both.

Senator WALSH Of Montana. You both worked together on it?

Mrs. JONES. Certainly. You don't think she had no right to get
her statistics from me, do you?
Senator WALSH of Montana. Certainly not.
Mrs. JONES. Then why areyou asking about it? Is this one of the
.i ayou want to get into the newspapers to help the cause of low
Senator CARAWAY. Did it ever occur to you, Mrs. Jones, that
possibly you don't help your case by complaining of what everybody

did, including yourself? If the facts are not something to be ashamed

of, thenyou ought notMrs. JONES. I am not ashamed of them, but I simply said that your
springing them out here makes the public think it is something that is
wrong.
Senator CARAWAY. Oh, well, the public has some sense, if you will
just give it some credit for it. That is the person you are addressing
all your wisdom to, and you don't want to discredit ita intelligence,
Mrs. JONES. But any committee that is investigating is naturally
investigating for bad things, and the public says that anything that
comes out here is bad.

Senator CARAWAY. Are you aware of the fact that our desks are

loaded with people who are asking us to disclose this thing, that thing
and the other? If it is all right, there is no better way to get it before

1960

LOBBY INVESTIGATION

the public than through this committee. If you are right, you will
get more publicity for at this way than you wiliby your releases.
Mrs. JONES. That is all right. Then, we will start all over again,
Senator CARAWAY. Has your organization circulated this speech?

them
Mrs. JONES. I took some of the copies of this speech and sent
out.
Senator CARAWAY. Did you mail them out?
Mrs. JONES. I give them to people.
Senator CARAWAY. Do you mail them out?
Mrs. JONES. Certainly.
Senator CARAWAY. Under the frank; all right.
Mrs. JONES. I am sending them to people who are interested, of
course.
Senator WALSH of Montana. Mrs. Jones we have got to this point
that this document which I hold in my hand entitled "Ruth's speech,'
so far as the literary work is concerned,
Mrs. JONES. Now listen, Senator WalshSenator WALSH of Montana. Just a minute. So far as the literary
work is concerned, is the joint work of you and Mrs. Pratt, is that
correct?
.F
Mrs. JONES. Yes, sir.
typewriting?
Senator WALSH of Montana. Who did the
Mrs. JONES. My secretary, probably, did the typewriting of that.
Is that just like the other one? Her secretary did some too.
don't know.
Senator WALSH of Montana. I show you the document and ask
you who did the typweriting?
Mrs. JONES. My secretary did that, I think.
Senator WALSH of Montana. And where was the dictation of this
to the stenographer?
Mrs. JONES. I don't know particularly what spot. I dictated this
to her wherever we were.
Senator WALSH of Montana. At your office?
Mrs. JONES. I suppose so, or at my home.
Senator WALSH of Montana. Then, as I understand it, you dictated this to your stenographer at your office?
Mrs. JONES. The morning after .Mrs. Pratt and I went over it;
yes, sir.
Senator WALSH of Montana. I ask that this be incorporated, as
well as Mrs. Pratt's speech, and I will say for the information of the
committee that a comparison shows that in the published speech the
word "Speaker" in the typewritten speech is changed to "Chairman."
Evidently it was addressed before the Committee of the Whole. The
word "gentlemen" appears inserted in one place in the printed
speech, and the word "Applause" appears in the printed speech at
the close. Otherwise they are identical.
(The documents in question are as follows:)
(Not printed at Government expense]
SPEECH OF HoN. RUTH PRATT, OF NEW YORK, IN THE HOvSE OF RPuRESENTA.
1929
TIVES, MONDAY, MAY 20,
PROTESTING AGAINST AN INCREASE IN THE TARIFF ON SUGAR

Mrs. RUTH PRATT. Mr. Speaker and Members of the House, my remarks to-day
are not to be confined to the labor situation in the domestic sugar industry.
The letter I read here on Friday from William Green Is expert testimony. Corn.

ing

and
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Vol.

#do

LOBBY INVESTIGATION

1961

Ing from the Federation of Labor. which stands for protection of American labor
and for farm relief legislation, this testimony is final on the matter of the employment of women and children and Mexican labor in the beet fields.
My reason for standing against an increase in the tariff on sugar is the obvious
impossibility of an expansion of the sugar Industy In this country to a point
where it can even begin to supply our needs. The domestic Industry is not
only bound by its labor problem; it is limited by our climate, Statistics show
that It Is impossible to expand the production of sugarcane in this country. In
1902, 27 per cent of the whole source of our consumption was supplied by domestic sugars. After a quarter of a century of protection the percentage of domestic
sugars dropped from 27 per cent to 15 per cent In 1927. Why? Because sugar
belongs to the Tropics.
There have been recent attempts to produce cane in the Everklades, but aecording to our Department of Agriculture (No. 893, Sugar, p. 14) drainage of the
Everglades has never advanced to attain Immunity from inundations. The cane
can not stand in wet muck. If it escapes the flood, it is destroyed by drought.
The Department of Agriculture attributes 85 per cent of the failure of crops In
Louisiana to drought. (No. 893, Sugar, p. 16.) We have also early frosts and
diseases of cane due to our temperate climate. We learn from the Department
of Agriculture (No. 893 Sugar, p. 38) that the presence of these diseases constitutes one of the hazards which confront the cane growers. The amount of seed
cane necessary to get a good stand in this country as compared with tropical
countries shows the Injury worked by disease. In the Tropics, where the dormant period is almost negligible, 1%tons of seed will produce a good stand. In

Louisiana4 to 6 tons of seed are required.

Farmers' Bulletin No. 1034 states:

"Sugar cane requires a warm climate and long season so its culture in the
United States Is limited to a region 200 to 300 miles wide aiong the extreme south
Atlantic coast and the Gulf coast and to some low-lying valleys under irrigation
in southwestern Arizona and southern California."
(Gentlemen) A glance at the past history of the sugar industry in this country
makes it impossible for me to hold but one opinion as to the expansion of our
sugar production. The cane growers are limited by climate, and, according to
their own testimony, the beet growers' problem Is labor.
Work in the beet fields is not work for Americans. I have heard it said on
this floor that Mexican labor is not employed in the beet fields or that when it Is
employed the percentage is small. Note the conflict of the opinions of Colorado
when It wants labor and when it wants tariff. Hon. Edward F. Taylor, a member
of this House has testified before the Committee on Immigration that never
in his life has he known of any member of organized labor going Into a sugar-beet
field. (Hearing No. 69.1.7, Seasonal agricultural laborers from Mexico.) He
further stated:
"The American laboring people will not get down on their hands and knees in
the dirt and pull weeds and thin these beets and break their backs. * * *
No matter how much they are paid, they will not do it. That kind of labor Is
tedious work that does not compete with any ordinary farm labor. * * *"
Mr. Taylor has said that If C6ngress will not permit the sugar-beet growers to
obtain the necessary number of Mexicans -they will be compelled either to stop
growing beets or go to POrte Rico for help ( 263).
Mr. Taylor described the exacting hard Job the sugar-beet-field worker has to
do ( 266) and asked the committee:
"How would any of you gentlemen or your sons like to undertake the Job of
getting down on your hands and knees thinning out the beets in a row to I beet
to every 12 Inchs, 5,280 in a mile, and pulling out all the weeds around and
between each remaining beet and hoeing that row backward and forward, a
row 40 miles long, from the time they come out of the ground in the spring until
they are own, and then pulling them u in the fall, knocking the dirt off of

them, and cutting off the tops and piling hem up '
Those who are interested In veriying Mr. Taylor's description shall find the
process described in Farmers' Bulletin No. 568 from the Department of Agriculture. You can find no better refutation to arguments that the condition of
Mexican labor has been misrepresented.
Mr. W. D. Lippitt, of Denver, who represented the United States Beet Sugar
Association at the hearings on the sugar schedule, when asked his opinion of the
possibility of an increase In the production of sugar in this country, said (p. 3331,
vol. 5, Schedule 6):
"I think that the increase in continental beet production would be relatively
slow. I doubt that any reasonable tariff would permit us to expand the industry

1962

LOBBY INVESTIGATION

In any reasonable period of time to supply our own requirements. I think, in

production, our expansion in continental United States would barely keep pace
With the-increase In consumption."
Mr. Lippitt does not state why the industry can not be expanded to meet
our sugar requirements even with the greatest tariff protection. Shall we find
the answer in the letter of the president of the greatest body of wa e earners in
this country where he refers to the domestic Industry as I'an Industry which
employs women, children, and Mexican labor at Indecent wages and under Intolerable conditions of employment."
S. J. Holmes, professor of zoology in the University of California, writing In
the May, 1929, Issue of the Nort' American Review, quotes the president ofg
the"Thoe-ugar-beet
Humanitarian Heart Mission on conditions in Denver. Sas that gentleman:
conpan employs the very poorest and most Ignorant Mexicans with large families; brings them to Denver, working them In the beet fields
until snow flies. These unfortunates then congregate in Denver with $15 to
$20 to keep a larle family and no possible means of support by labor through
the winter season.
Ladles and gentlemen, the domestic sugar industry can never be a dominant
or adequate American Industry, for it is not supported by American climate or
American labor.
In pencil:) "File Ruth's speech."
Mr. Speaker and Members of the House, my remarks to-day are not to be
confined to the labor situation in the domestic sugar industry. The letter I
read here on Friday from William Green Is expert testimony. Coming from the
Federation of Labor which stands for protection of American labor and for farm
relief legislation, this testimony is final on the matter of the employment of
women and children and Mexican labor in the beet fields.
My reason for standing against an increase In the tariff on sugar is the obvious impossibility of an expansion of the sugar industry In this country to a
point where It can even begin to supply our needs. The domestic Industry is
not only bound by its labor problem; it is limitedby Our climate. Statistics showto
that It is Impossible to ex and the production of sugar cane in this country. In
1902, 27 per cent of the whole source of our consumption was supplied by domestio sugars. After a quarter of a century of protection, the percentage of domestic sugars dropped from 27 per cent to 15 per cent in 1927. Why? Because
sugar belongs to the Tropics.
There have been recent attempts to produce cane In the Everglades, but
according to our Department of Agriculture (No. 893, Sugar, p. 14), drainage of
the Everglades has never advanced to attain Immunity from Inundations.
The cane can not stand in wet muck. If It escapes the flood it is destroyed by
drought. The Department of Agriculture attributes 85 per cent of the failure
of crops In Louisiana to drought. (No. 893, Sugar, p. 16.) We have also early
frosts and diseases of cane due to our temperate clinate. We learn from the
Department of Agriculture (No. 893 Sugar p. 38) that the presence of these
diseases'constitutes one of the hazards which confront the cane growers. The
amount of seed cane necessary to get a good stand in this country as compared
with tropical countries shows the Injury worked by disease. In the TIopics
where the dormant; period is almost negligible 1%6 tons of seed will produce a good
stand. In Louisiana 4 to 6 tons of seed are required.
Farmers' Bulletin No. 1034 states,
"Sugarcane requires a warm climate and long season, so its culture in the
United States is limited to a region 200 to 300 miles wide along the extreme
South Atlantic coast and the Gulf coast and to s6nte low-lying valleys under
Irrigation In southwestern Arizona and southern California."
Gentlemen, a glance at the past history of the sugar industry in this country
makes it impossible for me to hold but one opinion as to the expansion of our
sugar production. The cane growers are limited by climate and, according to
their own testimony, the beet grower's problem is labor.
Work In the beet fields is not work for Americans. I have heard it said on
this floor that Mexican labor is not employed In the beet fields or that when it is
employed the percentage is small. Note the conflict of the opinions of Colorado
when It wants labor and when It wants tariff. Hon. Edward T TAylor,
y
a member
of this House, has testified before the Committee on Immigration that never In
his life has he known of an member of organized labor going into a sugar-beet
field. (Hearing No. 69.1.1 seasonal agricultural laborers from Mexico.) He
further stated,

the
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ste
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sha

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Vo

thi

LOBBY INVESTIGATION

1968

"The American laboring people will not get down on their hands and knees In
the dirt and pull woods and thin these bets, and break their backs. * * *
No matter how much they are paid they will not do It. That kind of labor Is
tedious work that does not compete with any ordinary farm labor. * * *"1
Mr. Taylor has said that If Congress will not permit the sugar beet growers
to obtain the necessary number of Mexicans, they will be compelled to either
stop growing beets, or go to Porto Rico for help (p. 263).
'Mr. Taylor described the exacting hard job the sugar-beet field worker hag
to do (p. 266) and asked the committee:

"How would any of you gentlemen or your sons like to undertake the job of
getting down on your hands and knees thinning out the beets In a row to one
beet. to every 12 Inches, 5,280 In a mile and pulling out all the weeds around and
Between each remaining beet and hoeing hat row backward and forward; a
row 40 miles long, from the time they come out of the ground In the spring until
they are grown and then pulling them up in the fall, knocking the dirt off of them
,Ind cutting off the tops and piling them up?"

Those who are interested in verifying Mr. Taylor's description

shall find the process described in Farmer's Bulletin No. 568 from the
Department of Agriculture. You can find no better refutaton to
arguments that the condition of Mexican labor has been misrepre0
sented.
Mr. W. D. Llppitt, of Denver, who represented the United States
Beet Sugar Association at the hearings on the sugar schedule when
asked his opinion of the possibility of an increase hi the production of
sugar in this country said (p. 3331 vol. 5, Schedule 5):
"I think that the increase in continental beet production would be
relatively slow. I doubt that any reasonable taiff would permit us
to expand the industry in any reasonable period of time to supply
our own requirements. I think in production our expansion in
continental United States would barely keep pace with the increase
in consumption."
Mr. Lippitt does not state why the industry can not be expanded
to meet our sugar requirements even with the greatest tariff protection. Shall we find the answer in the letter of the president of the
greatest body of wage earners in this country where he refers to the
domestic industry as "an industry which employs women, children
and Mexcaa labor at indecent wages and under intolerable conditions
of employment"?
S. J. Holmes, professor of zoology of the University of California writing In the
May, 1020 Issue of the North Amerlan Review, 'quotes the president of the
Hutanitarlan Heart Mission on conditions In Denver. Says that gentleman:
"The sugar beet company employs the very poorest And most ignorant Mexitans with large families; brings them to Denver, working them In the beet fields
until snow flies. These unfortunates then congregate in Denver with $15 or $20
to keep a large family and no poE,,ible means of support by labor through the
winter season.'
(Following in pencil:) "LaIie' cind gentlemen, the domestic sugar Industry
can never be a dominant or adequate American Industry, for It Is not supported
by American climate or Ameri an labor."

Senator BLAINE. In connection with this, Mrs. Jones, you think

impassioned speeches in eitherr House have an influence upon the
membership of the rspective Houses in which they are delivered?
Mrs. Jo s. I don't know. I can't say that. I think they have
a great influence on the constituents.
Senator BLAINE. But the constituents in this case are not going to
vote directly. They are going to vote through their representatives,
the Members of the Senate and the Members of the House.

1964

LOBBY INVESTIGATION

Mr. JONES. I know, but public opinionSenator BLAINE. You think that if a Member does not make a long
or impassioned speech that they are not doing very much for the
cause,
Mrs. JONES. I don't know. They themselves are anxious to have
them printed in the Congressional Record. I don't know why they
are.
Senator BLAINE. But you are complaining, or rather you were
asserting your fear that this committee would not take an active part,
or the members of this committee would not take an active part, on
the floor of the Senate in making speeches against this proposed raise
in the tariff schedule.
Mrs. JONES. The speeches-

Senator BLAINE. That was your fear.

Mrs. JONEs. The speeches are reported in the newspapers. I mean
your constituency not only reads it, but it is reported in the New York
papers, the Chicago newspapers, and everywhere.
Senator BLAINE. I am getting at legislative activity.. The votes
are going to be taken in Congress not out among the constituents.
Mrs. JONES. Well, they should be taken according to public
opinion.
Senator BLAINE. Exactly. But you are complaining, or rather
you are expressing the fear that this committee will not exercise a
great deal of speech making on sugar. Is that it?

co
in
an
dif

sY

to

In

Mrs. JONES. Yes.

Senator BLAINE. Well, as I recall, after Mrs. Pratt made this

speech to which you refer she voted for the House increase.
Mrs. JONES. That is all right. She.had to go with her party.
Senator BLAIN.. Which is a larger increase than the Senate.
Mrs. JONES. You can not be effective if you do not go with your
party, unless you have enough as you have, to make another unit.

pr

Senator CAUAWAY. So you think that the duty of a Representative

or Senator is to make a speech on one side and then vote on another?

Mrs. JONES. I certainly do. I think she has the right to her personal convictions as a citizen. She has a right to that, as apart from
her political ituation.
Senator BLAINE. Certainly. Anybody has the right to talk one
way and act another, if they want to.
Mrs. JONES. You are not being guilty of striking at a political

opponent through this controversy, are you?

Senator BLAINE. I am thinking about these long, impassioned
speeches' you want made.
Mrs. JONES. All -iht.
Senator BLAINE. YTou would like the committee, I suppose, to
make speeches against this tariff?
Mrs. JONES. I certainly would, and I would like for them to recall
the tariff commissioner and all that.
Senator BLAIN-. You would like to have them make speeches
against a tariff increase, and then it would be all right if they turned
around and voted for it?
Mrs. JONES. That is their problem not mine.

C
h

1o

That is the way

at
she worked it out. You will have to work it your way.
as to
viewpoint
your
get
to
endeavoring
was
I
Senator BLAINE.
the weight and. influence of a speech in either house of Congress.

LOBBY INVESTIGATION

1965

Mrs. JONES. I say that is her problem, you see. It is not mine.
Senator BLAINE. I just had in iind this criticism you had of the
committee, and then these facts that have just recently developed
in the last minute or two.
Mrs. JONES. I see. But what I was afraid you would do Was vote
and not fight. She fought and voted the other way. That is the
difference.
Senator BLAINE. Do you know anything about the Inter-Ocean
syndicate?
Mrs. JONES. Yes, sir.
Senator BLAINE. Where is it located?
Mrs. JONES. In Chicago.
Senator BLAINE. Do you know anything about a contract alleged
to have been had with the United States Beet Sugar Co.?
Mrs. JONEs. Not my company, beet sugar.
Senator BLAINE. Beet sugar company.
Mrs. JONES. That is what I heard here on the stand. I knew that.
Senator BLAINE. Just what you heard had been testified to?
Mrs. JONES. Yes, sir. I know they had a contract.
Senator BLAINE. Do you know a Mr. E. M. Nolan?
Mrs. JONES. No, sir.
Senator BLAINE. Whom I understand claims was president of the
Inter-Ocean syndicate at some time?
Mrs. JONES. No; I only know by hearsay about him.
Senator BLAINE. Who is he?
Mrs. JONES. That he is the Inter-Ocean syndicate man. Is he the
president of the Inter-Ocean?
Senator BLAINE. I don't know.
Mrs. JONES. I understand that the manSenator BLAINE. You will do us a great favor if you can locate Mr.
E. M. Nolan.
Mrs. JONES. I understand that the man who runs the Inter-Ocean
syndicate was a former newspaper man, I think a former A. P. man.
I heard about him in New York, but I have never met him. I only

heard.
Senator BLAINE. You do not know where he is located?
Mrs. JONES. No. Except this outfit is located in Chicago.
Senator BLAmE. You haven't any knowledge concerning the InterOcean syndicate in connection with the sugar lobby other than you
have indicated in answer to my question?'
Mrs. JONES. No.

Senator

BLAINE.

That is all you know about it?

Mrs. JONES. Yes.

Senator BLAINE. Now, Mrs. Jones, Mr. Austin who was running the
lobby for the United States Sugar AssociationMrs. JONES. No, Beet Sugar Association.
Senator BLAmIE. Yes, the United States Beet Sugar Association. I
just want to call your attention to his testimony on page 310 of the
typewritten transcript of the testimony. I find there that Mr.
Auistin testified to this effect:
Then, there was a press association, or Individuals in the Press Building, under
the supirvislon of a Mrs. Gladys Moon Jones, who has been sending out a great
quantity of press releases and statements.

1966

LOBBY INVESTIGATION

That is in reference to organizations antagonistic to the United

States Beet Sugar intem'estsThey have changed their name several times. Sometimes it Is the United States
Chamber of Commerce in Cuba. Sometimoit is the United States Sugar Assocla.
tion, which is an association of financial Interests who have money invested in
Cuban sugar industries.

Now, you have testified regarding those two organizations.

Mrs. JoNEs. Yes, sir. They were clients, and I always mention
the names of my clients.

Senator

BLAINE.

And then he adds this:

Sometimes they come out with some other funny name they have.

Under what other names have any of these interests operated?

Mrs. JONES. My publicity bureau, the All-States News Bureau is
what he probably means.
Senator BLAINE. Well, that isn't a funny name.
Mrs. JONES. No. I don't think it is either. I think it is good.
Senator BLAINE. Do you know of any other funny names under
which these interests are operating?
Mrs. JONES. No, sir. I put out two statements of George A.
Zabriskie. Maybe he means that. I don't know at all, because that
is all that I have ever done.
Senator BLAINE. Did you put out a statement that the University
of Wisconsin was financing the organization opposing an increase in
sugar?
Mrs. JoNEs. I put out a statement in which the wording slipped
through that way as to the Universitq, of Wisconsin. Naturally
those three professors who were conducting this at the University of
Wisconsin-the person who wrote the first draft of that story wrote it
that way, and evidently in rewriting it I let it slip.
Senator BLAINE. That was the statement released in July, 1028?
Mrs. JONES. Yes, sir.

Senator BLAINE. Either the 26th or the 20th. I don't remember.

Mrs. JONES. Yes, sir.
Senator BLAINE. And the statement was in the following words:
The fo lowing is one of a series of statements approved by H. B. Hibbard,
John R. Commons, and Selig Pearlman, of the University of Wisconsin, resulting
from an impartial investigation of the thritf, conducted under their direction
with funds generously supplied by W. T. Rawleigh, of Freeport, ill.

Mrs. JONES. Yes, sir.

Senator
made?

BLAINE.

That is the staetment to which reference was

Mrs. JONES. Yes, sir. That was my understanding of it, and it

still is may understanding of how it was done.
Senator BLAINE. I don't know anything that was incorrect about
this.
Mrs. JONES. I say that is the way I put it up. I thought you were
referring to one before.
. Senator BLAINE. I hadn't any reference to that. What statement
was that?
Mrs. JONES. The first story I put out, on the professors' economic
releases. My reporter wrote that it was under the University of
Wisconsin, and the beet-sugar people came back with a release chal-

LOBBY INVESTIGATION

1967

longing that, that it was put out by the University of Wisconsin.

They didn't challenge the merit of what was put out, but just who
put it out. That is what I thought you had reference to.
Senator BLAINE. That President Frank, of the University of Wisconsin, had sent out a wire?
Mrs. JoNsS. They wired him.
Senator BLAINE. They wired him, and he in turn answered by
telegrph.
Mrs. JoNEs. They used that to. discredit my release.
Senator BLAINE. You assumed that the three professors of the
university investigating the tariff were making the investigation under
the authority or by direction of the university?
Mrs. JoNEs. I made no positive assumption. As the story went
out, it looked as if I had assumed that, but in writing it the words
slipped through in that way. I had no positive assumption one way
or another. I think it is immaterial to this date who did it. It is
what they did that counts.
Senator BLAINE. In addition to sending out press releases in connection with this sugar schedule, you made some field inspections, did
you not?
Mrs. JONES. Yes, sir.
Senator BLAINE. Where did you go?
Mrs. JoNEs. I went to Colorado.
Senator BLAINE. Did you go to Michigan?
Mrs. JONES. Yes, sir.
Senator BLAINE. I have here a typewritten document purporting
to be a report of investigation of the labor conditions in Michigan
and Colorado beet fields. I assume that came from your files?

Mrs. JONES. Yes, sir.

Senator BLAINE. Did you make that report?

Mrs. JONES. Yes, sir.
Senator BLAINE. To whom did you make the report?
Mrs. JONES. I gave it to various people who were interested in it.
Senator BLAINE. Has this report ever been published?

Mrs. JonEs. No, sir.

Senator BLAINE. Has it over been printed?

Mrs. JONES. No, sir. In fact, that is the only copy.
Senator BLAINE. Why hasn't it been printed?
Mrs. JoNEs. I don't know. I did all this field work for my own
and my clients' information, not for publicity. You see, I was writ.
ing all these stories about Mexican labor and they sounded so bad I
couldn't believe it, and I went out to see. I never had seen a sugar
beet growing in the field. I never had seen a Mexican working in the
fields, but i understood the conditions were such, from the Home
Economics Bureau and the Children's Bureau, and I went out to see.
Senator BLAINE. Mrs. Jones, if this report had been primted and
circulated, assuming that it is true, it would seem to me tha it would
have a greater influence on public opinion and the representatives of
the people than all the publicity and ail the propagandaMrs. JONES. I agree with you.
Senator BLAINE. That has been sent out by any association for
or ast this proposition.
Mrs. JONES. I absolutely agree with you.
Senator BLAINE. Then, why didn't you have it published?

1968

LOBBY INVESTIGATION

Mrs. JONES. Because of Senator Smoot. I was constantly told

not to irritate Senator Smoot.
Senator BLAINE. Does this report tell the truth?
Mrs. JONES. So far as I know. There are some things in that
report that I received from a lawyer in Denver about the control of
Colorado by the beet-sugar people that I wouldn't say was the truth.
I don't know. He told me all that.

Senator BLAiNE. Is that part of the report which you state upon
your own informationMrs. JoNEs. On my information.
Senator BLAINE. The truth?
Mrs. JONES. On my information and the gossip I picked up. I
didn't see them, and I don't say now it is the absolute truth, but I
say where I got it.
Senator BLAINE. In this report you recite the facts that you personally observed in the fields?
Mrs. JoNEs. Yes, sir.
Senator BLAiNE. Are these facts true?
Mrs. JONES. Absolutely true, and I have pictures taken with my
own kodak.
Senator BLAINE. Here is an interesting little paragraph, in view
of your testimony that you got out publicity for the Ford automobile. In discussing the shacks in the beet fields, there is this statement:

the
bee
ye
Co

lice

MY

orT
thil

Each of these shacks consists of two small rooms, built on a Ford chassis.

Were you advertising the Ford car there?

Mrs. JONES. No.

Senator

BLAINE.

Senator

BLAINE.

Well, is that a fact?

Mrs. JONES. That I understand from a labor man was the fact, in
Michigan.

That is Mr. Murray?

Yes. Don't I quote him?
Senator BLAINE. Who is Mr.Murray?
Mrs. JONES.

Mrs. JONES. He was an official of the Michigan labor people, and

he did an investigation for them.
Senator BLAmn. To whom did you make this report?
Mrs. JONES. I didn't make it to anybody. I simply wrote it down
to assemble what I found out and I showed it to Mr. Shattuck, Mr.
Lakin and Mr. Hartenstein. I simply showed it to them. I made no
report. I was under no requirement to make any report. I did this
thing on my own. I said' "I am writing all these stories about Mexi.
can labor, and I can't believe it." I said, "What about qoing out to
Colorado and seeing if they are so?" And I wired a man m Colorado
and asked whether they were weeding those beeta now, and he wired
back they werd, and so I went out, and I asked if I could go.
Senator BLAINE. You made this survey at the expense of the people
who employed you?
.n&
Mrs. JONES. They pad my expenses, yes; but I begged them to
let me go. It isn't their idea at all. It is my own. I did it to get a
background for writing the stories.

Senator

CARAWAY.

When was it then, that they decided that

Senator Smoot wouldn't let you publish it?

Mrs. JONES. They have always told me not to use his name or not
to put out anything too drastic and offend him, because the only way

it
E
the
the

wa

M1
the]

LOBBY INVESTIGATION

1969

they ever hoped to get anything was through an agreement with the
beet people not through fighting them.
Senator BLAINE. But they used the names of other Senators, as
you recall the other day.
Mrs. JONES. But other Senators are not chairman of the Finance
Committee or chairman of the Committee on sugar.
Senator BLAINe. But they are members of the Finance Committee.
Mrs. JONES.

I know.

Senator BLAINE. And I think your organization had all the Republican Senators catalogued.
Mrs. JONES. I don't know about that. I didn't.
Senator BLAINE. Senator Robinson brought it out.
Mrs. JONES. That is the bottlers. That has nothing to do with
my organization.
Senator BLAINE. Well, the same interests, exactly.
Mrs. JONES. Of course. I never did anything of that sort.
Senator BLAINE. I didn't mean to imply you or your particular
organization did. I mean the people who were employing you to get
this information out.
Mrs. JONES. I see.

Senator BLAINE. Have you got more than one copy of this report?
Mrs. JONES. No, sir; that is the only copy I have, and that is the
first draft, and I simply dictated it straight to the machine.

Senator

BLAINE.

This is your personal-

Senator

BLAINE.

To whom did you report when you were out on

Mrs. JONES. It is all my own personal memorandum, absolutely.

I said I had shown it to just three men.
Senator BLAINE. I presume you would like that returned to you?
Mrs. JONES. I absolutely would.
Senator BLAINE. I think it would be a very valuable document if
it were published.
Mrs. JONES. I will publish it some day.
the field?
Mrs. JONES. When I found conditions-it was during the time that
the hearings were being held on the sliding scale, and it was through
the sliding scale-

Senator BLAINE. No. I say to whom did you report?

Mrs. JONES. Wait until I tell you.

Senator

BLAINE.

Just give the name.

Mrs. JONES. Well-

Senator BLAIB. I want to. hasten the examination. It isn't very

material, only to connect it up. You reported to Mr. Shattuck, who
was here on the ground?
Mrs. JONES. Yes.

Senator BLAINE. I notice in a telegram dated June 25, from Saginaw, Mich., addressed to Edwin P. Shattuck, you say:
John Murray, deputy State inspector for department of labor and industry,
Michigan, says woinen and children now thinning and weeding beets. I saw
them to-day crawling on hands and knees in field about 8 miles south of Saginaw.

Did you see them?

Mrs. JONES. Yes, sir; I saw them with my own eyes.
78214--30--vt 5-18

1970

LOBBY INVESTIGATION

Senator BLAINE (reading):

Also visited 360-acre farm owned by Michigan Sugar Co. 105 acres in beets;
employs five Mexican families. Foreman said drought will cost 60-acre loss
this year. States sugar companies lose money sending down for Mexicans who
desert o way up or after they get here. Sugar companies furnish labor to
farmers for which farmers pay $23 an acre. Btate receives same amount for
convict labor. One hbudred convicts are in beet fields near Owosso.

Was this information obtained by _'ou personally or through Mr.

John Murray, deputy State inspector
Mrs. JONEs. By me personally from the governor of Michigan, who
says, "We have turned in the convicts"; and while I was in his office
somebody called up over his telephone and said they needed hats to
protect them front the sun, and he had just been out to see them.
Senator BLAINE. I notice a telegram of June 27-I want to ask
you i the telegram I have just read, although I haven't read what
Governor Green said-was that telegram ever published?
Mrs. JONES. No, sir.

Senator BLAINE. Did you ever make up a news story based on the

information contained in that telegram?

Mrs. JoNEs. Yes, sir' lots of them.

Senator BLAINE. And circulated them?

Mrs. JONES. Yes, sif.
Senator BLAINE. Through your organization?

Mrs. JONEs. To everybody. That is what I went out there for.

Senator BLAINE. Were copies of this telegram sent to members of
the Finance Committee?
Mrs. JONES. Not the telegram.

Senator BLAINE. Any member of the Finance Committee?

Mrs. JONES. All the stories founded on it were sent to everybody,

all the Members of the Senate and House.

Senator BLAINE. I notice a telegram dated Denver, Colo., June 27,

addressed to Edwin P. Shattuck, which reads:

Spent day on land around Holly Co. plants. Found women- and children
thinning beets near Swink and Rockyford, Colo. Visited Mexican colonies in
mud huts, no floors. Conditions unbelievable.

Did you personally see those conditions?

Mie. JONES. I personally sat and talked to a Mexican woman the
only woman in the colony who could talk English, and she coukd not
do it very well.
Senator BLAINE. Let me read further:

Shacks built and owned by sugar company. Only woman speaking English
widow of man who worked for sugar company 22 years. Widow now rheumatic
from topping beets in snow last fall. County gives her $6 in groceries monthly.

Where did you get that information?

Mrs. JONES. From her.
Senator BLA11E (reading):
Another woman' and 12 children in the fields this afternoon took pictures in

fields and in colonies on 35-mile drive.

t
t

Saw no white farmer or worker.

Mrs. JoNEs. That is true.

Senator BLAINE. On the 35-mile drive?
Mrs. JoNEs. That is true.
Senator BLAiNe. What type workers were they?

Mrs. JoNEs. They were Japanese farmers and Mexican laborers.

Senator BLAINE. This is contained in your telegram:
Japanese farmer said with pride he worked Mexicans.

Hordes of Mexican..

One told me field boss is Greek who thinks Mexicans are donkeys.

LOBBY INVESTIGATION

1971

Mrs. JONES. That is true.

Senator BLAINE. That is all true?
Mrs. JONES. All true.
Senator BLAINE (reading):
Mexican stated that if they have not money enough to get south in fall they
must stay and suffer in mud houses all winter. Must pay $2 a tank for water.
Mrs. JONES. Yes, sir.
Senator BLAINE. I understand they paid $2 a tank for water or
they must drink the water out of the irrigation ditches, which is not
regarded as clean.
Mrs. JoNES. Yes sir.
Senator BLAINE reading):
And ton to thirteen a ton for coal. Stated sugar people do not care but turn
them into places like pigs. My own eyes verified it. Could not be worse.
Mrs. JONES. Yes, air I did, in Colorado.
Senator BLAINE. Did you over give publicity to this telegram?
Mrs. JoNEs. I certainly gave lots of publicity.
Senator BLAINEN. To this telegram?
Mrs. JONES. I moan to stories founded on the telegram.
Senator BLAINE. Stories which you wrote?
Mrs. JONES. Yes, sir.
Senator BLAINE. Another telegram dated June 28 to Mr. Shattuck:
John Gross, secretary Colorado Federation of Labor, has just completed Investi-

gation, child and Mexican labor, in beet fields of Boulder, Weld, and Larimer

Counties. Stated ho found that 5,000 children between ages of 6 and 16 out of
school last fall to top beets. Stated that every time an acre Is thinned or weeded
child crawls five miles.

Mrs. JONES. Yes.

Senator BLAINE. That statement is based uponMrs. JONES. John Gross.
Senator BLAINE. John Gross' statement?
Mrs. JONES. John Gross. A person from his office had just made
a survey and he told me that that morning before I started out to see
itmyself.
Senator BLAINE. The telegram continues:
Twenty eight thousand workers in northern fields. Death rate among children

said to be higher than any In United States. Gross said "Show me one Mexican
that goes back to Mexico unless deported for disease, crime, or red agitation."

Stated that child-labor amendment has been up in every session for six years.
Can not get ratification.

Did you ever have that telegram published?

Mrs. JONES. I published everything in that telegram, not as a
telegram, you understand, but as a news release and stories.
Senator BLAINE. I thought you would have just sent a copy of the
telegram to the Senators.
Mrs. JONES. Do you know what would have happened? At that
time they were trying to get together on the sliding scale, and I was
positively told by the people who employed me not to irritate them,
and that is the truth.
Senator BLAINE. There are just two others and I am through.
June 28, Denver, Colo., addressed to Edwin P. Shattuck, reading:
Conditions In Wyoming said bad. Will stop there. Is It necessary to go
Utah Idaho? Have much knowledge can not wire American farmer not to
benefit expression here.

1972

LOBBY rNWBSTIGATION

Among whom was that expression given?

When I went out there, of course I got into contact
Mrs. J ,NEs.
of charity
with personal friends and with people who were heads
organizations and heads of labor organizations, people whom I know.
I suppose it was the general belief that I had picked up, that the farmer
out there would not benefit.
Senator BLJAINE. The telegram further states:

W
C
C

Farmers who farm the farmers.

Mrs. JONES. That is the expression.

Senator BLAINE (reading):
Y

To designate bankers who operate land under Mexican peon and child labor.
Bankers who operate beet lands also control mines, and Great Western sugar
mines also employ Mexicans at extremely low wages. Great Western gets coal
at half price then they talk Wall Street in Cuba.

Did you have that telegram published, or just issue a news story
upon it?
Mrs. JONES. A news story.
Senator BLAINE. Did your news story go to all the Senators?
Mrs. JoNEs. It went to all the Senators and all members of the
house until I was told not to send it to the Senate any more because
it was irritating them.

o
p
s

Senator BLAINE. I will read only a portion of the telegram of June

28 to Mr. Shattuck from Denver:
Saw one white- family weeding beets.

Father crippled on section.

Took

beet contract so three daughters 11 to 15 could work also mother, who said never

a.

again. Have also a child 3, and all 6 live in shack with 2 small rooms on the field.
Another district farmer stated 90 per cent of school children are Mexicai and
most of them on the county during winter.

Did you observe that outside of what was told you?

Mrs. JONES. I went especially to the woman who was head of what
you would call the social welfare bureau in this town. She had her

statistics. She had reported to the town council, and she gave them
to me.
Senator BLAINE. Did you give publicity to this telegram?
Mrs. JONES. Yes, sir.
Senator BLAINE. I have but one more. It is dated June 28,

addressed to Edwin P. Shattuck, and reads:

The influx of Mexicans into the United States was described Thursday in an
address before the national conference of social work as one of the greatest racial
movements In history. The conference was held in San Francisco. Robert N.
McLean, of the city Immigrant and industrial department of the Board of National
Missions of the Presbyterian Church in the United States told the delegates that
the approximately one-fifth of the Spanish-speaking Mexicans live under the
American flag. Hb also asserted that but few of the 2,000,000 Mexicans in the
United States ever would return to their native land but that their love for their
country makes them disinclined to become American citizens.

n
t

Did you give publicity to that?

Mrs.JoNzs. Yes, sir.
Senator BLAINE. By what means?
Mrs. JONES. By every means I had. I put out stories especially
sent all this material to editors. I collected that very speech I tokI
you about and sent it to editors all over the country, some 5,000
or more are on the list.
Senator BLAINE. There is just one other. You sent a telegram

to Helen Critchett, June 28, in which you said:

I
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LOBBY INvSTIGATION

1973

Please Interview Gertrude McNally, secretary of Federal Employees, In building

where Keatings Labor is published. Miss McNally addressed convention of

Colorado Federation of Labor In Denver this month. Told delegates of several
days In beet fields. Saw children and mothers with small babies. Barbara
get copy of paper delivered by Mahony before Catholic conference In Denver
[ast of May. Copy in possession of Linna E. Bresette, field secretary of National
Catholic Welfare Conference, 1312 Massachusetts. Might get statement of
McNally out. Give copies Mahoney paper to Harrison. Got Commonweal

of June 5.

Was that all done?

Mrs. JONES. Yes, sir. I hope so.
Senator BLAINE. These statements were statements made not by

you, but by Miss McNally, of th3 National Catholic Welfare Council?

Mrs. JONES. Yes.

Senator BLAINE. And you were merely relaying the information

along?

Mrs. JONES. Yes, sir. That is what I call mobilizing public

opinion.
Senator BLAIWE. Did you get out a statement on that?
Mrs. JONES. Yes sir Then we could run a news story. A newspapor can not possibly keep a staff to cover all sorts of things, and if
somebody does something to redound to our story, we can get out a
story and call their attention to the fact that it has been done.
Senator WALSH of Montana. Mrs. Jones, the sliding-scale question
was disposed of some months ago.
Mrs. JONES. Yes, sir.
Senator WALSH of Montana. Is there any reason why this matter
should not now be published?
Mrs. JONES. No. As soon as the sugar schedule comes up in the
House I intend to put it out again, this sort of thing.
Senator WALSH of Montana. Why, when the sliding-scale matter
was finally disposed of was not this matter published?
Mrs. JONES. Everything was dead in the summer, and nobody was
doing anything about it.
Senator WALSH of Montana. Congress has been at work on this
since to 4th day of September.
Mrs. JONES. Not exactly on sugar.
Senator WALSH of Montana. No; not on sugar.
Mrs. JONES. I mean, things quieted down.
Senator WALSH of Montana. But you have been putting out all
manner of stuff all this time.
Mrs. JONES. Oh, yes. I have been putting out some of this material all that time.

Senator WALSH of Montana. But you haven't felt impelled to publish this report.
Mrs. JONES. No.

Senator WALSH of Montana. I hadn't quite finished with the Mrs.

Pratt story. You got out a release on that speech, did you not?
Mrs. JONES. Oh, certainly.
Senator WALSH of Montana. Was that prepared before or after the
speech was delivered?
Mrs. JONES. After. I mean we knew we would get out a release.
I knew she was going to make a speech. I didn't know when she was.

I didn't hear her make it. After she had made it I called up the
secretary and he said she has made it to-day, and then I got out the
release.

1974

LOBBY INVESTIOATION

Senator WALSH of Montana. Had you prepared the release prior

to that time?
Mrs. JONES. No. I had prepared to put out a release. Just as a
newspaper prepares the obituaries of people, waiting for them to die.
They keep them.
Senator WALSH of Montana. I notice in the copy of the release
which I have before me you use her remarks fully, and then you
start off, "Mr. Speaker and Members of the House," whereas, as
a matter of fact, she started out, "Mr. Chairman and Members
of the House," while your typewritten copy says, "Mr. Speaker,"
instead of "Mr. Chairman."
Mrs. JONES. You are familiar with the way all newspapers and
news bureaus work. They get advance copies of speechesSenator WALSH of Montana. Not altogether, I am sure.
Mrs. JONES. Well, they get advance copies on speeches. When
I worked with the Science Service, the Science people were here
going to have a meeting. All speeches, advance copies, came in
two weeks before they held it.
Senator WALSH of Montana. You were asked about circulating
Mrs. Pratt's speech. I see here with reference to that matter,
in your letter of May 30, 1029, to Mr.Francis, there is the following:
Through Editor Keating who represents Labor I started something in Colorado.
Mrs. Pratt received a letter from the head of Colorado Women's Clubs thanking
her for her speech In Congress and asking her to send copies of this speech to
all women's clubs in Colorado. Accordingly Mrs. Pratt has ordered 70,000
copies of the Congressional Record containing her speech.

Mrs. JONES. I didn't circulate them to Colorado at all. I asked

her if I could have some copies to circulate. I wanted them for two
people. I wanted them for the office here who have to do with
propaganda against Mexican labor in this country. They asked
for some copies and I said I would try to get some. I asked if I
could have some copies of her speech to send to people who were
interested and she said, "Certainly; of course." She ordered some
more copies, and I wanted to pay for the printing and I sent her a
check for the printing.
.
Senator WALSH of Montana. How many copies of the speech did
you ciic)ulate?
Mrs. JONES. I can't say exactly. Five or six thousand, probably.
I think I asked her if I could have-I don't know. I will have to
ask my secretary. Eight or ten thousand, maybe. But we still
have some in our office.
Senator WALSH of Montana. Here is a reference in your letter of
June 13, as follows:
We are busy sending copies of Mrs. Pratt's speech as coming from her to the
American Feaeration of Women's Clubs, American Association of University

Women, etc.
It says there, "as coming from her."
Mrs. JONES. Well, that means in that form that she has them
there.
Senator WALSH Of Montana. I don't quite understand that.
Mrs. JONES. You see that form right on top here. We sent them
them out in that form.
Senator WALSH of Montana. What is the meaning of this language
"as coming from her"?
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LOBBY INVESTIGATION

1975

Mrs. JONES. That is what you see on the outside. It has "Ruth
Pratt" on the outside of it.
Senator WALsH of Montana. Of course, if this was sent out it
would be Mrs. Pratt's speech..
Mrs. JONES. Well, that is it. I asked her if I could have some
copies in that form. Her secretary puts them up in that form,
which I thought was very clever, because nobody has to break any
seals or anything. It just opens up. I asked if I could havesome
extra copies of it, and Isent her a check to cover the cost of printing.
Senator WALSH of Montana. Yes; but that would be indicated
of
Mrs. Jones, if the letter read, "We are busy sending 10,000 So0ies
Mrs.Prattls speech to the American Federation of Women's clubs "
Mrs. JONES. Certainly.
Senator WALSH of Montana. But you say, "As coming from her."
Mrs. JONES. That form.

I think it is good.

Senator WALSH of Montana. The language "as coming from her"

appears to be underscored in the letter.
Mrs. JONES. I meant to call attention to that form that she got
it out in, which naturally would be much better than sending out a
mimeographed sheet of the speech.
Senator WALSH of Montana. I think that is all.
Senator CARAWAY. Who is Mrs. Eichel?
Mrs. JONES. Mrs. Eichel is my New York report and contact
woman.
Senator CARAWAY. Does she hold an office in some women's club?
Mrs. JoNEs. She did -formerly. She doesn't now.
Senator CARAWAY. Does she at this time?
Mrs. JONES. No, air.
Senator CARAWAY. I notice a letter here to the effect that some
lady was go get you appointments for you to make speeches.
Mrs. JONES. Yes, sir.
Senator CARAWAY. You were to pay her $25 forMrs. JONES. Each booking.
Senator CARAWAY. That she would invite you to?
Mrs. JONES. Yes, sir. She booked me.

Senator

CARAWAY.

That was paid for by the sugar people?

Mrs. JONES. Certainly.

Senator WALSH of Montana. What was the organization with
which she was associated?
Mrs. JONES. She was formerly executive secretary of the National
Council of American Women, I think they call it.
Senator WALSH of Montana. And who is Miss Mandiao?
Mrs. JONES. Mandi-she is a girl who has a publicity bureau in
New York, a former newspaper woman, called the Phoenix News
Bureau.
Senator WALSH of Montana. I find here a letter from Mrs. Ruth
Byers Heed, of date September 24, in which occurs the following:
Miss Mandigo tells me that her understanding with you was that no one but the
committee was to be mentioned in the story and that it was not to be rewritten.
The result of the story as it appeared io that the consumers' committee to investigate living costs has told us definitely that no more stories can be released through
your organization or through you and that any cIreularization of Congressmen
and Senators which the committee does will have to be done directly through their
own headquarters without in any way tying them up to the sugar Interests.
They are very definite about this point. "Atthe present time we have not been

1976

LOBBY INVESTIGATION

Informed what their policy will be In regard to the way in which they will approach
Members of Congress.

What was the committee to investigate living costs that was

referred to there?

Mrs. JoNEs. Miss Mandigo and Ruth Heed are a publicity bureau
in New York that was doing publicity for the committee to investigate
living costs in the United States. that is the committee she meant.
Senator WALSH of Montana. Have you been putting out stories
from this committee?
Mrs. JoNEs. I put out two stories from them. I agreed to put out
any stories that had a slant that agreed with my slant for lower tariffs.
I put out this story over which this controversy arose and put my
name and office address at the top, and some New York newspaperman
put my name in the body ot the story and she thought I had changed
the story and taken the glory of the story from her newspaper, so she
was cross about it. That is all.
Senator BiAINE. That is just some of the little troubles among
newspaper people?
Mrs. JONES. Yes; professional jealousy.
Senator CARAWAY. Mrs. Jones, would you like to have included in
the hearings your release to the comnUmttee?
Mrs. JONES. That is all right with me.
Senator WALSH of Montana. After the talk we have had about that?
Mrs. JONES. I have changed my mind. I change my mind from
day to day. I may change my mind to-morrow. I would hate to
have it go in there-I wouldn't want to have it included inthere and
forever say I stand like that. In fact, I changed my mind after I
talked with Senator Blaine.
Senator BLAINE. Your mind is easily changed, then, I fear. I
might suggest to you that there were two members of this committee
who joined in the colloqui yesterday on the floor of the Senate.
Mrs. JONES. I am going to read it.

Anyway, I want to apologize,

because your general treatment of the Cuban people and these others
has made me act this way. But you have been awfully nice to me.
Senator CARAWAY. You don't have to apologize. You are entitled
to your opinion. You don't have to apologize for it.
Mrs. JoNEs. I mean .1 thought you were going to ride me pretty
hard, because you have the other people.
Senator CARAWAY. But I wish, Mrs. Jones-you have suppressed
the best piece of testimony you gave.
Mrs. JONES. Can't you see, if a manSenator CARAWAY. All we want is for the public to know what is
done so that they can make up their minds. If you will give us the
name of the man who said that one of these associations burned
their mail, we will give him a special day to tell us about it.
Mrs.

JONES.

Well, now look, Senator Caraway, I know a whole lot

that has been said to me by men after they have had a few drinks at a
dinner table.
Senator CARAWAY. Well, you just tell us who they are and we
won't mention the fact that he was drunk. Tell us this; tell us what
association he was with.
Mrs. JONES. He was with the other side, the High Tariff Sugar
Association.
Senator CARAWAY. But with which group?

t
t

LOBBY !MVESTIOATION

1977

Mrs. JONES. The domestic group. Would you, if a man told you
something at a dinner table, after he had had a cocktail, would you
tell it before an investigating committee? I ask you because I don't
know, really. I don't know whether it is ethical to tell or ethical
not to tell.
Senator CARAWAY. I would do this. Your sense of propriety is
better than mine. I either would tell his name or not mention it at all.
Mrs. JONES. I don't think so. I think the information itself is
worth something.
Senator CARAWAY. No; information is not worth anything, because
it is always one of those charges that people won't stand back of. I
get a dozen or two letters every day, aind I suppose the rest of the
Senators do, from somebody who won't sign his name.
Mrs. JONES. Let me tell you the unique conditions. If a personal
friend, who was a personal friend before the sugar controversy--Senator CARAWAY. I just presumed you folks were at war.
Mrs. JONES. We are very friendly.
Senator CARAWAY. This is just for the public?
Mrs. JONES. No; economically we are at war, but I have some
very good friends among the beet sugar people.
Senator CARAWAY. Yes; I read one of your postscripts one time.
Senator WALSH of Montana. Now,. Mrs. Jones, I ask you if you
care to have that release of this morning incorporated in the record,
because I state to you frankly that I resent very much the statement made in there that this committee has been active in any way
except with a conscientious desire to develop the facts upon both
sides of this controversy.
Mrs. JONES. I said apparently.
Senator WALSH of Montana. I believe that the newspaper representatives here will agree that the committee has been searching
upon both sides of this question. I don't think that you care to
have that go to the world as your opinion of what this committee
has been doing.
Mrs. JONES. It was my opinion yesterday, and it was my opinion
this morning, and when you count up the days that you have had in
this chair the men interested in Cuban sugar, and you count up the
letters which you have read, from which you have inferred things,
and then count up the days you have had the domestic people in
this chair, you will see what I mean by the general effect on public
opinion.
Senator CARAWAY. Did it ever occur to you that we wasted two
or three days on some people on the Cuban side that if they had
been candid and frank with us we could have gotten through with it
in an hour?
Mrs. JONES. Yes, sir.
Senator CARAWAY. They made a statement and we had to go
back and search the files to find out that they were not reliable.
The committee has not gotten any very great joy in listening to a
lot of them.
Mrs. JONES. Public opinion is what I am talking about.
Senator CARAWAY. All we have put in the record is what. we have
done.

1978

LOBBY INVESTIGATION

Mrs. JoEs. If you had kept Mr. Petrikin on this stand and
questioned him as minutely as you questioned Lakin and Mr. Shattuck and me and the bottlers, you would have found outSenator CARAWAY. You know something we don't know?
Mrs. JONES. Lots.

Senator CARAWAY. If you will indicate it, we will go after it.

What is it you know?
Mrs. Joxs. I don't know. Ask him.
Senator CARAWAY. We asked him.
Mrs. Joxigs. You didn't keep him here. You didn't get his letters.
You didn't, question him. You asked him if that pamphlet we put
out was right. You didn't get the Interocean syndleato.
Senator CARAWAY. Well, we are not through yet, if you will just
stay with us.
Mrs. JoNES. All right, I will stick.
Senator CARAWAY. I want to put in the record at this r )int two
letters affecting General Crowder.
(The letters in question are as follows:)
Yesterday I forgot to speak to you about a matter of importance to me Just
now. General Crowder has been of much help to us In Washington and will be
even more so in the next few months. He has an approach to Senators which
is not excelled by that of anybody. We shall have to consult perhaps half the
Senators personally. Crowder Is the man we are using for that work. We have
been keeping him at the Mayflower Hotel most of the time since January 16.
We have been paying his expenses, but he has declined to accept any compensation. Of course we know that he has neglected his other business While working
with us.
Mv reason for writing you is that it was you who told me about lile arrangement
with the mills and because I have a feeling that it may have been you who told
me that his arrangement with the mills expires on September 1. lils usefulness
in our cause will be at its highest point from September I to November I or
December 1. 1 am anxious to learn if the mills have any intention or would be
willing to extend his retainer for a few months more until this fight is finished.
I expect some difficulty in finding enough money to pay our expenses now thdt
final action has been postponed to such a late date, and if the mills would take
care of Crowder's compensation for three months, it would help us just that much.
I am sorry to trouble you, but I do not know which mills are paying Crowder.
It you would speak to the proper person, whether General Machado or whoever
it is, and let me know the situation, I should appreciate it very much. If the
mills .can do nothing I shall have to try to get the money somewhere, because
I know Crowder could not afford to work three or four months without pay,
though he would be patriotic enough to"Cuba's cause to do so.
I have before me your letter of the 8th instant, in reference to the services of
General Crowder in Washington and the advisability of extending his retainer
up to November or December of this year. Yes; it was me who spoke to you
about the arrangement which certain mills have with the General and I agree
with you in all you say regarding his usefulness in Washington in connection
with the tariff. Since I received your letter I have been endeavoring to see
President Machado (for it was through his good offices that this arrangement
was made), so as to put your suggestion before him, but owing to his absence
from labana to rest from the festivities of May 20 and having been very busy
since his return with political conferences, it has been utterly impossible for me
to see him and I hn afraid I shall not be able to approach him at all for the next
week or 16 days, as I am leaving for Camaguey tonight and will not be back to
Habana until the latter part of the coming week. Upon my return I shall try
again to see President Machado, anid in duo course I shall be glad to communicate
with you giving you the outcome of my interview with him. In the meantime,
believe me.

Senator CARAWAY. The committee will stand adjourned until 10

o'clock Tuesday morning.
(Whereupon, at 12.30 o'clock p. m., the committee. adjourned until
Tuesday, January 14, 1930, at 10 o'clock a. m.)

LOBBY INVESTIGATION
TUESDAY, UANUAaY 14, 1930

INITh

STATES SENATE,

SUBCOIMITTEN OF TilE COMMI1'rEE ON 'T118 JUDICIARY,

Washilgfton, D. 0.

The subcommittee met, mrstuant to adjournment, at 10 o'clock a.

m., in room 212, Senate Oflice Building, Senator Thaddeus H. Caraway, chairman, presiding.
Present: Senators Caraway (chairman), Robinson of Indiana,
and Blaine.
Also present: John G. Holland, Esq., counsel to the committee.
Senator Caraway. Is Mr. Pickrell in the room?
TESTDIONY OF EUGENE R..2ICKEELL
(The witness was duly sworn by Senator Caraway.)
Senator CARAWAY, Will you give the stenographer your name, residence, and occupation?
Mr. PICKnELL. Eugene R. Pickrell; businmes address. 230 Fifth
Avenue, New York City. I am a chemist and a customs consultant.
Senator CARAWAY. Now, just what does that latter statement mean,
customs consultant V
Mr. PiciULI,. I look after the customs matters of several concerns.
Senator CARAWAY. As an attorney or as an expert on the character
of goods?
Mr. PcxRExi.
As an expert. I am not an attorney.
Senator CARAWAY. How long have you been engaged in that, Mr.
Pickrell?
Mr'. PicKiL. I have been engaged in customs matters since 1910.
Senator CARAWAY. Do you have one importing firn for whom you
work, or do you work for anyone who wants to employ you?
Mr. PKCIUELL. Anyone who wants to employ me.
Senator CARAWAY. Dealing altogether with imports?
Mr. PIOcRELL. Yes.

Senator CARAWAY. What line of goods?

Mr. PICHKELL. Chemical and related products.
Senator CARAWAY. Were you interested in any way in the present
tariff bill as it is now pending in the Senate?
Mr. PICKELL. Yes.
Senator CARAwAY. For whom did you act, Mr. Pickrell?
Mr. PICmitELL. I acted for the General Dye Stuffs Corporation.
Senator CARAWAY. They employed you for that particular
Purpose
N
fr. PICH7ELL. NO.
10T0

1980

LOBBY INVESTIGATION

Senator CARAWAY. Well, how could you be acting for them if you
were not employed by them?
Mr. PoREIl. I am employed by them, handling their customs
matters, and the tariff, naturally, is an incident to the customs
matters.
Senator CAnAWAY. Did you get any extra pay?
Mr. PIcRRnLL. No, air.

Senator CARAWAY. Just your expenses?

Mr. PiORRELL. Yes sir.

Senator CARAWAY. You got more money for your services when

you came down here than wen you were in your office in New York
City, did you not?
Mr. PIcknriL. No, sir.
Senator CAnAWAY. Well, you couldn't look after but one man's
business down here, and you say you were looking after anybody who
wanted to employ you there.
Mr. PxoKRzL. Senator, I looked after the customs matters for
more than one concern. Besides the General Dye Stuffs, there is
the Kutroff Picard Co the Synthetic Nitrogen Products Corporation the Afga-Ansco corporation, H. A. Dietz & Co., the General
Analine Works, and the Consolidated Color & Chemical Co.
Senator CARAWAY. They were all interested in the tariff?
Mr. P0KcRnEu. Some were and some were not.

Senator CARAWAY. That is what I am trying to get at. How

much of your time did you devote to the tariff?
Mr. PxcRzLL. That is hard to say, Senator Caraway. I devoted
quite a considerable portion of my time to the tariff. I looked
after customs matters at the same time.
Senator CARAWAY. YOU stayed down here quite a little while,

didn't you?

Mr. AIcHRELL. I was here off and on quite a little time.

Senator CARAWAY. There was no extra charge for it?

Mr. POCREL. There was not.

Senator CARAWAY. You just have a flat retainer by the year?
Mr. POKRRELL. That is right.
Senator CARAWAY. You, of course, got your expenses?
Mr. PIOK1REL. That is right.

Senator CARAWAY. Did you have any expense money other than

your own personal expenses?

Mr. PIOKRELL. No, sir.

Senator CARAWAY. Did you do any entertaining?

Mr. PIcRRELL. No, sir.

Senator CARAwAY. Did you do any going around to see any inembers of either House?
Mr. POC.RELL. Practically no entertaining.
Senator CARAWAY. Did you entertain any members of either body
of Congress?
Mr. PIORRLL. I think I had one or two to dinner once, that is all.

Senator CARAWAY. Who were they?

Mr. PICKRELL. I had Senator King to dinner once.
Senator CARAWAY. Anybody else?
Mr. BILAINJ. What Senators?
Mr. PICKRELL. Senator King.

LOBBY INVESTIGATION

1981

Mr. BLAINE. I thought you said another Senator.

Mr. PICKELL. No.
Senator CARAWAY. Did you have any other Member of the Senate?
Mr. PicKmuLL. No.
Senator CARAWAY. Any Member of the House?
Mr. PIoxRELL. No. I was to lunch with a Member of the House,

as his guest.

Senator CARAWAY. Who was that?

Mr. PIOR1REU. Congressman French of Idaho.
Senator CARAWAY. Did you go to lhe office to see any Members
of either branch of Congress?
Mr. PICIaimEL. Yes.
Senator CARAWAY. Will you give us the names of those on whom
you called ?
Mr. PcRsELL. Of both the House and the Senate?
Senator CARAWAY. Yes.

Mr. PICKRELL. The House, I saw the different members of the

Ways and Means Committee.
Senator CARAWAY. Did you see all of them?
Mr. PICKRJLL. Not all of them; no.
Senator CARAWAY. Do you remember the names of those you did
not see?
Mr. PIcxlaP.LL. Well, there were several of the Democratic members I didn't see.
Senator CARAWAY. You didn't think they amounted to much and
didn't go to see them?
Mr. PtCKRELL. No. I saw some of them. Some I did not. I
probably didn't have time or maybe thought it was not advisable at
the time.
Senator CAnvAy. Who did you see in the Senate?
Mr. PcRUELL. I saw Senator Moses; I saw Senator King; I saw
Senator La Follette; I saw Senator Copeland; I saw Senator
George; I saw Senator Robinson of Indiana.
Senator CARAWAY. What did you talk to them about
Mr. PICK ELL. I spoke to them about-principally on American valuation, paragraphs 27 and 28. And the Senator from Indiana, Senator Robinson, I spoke to him about fertilizer,
Senator RoBINsoN of Indiana. How long did you talk to met
Mr. Piou aE..Not more than 10 minutes, I would judge.
Senator RoBINsoN of Indiana. You know you didn't talk to me
longer than two minutes, don't you?
Mr. PxoRiRLL. Well, I can't say whether-it was just a few
minutes.
Senator RoBiNsoN of Indiana. When did you come to see met
Let us find out about that now.
Mr. PicKILL. When did I come to see you, Senator?
Senator RoBINsoN of Indiana. Yes.
Mr. Pimmrzi
. I came to see you about three or four weeks ago.
Senator RoINsoN of Indiana. Three or four weeks ago?
Mr. PioeRELL. Yes.
Senator RoBINsoN of Indiana. You came to the Senate and sent
your card in. Is that itt
Mr. PioRan-u. Yes.

1982

LOBBY INVESTIGATION

Senator Roxsox of Indiana. I came out to see you?

Mr. PICknrELL. Yes.
Senator ROBINsoN of Indiana. You talked to me about oni minute,
or I talked to you aboutthat long. Isn't that true?
Mr. PWKRV.JLL. It was a few minutes. I wouldn't say it was I minute or 10.
Senator RoBN soN of Indiana. You know it wasn't 10?
Mr. PWK1iELL. Well, it pprobably wasn't 10.
Senator Rom.sox of Indiana. You found out very shortly that I
didn't care to talk toyou, didn't youI
Mr. Pw~NULL. Well---Senator Roinxsox of Indiana. I am surprised that you made
that statement. Go ahead.
Senator CARAWAY. You were trying to put the argument before

the Members of the House and Senate opposed to the American

valuation?
Mr. PCKR:LJL. Yes.
Senator CARAWAY. Or the domestic valuation or whatever they
call it?
Mr. PIORRELL. Yes.
Senator CARAWAY. Did you talk to them about the rates on
chemicals?
Mr. PICKRELL. I think not.
Senator CARAWAY. Did you appear before the Committee on Ways
and Means of the House?
Mr. PICKHELL. Yes.
Senator CARAWAY. What did you discuss there, Mr. Pickrell?
Mr. PIoKnp.L. American valuation.
Senator CARAWAY. Did you go before the Finance Committee of
the Senate?
Mr. POKRELL. Yes.

Senator

CARAWAY.

What did you discuss before it?

Mr. PIOR.LL. American valuation.

Senator CARAWAY. Did you file a briefI

Mr. PIcORELL. Yes.

Senator CARAWAY. In your brief did you discuss only the American valuation?
Mr. PIcKRzEIL. In one brief, filed with the Ways and Means Committee, I discussed the question of rates, opposing the request for
an increase in rates on dyes covered by American valuation-and
other coal-tar products.
Senator CARAWAY. Did you disclose for whom you spoke when
you were before the two committees?
Mr. PICKRELL. Yes.
Senator CARAWAY. When you undertook to talk with Members of
the House and -the Senate, either in their offices or sending for
them to come out, did you disclose for whom you talked?
Mr. PIcKUELL. Absolutely.
CARAWAY. Were you working here in collaboration with
Senatorelsef
anybody
z. No, sir.
Mr.aiodp

Senator CARAWAY. Did you maintain an office hereI

Mr. PICoRELL. No, sir.

LOBBY INVESTIGATION

1983

Senator CARAWAY. Where did you stay while you were here.

Mr. PiVKRELL. I stayed some time at the Mayflower Hotel, and

sometimes I stopped at the Wardman Park Hotel.

Senator CARAWAY. Did you have a secretary here with you, sir?
Air. PICKHELL. No, sir.
Senator CARAWAY. You didn't write your letters and make your

reportsI

Mr. PICKnELL. No, sir.

Senator CARAWAY. Did you make any report, Mr. Pickrell, to

these people for whom you were working

Mr. PICRELL. I made reports when I went back to New York.

I may have called up on the telephone.

Senator CARAWAY. You did not make any written report?
Mir. PICtRELI. No.

Senator CARAWAY. Have you any letters or written reports or

instructions from your employers?

Mr. PICKRELL. No.

Senator CARAWAY. Have you an assistant in New York City?

Mr. PiciKtu.. I have two young ladies and a boy in the office.
One is a secretary, the other is a stenographer, and I have a boy in
the office.
Senator CARAWAY.here?
Have you any other employment other than
you have disclosed
ir. PICHRILL. I have not.

Senator CARAWAY. What was your occupation prior to that, Mr.

Pickrell?
Mr. PICKRELL. I was out West for a period of time.
Senator CARAWAY. What were you doing out there?
Mr. PICmELL. For about six or seven months I was engaged in
business in Portland, Oreg.
Senator CARAWAY. In the chemical business?
Mr. PIVKRELL. No; I bought a firm out there engaged in the
wholesale and retail sporting goods business. I came from the
Pacific coast and I returned.
Senator CARAWAY. You are a native of Oregon ?
Mr. PICKUELL. Washington.
Senator CARAWAY. I have nothing further.

Senator RoBiNsoN of Indiana. Doctor Pickrell, you were in the

service of the Government?
Mr. PICKRELJ. That is right, Senator.
Senator ROBINSON of Indiana. How long?
Mr. PICRELL. I was in the Government service between 1909 and
1919.
Senator RoBIxsoN of Indiana. 1909 to 1919?
Mr. POKRELL. Yes, sir.
Senator RoBiNso,. of Indiana. What service did you render for

the Government?

Mr. PxCKuLL. From 1909 to 1910 I was in the assay department

of the United States Mint in Denver, Colo.
Senator RoBINsoN of Indiana. In what?
Mr. PICRREmL. In the assay department of the United States Mint
at Denver, Colo.
Senator RoBINsoN of Indiana. That is until when?

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LOBBY INVESTIGATION

Mr. PICOKELL. From 1909 to 1010. From 1910 to 1911 I was in

the assay office of the United States Customs Service in Kansas
City, Mo. From 10i to 1610 I was in the laboratory of the ap.
praisers' stores in the United States Customs Service in New Yok.
During a portion of that tite, from 1012 to 1919, I was the chief
chemist in the Customs Service in New York.

Senator RoBiNson of Indiana. And what was your duty there,

Doctor, as the chief chemist in the Customs Service of the United

States Government at the port of New YorkI

AMr. PWIKEr 1 . My duty was to supervise the analyses of samples
that were sent to the laboratory from the various examinerS, sent
from the Assistant Attorney General's office in charge of customs,
and samples sent from special agents of the service; also to appear
before the Customs Court as a witness in any case involving reappraisement or classification of chemicals or related products.
Senator Roni- qo of Indiana. That is just the point. You had a
lot to do with testimony with reference to the appraisal of imported

chemicals of various kinds?

Mr. PzcxRELr. Yes.

Senator Roi.NsoN of Indiana. You were employed as an expert
along that line by the Government?
Mr. PIcxnKRt,. Yes.
Senator RoINisoN of Indiana. When did you leave the Government services
Mr. PI0CRELL. I left March 1, 1919.
Senator RoBiNsoN of Indiana. March 1?
Mr. PICORELL. Yes.
Senator RoBIZSON of Indiana. What salary did you receive as
chemist with the Government?
Mr. PwCKRFLL. I received $3,000.
Senator ROBINSON of Indiana. $3,000 a year?
Mr. PoKREL,. Yes.
Senator Rontzcson of Indiana. Why did you leave the service on
March 1, 1919?
Mr. PIcKRELL. I left, Senator, because at that time, due to the in.
creased cost of living, $3,000 was hardly a living wage.

Senator

BLAINE.

That was in Washington?

Mr. PoKRL L. New York.

Senator RoBINsoN of Indiana. Did you have a position before you
loft?
Mr. PoKRELL. I did Senator.
Senator RoBI.soN oi Indiana. With whom?
Mr. PORRELL. W. D. Young & Co.
Senator RotNsoN of Indiana. What is their business?
Mr. PICKRELL. Domestic manufacturers of hospital and surgical
supplies.
Senator RoBINisoy of Indiana. What did they pay you?
Mr. PORE.L. They paid me $8,000.
Senator RoBaIsoN of Indiana. Was that in New York?
Mr. PWictELL. In New York and Boston. Their principal place
of business was in Boston.
Senator RoBiNsoN of Indiana. How long did you remain with
thlem ?

LOBBY INVESTIGATION

19815

Mr. PxCIxnELL. A little over one year.

Senator RoBiNsoN of Indiana. 'that is to March 3, 1920, about?

Mr. PIcHIcML. Approximately, yes. I think it was a little later
than that.

Senator RomNsoN of Indiana. Why did you leave them?

Mr. PICKRELL. Because they didn't live up to the provisions of

the contract I had with them.

Senator RoBiNsON of Indiana. They didn't live up to it?
Mr. PICICItiL. Yes.
Senator RoBIxsoN of Indiana. In what respect?
Mr. PicKiuvLL,. I had an agreement with Mr. Young, the presi.
dent of the company, that we would form a company for the manufacture of certain pharmaceutical preparations. He told me that
he was not in a position to fulfill that part of the contract, owing
to financial reasons, and so forth. That is the reason I left.
Senator RoIsnso- of Indiana. So you left him?
Mr. Piciv.iL,. Yes.
Senator RonsoN of Indiana. Did you have a position before
you left hin?
Mr. PICKmruL. I did not.
Senator RomixsoN of Indiana. What did you do when you left
that concern?
Mr. PiCitimiL. In engaged in business for myself, principally.
as a consultant.
Senator RoINSoN of Indiana. As a consulting chemist?
Mr. PICicIIEIA. As a consulting chemist.
Senator RomsoN of Indiana. Did you have an office?
Mr. PICKItJ:LL. Yes.
Senator ROBINSON of Indiana. Where?
Mr. PICKRE.L. In Park Row, New York.
Senator RoimINsoN of Indiana. Who were your clientsl
Mr. PcKinutI., I had no definite clients at the time when I left.
I did some workSenator RoBi,,soN of Indiana. Let us see. When you first opened
up your now office as a consulting chemist, you had no clients?
Mr. PjcKmnmi. That is right.
Senator RoNnsoN of Indiana. And who were your clients after
you opened the office?
Mr. PicKnELL. I did a little work for one or two people on tariff
matters. I was engaged at the same time in a manufacturing enterprise with another gentleman. That only lasted for about a
year, less than a year.
Senator RoBiNsoN of Indiana. About 1921, the spring of 19211
Mr. P1c0nm.EL. That is right.
Senator RoINSON of Indiana. Then what did you do?
Mr. PICICuELL. I went with H. A. Metz & Co.
Senator RoBINsoN of Indiana. H. A. Metz & Co.?
Mr. Piomnwzu. Yes.
Senator RoBNo of Indiana. Have you been with H. A. Metz
& Co. continuously since that time?
Mr. PxcnUeLL. No, air.
Senator RonNsoN of Indiana. When did you go with H, A. Metz.

& Co.?

78214-30--Pr 5-14

1986

LOBBY INVESTIGATION

Mr. PICKnIL. On March 1.

Senator CARAWAY. May I interrupt?

Is that H. A. Metz who

used to be a Member of Comigress from New York?
Mr. PwKn'KL,. That is right.
I
Senator CARAWAY. I thought I knew him.

Senator Ronixtsox of Indiana. March 1, 1921: How long did you

work for him continuously?
Mr. PlC!KI, LL. I worked for him and a succeeding company until
July i5, 1027.
Senator Rowxsox of Indiana. Very well. Where did you go July
15 1927?
Mr. PICKUELL. I bought a business in Portland, Oreg.
Senator Rommisox of Indiana. Portland, Oreg.?
Mr. PwteuE..,. Yes.

Senator Roi.iisox of Indiana. Did you go to Portland, Oreg.?

Mr. PICKIME,. I (lid.0

Senator Romxsox of Indiana. How lon were you there?

Mr. PicnnELL. I was there until about February 1, 1928.
Senator Ronixsox of Indiana. And you left Portland, Oreg., and
returned to New York?

Mr. PicKRI.I0I. Yes.

Senator Roisixsox of Indiana. With whom did you go then?
Mr. PICKRELL. I had nothing definite. I went with Maj. A. C.
Vandeveer.
Senator RoTIxsox of Indiana. How long did you remain with
him?
Mr. PICHKnREL. Until January 1, 1929.
Senator RoBINsoN of Indiana. Then where did you go?
Mr. PICKnELIL. I started an office as a chemist and customs consultant.
Senator Ronu.sox' of Indiana. Did you go back to the employment
of Mr. Metz?
Mr. PICKHtE.L, NO.

Senator Ronisox of Indiana. Do you mean to say you have not

been in the employ of Metz since 1927 in any capacity

Mr. PKCKHELL. I have looked after customs matters.

Senator Roluxsox of Indiana. How?

Mr. PicKuELL. I have looked after customs matters of some of his
companies on a retainer basis, but I have not been in his employment.
Senator RoniNsox of Indiana. But you have been continuously
with Mr. Metz, so far as customs were concerned, since 1921, haven't

you?
Mr. PiCR.LL. No, Senator.
Senator RomNsox of Indiana. How long during that time were
you entirely disassociated from the Metz concern?
Mr. PICHBELL. From July 15, 1927, to January 1, 1929.
Senator Ronixsox of Indiana. You did not work for Metz or
his company during that period?
Mr. PIoCKL. Not directly,
Senator RoINsox of Indiana. I am asking you if you did anythina1
Mr. PIoKRELL. I worked with Major Vendeveer.

a
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LOBBY INVESTIGATION

1987

Senator RoBhxsO. of Indiana. I mean Metz.

r. PICKRELL. Metz; that is right.

Senator Rom. sox. of Indiana. You did nothing for Metz, is that
trite, during that period?
Mr. PicKRELjL. That is right.
Senator Rom.msox of Indiana. You said "not directly."
Mr. PicicELL. I have been working for Major Vendeveer during
the year 1928.
Vandeveer?
is Major
RommisoSenator
Colonel Metz.
Metz, for
for Mr.
attorneyWho
He isofanIndiana.
Mr. PtCI(REU.
Senator Roiwxsox of Inditina. Well, then, you did work for Metz,
didn't you e It is the saune thing exactly, is it not?
Mr. PXCKRE1J,. I caJt say about that, Senator. He happens

to be his attorney.
Senator Roiti. uso" of Indiana. What was your business in 1928
out in Oregon?
Mr. PwIHnRE.I.. It was sporting goods, retail and wholesale spore-

ilg goods busilless.

Senator Rosimso.x of Indiana.
Mitjor Vandeveer at times?
.1r. PICKRFLL.

i)uring that period you worked for

While I was in Portland, Oreg.?

Senator Romi.%sox of Indiana. Yes.

Mr. PicintEu4 . No.
Senator Ro.ixso" of Indiana. Not at all?
Mr. PicKitE,. No.

Senator Ronixsox of Indiana. How long were you in Portland,

1ir. PCKRELL. From the latter part of July, 1927, until the latter
part of January, 1928.
Senator Rommsox of Indiana. Doctor, when you first went with
Mr. Aetz in 1021, what salary did you draw?
Mir. PICKRIELL. $5,000.
Senator Ronixsow of Indiana. And your expenses?
Mr. PicKitmU.. Whenever I had any expenses.

Senator Rommstsox of Indiana. D)id you have any?

Mr. PICKRELL. I did.
Senator Roixsox of Indiana. Then, you drew your expenses

along with that?

Mr. PICKRBEL. Yes.

Senator Ronixsox of Indiana. What was yotr businem with Met%

when
first went with him? What dtites (id you l)erforn?
Mr. you
PICKIELL. Looking after
his euston.

matters.

Senator RoniNsoN of Indiana. In New York?

Mr. PICKRELL.

Yes.

Senator RoINso. of Indiana. Did you do any other work for

Mr. Metz during that first year?

Mr. PICK.ELL. Customs matters and the tariff matters incidental

to customs matters.
Senator RoBixsoN of Indiana. How about tariff matters? What
did you do with reference to the tariff?
Mr. PicKREL. I was down here during the dye embargo fight of
1921-29.

1988

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. In 1921, what time did you come

here?
Mr. PzcRiPLL,. I think I came down here first in May, 1921.
Senator Ronizsox of Indiana. And how long were you here?
Mr. PIORELL. I was here off and on into 1922 until the tariff bill
was passed.
Senator RoBINsON of Indiana. When was that?
Mr. PICKUELL. September 22, 1922.
Senator Roeixsow of Indiana. Therefore, during the period from
1921, the spring of 1921, until September 1, 1922, you were in Wash.
ington a great deal of tihe time?
Mr. PICKRELL. That is rifht.
Senator RomBIso- of Indiana. During that period of time, Doc.
tor, what salary did you draw?
Mr. POHRELI. $5,000 a year.
Senator RonI soN of Indiana. Did you draw $5,000 a year until
September, 1922?
Mr. POKRELL. That is right.
Senator RoinsoN of Indiana. And you didn't receive anything
additional to that?
Mr. PICKREL,. Only the expenses that I incurred.
Senator RoniNsoN of Indiana.. How much were your expenses?
Mr. PICKRELL. My expenses probably ran about $10 a day.
Senator Roni-.-sox.- of Indiana. $10 a day. That is $300 a month?
Mr. PICHRELL. Yes.
Senator RoBimsoN of Indiana. $3,600 a year, plus $5,000, would
be $8,600, approximately, a year?

FO

to

th
hei

fo

em

Mr. PicPirLI.. Yes.

Senator Romxsox.- of Indiana. Salary and expenses?

Mr. PICEREL. Yes, sir.
Senator Romxsox of Indiana. You received no further pay from
Mr. Metz than what you have just stated during that period of time?
Mr. P1K0RE.T. That is riaht.
Senator RoBiNsoN of Indiana. Did you receive any money or any
stipend from any other concern during that period'of time?
Mr. PoiiELL. I did not.
Senator RoBINsoN of Indiana..Were you then a consulting chemist?
Mr. POKRPEL,. I was not a chemist,--customs matters.
Senator RoiNsoN of Indiana. You were giving your entire time
to H. A. MetzI

01

im
th

fo

Mr. PCICRELL. That is right.

Senator ROBINSON of Indiana. Do you know of any other money

that was spent here during that period by H. A. Metz?

Mr. PokUELL. I do not.

Senator ROBINSON, of Indiana. Doctor, when you were here during

that period, until September, 1922, from the spring of 1921, where
did you make your headquarters?
Mr. PoKR.LL. I lived most of the time at the Hotel Raleigh.
Senator RoMnsox of Indiana. The Hotel Raleight
Mr. Pxwocwa. Yes.
Senator RoBiNsoN of Indiana. Where did you have your office?
Mr. PoRREL. I had no office in Washington.

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LOBBY INVESTIGATION

1989

Senator RoBINsoN of Indiana. Did you have any office facilities of

any kind?
Mr. PzoBLL. Only I had, at times, a typewriter in my own hotel
room. That is all. Ihad no office.
Senator ROBmNsoN of Indiana. You didn't use any office anywhere
else?
Mr. PxoJ1UML. No.
Senator RoBiNSon of Indiana. You didn't use any office in which
to hold meetings, except your room at the Raleigh HotelI
Mr. Picioem. That is right.
Senator RoINisoN of Indiana. During that period of time, while
you were working on the tariff, in 1922, what Members of the
House and Senate did you call on, if any?
Mr. PICKUREU.

Of course, that is very hard to recall, Senator.

Mr. PIOKREL.

Very few.

It was several years ago.

Senator RoBINso. of Indiana. -Do you remember how many of
them you called on?

Senator RoBiNsoN of Indiana. You say you were working down

here in the interest of Mr. Metz at that time, on the tariff. Just
what kind of work did you do on the tariff?
Mr. P1.PRnELI. Senator, I prepared material as to the argument
for and against the dye embargo.
Senator RoBINsoN of Indiana. The what?
Mr. PIoxKtr. The dye embargo.
Senator RoBINsoN of Indiana. What do you means by the dye
embargo.
Mr. PoiRRiELL. There was a provision in the bill of 1922, as reported out by the Ways and Means Committee, and also as reported
out by the Senate Finance Committee licensing products, imported
dyes, and there was also what might be called a selective embargo.
Certain things could be imported and certain things could not be
uiorted'
nator RoBINsoN of Indiana. Well, so far as dyes were concerned,
there was a reparations dyes and the other dyes shipped directly to
the urchasers in this country. Isn't that true?
Mr. PzcKcELL. Yes, sir.

Senator RoBINsoN of Indiana. As I remember Doctor, you were

for the American valuation on the reparations dyes, but you were
opposed to the American valuation on other dyes. Isn't that true?
Wasn't that in your testimony at that time?
Mr. PicutEL.. The situation was this Senator. I made a pro.
posal, a suggestion, for the handling of 1he reparations dyes.
Senator RoiNsoN of Indiana. Won't you speak a little louder?
M.r. PIOKUELL. I made a suggestion as to the handling of the reparations dyes. The reparations dyes were purchased abroad at exceedingly low figures, at prices considerably below the markets in
those countries: They were imported into this country and naturally sold at probably lower prices. I made a suggestion as to
phraseology_aSenator Ron-soN of Indiana. Let us not go into the phraseology,
Doctor. Let us talk about values. You were working against the
American valuation at that time, were you not?
Mr. PioRcRu. No, sir.

1990

LOBBY INVESTIGATION

Senator Romnisox of Indiana. Well, are you against the American

valuation nowIU
Mr. PiCKuEU.I. I am.
Senator Rom.soN of Indiana. You are for the foreign valuation?
Mr. PWKItF.L. Not necesarily.
Senator Rornisox of Indiana. Well, are you or not? Nee.esarily
or not necessarily.
Mr. PCK:ELL. I believe that the American valuation is the pref.
erable valuation, but I am not particularly advocating the foreign
valuation.
Senator RoBmIsoN of Indiana. You say you think American value.
ationsMr. PCURELL. No; that foreign valuation is the preferable value.
ation.
Senator RoJIINsox of Indiana. You think the foreign valuation
is the preferable?
0
Mr. PCjoicmLL. But I am not advocating that.
Senator RoiNxsoN of Indiana. When did you come to the con.
delusion the foreign valuation was preferable to the American?
Mr. PICKtE.LL. The experience I have had with American valua.
tion since 1922, as in the present tariff act on coal-tar products.
Senator RomsoN of Indiana. Then you changed your opinion
on that subject after you went with Mr. Aletz I
Mr. PwICKRn,t,. Not neceSsarily.
Senator RoniNsox of Indiana. Well, not necessarily. Did you or
did you not?
Mr. PICKREL. I entertained no positive opinions as to the American valuation prior to 1922.
Senator RonrsoN of Indiana. Weren't you on record prior to
that as favoring the American valuation?
Mr. PICKUELL. Not necessarily.
Senator RonINSON of Indiana. Well, necessarily or not, Didn't
you make the statement. that you were favorable to the American
valuation and that foreign valuation permitted dyes to come in
here undervalued on all sides?
Mr. PICIELL. I did not. Senator, if you will allow meSenator RoImNox of Indiana. No; I just want all answer to my
question.
Senator CARAWAY. Let him make his explanation.
Senator RomxNsoN of Indiana. He will get plenty of opportunity,
and if anybody wants to ask him question, they can.
Mr. Witness, before you appeared before the Ways and Means
Committee in 1022, didn't you write a letter saying the foreign valiation was dangerous to the American dye industry?
Mr. PicitimmT,. No; Senator.
Senator ROINsON of Indiana. Suppose we read the letter a little
later.
Mr. PWCXE.irx. I would be very glad. I would be glad to put it
in the record.
Senator RoBINiso of Indiana. We will. Let us get back, then, to
your employment by Mr. Metz. Doctor there was no, dye industry
in this country to speak of prior to the W world War, was there?

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LOBBY INVESTIGATION

1991

Mr. PCKRELJ,. The industry supplied about 5 to 10 per cent of

the domestic requirements.
Senator ROBINSON of Indiana. What per cent can the dye industry
Supply now?
Mr. Piciwrt, j,. About 913 to 90 per cent.

Senator Romxmso.x of Indiana. Then, you would say the industry

has been built up during and since the war

Mr. PIewnEi,. Right.
Senator RoBjsisnO of Indiana. What would you say is the value of
the dye industry in this country at the present time?
Mr. PwIJi.i. It dollars and cents, as to capital lnvestmnent?
Senator RomusoN of Indiana. Yes.
Mr. Picimciy.r 1,. That is very hard to say. I have never seen any
Government figures. I have only seen estimates that have been made
at different times by individuals. I have no way in which I can determine the capital investment. I have seen figures running froni
probably thirty or forty million dollars to one hundred million
dollars.
Senator Rom.msoN of Indiana. Do you know anything about the
inport of dyes to this country, Doctor?
Mr. Pw ELLJ. Yes, something.
Senator Rommsox of Indiana. Where do the principal dye imiports come from?
Mr. Picxutrat. About 60 per cent from Germany, and thirty-odd
per cent from Switzerland, and the other 9 or 10 per cent from
?rance and England.
Senator Romixsox. of Indiana. How inuch from England?
Mr. PwICKRLL. It is variable. I would say probably 5 per cent, t0
per cent.
Senator Ronr.soN of Indiana. Doctor, what is the name of the
concern in Germany that manufactures dyes, chiefly?
Mr. PiCKIRELL. The I. G. Farben industry.

Senator Ro.xxsox of Indiana. The I. d. Farben industry?

Mr. PcinELI,. Yes.
Senator Rojinsox of Indiana. What does the "I. G." stand for?
Mr. PCKIELL. It stands for German words which mean associated
interests.
Senator Rontxsox of Indiana. There are six big dye concerns in
Germany, are there not, all merged into one, the I. G.1
Mr. PwKm.:Lr,. That isright.
Senator Ronuxsox of Indiana. They used to be called the Big

Six?

Mr. PICICRTEL. Yes.

Senator RomNsoN of Indiana. Now, the I. 0. has merged them
all?
Mr. PWKeiL,. Yes.

Senator Ronixsox of Indiana. You are familiar, too, Doctor with

the fact that 4 dye cartel has been organized in Europe embracing
the dye industries of Germany, France and Switzerland?
Mr. PICKIWILIJ. I have seen statements in the papersSenator Ronixsox of Indiana. Well you know all about that,
don't you
Mr. PI IrELL. Only what I have seen in the papers.

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LOBBY INVESTIGATION

Senator ROBINSON of Indiana. No; but you know about it with

intimate knowledge, don't you, Doctor.

Mr. PIoKEmLL. Only what I have seen in the papers.

Senator ROBINsON of Indiana. You never talked with Mr. Metz

about it?

Mr. PicKREx. No.

Senator ROBINSON of Indiana. Doctor you also are acquainted
with the fact that the terms under which this merger has been organ.
sized in Europe are such as would prevent its being organized in this
country under similar terms, are you not?
Mr. PzomimLu. I don't know.
Senator RoBINsON of Indiana. Because it would be in violation
of the American antitrust laws.
Mr. PIOKRELL. I am not familiar with that.
Senator ROBINSON of Indiana. You know one of the purposes of
this European dye cartel is to set the prices of dyes all over the
world, do you not?
Mr. PxoKwuz. I don't know that.
Senator ROBINsoN of Indiana. Have you any idea on that subject?
Mr. PtcxnmLu. I haven't paid any attention to it, Senator.
Senator RoBinsoN of Indiana. You are not interested in that?
Mr. PXWKRELL. Not at all.
Senator ROBINSON of Indiana. Doctor, has the German I. G. industry-they manufacture practicaly all the dyes in Germany?
Mr. PIOKczrL. They manufacture a large portion of it.
Senator ROBINSON of Indiana. Have they any branches in this
country?
Mr. PCKWF.L. Not that I know of.
Senator RoBINSON of Indiana. You are not acquainted with any
brancest
Mr. PCKRFJL. No.
Senator ROBINSON of Indiana. Is there an 1. G. company in this

country?

Mr. PICKPLL. There are two concerns that bear the name I. G.
in this country.
Senator ROBINSON of Indiana. Are you familiar with either of
them?
Mr. PIOKItELL. Only whatSenator RoBNsoN of Indiana. You have seen in the papers?
Mr. PIOKRUE.
I have seen in the papers.
Senator RoBINSON of Indiana. You don't know anything except
what you have seen in the papers?
Mr. PIxCKM,. Yes.
Senator RoBINSON of Indiana. Are you acquainted with Mr.
Metz?
Mr. PicitUREL. I know Mr. Metz.
Senator ROBINSON of Indiana. You don't get that from the papers?
Mr. PIOxitLL. That I know him?
Senator RoBiNsoN of Indiana. Yes.
Mr. PtoxnLL. No.
Senator ROBINSON of Indiana. Do you know Doctor Bosch?
Mr. Ptoicuri. I met him once.
Senator RoBNsoN of Indiana. Where did you meet him?

LOBBY INV'.STIOATION

1993

Mr. PICRREJJL. I met him in Mr. Metz's office.

Senator RoInnmsox of Indiana. Do you know anything about his

connection with the German dye industry?
M[r. PIVKnJI., Only what I have seenSenator Ronit-sox of Indiana. In the papers?
Mr. PIOKnIELL. In the paper.,, yes.
Senator RoN
iso. of Indiana. Aside from what you have seen
in the papers, you know nothing about who Doctor Bosch isI
Mr. PIcKBELL. That is all.
Senator Rom-sox of Indiana. Why, doctor , don't you know he
is the head of the German dye industry?
Mr. PWictEra. So I undeI',0od from the trade papers.
Senator Ronison.- of Indianu. WelI, what di1d you see Mr. Bosch
about'? You said you met him in Mr. Metz's office.
Mr. PiOKn:iJ,. I was lust introduced to him. That is all.
Senator Rowxso. of I liali. )id Mr. Metz say anything about
the. man to whom he introduced you?
Mr. Picimi+Ip,. No.

Senator Roimusox"of Indiana. You just were introduced to Doctor

Bosch?
Mr. PICICnUL. Yes.

Senator Rojwxsox of Indiana. That is all you know about it, except what you have seen in the papers?
Mr. PIcitiwL. That is it. I knew who he was priorSenator Ronixsox of Indiana. What have you seen in the papers
about him?
Mr. PICKHRELL. He is president, or whatever they call it, of the
I. G.
Senator Rommnsox of Indiana. What would you call it?
Mr. PICmIELL. What would I call it?
Senator RomxsoN of Indiana. Yes.
Mr. PIcKnELL. I would call it president.
Senator RonimsoN of Indiana. When was the American 1. G.
Co. organized.
fr. PICKItELL. Some time within the past year.
Senator RonINsox of Indiana. Within the past year?
Mr. PICKFALL. Yes.
Senator Ronixsoa of Indiana. What is the American 1. 0. Dye

Co.?

M.r PIOCRELL. I don't know of any American I. G. Dye Co.

Senator RopiNso, of Indiana. Well, cut the "'dye fi part, the
American I. G. Co.
Mr. PWCKRELL. From what I can understand from the papers, it
is a holding company.
RoniNsox of Indiana. Oh, you got your information from
theSenator
papers 1 ELL. That is right.
.
Ar.-PtcnRs
Senator RoBINsoN of Indiana. Do you know anything about Mr.
Metz's connection with the American I. 0. Co.
Mr. PictmEL. He is one of the directors.
Senator RontINso of Indiana. He is one of the directors. He is
more than one of the directors, is he not?

1994

LOBBY INVESTIGATION

Mr. PicxctELL. So far as I know that is all he is, the same as

Stanley Mitchell, of the National City Bank; Walter Teagle, of
Standard Oil; and Edsell Ford, of the Ford Motor Co., all directors.
Senator RoBINsox of Indiana. What is the capitalization of the
American I. G. Co.f
Mr. PICxRIELL. I couldn't tell you.
Senator RoBnrsoN of Indiana. It is the American I. G. Chemical
Corporation, isn't it?
Mr. PICKRELL. I think that is the name.
Senator ROBINSON of Indiana. You think it is?
Mr. PICxRELL. Yes.
Senator CARAWAY. May I ask you a question? Is that the concern that thought of establishing a business down in Louisiana, or
do you know?
Mr. PICKRIELL. I think it is. I am not familiar with it-, Senator,
but I think that is the company.
Senator RonINsoN of Indiana. Doctor, how many American manu.
facturers of coal-tar chemical products are there in this country,
if you know ?
Mr. PIOKRELL. I think, according to the last census, there are
forty-odd, something like that.
Senator ROBINSON of Indiana. Some 47, aren't there?
Mr. PICKRELL. I think that is true. Forty-odd. I don't know
the exact figure.
Senator ROBINSON of Indiana. Now, Doctor, don't you know that
Mr. Metz is vice president and treasurer of the American I. G. Co.?
Mr. PICKRELL. I do not, Senator.
Senator RoBINsoN of Indiana. You know that Mr. Metz is president of the General Aniline Works?
Mr. PICORELL. That is right.
Senator RoBINsoN of Indiana. And you were down here representing the General Aniline Works?
Mr. PICKIEL. And I appeared before theac committeesSenator RoBiNsov of Indiana. Just answer the question yes or no.

tr

di

P,
m

'_

Mr. PICKRELL. No.

Senator RonINo. of Indiana. Didn't you say you were?

Mi. PIORRELL. No, sir.

Senator ROBINSON of Indiana. At any time?
Mr. PicKRELL. No, sir.

Senator ROBINSON of Indiana. What is the General Aniline

WorksI
Mr. PICKRELL. It is a manufacturing dye-stuff concern.
Mr. Metz was president of tle
Senator RoBiNson of Indiana.
not?
lie
was
Works,
General Anilihe
Mr. P
ELL. Yes.
Senator ROBJnso.N- of India~a. You did represent Mr. Metz down
here?
Mr. Pict tL,. I represented companies which he is connected with.
Senator ROBINSON of Indiana. Didn't you say you were employed
by Mr. Metz here, in one of your statements?
Mr. PICKRELL. No. sir.
Senator ROBIXSON of Indiana. I will try to get your testimony and
see just what you did say as to who you represented here, this year. '

in
C

IV

at

tl

LOBBY INVMSTIOATION

1995

Now, Mr. Witness, let us see, Herman Metz was president of the
General Aniline Works. That is true, is it not?
Mr. PiRctELL. Yes.
Senator RoniNsON of Indiana. And the General Aniline Works

was taken over by the American I. G. That is true, is it not?

Mr. PIORRELL. Possibly.

Senator RoINsoN of Indiana. Well, is it or isn't it?

Mr. PICVRELL. I am not familiar with that, Senator. All I know
is what I read in the papers, and I think-it is a holding company.
Senator Rotnsox of Indiana. Mr. Metz is vice president and
treasurer of the American I. G. That is true, isn't it?
Mr. PICKRELL. That is possible. I don't remember.
Senator RoBIxsox of Indiana. Mr. Metz has been your employer
and was for years.
Mr. PicKiRJ.L. He was my employer from March 1, 1921, to July

15, 1922, or 1927.

Senator RoBiNsox of Indiana. Let us get at it another way. You
did represent the General Dye Stuff Corporation here, did you not?
Mr. Picmmm. That is right.
Senator Rorxxsox of Indiana. And that was Mr. Metz's company?
Mr. PICKIEL. Mr. Metz is president of that coin )any*
Senator RoniNso. of Indiana. And the General Dye Stuff Corporation were the exclusive importers of German I. G. products?
Mr. PICORELL. No.
Senator RoBINsoN of Indiana. What other concerns imported Ger-

man I. G.I
Mr. PiCKRELL. There are several concerns that importSenator RoBINsoN of Indiana. Well, what concerns?

Mr. PICKRELL. A. Klipstein & Co. There is H. Litter. There is

Rossler-Hasslacher. There is Kutroff-Pickard & Co. There is Ihe

Synthetic Nitrogen Corporation. There is the Fitchburg Yarn Co.
There is the Afga-Ansco Corporation, and probably other concerns.
Senator RoBIxson of Indiana. You know of your own knowledge

that all these concerns are importers of German I G.

Mr. PICKUELL. Products, yes.

Senator RoBinsoN of Indiana. Now, Doctor, this is what you said

in your testimony before the Committee on Finance in the Senate, a

subcommittee. I quote your own language:
Mr. PiCeRnL. I reloresent the General Dye Stuffs Corporation of New York
City, dealers In dyestuffs, sole selling representatives of the General Aniline
Works (Inj.), formerly the Oraell Dye Corporation, with factories located

at Rensselaer, N. Y., and Grassell, N. J., and of the Consoliated Color & Chem.
lea] Co., with factories tit Newark, N. J., atnd importers of dyestuff from
Germany.

But, Mr. Witness, you didn't say you represented the German I. G.

Mr. PicKHnLY. I don't.

Senator RoBnwso" of Indiana. How could it be otherwise when

these corporations are altogether?

Mr. PicOnLL. I don't know-

Senator Ronixsox of Indiana. When the American I. G. has taken

over General Aniline, when the General Dye Stuffs Corporation, of
which Mr. Metz is the president, and who has the controlling interest, is one of the principal importers of German I. G., when Mr.

1996

LOBBY INVESTIGATION

Metz is vice-president and treasurer of the American I. G., and when

Doctor 3osch, the president of the German I. G. controls the Amen.
can I. G. How, with tlint statement of the situation, could you pos.
sibly be representing anybody finally but the American 1.. ?

by

Mr. PICKF..L. I don'tthiink tiere is any direct relationship be.

tween the Oerman I. G. and the General Dye Stuffs Corporation.

Senator ROBINsoN of Indiana. Well, let us see. Doctor, if the Get.
man I. G. and the American I. G. are practically the same; if they
are officered largely by the same people, then the American I. G., or
the efforts of the officers of the American I. G., or of the American
I. G., to get foreign valuation for imports, is a direct slap at the
product
I. 0.? of their subsidiary in this country, is it not-the American
Mr. PICICHELL. I don't know, Senator.

Senator RoBixsoN of Indiana. It would be better for the American

company to have United States valuation, would it not?
Mr. P01CRn.LL. I don't know.
Senator Ronm-sov of Indiana. Well, have you any opinion on the
subject?
Mr. PIcK.L,. You are speaking about United States value?
Senator RoBixsoN of Indiana. American value. Call it American
value.
Mr. PI1CKER.-L. American valuation?
Senator Roix-so.- of Indiana. Yes.
Mr. PIcKRELu.

I don't think so.

Senator RoBinsox of Indiana. 1 ell, you know this dye cartel in

Europe sets the price at any figure they desire, don't they?
Mr. PIOCRELL. I don't know. I am not familiar with it.
Senator RoBINSON of Indiana. You don't know anything about it?
Mr. PIOKRELL. I am not familiar with it.
Senator RoBixsoN of Indiana. Well, what were you down here for

in 1922, and again in 19291 Wasn't it chiefly, Doctor, with reference

to the Valuation proposition?

Mr. PICKULL . No.

Senator RoBInsoN of Indiana. Weren't you trying especially to

dI

get foreign valuation on these products?

Mr. PICKELL. No.

Senator RoBINso-N of Indiana: What were you here for?

Mr. Pcmitm. In 192'2 I was down opposing the dye embargo.
This time I am down opposing the continuation of the American
valuation in paragraphs 27 and 28. I am not advocating foreign.
market value or any basis of valuation particularly.
Senator RoBi-xsox of Indiana. But you are opposing American
valuation ? a
Mr. PIOKRELL. That is right.

Senator RQmNSON of Indiana. And that is in the interest of the

European dye cartel?
Mr. PIcxnlmL. No.
Senator Ronmisox of Indiana. Well, whose interest is it in? Certainly not the American manufacturers.
Mr. PICKinELL. It is in the interest of the consumers. It is in the
interest of the American people.

ro

LOBBY INVESTIGATION

1997

Senator RoBiixsoN of Indiana. You are not, then, being employed

by the American people, are you?
Mr. PiKnEm. No.
Senator RoBixsoN of Indiana. Isn't it a fact, now, Doctor, that you
are employed by the German dye interests?
Mr. PCKttLL. It is not..
Senator RoBinsoN of Indiana. Who pays you?
Mr. PCKRELL. I am paid-I have a retainer from the General Dye
Stuffs Corporation.
Senator RoBINsoN of Indiana. How much does the General Dye
Stuffs Corporation pay you?

Mr. PICKRELL. $5,000 a year.

Senator RonIsoN of Indiana. $5,000 a year?
Mr. PICiELL. Yes.
Senator RoBixsox of Indiana. But I understood you to say a while
ago tbat you were itust receiving retainers now.
"iA. PiCKUiELL. No, no. They pay me annually so much a yeara yearly. annual retainer.
Senator RonIsoN of Indiana. When did you make that contract
with them?
Mr. PicKxnL. It was made January 1, 1929.
Senator RoBiNso- of Indiana. In 1929. Very well. You have

spent most of your time since January 1, 1929, down here?

Mr. PIoRRELL. No, sir.

Senator RoBINsox of Indiana. Where have. you spent your time?

Mr. PIOc ELL. I spent most of it in New York.

Senator RoBINsoN of Indiana. How much of your time have you
spent down here?
Mr. PICKUELL. I spent quite a little time down here in September
and October, of 1929.
Senator RonIsoN of Indiana. September and October?
Mr. PzoKRFLL. September and October; yes.
Sector ROBINso- of Indiana. How much time did you spend
down here last January?
Mr. PIHRnETLL. I was here a few days.
Senator RoiixsoN. of Indiana. How many days?
Mr. PCKRIEL. It is very hard to recall, Senator. I don't suppose
I was liere more than 10 days at the most.
Senator RoBInXso2 of Indiana. Ten days?

Mr. PICKCIELI. At the most. I doubt if it was that many.

Senator RoBIsoN of Indiana. Let us put that down. How many
were you here in February?
Mr. PORKRELL. I don't recall.
Senator RoBINsoN of Indiana. Oh, yes, you do.
Mfr. PICORELL. I thinkpractically none in February.
Senator RoBIaNsoN of Indiana. Weren't you in the city last Feb.
ruary?
Mr. Picizx: Possibly. I don't recall. But I doubtSenator RoBizsoN of Indiana. How many days were you here?
Mr. PiciumE. I don't know.
Senator RoBINsoN of Indiana. How many days were you here in
March?
Mr. PiORRELL. I don't recall.

1998

LOBBY INVESTIGATIOi

Senator RoBINsoN of Indiana. How many days in April?

Mr. PICKRELL. I don't recall.
Senator Roni.soN. of Indiana. How many in MaTy?
Mr. Pfcniu,. I kept no record. I don't knowv.
here
Senator Rtoemsox of Indiana. But you remember you
a. were

10 days last January?

Mr. Pi.ii.... No, no. They had hearings over in the House
Ways and11( Means C'omnittee in January. I was here during those
three days, see, antd I think I was dowi here at a meeting prior to
that time. That would be one day. That makes four days, and I
don't know how much, more I was here.
Senator RoilhNSOX of Indiana. How many days were you here in
June?
1%1'. PwIuELL. In JumIe? I don't know whether I was here at all,
or not.
Senator Romx.sox of Indiana. How many days were you here in

July?

Mr. PICKRFLL. I was here a few days. They had hearings before
the Senate Finance Committee in July.
Senator RoBNsox of Indiana. How many days?
M'. PcKnIELL. I was here, I think-well, it is hard to say. Those
hearings lasted three or four days. I was here during that time.
Seantor RoBIXsox of Indliana. How many in August?
Mr. PWCKRELb. I was here a few days the latter part of Augnst.
Senator RoBnxsox of Indiana. And Septenber-t
Mr. PU.HRELL. I was here a good deal of September.
Senator RoBINsoN of Indiana. And October?
Mr. PWKIRELL. And October.
Seantor Ront.soN of Indiana. And November?
Mr. PICKRELL. Very little.

Senator RoBizsox of Indiana. Isn't it true, Doctor. you left here

about the time you comnenced reading in the papers that tihe Senate
Lobby Committee was going to call you here?
Mr. IPICIKI1ELL. I left herIe, Senator, at the time when they comnpleted tile chemical schedule.
Senator Rom.xsox of Indiana. But you left very suddenly, didn't
you, Doctor, and left all your ejigagements behind yu, didn't youl?
Mr. PICIKn:1.. No, sir, I left no engagements behind me.
Senator RoBinsox of Indiana. Vei-1, we will see about that later.
You haven't been back much since, have you, Doctor?
Mr. PWIKELL. I have been back here, Senator, as necessity required it.
Senator Rojixso" of Indiana. But necessity hasn't required it
muich. It has rather required you to stay away, hasn't it?
Mr. PICKRELL. Not necessarily.
Senator R.0ixsox of Indiana. Doctor, you have mentioned that
you are receiving $-,000 a year now, and your expenses, from the
American Dye Stuffs Corporation. Is that it?
Mr. PICKRELL. The General Dye Stuffs Corporation.
Senator Roni.so. of Indian. Whom else do you represent down

here?

Mr. PICICRELL. Kutroff-Pickard & Co.

t
t

fl

ta

LOBBY INVESTIGATION

1999.

Senator RomNsoN of Indiana. How much do you receive from

them?
Mr. PIclop.LL. $3,000.
Senator Roiixso, of Indiana. $3,000 a year?
Mr. PiCKRELI,. Yes.
Senator RoIxsNoN of Indiana. And expenses?
Mr. PICK41:LL. Yes.

Senator Ronmxsox" of Indiana. Whom else do you represent,

Dottort
Mr. Plcitit, L. The Synthietic Nitrogen Products Corporation.
Senator Roiixs.o- of Indiana. The SyntheticMr. PiKiom:iL. Nitrogen Products Corporation, a fertilizer corporation.
Senator Ronm'sox" of Indiana. How much do you receive from
them?
Mr. PwIuIxir.L. $1,000.
Senaitor RoiimsIox of Indiana. $3,000 from them ?
Mr. PWCII:Ll.. Yes.
Senator RoiimNso.x of Indian. That is five and thrle are eight, and
three are $11,000. Now, whom else (to you represent?

Mr. 1PICKRl:1,. The Afga-Ansco Corporation.

Senator Rom.jisox of Indiana. How nmch do you receive from

them?
15,000.

A[r. Pl('ith"T.I..

Senator ROBINSON of Indiana. And from whom else?

Mr. PbOtuRELL. That is all.

Senator RomNsoN of Indiana. Those are the corporations you represent down here in this tariff matter?
Mr. PICKRELL. Customs, and incidentally, tariffs.
Senator RoBIxsox of Indiana. And your activity down 'here has
been in the direction of a low tariff on these various products?
Mr. PIcIRuELL. No.

Senator RoBINsoNx of Indiana. What hag it been?

Mr. PICKELI,. It has been in opposition to requests for increase.
Senator Romxsox of Indiana. Well, that is the same thing, isn't it?
Mr. PICiRma,. Not necessarily.
Senator Romxsox of Indiana. That is keeping the tariff low,
isn't it?
Mr. Psu1ELL. No, keeping it at its present level.

Senator RoBisox of Indana. Your idea was to have no increase

in the tariffI
Mr. Ptciumi,. That is right.
Senator RoBI.,soN of Indiana. Now, Doctor, again to get to the
point where you suggested you knew nothing about the German I. G.
Co. excepting what you had read in the papers. This is your own
statement before the committee on Ways and Means in the House..
I quote:
Mr. Chairman and gentlemen, I represent the General Dye
Mr. Piomc=.
Bluffs Corporatim, New York City, dealers in dyestuff, sole selling representative of the Gras~elll Dye Stuffs Corporation, with factories located at Renseler, N. Y., and Grizyselll, N. J., and the Consolidated Color & Chemical Co.,
with factories at Newark, N. J., and exclusive importers of dyestuffs manuw
factured by the 1. 0. Farben Industry, A. G., of Germany.

2000

LOBBY INVESTIGATION

Then, you did represent them here in this tariff matter, didn't you,
indirectly?
Mr. PiCKRELL. I wouldn't say so.
Senator RoBpIso.- of Indiana. Didn't you say so in your own
statement? You understand English. I have just read what you
said yourself. This is on page 423 of the hearings.
Mr. PICKRELL. I grant it. I am representing the General Dye
Stuffs Corporation.
Senator RoBiNsoN of Indiana. Well, why don't you say so, in.
stead of saying you know nothing about the German I. 0. except
what you read in the newspapers.
Well here is your own statement that you are representing them.
Mr. PIcKnrELL. That don't say anything about the Uerman 1. G.
Senator RoBINsox of Indiana. Of course, you spoke of the German
I. G.; the German I. G. Farbenindustrie ot Germany?
Mr. PIOwHELI. That is one concern, the German I. G.

he

in

en,

Senator ROBINsON of Indiana. They are all together?

Mr. PiCKRxELL. I don't know anything about it.

Senator RonI.soN of Indiana. You just said that a moment ago.

Not only in (ermany, but in Switzerland, France, and Germany.
They have a dye cartel to regulate the price of dyes throughout the
world, and don't you know that they furnish more than 90 per cent
of the exports of dyes for the whole world to-dayy
Mr. PIORRELL. No; I do not.
Senator RoBINsoN of Indiana. Well, that is the fact. It may
interest you. Maybe you can get that from the newspapers. Doctor
Pickrell, during this year, these various days you spent in this city,
where did you make yourLheadquarters?
Mr. PrcicitFL. At the Mayflower and also at Wardman Park
Hotel.

th

Senator RoBINsoN of Indiana. Did you have an office here?

Mr. POKRELL.

No.

Senator ROBINsSOx of Indiana. The importers have an office here,

do they not?

Mr. PCKnrxL. That is right.

Senator RoBi.so.N of Indiana. Did you ever go around to see

them?

Oh, yes.
Senator RoeINsoN of Indiana. You are the head of one of their
groups, are you not?
Mr. PICKREL.

Mr. PICKRELu. No.

Senator RoI.NsoN of Indiana. You are not connected with either

of the groups of importers?

th

Mr. 'ICKRELL. I am not the head of any group.

Senator RoBIsoN of Indiana. You met with them right along at

their meetings-in New York?

Mr. PICKiiELL.

Yes.

Senator RoBINsoN of Indiana. That is, the importers and traders

council?
Mr. PiorRE. That is right.
Senator ROBiNsolN of Indiana. Did you prepare any statistics down
here or draft any reports for these committees?
Mr. PicwaRELL. Yes. I prepared briefs.

an

thi
yo

LOBBY INVESTIGATION

2001

Senator ROBINSON of Indiana. Where did you prepare them?

Mr. PIOgRELL. The briefs I prepared for the committee?
Senator RoniNSOs of Indiana. Yes.
Mr. PIORRELL. I prepared them in New York.
Senator RoBINsoN of Indiana. You did not prepare any of them
here?
Mr. PXCKRELL. No.
Senator ROBINSo of Indiana. You had no correspondence here at

all, did you?

Mr. Picxm.LrL. Here in Washington? Do you mean while I was
in Washington?
Senator RoBINsoN of Indiana. Yes.
Mr. PxoKRELL. Practically none.
Senator RoBINsoN of Indiana. You do not have much correspondence, do you?
Mr. PICKRELL. No.

Senator RoBINsoN of Indiana. You haven't any correspondence

with you, have you?
Mr. PIcKRELL. No.
Senator ROBINSON of Indiana. Any in your files?
Mr. PxcKtc.L. No.

Senator RoBINsoN of Indiana. Our investigator was down to see

you in Now York, was he not?
Mr. PICRRELL. Yes.
Senator RoBINsoN of Indiana. And you did not have any core.
spondenco there?

Mr. Pxcinm L. I had some. He saw whatever I had.

Senator ROBINSON of Indiana. Yes; but you made the statement
there that you could see your people mostly.

Mr. PIOcRELL. Yes.

Senator ROBINSON of Indiana. That you did not need much corre-

spondence? Wasn't that it?

Mr. PIcKuihUj. That is true.
Senator RoBINsoN of Indiana. When did you go to Europe the
last time?
Mr. PICKInFmL. I have only been there once.
Senator RoBNsoN of Indiana. When was that?
Mr. PxCKRELL. 1923.

Senator RoINisoN of Indiana. Did you go over to the German

I. G. at that time?
Mr. PIOXRELL. No.
Senator ROBINSON of Indiana. Who paid your expenses over

there
Mr. PIcniRELT,. Mr. Metz.
Senator RomNsoN of Indiana. Mr. Metz?

Mr. PIoKinLr. Yes.

Senator RoBINsoN of Indiana. What was your business in Europe?
Mr. PxORREm. I went over there on the question of the invoicing
and marketing under the new regulations on dyes, incorporated in
the act of 1922.
Senator ROBINSON of Indiana. Did you call on Doctor Bosch while
you were there?
Mr. PIOcKEELL I did not.
78214--30-T5 -- 15

2002

LOBBY INVESTIGATION

Senator ROB1NsON of Indiana. Now, let us see about these various

organizations. Dr. Carl Bosch is chairman of the executive com.
mittee of the German I. G.; isn't that true?
Mr. PoCnELL. That is probably true.
Senator ROBINSON of Indiana. You testified to that a while agoI
Mr. PIoiRELL. I don't know.
Senator Ronixsox. of Indiana. But you have already testified to
that.
Mr. PioitwEm. Of the German I. G.1 I think he is the so-called
president-whatever it is.
Senator ROINSON of Indiana. And he is the head of the board of
directors of the American I. G., isn't he?
Mr. P10SuELL. I don't know.
Senator RoINSON of Indiana. Well, would it surprise you to learn
that he is?
Mr. PiciiuL. It is probably true.
Senator ROBINSON of Indiana. Well, don't you know it is true?
Mr. PoK1mJL. I have no interest, and I paid no attention to it. I
have read it in the newspapers.
Senator RoBiNsox of tIdiana. But you pose as an expert on dyes
and chemicals. The strangest thing about your testimony is the
lack of candor. Why don't you just speak straight out and tell us
the facts about these things. Of course you know that Dr. Carl
Bosch is chairman of the executive committee of the German I. G.
Of course you know that he is the head of the board of directors of
the American I. G., and of course you know that Dr. Wilfride Greif
and Dr. Hermann Schmittz are members of the German I. G. execu.
tive committee and also members of the board of directors of the
American I. G.; that Doctor Schnitz is the president of the Ameri.
can I. G., and Doctor Greif is a fellow member of the German I. 0.
and executive fist vice president. You know that Herman A. Metza
who was for years American agent of the German I. G. an
president of the General Dyestuffs Corporation, is vice president and
treasurer of the American I. G., and you worked for Metz. Now,
they all dovetail together, Doctor Pickrell, and you must know this.
1s4't that a fact?
Mr. Picii.y,. I am not familiar. I have not paid any attention
"
to this thing.
Senator tomnixsox. of Indiana. But you could get that out of the
r
newspapers, couldn't you
Mr. FI(KRELL. I probably read it. I do not recall all of those
facts that you have just enumerated there.
Senator RomNso of Indiana. But how strange your conduct on
the stand is: Dr. Herman A. Metz, who sentyou to Europe and for
whom you worked for seven years and fbr whom you went back to
work last Jamtary and tire now working for at this time is vice presi.
dent and treasurer of the Ame'ean I. G. which absorbed the General
Aniline, which you represented down here, and Doctor Bosch is the
head of both the organization in Gertmany and in this country, and
don't you know, Doctor Pickrell, that if foreign valuations are good
for the German I. 0. an 1 for the European dye cartel, they are
poisof for the American I. G. which was incorporated for $0,0
000 a short time ago? Isn't that a fact? Don't you know that
those things naturally follow?

01

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tl

b
at
as
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of
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LOBBY INVESTIGATION

2003

Mr. PICKREL. I don't think so.

Senator RomxsoN. of Indiiana. Well. if foreign valuation is good
for the European cartel, it is not good for the Amierican concerns,
is it? That is, when yo1i testified here for the foreign vaiatioh you
testified against the best interests of the American I. G. which is
owned by the German I. G.; isn't that a fact, and isn't it here, and
is it not a part of your business to break down American industry
through the German I. G. to the end that ultitnately the price may
be set for dyes all over the world by the European dye cartelt
Isn't that a filet?
Mr. PeiCKtEIt.,. It is not.
Senator RoniNsoN of Indiana. Now. Doctor, don't yevo know also
that Southern Europe ains ben parceekd out to the Switzerland dve
manufacturers, and that the South Anerlca and Latin coiintries
have been parceled out to France anid that (ermany has the Orientthe German dye industry has the Orient, and that they fix the prices
on those dyes and on all stuffs?
Mr. PItKflELL. No.
Senator Ronixso.x of Indiana. Don't you know that?
Mr. PICICHELL. No.
Senator RonmIsoN of Indiana. And don't you know, and haven't
you said that they can get around Valuations as long as Ioi have
the foreignm valuation system, so that they can set the price at
any figure, over there? Haven't you made that statement?
Mr. PwCrIELL. Not exactly hke that. I made a statement in 1921,
at the time when there was no antidulnping law on the books.
Senator RoBIxso. of Indiana. When did you change your mind on
that question? That is what I would like to know. When did you
become opposed to the American valuation?
Mr. P1I0mrF.M. In 1921 I wrote it letter to l)oetor Matthews, who
at that time was with the Gras-selli Dye Stuff Corporation, in re.sponse to a letter where he asked me for suggestions of a plm of
dye stuff provisions, as an alternative for the dye embargo. 1io
asked me to predicate it upon three facts, first, that these uggestions would prohibit the importation or embargoing iniportit on.4
of all dyes produced in this country; that it would permit the im.
portatlon of dyes that were not being produced in this country; that
it would prevent dumping. I made three proposals, two (if which
were on rates of duty , based on foreign market values-difterent
ihraseology. The tlid one was based on American valuation.
Tien in thiis proposal I mentioned the fact that there had probably
been under'a nation of products in the plast, and thilt there would
probably be importations in the future. This was also written at a
thieSenator RoBixsoN of Indiana. Well, I will put that letter in the

record.

Mr. PICURELt,, This was written at a time when there was no anti.
dumping law on our statute books, it being enatcted subsequent to
that time, in May, 1021.
Senator RoBizsox of Iniana. Now. I will insert in the record as
a committee exhibit at this point, this financial advertisement, signed
by the National City Bank and other banks and brokers of the
American I. G. Chenical Corporation, $30,006,000, guaranteed 51/j

2004

LOBBY INVESTIGATION

per cent convertible debentures, and call attention to the fact that
the advertisement states:
The board of directors of the Anerlitl 1. 0. C1h'milcal Corporation will i.
cliude uong others, Prof. Dr. ('arl Huo.h, cilmlrnlo of tile exe0utive coil,
mittee. . (. lirhillilustr0; 'Mr. Walter Teligh. pvsidenlt Standard Oil Co.
of New Jers0y; Mr. Charles ]. Mitcliell, (.halrunln National City Bank of
New York; Mr. Edsel B. Ford, pre-silent Ford Motor Co.; Mr. Paul M,
Warburg, chairman International A(ceAtmuice Bank (lic.) ; Mr. Adolf Kut.
troff: Mr. H. A. Metz, president Gnevl Anilline Works (Inc.) ; Mr. W. !.
Weiss, vice president Drug (Inc.); Dr. Hermann eRhailtz, member executive
committee, I 0. IPrbenlndustriv; Dr. Wilford Orelf, member executive com.
mittee, 1. 0. Farbenlndustrie.

I
t
t

81

And I call attention to this remarkable statement in the adver.

tisement:
Neither class of stockholders has any preemptive right to subscribe for
future issues of common A shares. Both classes have the same voting
Connioti A shares will be redenable at the option of the
rights per shat.
company, ias a whole or In part. ait any. tine, tit i price equivalent to the
average stock exchange quotation for such shares during tile 30 days next
preceding such call for redemption, but li no event tit a price less than $10
per share lit excess of the last price at which any of the convertible deben.
tures shall have been converted into common A shares.

A most remarkable statement in a financial statement, different

from the methods that have been pursued conservatively for many

years in other countries.

I will put this in as a committee exhibit.

(The advertisement above referred to was received as an exhibit
and reads as follows:)
$30,000,000 A.stiC.mi 1. 0. CHymtccL Coapo&%riox Gut;Ta,??

51/

Pan

GU1N?

CONvERILsEs DEnieNTURS

Principal and interest and premium, if any, upon redemption uncondition.

Farbenindustrie
ally guaranteed by Indorsement on cach debenture by 1. 0.Germany.
be
Aktzengesellschaft (I. G. Dyes), Frankfort on the Main, and InterestTopaydated May 1, 102.0; to mature May 1, 1040. Both principal
of weight and
able In United States gold dollars of the present stndardYork,
In London,th
New
of
Batik
('ity
National
tile
of
office
fineness, aIt the head
In
Eugland, in pounds sterling, or at the Deutsche Laeuderbank, Berlin,
relchsmarks, in each case at the their current buying rate of the respective
banks for sight exchange on New York. Coupon debentures In the denon.
Nations of $1,000 each. Redeemable as a whole or it part, at the option
of tile company, on any Interest date upon 60 days' notice, at 110 and interest
if redeemed on or before November 1, 1M38, and at 100 and Interest thereafter. Conversiuo rights on any debentures called for redemption may be
exercised up to anti including the sixth day prior to the date fixed for
redemption.
Tle National City Bank of New York, trustee, convertible at any time prior
to January 1, 1039%, into common A shares of the American 1. 0. Chemical
Corporation at the rate of 17 shares per $1,000 debenture up to December 81,
1931; at the rate of 10 shares during the year 1932, the number of shares
decreasing in each subsequent year at tile rate of one share a year until 1038
when the conversion rate Is to be 10 shares per $1,000 debenture.
The following information has been summarized by Gehelmrat Dr. Hermann
Sehmits and Dr. Wilfrid Greif, managing directors of the 1. G. Dyes, from
their letter written In connection with this issue:
I. 0. Dyes is the largest chemeal enterprise In Germany, and one of tile
largest and most successful corporations In the world engaged In the chemical
and allied industries. For the years 1025 to 1027 Inclusive, Its net earnings

e,

W
at
to
81

at
sh
r
tb
e
e
co
F

2005

LOBBY INVESTIGATION

available for depreciation and dividends on its stock averaged about $45,047,000
per unnum, or over twenty-five times the maximum interest requirement on
these convertible debentures. For the year 102 such earnings amounted to
over thirty times such guaranteed interest, and it Is expected that the final
figures for 1028 will be at least as favorable as those of 1927. The present
Indleated market value of the outstanding common stock of 1. 0. Dyes is
approximately $450,000000.
As at result of the development of its World-wide activilles, I. U. Dye.s has
found It desirable to cause a corporation to be organized In the United $tites,
under the name of the American I. 0. Chentlcit Corporttiolof, with broad
corporate powers to foster and finance the develpiptint 6f eliieal tiid sullied
industries in the United Htates and elsewhere. All of the conlinlOil stuck of
this complmny to lie presently outstanding will be issued against cash, or for
acquisition of stocks of certain Americat chelitcal conmalides itncludlng
the
Aniline Works
tenerail
substtntail intersts It Agt.Anso ('otoratllo and
(Inc.), (fornierly OrasseiI Dyestutff (orpirtillon).
The capitalization of the American 1. 0. Chemical Corporation, ulpom t11antpletion of this financing, will be as follows:
* Authorized IIsucdt
I---

Ouaraneut. 5 1 per cent convertible debenturs (hs fsue) .............

Coniion A snares, no pIr value.....................................
Common B shares, no iar value.....................................

33.AOW

(O
3 W(%X,
3(o,
t0 000

300OC000
1400,00
3,0A 000

I The I. 0. )yes will have the option to acquire prior, to Jan. I, ItE, atn agwgte, of 1.0oo10004 1Itdlona
oemn:on A shares at prcs CuIViilent Io Ilt. ctrrclt prices tit which Ilie docbn( uititure convertible.

The American I. 0. will own assets valued in excess of $60,000,000. It iS

I'ltk'4 which It will own, together
lite
expected that the net earlnings fronih
with 6 per cent interest upon the inllial caish funds it Its tre.a'oary. will
amount to more than double the interest requirements on the debentures.
Fron any sums declared as dividends, the common A shares will be entitled
to receive dividends at the rate of $1 for each 10 ceuls p.ahld oi conunon B
shares. In case of voluntary or ilivolunitflry Ilquidation, ((oinl4ton A shares
are to be entitled to receive $75 per share before any 'aytn'lt 14 inltdt, hltotn
common B shares, and any baltnce must be distributed in equal aunioults tier
share to the two classes. Neither class of stockholders hits tiny lpreeniptive
right to subscribe for future issues of commott A Alwres. Iiolh classes have
the sanne voting rights iwr share. Common A shares will be redeemitlilet at
the option of the company, us a whole or ii part, at any thne. at a prico'
equivalent to the average stock exchange quotation for such shares during
the 80 days next preceding such call for redemption, but in no event at a
price less than $10 per share in excess of the last price at which any of the
convertible debentures shall have betsn converted into cotainio A hares.
The board of directors of American 1. 0. Chemical Corporation will iteitide,
among others:
1. 0.
Prof. Dr. Carl Bosch, chairkuni of the executive conmilei,
Farbenindustrie.
Mr. Walter Teagle, president Standard Oil Co. of New Jersey.
Mi. Charles 13. Mitchell, chairman the National City lank of New York.
Mr. Edsel B. Ford, president Ford Mptor Co.
(la .).
Mr. Paul H. Warburg, cludinian Internallonl Acceptaneo ltik
Mr. Adolf lCuttroff.
Mr. II. A. Metz, president (lJeneral Aniline Works (Inc.).
Mr. W. I0. Weiss. vice president, Drug (Inc.).
Dr. Herman Schlitz, member executive coinnittee 1. 0. Farbenllithidustrle.
Dr. Wilfrid Greif, member executive committee I. U. Farbenlndusirie.
Application wIU be made to list these convertible debentures on the New
York Stock Fxclnge.
Price 05 and interest, to yield 5.93 per cent.
We offer these debentures if, as, and when Issued to and received by us. and
subject to approval of nil legal proceedings by our counsel, Messrs. Sheatrmann

2006

LOBBY INVESTIGATION

& Sterling, New York City. It is expected that delivery will be made on ot
about May 10, 1020, in the form of interim receipts of the National City Co.

Te NATzONAL OITy Co.

INTERNATIONAL MANHATTAN CO. (INC.)

LEE, HiooiNsox & Co.

IJAUIs, FORBES & Co.
BROWN BROS. & Co.

BANKtaS CO. OF NEw YORKC.

Tui EQUITABLE TRUST CO. OF NEW YoRK.
CONTINENTAL ILLINOIS CO.

The above Information has been obtained, partly by cable, from sources which

we consider reliable. We do not guarantee, but believe it to be correct. All

conversions of Rm. have been made at the rate of exchange of Rm. 4.20 to the
dollar.

Senator RonNisoN of Indiana. Now, Professor, in the light of all

of these facts, do you still want to say that you are not connected

with the German I. G. in any capacity?

Mr. PCKnEU,. that is right.

Senator RoBINsoN of Indiana. And that you are not representing

them even indirectly?
Mr. PewRELL. Yecs.

Senator RoBINsoN of Indiana. Do you know what the value was

of the coal-tar dyes exported by the European dye cartel in 1928?
Mr. PIcREU,.

I do not.

Senator RoBIpsoN of Indiana. Would it surprise you to learn it

was approximately $75,0000,00
Mr. PICKrRML. Possibly it.was.
Senator RoBINsoN of Indiana. Would it surprise you to learn that
the coal-tar dye exports of the United States for the same year were
approximately $6,000,000?
Mr. PxcKREm. Probably that is right.
Senator RoBmIsoN of Indiana. Doctor Pickrell, are you acquainted
with Kuttroff & Pickardt, of New York City?
Mr. PicxnEi
. That is right.
Senator RoBINSON of Indana. What is their business?
Mr. PXIORmL. They are importers and dealers in chemicals.
Senator RomNsox of Indiana. They are importers of chemicals
fropi the German I. G., are they not?
Mr. PICiELL. They import some from there.
Senator RoniaNsox of Indiand. Are they not exclusive American
agents for chemicals, other than coal.tar products and fertilizer?
Mr. PwCKrILr. No.

Senator ROBINsON of Indiana. They are importers from the German I. G., however?
Mr. PIcshlEI.

Yes.

Senator RoDNsoN of Indiana. How much did they pay you for
representing them?
Mr. Pioxn LT,. $3,000.
Senator RoINsON of Indiana. Is that in the record?
Mr. PicxtELL. Yes.
Senator Romxsox of Indiana. Are you acquainted with Mr.
Mullally?
Mr. PWici.Lr,. Yes.
Senator RoBnsoN of Indiana. What was he doing down here?

a
t

LOBBY INVESTIGATION

200W7

Mr. PIOKRELL. He appeared before the Senate Finance Committee and Ways and Means Committee.
Senator RomsNo of Indiana. In what capacity?
Mr. PICKIE.L. He is their director of sales.
Senator RoBINsoN of Indiana. Well, he urged a reduction in all
of the chemical rates, did he not?
Mr. PICK tEL,. No.

Senator RoBinsoN of Indiana. I mean in which his employers

were directly concerned?
Mr. PICKRE.L. No.

Senator RooiNsox of Indiana. Well, what did he dot That is

what lie was here for, was it not?
Mr. PICKRELT,. He opposed increases.

Senator Rolun-sox of Indiana. Some rates he thought were too

high; isn't that true?
mrL. He was askingMr. PwKm
Senator RoBixsox of Indiana (interposing). And that has been
your opinion right along?
Mr. PICKItELL. NO; not necessarily.
Senator Rouixsox of Indiana. Doctor, have you told us all of
the sources of money you have had for your lobbying activities down
here?
Mr. PIKR LL. Yes.
Senator RoBinsoN of Indiana. You testified before the Shortridge committee in 1922?
Mr. PiCKnELL. That is right; yes.
Senator ROBINSON of Indiana. Do you know anything about the
origin of the Shortridge committee?
Mr. PicityF.LL. Only hearsay.

Senator RoBinsoN of Indiana. A subcommittee of the Committee

on the Judiciary?

Mr. PICKIRELL.

Yes.

Senator RoBiNsoN of Indiana. Do you know anything about its

origin
Mr. PicHELL. I knew it was appointed as the result of a resolu.
tion adopted by the Senate.
Senator RoBnsoN of Indiana. A resolution to investigate the
alleged dye monopoly in this country?
Mr. PICKRELL. Yes.
Senator RoINsoN of Indiana. Who was the autthor of th%resolution?
fr. PICKELL. Senator King.
Senator ROBINSON of Indiana. I was looking for your letter.

wanted to put it in the record.

Mr. PICKR L. The letter to Doctor Matthews?
Senator RoBINsoN of Indiana. Yes.
ionLm.
Mr. Pm

I will give it to you.

Senator RomnisoN of rudiana. Have you got it there?

Mr. PICKRIca

. Yes.

Senator RoBiNsoN of Indiana. I will put this in the record as a

committee exhibit. It is a letter from Mr. E. R. Pickrell to Dr. J.
Murray Matthews, and it reads as follows:

2008

LOBBY INVESTIGATION

Nsw Yoiuc, December 9, 1920.

Dr. J. 31mamTr MATUnws,
51 Rast Fortly-First Strcct, Neto York Oily.
DAR Doo'roR MArruiisWS: In accordance with your request, the writer has
given careful consideration to an alternative for the hieiisiiig feature of
H. I. 8072, to be submitted to the American Dyes Institute.
The writer understands that this licensing feature will make effective the
following results relative to the Iuportatlon of dyestuffs and related chemicals,
which results are not now insured by the act of eptember 8, 1018. and which
are essential for tlt,-permanent establishnient i this country of it self-cosstained

and independent dyestuff and related chemical industry:

(1) Prohibition of importation of dytistuffs Iand related chtenilcals inanufac.
tured in lis country.
(2) Permission to import such dyestuffs mid related chentlcalis as are not
manufactured In this country within limits.
(3) Protection against the Importation of dyestuffs and related etictiteals
of unreasonable quality, price, and quantity of delivery-i. e.. duniing.
Furthermore, the present act does not assure protection which will equalize
the varying differences ill cist of lirtiuhtiolln of the many Wil varous dyestuffs mid related chemicals in this country umi (ternmny.
The writer has kept it mind these results which would lie accomplished by
the licensing feature in his cmsidleration of iy alternative which would lie
based on the protective tariff policy.
Suggestion No. 1 would provilo rates of duty for all the intermediates
ond such dyes as are manufactured In this country, which rates of duty would
prohibit their importation. Thie-t' rates of duty are Conmpomuld-that i.-, aU
valorem and slecillc-and vary according to the tllpralsed value oif tile artlhue.
In this manner practically a lat ad valorem rate can be assured fAr all lite
intermediates ad another for all the dyes which are manufactured in this
country. YoU will note that Table 1 slows that tile Hilt rates its usedl in
suggestion No. 1 are approximately 100 Ixer cent for tilt Intersnediates and
125 per cent for the dyes. It would be necessary to defliltely establish what
flat 0 rates would be necessary to prohibit (t importation of the articles
which show the greatest differeslce in cost of 1roi110on li t is (.Otll1try 11n1d
in Germany. and .o adjust the ad valorem and specific rates for the different
cost groupings as to niake these tlht rates.
It is customary lit tariff acts to vary the rates of duty according to the
appraised values; also to state the compound rate after two or more articles
In the sanio paragraph or group. All the dyes which are not manufactured
in tils country could be spiflctally mentioned by utame it a separate pairgraph, either free of duty or with it low rate of duty. For Illustratlon. tile
writer has taken all the dyes listed in Table 33, " Memorandu m in tle matter
of Title V, dyestuffs act of Septenber 8, 1911." which dyes were imported
durig fiscal year 101-3-14, iln quantities less 1i11i11 1 ton, 11t idned thaeua
specifically itGroup V tit at rate of duty of f5 per cent ad valoren. The new
census of dyestuffs noW being prepared by the United States Tlariff Commis.
slon. which is now in the hands of tle printer, would furnish information
as to what dyes are not now nanufaictured lit this country. These mIid lil.y
other dyes and related chemicals could lie specifically provided for Ill tills
group so as to permit possible entry into thi-s country. At such ime ts ally
(if these dyes aniid related cheleals ire mianufaetured lit this clntry In
quantity to lie determined (one tone was used for Illustration), then tle
President by proctlation would state that such dye or rehltel chiual would
henceforth be dutiable at tie prohililtory rate provided for the dye. mainfactureil i this country. Thls principle of protective tariff Is incorporated in
the present law, in the paragraph providing for tin ore and block tin, and was
also eboulotled in.the tariff act of 1009 covering tile sane mierehanditse.
Suggestion No. 2 is the Slite as suggestion No. 1, with a different formi of
proposed rates of duty. The writer as a matter of Information compared
Invoice prices of dyes and intermediates in Norton's Dyestuff Census with
present domestic market prices and has compiled Tahles IV and V, ..etting
forth this data. You will note that tif the 49 intermediates the average
domestic rwarket price is 7.2 times higher than the average invoice price given
in Norton's Dyestuff censu; -and that the domestic market price varied from
1.4 times to 81 times higher than the Invoice price of the corresponding article
In Norton's Dyestuff Census. You will also note that of the 40 dyes listed In

LOBBY INVESTIGATION

2W

Table V the average domestic market price Is 9.3 times, and the domestic
market price varied from 2.1 times to 32.4 times higher than the invoice price
of the same dyes in Norton's Dyestuff Census.
In view of the possible wide range in the difference in the cost of production
here and in Germany of the various dyes, intermediates and coal-tar chemicals-, and the fact that it would probably be necessary to impose rates of
duty of several hundred per cent in order to definitely prohibit the importation
of all the dyestuffs and rMlated chemicals now being manufactured in this
country, the writer offers in suggestion No. 2 rates of duty when reduced
to ad valorem amount to several hundred per cent. The rates of duties illustrnted in this suggestion amount to :0 to 500 per cent. The specific rates
based on the tineterial strength could lie Increased if necessary so that the
rates of duty would he still greater. Tilis method of Imposing duties on imported merchandise is quite simlhar to the duties in the present tariff act on
sugar,

hI1lasse.,

etc.

Huggestilon No. 3 Is the same is H. It. 80T8 with the exception that certain
d'es stad related chemicals not manufactured in this country are specifically
provided for in a separate group, as In suggestion No. 1, with a provision that
when the domestic manufacture of any such articles or material shall reach a
certain quantity the rates of duty imposed on articles of domestic manufacture shall their become effective, and with. an additional section providing that
all articles or materials of domestic manufacture provided for In the act shall
he 1al1ralsed lit the wholesale doniestle market value of such articles or
materials manufactured in this country.
All articles or materials niot manufactured in this country would be appriClsed at the foreign market value on the date of exportation. This pro.
vision for appraising till articles which are manufactured in this country at
the domestic market value would automatically take care of a large portion
if not all of the difference in the cost of production In this country and
Germany. By levying high enough duties the entire difference would be
eliminated. This appraisement on domestic market value would also eliminate
undervaluation, which was probably resorted to it the past in the importation
of the merchandise to be covered by this bill and would probably be attempted
again if occasion warranted it.
Conclusions: The writer realives that none of the three suggestions submitted are is efficacious in obtaining the results desired as the licensing feature
embodied in 11. It. S0T8, but is of the opiiont
ithat suggestion No. 3 would
serve as a good alternative with pos.Ible substitution of rates of duty as
sulbntited in either sug(estloti No. 1 or No. 2. The writer appreciates the fact
that It Is a cardinal principle in tariff legislation in this country to have all
iniported inerchandlse appraised oil foreign-nmrket values and knows that
the only the in the admifnlstratlon of a tariff act that donestlc-narket values
art emphmyed is when mo forelgii-market values tre uscertbainble, but believes

since undervaluation of the merchandise covered by this ill Is so difficult to

detect. and will he wuore so in ti future, owilig to the fact thait all tie coat-tar
industries iu Germany now form one trust. aid owing to the exigency of the
occasion, that this alternative would receive serious conilderatlon by our
National Legislature.
Very truly yours,

1 11. P10oCHEM.

Senator Ronmxsox of Indiana. You have changed your opinion

on that subject and gotten clear over to the advisability of foreign
valuation, is that it?
Mr. PcKnPf.LL. Not neemsarily.
Senator Ronisox of Indiana. Did you urge foreign valuation
here with people with whom you have talked?
Mr. PICKIIELJ. No.

Senator Ronrsox of Indiana. Are you not. opposed to American

valuation, for the companies you represent .
Mr. POicKn.LL. I am opposed to a continuation of American

valuation.
Senator RoINasoN of Indiana. Well, that is the same thing, as I
see it. What is the Ansco Co.f

2010

LOBBY INVESTIGATION

Mr. PIowRErL. It is a manufacturer of photographic materials and

Supplies.

Senator ROnISo" of Indiana. It is a subsidiary of tie American

I. G., isn't it?

Mr. PIOKIRELL. It is one of the concerns that is held by the Amer.

ican I. G.
Senator Ronwiso.N of Indiana. You have worked for the Ansco

Co.?

Mr. PoxtiEL. Yes, sir; I have.

Senator RomIsox of Indiana. Doctor, how much money have you
received from all of your concerns tip to date-the total salary and
expenses, since January 1 last year?
Mr. PIORItELL. I coul lot tell you without lookin at my hooks.
Senator Roi-,soNq of Indiana. have vol got yourbooks .withyou
Mr. PicKlmu,. No. But I presume it is what I have given here.
and expenses, when I have been down here, have run probably $15 a
da.
denator RoBiNso-. of Indiana. $15 a day?
Mr. PICIRELL. Yes.

Senator Roisixso- of Indiana. That would be $450 a month, ap.

proximately?
Mr. PIcIVELL. Yes.

Senator RoBI.soN of Indiana. Do you make any accounting for

your expenses?
Mr. ICi iUEL. I sent then bills.
Senator Ronix.-sox. of Indiana. Do yon send ill of these companies
bills
Mr. PICKiULL. I send each company it bill; yes.
Senator RoBiNso.N of Indiana. Do yoU send all of theso companies
bills, and do they give you unlniited eXpenso allowances lere ?
Mr. PCIcREiL, 'They have taken iny word for whatever I said were
my expenses.
Senator RoBINso.subject?
of Indiana. Have you had any correspondence
with them on that
Mr. PcKIMLr,. No.
Senator RonmsoN of Indiana. You never live written them about
youW expenses at all?
Mr. PwCKELL. Why. I sent theih a bill with my expenses incurred.
Senator RoBI.-so of indiana. But have you ever written them any
letter stating what the expenses were incuirred for?
Mr. PICKCRELL. NO.

Senator RoBIxsoNi of Indiana. You just sent them a blanket state.

ment; is that the ideaI
Mlr. PxcitnELL. Yes.

Senator RoBixsox of Indiana. And no matter what the statement

is. they send you a check back?
Mr. PiIIiELL. That is right.
Senator RoBNsoN of Indiana. Do they ever write you any letters
about what the expenses had been or in connection with lite expenses?
M.%PICKIm.LL. NO.
Senator ROiSINSloiN of Indiana. Now let us get this straight. You
just write out a statement, as I understand, anld put on there "To

LOBBY INVESTIGATION

2011

Doctor Pickroll. for expenses, $450," or "$300," or "$100," and you

put that in an envelope and you mail it to this company?
Mir. PICKIIELL. Yes.
Senator Ronusox of Indiana. Without a word of eXlflanation of
any kind, and then that company writes a cheek for that amount and
sends it back to you here, without any explanation ?
Mfr. PIORitiLsT. No, no. '1This has all "been done when I have been
in New York. I submit them a statementSenator ROBlNSON of Indiana. No; but your work down hereI mean when you are here-have you never sent any expense itate.
ments back there wifle you have been here?
Mr. PInRP.,. X1O."
Senator Ronimsox of Indiana. You have gone back to New York
and handed it to then; is that the idea?
Mr. PICI ItLL. Certa ily.
Senator 1onuisoux of Indiana. And gone over anl gotten the
M'. PiliumI.1,. No.
Senator Ron xsox of Indiana. So that there has b'eil no correspondence on it at till?
Mr. PICItmLL. No correspondence on it.
Senator Romsox of Indiana. Not the slightest; not a word on
subject?
tile,,%fr.
PIC1.IIII,. No. I have xenl them a bill and they have sent
the check.
Senator Ronixsox of Indiana. Without any word of any kind
whatever?
Mr. PICKRFL. WellSenator RonxpSo of Indiana. Now, Doetoi, do you exle[ this
committee to believe that?
Mr. PicmxL. Why, certainly.
Senator Ronx-sox of Indiaha. IVAl, (heywill have io strain
themselves. Well, while you have been down here. what. Senators
have you seen this year?
Mr. P0c1 IILr,. I have seen Senator Mose-Senator Roimxsox of Indiana. When did you see Senator 3moses.
Mr PICORnLT,. This year, (o you mean, 19O?
Senator Ronixcox of Indiana. I mean 1020, duritig this tar'iff
controversy.
Mr. PicKRm:L. I have seen Senator Moses at different times. I
can't say what time.. I have known Senator Moses sice 1921 or
1022. Whenever I ant in Wnshingon. and have heenl since that
time and have had a moment I drop into th ofie amd pay my
respects to him-since 1922. I hav been dIown here at diver's iimes,

long before the tariff bill was un(ler consideration by Congress., and
I would drop u) here to see himl).

Senator Rouimxso.x of Indinn. Whom else did you see?

Mr. PICIui L. I saw Senator La Follette and Senator King.
Senator RoAwxssox of Indiana. How much time did you .pend with
Senator La Follette?
Mr. PexmmRIr,. Oh, very little. I could not say how mitch tiht.

Senator RomXsoN of Indano. )id you work with Senator La

Follette any?

2012

LOBBY INVESTIGATION

Mr. PicKnvt.i,. I prepared some material for him at his request.

Senator RonINsoN of Indiana. Was the material used?
Mr. PICKItELL. I Can't SRy.

Some of it.

Senator Roaixsox of Indiana. Any of it that you know ofi

Mr. PioKittii. Some of it.
Senator RoBIzsox of Indiana. How?
Mr. Piciiamn,. Some of it on the floor of the Senate.
Senator Rom.-sowx of Indiana. In speeches?

Mr. PicimnELLr. Yes.

Senator RoniNsox of Indiana. The matter that you had preparedMr. P1otRLL. Portions of it-woven in, you know.
Senator llonrxsox of Indiana. Woven in, you say? How do you
mean "woven in "
Mr. Pe:itr.,. Well, it is not my hnguage, or anything like that.
He asked me for material and I gathered it for him.
Sea0 tor (YAwRY. Would you mind explaining to me what. you
mean by " material "?
Mr. PICUlW.L. Facts or statements of statistics.
SenatoP CARAWAY. Figures with reference to manufactures, imports, duties, and so on?
Mr. PICHIIML. Manufactures, imports, duties, and so forth, and
I prepared for him, you might call it, a primer in the chemical
schedule.
Senator Ronixsox- of Indiana. A primedl
MUr. PlWKIIELiL. You can call it a primer or a digest or whatever
you wish to call it. It covered till of the amendments, either by the
house or the Senate Finance Committee, on these commodities cov.
ered by these amendments. It was imports, exports, tariff history,
uses. and so forth. I will be glad to give you a copy and give it to
the committee.
Senator RoniNsoN of Indiana. Well, it is in the record.
Mr. PNccw.r.L. No, no.
Senator CARAWAY. YOU would have to give us a hornbook, you

know.

Mf'." PICKIRELL. It is quite a document. I will 1e glad to give it

to I-ou.
Aenator BLAINE. You say it is not in the record?
Mr. Picictu:.,. No, no.
Senator RoBmsox of Indiana. I understood you to say it was
woven in.
Mr PICK1F.LI. Well, I prepared figures, and so forth. He might
have put some bf those in the record.
Senator IomIxsoX of Indiana. Might haire.?
Mr. PILT,..
He might have referred to it.
Senator Ronizso of Indiana. Well, don't you know it is int
W1hIy do you say "might have "I

Mr. PCHmR.,. Well; I think it is. This is all obtainable.

Senator Romnsox of Indiana. Well, now, you think--you know it
is, don't you I
Mr. PIoHRUL. That is all obtained from Government statistics,
Governnent publications, and so forth.

LOBBY INVESTIGATION

2013

Senator RoBINSON of Indiana. I know, butMr. PwIRtF%, Yes; I think it is in there-some of it.
Senator RoBixso.- of Indiana. Then .say so. Now, whom else did
you see?
Mr. PicilptEL. I saw Senator King.
Senator RoBtiNsoN. of Indiana. How niuch did you see Senator
King?
Mr. PIC0KRELL. I saw himn a few times; not many times.
Senator RoniNso- of Indiana. Why, Mr. Pickrll, you were with
Senator King constantly, weren't you?
Mr. PicitiF.uLL. No, sir.
Senator RoniNsoN of Indiana. Did you not make his place your
headquarters?
Mr. PIoxitEu,. I did not.
Senator RomiNso.v of Indiana. Didn't you go in there and write
letters?
Mr. PICKInELL. I wrote one or two letters to my office.
Senator RoBiisoN of Indiana. Well, you dictated letters in there,

didn't you, in his office?

Mr. PICKIELL. Only one or two letters.

Senator Ronixso. f Indiana. Right along?

Mr. PicRrj. No, sir.
Senator RoBiNxsox of Indiana. When did you la.,t dictate a letter'
there?
Mr. PIcjuRLL. Oh, that is hard to say. It. was along in Septen)ber. possibly, or October. I only dictated one or two letters and
they were to my office, for some pamphlets or publications of some
kind.
Senator RoBiNsoN of Indiana. Mr. Witness, didn't you use Senator King's office as a meeting plave for your friends?
Mr. Picxiutr,. Not necessarily; no.
Senator RoBINsox of Indianae. Haven't you met Mr. Mctz there,
at diltrent times?
Mr. PIcinittxL. I don't recall. I don't think I ever did.
Senator RoluNisox of Indiana. You don't recall? Let ine ask you
if on May 22, 1)29, you and Hermann A. Metz and Paul Pickardt all
met. together in Senator King's office?
Mr. PiOiCIt:LL. I don't recall.
Senator Rot.xsox of Indiana. Yot won't say tht you did not
iawet there then, will you?
Mr. P1cjcttvIT,. I don't think I did.
Senator RoBINsox of Indianm. Well, did you or didn't you? I am
aski g you the question.

M[r. PlIcmiI.f.

I don't know. I don't recall.

I don't think I did.

I do not recall any such meeting.

Senator Roji.ssox of Iindina. Did you ever meet Mr. Metz in
Senator King's office?
Mr. Prcti:L-L,. I might have. I don't remember.
Senator Rl~dii'sox of Indiana. Don't you know you did?
Mr. l)IcIcni:rl,,. I do1t know. I don't recall, Sen.ato.
Senator RoBINsox of Indiana. You have forgotten. Is that it?
Mr. Pjmoimmi,. 11hy, -it
made no definite impression upon my mind
whether I did or not.

2014

LOBBY INVESTIGATION

Senator Runixsox of Indiana. Well, any more than you don't know
whether the (lerman I. G. and the American I. G, are the same?
Mi'. PI('KLr.. I don't remember all of these things.
Senator RomUmcs-o

of Indhina. You knew, Mr. Pickrell, about news.

paper stories with reference to your using Senator King's office as

your Ieaiquatters?
Mr. POiRcILL. Yes.
Senator BLAINE. That is, you knew the newspapers carried stories
like that?
Mr. PIOliEL|. Yes.
Senator BLAINE. Were those stories true or untrue?
Mi'. PWICIELL. Untrue. I did not make his office my headquar.
teI.
Senator Romixsox of Indiana. Are you acquainted with Mr. Frank
K. BollH
Mlr. IPICKIHE"Lh.

No.

Senator IRomnisox of Indiana. Formerly of the Pittsburgh Post

Gazettel
Mr. 1ictimiOz. No.
Senator loiixsox of hidiana. Now with the Harrisburg Telegraph-a newspaper man.
,,'. PlcitIai. I don't think so.
Senator RIom, sox of Indiana. Let me refresh your memnory. Do
you remenibmr when a newspaper man three or four or five weeks
ago, or longer than that, I suppose, but not over two months ago,
however, came into Senator King's office and you were dictating a
letter, with your coat off, and your hat off in the office, as if it was
your phlce, and he told you he wanted to see you and wanted to talk
to you about the tariff, and you made an appointment to see him the
next day at 11 o'clock. Do you remember that occasion?
Mr. PIeKIItrJ,. I remember a gentleman coming in there. I had
my hat oil at the lime.
Senator RoBUNsoX of Indiana. You had your coat off, too; it was
a war1 (lay.
Mr. PbCIdiu.L. No; no coat off. I was dictating, not a letter. I
was dictating sonie material for Senator King's secretary.
Seniftor Roloixsox of Indiana. For his secretary I

Mi[. PI CKxur,. For hiss secretary, yes, and to his secretary, as I

recall, and this gentleman asked to talk to me about the chemical.
sdedule, and I (ld mistake an appointment for 11 o'clock the next
day, which is was imposible for me to keep.
Senator Roaiusox if Indiana. But you sent no word to hin that
it would bo impossible for you to keep the appointment?
Mr. PI cicimv.T,. I did not know whee to reach him. I had nele
seen the fellow before.
Senator Roiunsox of Indiana. The next day lie. did come back to
see y ( ml

Mr. PI('Kn.LL. I don't know.

Senator IRojn xsox of Indiana. And was informed that you had
been suddenly called to New York?
Mr.
PtCIrmEL,.
ThatOfis Indiana[
probably Were
true. you suddenly called to New
SenMator
ROnINsoN

York?

to

&

ill
-sit

LOBBY INVESTIGATION

2015

Mr. PIoCttRL. That is probably true.

Senator ROBINSO, of Indiana. That is about tile time tile newspapers commenced tile report that you were using that place there?
Mr. PIOKRErJ. No. It was some little time previous; two weeks
or a month, as far as I can recall
Senator ROBINSON of Indiana. About tile time?
Mr. P1oiCu.LL. No; it was in October.
Senator Roni sov of Indiana. Why didn't you keep the appointment the next day, as you had arranged?
Mr. Pic(InlJ,. It is quite possible that I had to go to New York.
I think that. is true.
Senator RoBINsox of ] ndiana. Yes; but why did you not keep the
appointment that you made there, at 11 o'clock?
Mr. PICIM:L,. Well, I camne down here for a day or two daysSenator Roniso" of Indiana. You were here then for longer
than that, or you would not have made the appointment.
Mr. PICIHRELL. Well, I can't tll-I
have cases in court, and other

matters, and so forth.

Senator RopNSON of Indiana. Well, what dlid take place that took
you back to New York?
Mr. PICKHEL.L. Well, I don't remember tile details of it.
Senator RoBixsoN of Indiana. You can't remember that?
Mr. PICKRELL. It was probably a case in court or some matter with
the customs officials.
Setator RonIsoN of Indiana. Mr. Witness, did you have anything
to do with presenting this resolution asking for an investigation of
the alleged dye monopoly in 1022?
31r. I (itELL. I had nothing to do with it.
Senator RoiNxsox of In(iana. You did at that time undertake to
defend the position which Senator King had taken with reference
to some statement he had inade about one of the witnesses who testi.
fled, did you not?
Mir. Plim:.j,. I don't think so, Senator.
Senator RoBINsox of Indiana. What?
Mr. PICKIWLI,. No, sir.
Senator Ront sox of Indiana. Let me read from your testimony
back there. "Testimony of Dr. John R. Pickrell, with H. A. Metz
& Co., New York." This is the headline. Hearings, 1922, on page
934. This is your testimony. Sec if you recognize it.
I hlvo rea(d with considerable interest the testiniony of Dr. Charles II. Hurdy
before this collnlittee, espc'lally the statistics whhIh (ht gentleina offered for
tM record at this Inve.tligition. I tossumle that Dotior lfurdy's object lin offer.
lIng tinse stitIstlc Wits"to point out apparen t initcurneles in!tile statistics presented by Senator King In his statement before this coltini(tet, tiiereby at.
tempting to disprove tlin slatsilts presented by tliat Sento. When hiter it
lo statistles offered 1v ])oetor Ilturdy lit his Wt-Ahmlony Ilnd failed to controvert
It tiny resp-ect whatever the fals presented ty $rcnator Kilng ill his opening
slitemnent, which are as follows-

)o you remeber now heing familiar with Senator King's opening

.tatenlent there?
Mr. Pi:chml".. That is probably tritP.
Senator Ronxsos of Indiana. And Senator King did this year
interroLtgate you at soein extent on the liea.ingsm here, (lid lie not?
Mr. PIcAnErL. Tie asked 1o0 some questions.

2016

LOBBY INVESTIGATION

Senator RoBmso. of Indiana. Mr. Pickrell, do you remember the

statement asserted about that time, of some 25 dyes, in 1022, by Sena.

tor King in his statement, picked d.yes, shown on page 98--let us get
that and see what they are. Here Is a statement of 25 picked dyes,
and the statement was inserted in the hearings before the Shortridgo
committee in 1022, starting out with statistics on yellow B; Tartra.
zine; Chysoidine Y; Ponceau RR; Metanil, yellow; Orange II
fast red A, etc.; 25 of them all told. Do you remember that list o
dyes?
Mr. PicrniLI. I don't recall now.
Senator RomaNsox of Indiana. Would you refresh your memory
to some extent by looking at it there, please? Do you remember that
list of dyes?
Mr. PIOiKBEL. I have seen that list.
Senator ROBINSON of Indiana. You gave that list to Senator King.
did you not?
Mr. PCKXIELL. Possibly. I don't recall.
Senator ROBINsoN of Indiana. Where did you get the list?
Mr. PIcKRMTJ. I probably-if I gave him that list, if I prepared
that list it was prepared-I will tell you how it was prepared if I
prepared it. Probably I did. First, the production statistics were
taken from the census of dyes, prepared by the Tariff Commission,
1920. The domestic prices were probably obtained from H. A. Metz
& Co.; also the pro-war prices. Those dyes undoubtedly represented
25 dyes of the principal production. I took them, not as picked, but
25 chief colors in production in this country, which represented 76
per cent of the total production-showing that that is 75 per cent or
three-q|arters, as a basis for statistical purposes.
Senator RoBixsoN of Indiana. Subsequently you put this same list
in yourself, did you not?
Mr. PoiciuEL. Did It I don't recall.
Senator RouiNsot. Yes; you did.

Mr.

PIORRELL.

All right.

Senator RlonlsoN. of Indiana. So that you wyere then working very

closely with Senator King, were you not?
Mr. Pci aCE. I probably prepared some material for him.
Senator RonINso-, of Indiana. In 1922 did you not spend a lot of
time in Senator King's office and. inake it your headquarters?
Mr. PICKIRELL. No, sir.
Senator RoInasox of Indiana. Who was Senator King's secretary
at that time?
Mr. PiCimRELL. Mr. Russell.
Senator Ronivsox of Indiana. Samuel Russell?
Mr. PICKUF.LL. That is right.
Senator RoBIxsox of Indian. He is not there any longer, is lie?
Mr. PICUIELL, NO, sir.
Senator Ron!~sox of Indiana. Did you ever see him in there?
Mr. PiWctrLL. I have seen him there; yes.
Senator Ronixsox of Indiana. In Senator King's office?
Mr. PICKIELL. Yes.
Senator Ronmrsox of Indiana. How often did you see him there?
Mr. PIORIELL. How often?

Mr. Roiuxso.; of Indiana. Yes.

LOBBY INVESTIGATION

2017

Mr. Pxom=. Probably whenever I was in his office.

Senator RoBINsoN of Indiana. That is the point. How often were

you there? We are trying to find out from you to see if your story
is the same as his.
Mr. PioxnRELL. I can't recall how often I was there. I was there
probably off and on.
Senator RoBizsoN of Indiana. How many times?
Mr. PIORUELL. I can't say.
Senator RoDiNsoN of Indiana. Have you any idea of the number
of times you were there?
Mr. PIOR101ELL. No; I have not.
Senator RoBiNsoN of Indiana. You have forgotten completely, is
that it?
Mr. PICKIELL. Well, the dye embargo was under consideration

by Congress from March 4, 1921, to September 22, 1922, a period

of a year and a half.
Senator RoBiNsoN of Indiana. And during that whole period you
made your headquarters there, did you not?
Mr. PICKnELL. No; I did not, any more than I made my headquarters in any other Senator's office that I might go into.
Senator RomNsox of Indiana. Any more than-what other Sen.
ators' offices did you make your headquarters in?
Mr. PICKIEELL. I did not make any headquarters in any Senator's
office.
Senator RoBixsox of Indiana. Then again I ask you, can you tell
how much time you spent there?
Mr. PICKHELL. No; I can not tell you. I don't recall.

Senator Ronimsox of Indiana. You don't remember. Can you tell

how much time you have spot there this last year?
Mr. PICKILI,. No.

Senator RonINsoN of Indiana. That is closer down.

nearer.

That is

Mr. PCKRELL,. I can't tell you that. If I am in the city, since

1922 up until 1029 1 dropped up and paid my respects.

Senator Ronixso. of Indiana. Did you ever keep that appoint.
nient with the newspaper iman that you arranged to keep?
Mr. PicmLL. I told you I could not get his name.

Senator Roixsox of Indiana. Are you going to keep it now that

you know his name, Frank K. Boal?
Mr. PIcipFFT,. If you will give me his name I will be glad to do it.
Senator RoBIxso. of Indiana. He is of the Harrisburg Telegraph.
Mr. P1CKR,U.

Yes.

Senator Rionitxso. of Indiana. I have a letter in my hand that

purports to be it copy written by you on April 15, 1029, to C. P.
Peters, Esq.
Mr. PIcitnP.LL. Yes.
Senator Ronixsox of Indiana. President Synthetic Nitrogen Products Corporation.
Mr. PICKUELL. Yes.

Senator RoniNsox of Indiana (reading):

I2elose1 herewith a iliotosilat c)py of certain
MIy dear lters: 'Th' hI
regulitlons, wilch I trust ttt yott will regpiu'd its confidentlud.
Oovernuwtme
With kildest liersomnl ri'girds, I ann, very truly yours.

78214.-30--rr 5-10

2018

LOBBY INVESTIGATION

What were those certain (Jovornniont regulations that should be

regIrded as confidential?
Mr. PcRnitEL. Those were the regulations on consular invoices.
Senator Roniz'sox of Indiana. On what?
Mr. PO1CEI.L. The preparation of consular invoices.

Senator Ronzxsox of Indiana. Consular invoices?

Mlr. PIOici,1.L. Yes, si'.
Senator Ronixsox of Indiana. Why would that have to be confidential ?
Mr. PxognEiu. Well, the only matter about it being confidential
was that these are regulations that aire issued to Government officials
and he just simply regarded them as such. He handed them around
to everybody in the office. .
Senator ftonJxsox' of Indiana. Another letter of August 30, addressed to Mr. Peters, from which I quote this paragraph:
Within the next two or three days I will confer with Government officials

as to the administrative Interpretations of these provisions, and will advise you.

Who were the (Government officials?

Mr. PIoKItnr.J. In the Bureau of Customs.
Senator Ronxso. of Indiana. Here?
Mr. PwKnELu. Yes; in Washington.
Senator Rom.Nsox of Indiana. Whoni there did you expect to confer with?
Mr. Piicitut . I think it was Mr. Ashworth, who haIs charge of
the classification. It was a question of the classification phraseology.
Senator Ronixsox of Indiana. You attended a meeting of the importers and traders council right along?
Mr. PiviutmL. That is right.
Senator RoBixsoN of Indiana. I wish you would prepare a state.
ment of the amount of money you have received and let it go in under
oath as your statement.

Mr. PicKitun,. All right.

Senator Ron.xsox of Indiana. From these various companies, since

January 1, last; from January 1, 1929), tip until December 31, 1029.
Mr. PICKtIEL,. Very well.
Senator RoBi.sox of Indiana. Both salaries, retainers, and expenses.
Mr. PwInPn T,. Very well.
Senator Rolxsox of Indiana. The total.
Mr. PICKUL. Yes, sir.
Senator RonBisox of Indiana. Mr. Pickerell, don't you think it is
rather peculiar that you, at Washington, had so little correspondence
at your office?
Mr. lX0cnEL,: No.

Senator RomsoN of Indiana. You have practically no correspondence.

Ml lPICIClUPL.. I have sonic; not a great deal.
Senator RIoniNsox of Indiana. But very little.
Mr. PiKciWJm,. Very little. That is true.
Senator lojiIwnsox of Indiana. Tliat is till for (he present, but I
may want to ask you sonic quest ion-s to-morrow.
Senator BLAIm*x. You (id not use any modern incinerators, thenI
Mir. P1oiutELL. No, no.

~.

,'~.

LOBBY IN VESTIOATION2

2019

Senator BLA.N.E. Doctor Pickrell, do you know Chester GrayI

Mr. PICUIELL. Yes.

Senator BL.INS. Who is lie?

Mr. PicinmrL. He is Washington's representative of the American
Farm Bureau Federation.

Senator BLtI~i..Has Mr. Gray over discussed any schedule in

the pending tariff bill with you?

Mr. PcIunELL. Yes.

Senator BLAIxP. Aproximately when?

Mr. PICUnELL. Wel, at different times.

Senator 13LAINE. The first time.
Mr. PicnEL,, 'The first time I would say it was during the spring,

probably March or April .something like that, of 1929.

Senator BLAI.Y:. Did Chester Gray go to you or did you go to
Chester Gray?
Mr. Picinir.,. I was introduced to him, and I think I spoke to him
fl11rt.
Senator BLAIN-R. Where was this introduction?
3r. PICHR.ULL. I was introduced to hint outside the hearing room
of lhe Ways and means Committee.
Senator BLAINL'. Did you have any conversation with him then
regarding any feature of the tariff?
Mr. PWKICELL. No.
Senator BLAVN9. Not at that time?
Mr. PIcuuELr,. No.

Senator BLAINE. When was the next time you saw Mr. Gray?
31r. Pwxm:LR,. Oh, it was probably two or three months subsequent
to that.
Senator BrLANNS. Where did you see him?
Mr. PWICU.L,. I steppe(] into his office.
Stenator BLAINi. His office in the city of Washington?
Mr. Picin.Lr,. Yes.

Senator ]IAiNE. How did you come to go to his office?

Mr. PixcutEr.t,. How did I come to go to his office?
Senator BLAIXE..

Yes.

Mr. Pc1mtL,. I went to speak to him about the tariff on fertilizers.

Senator IItiNE. At his requtesti or on your ownt initiative?
Mr. Pcqwtu:LL. On my own initiative.
Senator BLAnxi:. The tariff on fertilizer is included in the chemical
schedule?
Mr. PCIcKmi. That is right.. It i24 it part of it.
Senator BLAINE. Is M1'. (iray a chemist?
11r. PIIinELL. No.
Senator
lie has no familiarity with the chemical comlm,,rxu:,
ponients of fertilizer?
Mr. PIC{IUELL. No.
Senator BLA NE. What was your discussion with Mr. Gray in his
office at this time when yon saw him?
Mr. PlIcImr,. I (liscuessed with him the question of the tariff
possibility on fertilizer. Tihe American Fertilizer Association had
isked tit,; Ways and Means Committee to put a duty of 20 per cent
oi mixed fertelizers.
Senator 11LAuNo. That is a reduction, is it?

2020

LOBBY INVESTIOATION

Mr. Ptcipmu. ANo; an increase. At the present time all fertilizers

are free. except about two fertilizers In the chemical schedule, men.
tioned by naine. A representative of the National Fertilizer A.so.
ciation appeared before the Ways and Means Committee and asked
for a duty of 20 per cent on mixtures containing two or more plant
foods.
Senator BLAI.XE. Did von represent those fertilizer companies?

Mr. PIxCnmELL. No. The Synthetic Nitrogen Products Corporation

wore opposed to this inereas in duty.

Senator BLAINIE. You represented the Synthetic Nitrogen Prod.
ucts CorporationI
Mr. PoRRELL. Yes, sir. I spoke to Mr. Gray relative to that pro.
posal.
Senator BLAINE. Did you solicit him to go before the committee?
Mr. PicnELL. No.
Senator BLAIXE. What was his reaction to your proposal?
Mr. PICKREL. He was opposed to it; was opposed to increasing
the diuty on fertilizers. Ile asked the Ways and Means Committee
to put all fertilizers on the free list.
Senator BLt,,m. And you were opposed to the increase?
Mr. PicORELL. To the increase in duty; yes.
Senator BLAINE. Representing your clients?
Mr. PIoKnELt,. Yes.

Senator

BLAIN.

When next did you see Mr. Gray ?

Mr. PicitEmr,. Oh, it is hard to say. Sometime during the sum.

met. I think I saw him at the time of the hearings before the
Senate Finance Committee.
Senator BLAINE. I mean, when next did you see him and talk with
him personally, not at the Finance Committee?
Mfr. Pc1RFjAT,. Well, it was at that time, when I was in Washing.
ton. I N%
,.s in his office at. the time. of those hearings.
Senator BLAI.XE. Did you go to his office on your own initiative,
or at his suggestion ?
Mr. PicKirT,,. No. I think I went on my own initiative.
Senator BLAiUN-:. Did he ever discus with you the )reparation of
an amendment to the chemical schedule, relating to fertilizers?
Mr. PbourI.
,. Ye..
Senator Br,,x . When was that?
Mr". PICitELT,. Well, ie discu.sed that sometime during the sumi.
met and fall. He discussed it with me on two or three occasions.
Senator Br,13,Axs. Did he ask you to prepare an amendment?
Mr. PtcmLT,. le asked ine tor my suug estion as to phraseology.
Senator BrA4 Im%. As to the phraceologV of an aniendinent to the
chelicallcl sclhedile. relating to fertilizers
Mr. PlC1tRVT,. Yes.

Senator B1.Al*XE. What respon-se did you make to that request?

All.. PwluE:Lt,. I made a suggestion. I suggested that that sug.
gestion be .tl.mitted to the Connuissioner of Customns, for an
Op~I1110I).

Senator ]31.AIXN. Was that (lon'?

Mr. PICu411LJ,. It. was.

Senator BLANiE. Who drafted that suggested amendments

Mr. PiCKIELL. I think it was drafted by; both of us.

2021

LOBBY INVESTIOATIO2

Senator B1lAx.x. In Mr.Gray's office?

Mr.PIcuaErt. Yes,
Senator Br, Is,. What was tile opinion of tile enstons officials?
.Mr. PicKB EL,. 'Thatthe amendment wohl4I aCce)niplish tle llrpose.
Senator BLAt'F.. And that I)Url)oe was to entirely elinlinitte the
tariff ol fertilizer, or just redciwe It?
Mr. Pwnic itr,.
It would put all mterials used chiefly as fertilit.
lizer, on the free
Senator ]3LAINi.:. YOU Wore theil(lIs1ilt,

by Mr. (ray

for the

purl-pose of working out al aliiendn. that would aecolmjish free

trade in chemicals tiat go into fertilizors, and all fertilizers, do I
understand talit is torrec't).
3i . Pl(!II.il,I
thinl tlii 'ilkleln(llillent was just for like tiiat(rillis
that were to be lled as fertilize'. I .lionlil not say aill aliellllent.

I sholldl sav
Senator

"

jphra.c-ology ".

L[,AINE.

hen

'lat beltuns of the aetulimentl

after tile

ou1stolins oflhiil.s approved it, or lit let.t sigge-sted it would be practical from l

admiuii.strative standpoint ?

Mir. Pl Ie
II. Senator. fist I askel the cllstolns olhfiltsii for an
uioflicial o)inio as to W'etier this ]li'aseol)gy wotld accomplish

the pnrnpose. an11d not distoirb any comnmodities in the chemical

schedules. provided they were itsed for other
I obtained
Iurpos..
that unoileial opinion, and I gaove that to Mr. Gray.
Senator h,.LAN:. Y(n gave flat opinion to 'Mr. (4it'av
Mr. Picit.T,. 'hie unofficial opinion, yes. It was not in writing.
It. was just verbal.
Senator B1LAIN*,. I understand. Did Mr. Gray then draft an
amendinent in form that was to be proposed to the chemical schedule, relating to that?
Mr. PtcK.LT. No.
Senator BLAIN*:. Had you worked out an aniendneut'
Mr. PICHItLL. We worked out this phraseology, Senator.
Setator Br,AINx.
Phraseoloy o0
f what Requesting an official
opinion or an unofficial opumon or on phraAeology- relating to an
amtendnient to the tariff senedule-11r. PI('IIIELL. WeUl'it would be phraseology relating to an anienid-

ment to tie tariff'b111

Senator BAIx . Now, the phraseology must have been put on

paper,
was it not,.
M[i. PxolzuiJi.
Yes;"

Senator LBxkz.' Now, what. becAme Of that I

M. Pi-mina. I gave it to Mr. Gray ad Mr. Gray submitted it to

Senator Robinson.
Senator BAINE. Did you receive any pay for doing that work?
1Mr.
''ictiw..
No. Incidentally, this part icutlar *amendnient is of
no-the Snthetic Nitrogen Corporation, my clients t66 hot interested in this amendment. The representative so testified before tie
Senate Finance Committee, that they are not interested in whether
these particular products are free or dutiable.
Senator l3TAuN,. But, Mr. Pickrell, the Farm Bureau is interested.
Mr. PICiK ELM. Yes.
Senator BlAiN:. And it is assumed that the farmers tre interested.

Mr. luu{'mlni,. Yes.

We were glad

todo it for tieni.

2022

LOBBY INVESTIGATION

Senator BLAI.I:. And you worked out the phraseology in Conijee.

tion with Mr. Gray, for an amendment that the representative of Oile
Farm Bureau Federation desired proposed as an amuendament to tie
chemical schedule.
Mr. PICIiRELL. Yes.
Senator 131,Ax,:. And for that you received no pay whatever?
Mr. PctutELL. That is right.
Senator BiAix . Did you ever discuss that particular amendment
with Senator Robinson?
Mr. PICKHuELL. I discumsed the material or the memorandum pre.
pared, which explained whether or not this pluiseology would ac.
complish that purpose, and of court decisions upon which this
phraseology was based.
Senator BLAINE. Was that a verbal discussion that you had with
Senator Robinson?
Mr. PImaIvr,. I had a verbal discussion, and I gave hin a memo.
random oi the matter.
Senator BLAINE. You gave him this memorandum which you
have described ais one containing data in support of the amendment?
Mr. PICICRELL. That is right.
Senator BLAIXL'. And you left. that with Senator Robinson?
Mr. PCiIt.LJJ. It was in support of this phraseology. I have
never seen any amendment.
Senator BimxJi.. Well. it is an anntndment. We do not introduce
phraseology, as such. We introduce amendments in the respective
Houses. So that it had relation to this memorandum that had
been prepared by you and Mr. Gray in Mr. Gray's office; I under.
stand that to be correct.
Mr. Picm{IIELJ,. Yes.
Senator BLAINE. And that material, the data in support of that,
was left by you with Senator Robinson?
Mr. PIOKRF.LL. That is right.
Senator BLAnv.. Did you ask the Senator to return it to you?
Mr. PxCxniw .. No.
Senator BLAN1q. There was nothing improper about it at all?
Mr. PICRETLL. NO.
Sehator BLAI.E. Now, this expense for which you have received
reimbursement-just briefly and hi a general way state for what purpose the expenses were incurred.
Mir. PICKNiELL. They were my traveling expenses.
Senator BLAUKE. Your personal traveling expenses?
Mr. PCKtiELL. That is right.
Senator BLAiXJ:. The personal traveling expenses of anyone else?
Mr. PicmitFL. No.

Senator BLAINE. What else?

Mr. PicitIL,. My hotel bills.

Senator Bllimx. Yout personal hotel bills?

Mr. PtcmuRELL. That Is right.
Senator BLAI,. Did it include dinners given to groups?
Mr. PCKnELT,. No.
Senator BLAME. Merely your own personal hotel bills for room

and such service as you ordinarily obtain at a hotel?

Mr. PctELL. That is right.

2023

LOBBY INVESTIGATION

Senator BIAINE. For living expenses?

Mr. PlCKIIF.L. Ye' sir

Senator BLAIVIx. What other expense?

Mr. I IEoxLa,. Maybe for a taxicab.
Senator BLAINX. For whom?
Mr. Px(,autri. For myself.
Senator BIA[.N-. Your personal taxicab expenses?
Mr.
, YeS, sit.
Senator BLAI Xv. What else?
Mr. PcivW.L. That is all that I can recall.
Senator BLAINE. Did you pay out any money to anybody for
doing any work for you?
Mr. PXCI(nnLL. No.
Senator BlAIm-. Or for any of your clients?
Mr. PI(OREL,,. No.
Senator BLAINX. Mr. Pickre)l, when did you begin to interest
yourself in the rate features of the tariff bill?
Mr. Ikicititnsi,. Of the present bill, Senator?
Senator BLAIXNE. Yes. I am not speaking of the administrative
features. I am speaking of the rate structure. When did you first
interest yourself with reference to the rate structure of the present
tariff bill?
Mr. PCICnRF,,I,. When I heard that there were going to be increases
in the rates of duty on certain pro(lucts in the chemical schedule.
Senator BLAIX:. That was probably after the Committee on Ways
and Means reported it out of the committee in the House.
Mr. Picinw.Lt,. No. I heard that certain interests wIere going to
ask for increases, prior to the hearings before the Ways and Means
Committee.
Senator BLAI-. Oh; proposals for increases?
Mr. PICKRELL. Yes.
Senator B&,AiN.J. i't:iW.
d4 Ciwrceive such information?
Mr. PCKmmJji~i
Z
.
nical trade and also at
a meeting of thi,
citation.
Senator
t were t
'
Mr. Px
.1Peet

Air.

Sen
Mr.

We*omestl-

NIVE
OXRLL. There

synthetic organic
Senator JJLAINi

importance in the

y-

~atues

Pont de emz Co.

'-" What is their relative

this country?

LOBBY INVESTIGATION

Mr. Pirouuwu. They are the ones who produce dyes and sellSenator BLAINE. Are they large or small? Do they rate among
the largest
Mr. PIORRELL. It is an association of some of the largest.
Senator BLAINE. It is an association of the larger producers?
Mr. PORELL. Yes, sir. It is an association of certain manufac.
turers.
Senator BLAINH. NOWI what other interests?
Mr. PORcELL. There is the Newport Chemical Co., and there is
the Union Carbon & Carbide Co.
Senator BLAINE. Who controls the Newport Chemical Co.?
Mr. PIcxRI

L. It is owned by people by the name of Sleisinger,

as far as I know.
Senator BLAINE. You are getting pretty close to my own state,
are you not?
Mr. PIoKRELL. That is right.
Senator BLAINE. They were interested in getting an increase?
Mr. PoRRELL. That is right.

Senator BLAINE. Now what other large concern?

Mr. PixOREir. The Union Carbon & Varbide Corporation.
Senator BLAINE. Who controls that, mainly?

Mr. PxCKREU,. Well, I don't know. It is a large corporation, with

many stockholders and many subsidiaries.
Senator BLAINE. Well these companies which you have mentioned have been controlled by families or financial groups that
have been cooperating
Yes. together, over a great number of years?
Mr. PImKELL.
Senator BLAINE. And are known as groups?

Mr. PIORRML. Yes.

Senator BLAINE. Do you know what group controls the last.mentioned organization?
Mr. P1oxRztLL. No, I can not state.
Senator BLAINE. Now, what other large chemical producers were
interested in an increase in the tariff?
Mr. Pxcun iz. The Allied Chemical & Dye Corporation.
SenatQr BLAINE. Mainly, who controls that corporation ?
Mr. PIORRELL. Well, that is a stock corporation. It is not a family proposition. It is a holding company of five concerns.
Senator BEAIzNE. That is a combination of five subsidiary coin.
panies?
Mr. PIORREL.

Yes.

Senator BLAINE. IVho are interested largely in that company?

Any group of individuals?
Mr. PortELL. I don't know.
Senator BLmANn. What other large chemical producer?
m. That is the Monsanto Chemical Works. There is
Mr. Pommi
the Mallinkrodt Chemical Co.; there is Merck & Co.
Senator BLAIzN. Are they large producers?
. Yes. They are large producers. There is the
Mr. PoxUmK
Mathieson Alkali Works.
Senator BLAiNE. Do you know of any financial groups that are
particularly interested in any of the companies you have just men.
toned?

to
to

LOBBY INVESTIGATION

2025

Mr. PPR.iELL. No. I think they are all stock companies.

Senator BLAINE. What other companies?

Mr. POKRELL. Oh, there are several smaller companies.

Senator BLAiNE. I will not go into that. I will not take up the
time. There were a number of other smaller concerns?
Mr. PxcKELrL. Yes, sir.
Senator BLAINE. Who are chemical producers, who were seeking
an increase in the tariff on chemicals?
Mr. PCKLE.LL. That is right.
Senator BLAINE. Now, do any of those companies, either the holding companies or the subsidiary companies belong to the Chemical
Foundation (Inc.)?
Mr. PiXocitEU. No.
Senator BAINE. They do not?

Mr.

PICiCELL. No.

Senator BLAINE. Do they own stock in the Chemical Foundation

(Inc.)?
Mr. PICELL. Yes, sir. I imagine most of them do.
Senator BLAiNE. Do you know whether or not the Du Pont interests
have a very controlling influence in the Chemical Foundation
(Inc.)?t
Mr. Pxoicnnu They are one of the stockholders. I don't know
what their influence is.
Senator BLAINE. You know what the Chemical Foundation (Inc.)
is?
Mr. PxcRRELL. Yes.
Senator BLAINE. I just want to ascertain if you can live me some
facts in connection with the Chemical Foundation (Inc.). I am
going to quote from the prospectus of the Chemical Foundation
Inc) :
The company Is a Delaware corporation, capitalized at $M0,000, of which
$400,000 Is preferred stock and $100,000 conimon stock. Each of these stocks
Is limited so that it can receive no more than 0 per cent dividends.

Do you know anything about that?

Mr. PxoRRELL. About their dividends?
Senator BLAIN&. No ;about this organization.
Mr. PxConELL. Yes; I know something about it.
Senator BLAixn. They are organized along that line?
Mr. PcsiCELL. That is right.
Senator BLAINE. It is under the direction of a board of trustees, as
I understand it.
Mr. PIOKRELL. That is rIght.

Senator

BLAIN

(reading)

The parties in whom, under the voting-trust agreement, the control of the
foundation will be lodged are the following gentlemen, who have been serving
for many months as an advisory committee who has p,;sed upon all sales
made by the Allen Property Custodian.

And then is .given the name of Otto T. 'Bernard, chairman of the

New York Trust Co. Do you know Mr. Bernard?
Mr. P1OKRELL. I know of him. That is all.
Senator BLAINE. Has he any interest in any chemical company?
Mr. PioxEzm. Not that I know of.

2026

LOBBY INVESTIGATION

Senator BLAINE. You probably do not know that. Hon. George

L. Ingraham, late presiding justice, New York Supreme Court. Of
course, this prospectus was issued quite a number of years ago.
Mr. PioiclLL. Yes.
Senator BLAINE. Cleveland H. Dodge; B. Howell Griswold, jr., of
Baltimore; Ralph Stone, president Detroit Trust Co. Do you know
anything about their holdings in any chemical production companies
Mr. PocRiELL No j I do not.
Senator BLAINE,. And members of the American Dyes Institute.
What is the American Dyes Institute I
Mr. PIcKc

tli
tiy

or
the
be
too
tiol

E... The American )yes Institute was a trade associa-

tion of domestic dye manufacturers and is no longer in existence.

Senator BLAINE. What has taken its place?
Mr. PICK L. The Synthetic Organic Chemical Manufacturers
Association.
Senator BLAINE. "And Manufacturing Chemists Association." Is
that in existence?

T
$00

Ge
dat

Mr. PICKRELI. Yes.

Senator BLAiNE. What organizations belong to the Manufacturing

Chemists Association? Do you know any chemical production companies that belong to this association ?
Mr. PICKRL. Well, I imagine practically all of the chemical

manufacturers are members of that association. It is the parent

chemical trade association; the oldest.
Senator BLAINE. The prospectus goes on to say:
of
have placed themselves on record as willing to take the entire capital stock
the foundation and have provided In advance so much of the capital as was
required for the purchase of the patents.

Those were German patents relating to chemicals?

Mr. IOKRELL. Yes.

Of
A

the
see0

see
Fo

Senator BLAuIN (reading):

The company Is now endeavoring, under the supervIion of the Alien Prop.

erty Oustodlan, to distribute Its stock as widely its possible among the chemical
and allied Indutries.

to
ti

I understand that these chemical producers became the owners of

the stock, of the Chemical Foundation (Inc.). Do you know anything about that?

bec
$25
Am

Mr. PtoKiRP&.

Senator

So I understand.

BLAINE (reading):
It Is hoped that when this distribution Is complete, no single 8ub.-.rlber will
retain more than $1,000 of the preferred and common stock,

.Now, when did the domestic chemical production become of considerable proportions in this country?
Mr. PICKRELL. That is rather hard to answer without explanation.
Senator BLAINE. Well, was it subsequent to the tariff act of 1922?
Mr. PICKREu,. Pior to that time, ii certain lines.
Senator BLAINM. Was ibsubsequent to the sale of the German patcents by the Alien Property Custodian to the Chemical Founda.
tion (Inc.) ?
Mr. PrcimmuLY. In certain lines it was subsequent to 1922, if I may
explain.
Senator BLAINE. But subsequent to the organization of the Chemi.
cal Foundation (Inc.)I

Cou

the
Am
Am
A.

"S1

inte
Sen
2%
k
Y&

LOBBY INVESTIGATION

2027

Mr. PICkInp.LL. Yes. If I might explain, prior to the formation of

the Chemical Foundation (Inc) the chemical industry in this country was industrial chemicals, and so forth, and dyes, and some of the
organic chemicals were not pproduced in lar ge quantities. but since
the formation of this, dyes and the finest organic chemicals have
been n)oduced in this country in large quantities.
Senator BLAJNE. So that the impetus in the domestic production
took place largely after the organization of the Chemical Foundation (Inc.) ?
Mr. PcKiRELL. Yes.

Senator BLAINE. I find this (reading):

To the foidnatlii the Allen Propirly C'ttltlintI las sold fal tw sum of
$250,000 stlistlitlhill| till of tie Gerninilm dye anad ehtenihall Imitents swelzd by
him.

So then, its a inatler of fact, by a sy-stem of larceny by law of the

German patents, the chemical industry in America hita laid its foundations for its fortunes? Am I mistaken in that conclusions ?
31r. PICHRIzELL. In certain lines of the chemical inditstry that is true.

Senator

BLAMXE.

(reading) :

The patents cover a widew field and number approximately 4.,500.

Have you ever represented any of the interests who are in control
of the Chemical Foundation (Inc.)I
Mr. PCxnmuuL. No.
Senator BLAMEi. Have you ever been associated with any of
them?
Mr. PIcKUELL. No.
Senator BLAzNE,. Are these chemical producers who have been
seeking an increase in the tariff, interested in the Chemical
Foundation (Inc.)?
Mr. PICKRELL. I think practicallky all of them own stock in the
:Chemical Foundation.
Senator BLAI~x. Well, the ownership of stock gives them a right
to the receipt of nonexclusive licenses to manufacture chemicals
tnder the German patients. I understand that these industries who
became the beneficiaries of the sale of the German patents for
$250,000., ort of put their loot on the ground that that was good
Americanism and patriotic. Do you know anything about that?
Mr. PxonRFxL. That was the argument.
Senator BLAIXE. That was their cry? In other words if they
could go out and steal, practically, by hw, a system of legal larceny,
the German patents, so that they might promote their interests in
America, that was particularly patriotic anti one hundred per cent

Americanism. That appears to be the situation?

Mr. PcKtutL. That is right.

Senator BL.AIXE. Now, there appears in the record the name of

Senator Robinson," in connection with the amendment that I
interrogated you about. There are two Senators Robinson in the
Senate. Which'one was the one to whom you have reference?
Mr. PcwReLt. Senator Robinson of Indiana.
Senator BLALm. Has the amendment, the phraseology of which
you and Mr. Gray worked out, been introduced, to your knowledge?
Mr. PCKnELL. I understand. I have not seen it.

2028

LOBBY INVESTIGATION

Senator BrAI.E. You understand it has been introducedI

Mr. PICHRELL. YeS.

Senator BLAI.v. But vouhave not seen it?

Mr. PICKRlELL. That. is right.
Senator Ronixso." of Indiana. I can tell you about that. It has
not been introduced yet, but it will be, I think. It has been put
down as a proposed amendment, andl I think it will be introduced,
because I am for it. It. n'rings fertilizer into this country free, for
the henelit of the American farmer anl I am for it and intend to
introduce it.
Senator BLAIN.. I think the Senator from Wisconsin will heartily
support the Senator from Indiana on that proposition.
Senator RoBin.so

of Indiana. I only interrupted you because I

am better authority on that than the witness as to whether it has beed

introduced or not.
Senator BLAINE. Certainly. It was not especially material, except
that I wanted to know about the status of the amendment and who
was handling it.
Have you any further questions?
Senator RoniNsoN of Indiana. Yes; when you have finished.
Senator BLAIN. I am through.
Senator RowxIsoN of Indiana. Now, let us see about your visit to
me. I am interested in that. You came to see me shortly after you
commenced to get this notoriety in the newspapers, did you not,
about three or four weeks ago?
Mr. PCUKELL. About that time.

th
an
IV
of
can

in
me
de,

Ni
Th

Senator RoBINsoN of Indiana. That was your testimony and that

is as I remember it. Who came with you?

Mr. PICKRELM. Mr. Gray's assistant Mr. egg.
Senator Roixsox of Indiana. Why did not Mr. Gray come
himself I
Mr. PIOKELL. Mr. Gra was out West.
Senator Ronivsox of Indiana. And who was the assistant who
came with you?
Mr. PCKRELL. Mr. Ogg.
Senator RonINsoN of Indiana. He is cf the American Farm Bureau
Federation?
Mr. POKREL. Yes.
Senator RoBixsox of Indiana. Y ou came over to the Senate
Chamber?

for
fer

Mr. PICeRHELL. That is right.

Senator RonLusox of Indiana. And Mr. Ogg sent his card in?
Mr. PonFLL. That is right.
Senator RoBnso of Indiana. And I came out and he introduced

the

Mr. PIcXBELL. That is right.

Senator RontxsI of Indiana. You remember that?

re.
pua

me to you?

Mr. PICKnELL. Yes.

Senator RoinaisoN of Indiana. Do you happen to remember that

that interview was terminated almost immediately and that there
was no discussion of any kind, except my statement to Mr. Ogg
that I was for the amendment and would introduce it and had it
ready to introduce, and then I think I mentioned to him also some-

Wal

car
int

LOBBY INVESTIGATION

2029

thing, about, the legal decisions on that question, where there was
any discriminatory matter in connection with one item or another?
Was not that the sum total of the'discussionI
Mr. PxoKRzLL. This, Senator, is my recollection of what transired. Mr. Ogg sent in his card. First he called up your office.
Your office said it was advisable to see you-to call you off the floor
of the Senate. The card was sent in by Mr. Ogg to you, and you
came out, and Mr. Ogg introduced you to me, and introduced me
as repre enting the Synthetic Nitrogen Products Co., as a technician
in this thingSenator RoBINsoN of Indiana. No. He did not introduce you to
me, as I remember it as representing anything. He just intro.
duced you as Doctor Plckrell, and I said, "I have heard of you."
Wasn't that the way it was?
Mr. PoRELL. Ife introduced me as representing the Synthetic
Nitigen Products Co., and as being a technician on this matter.
That is the language he used, and on whom the Farm Bureau had
relied.
Senator RoBINsoN of Indiana. That is possibly right.
Mr. PjicOREu I told you at the time this fact, that I took
your letter to the Comnissioner of Customs and got an official reply
from the Commissioner of Customs back to Mr. Gray.
Senator BLAINK. I thought you said it was unofficial.
Mr. Pxcicuii. It was a liter one. I first got an unofficial opinion.
Senator ROBINSON of Indiana. Now wait. Let us get this straight.
I wrote a letter, as I remember, to Mr. Gray.
Mr. PIOKtL. That is right.
Senator RoBINsoN of Indiana. On the question of whether an
amendment of this kind would cover the question of bringing in
fertilizers and the ingredients of fertilizers, when used strictly for
fertilizers.
Mr. PtcKnL. Yes.
Senator RoBINsox of Indiana. Under this amendment, whether
that could be done or not.
Mr. PicKni

m. Yes.

Senator RomsoN of Indiana. And asked for an opinion from the

department on the question.
Mr. Pioiuz. That is right.
Senator ROBzsoN of Indiana. You mean to say that you took
the letter that I wrote to Mr. Gray, to the department?
Mr. Pxcxiu. I took the letter that you gave to Mr. Gray, which
was written to the Commissioner of Customs for an opinion.
Senator RoBINsoN of Indiana. Yes, that is right.
Mr. PtCmm . And I got from the Commissioner of Customs the
reply to you, saying that this phraseology would accomplish the
purpose.
Senator ROBINSON of Indiana. Let us get this straight. ' You
carried the letterI Mr. Gray gave you the -letterI
Mr. Pxojqtx. That is right.
Senator RoBiNsoN of Indiana. That was before you had been
introduced to me?
Mr. PtoX
mL.Yes, sir.

2030

LOBBY INVESTIGATION

Senator RoBINsox of Indiana. You carried the letter over to the

Customs DepartmentT
Mr. PCKi11rF.. Yes; that, is right.
Senator Romn.sox of Indiana. And got an answer from them to
me; is that the ideaI
Mr. PO1HELL. That is right.
Senator RoniNsov of Indiana. To my letter?.

Mr. PICKRELL. Yes, sir.

Senator RoB.vso.s"of Indiana. Well, that is very interesting. I

had not known that.
Mr. PICREL,. Yes; that is true. I stated that fact to you-not
in this detail at this conversation, but I said "Senator, here is a
memorandum relative to this phraseology." You said you would
like to have some material from Mr. Gray, and Mr. Ogg told you
Mr. Gray was out Vest. You said "1 am interested to know
whether or not the material here, which you have got here, willp
show that this amendment will accomplish the purpose; that ist
whether or not it will provide for these products. f 'ee of duty, notwithstanding the fact that they are mentioned in the chemical
schedule." I told you that it would. I said that there was a
Supreme Court decision which hold, in a similar case, on all fours
with this proposition; it held that potassium sulphate, although
mentioned by name in the chemical schedule, when chiefly used as
manure, was free of duty, and that there were court decisionsdecisions by the United States Court of Customs and Patent Appeals.
Senator Roni-sox of Indiana. I think that is substantially correct,
and I think that is practically the whole conversation.
Mr. PmtKILL. That is right.
Senator ROBINs o of Indiana. And then the interview was
terminated.
Mr. PICKELT,. Yes.
Senator Ro .Xxsoxof Indiana. I told you I could not talk to you
longer, and left.'
Mr. PICKWP.L. There was one other thing. You asked if Mr.
Gray would write you a letter, I think.
Senator Ronnssow of Indiana. That is right.
Mr. PiCKiRELT. Mr. Ogg said he would speak to Mr. Gray about it.
Senator RoBINsox of Indiana. Who was then out of the city?
Mr. PIClHRELL,. He was then in the West.
Senator RoBInsox of Indiana. Now, Mr. Pickrell, I think that is
correct, but I want to now suggest to you what my impression was
at that time, and I am convinced it was true since then, in the light
of what has taken place here. As a matter of fact, you were anxious
to come and see me so you could tell somebody you had seen me,
isn't that'trueI
Mr. PCirRPLL. Not at all, Senator. Here is the pointSenator Ronxso of Indiana. If that is not true, why have you
had it brought out this morning-a matter of such inconsequential
imports
Mr. PICHREL,. I have not had it brought out, Senator.
Senator RoniNsoN of Indiana. Well, it was brought out some.
where. Didn't you tell it? I have no objection to your telling it,
but did you not tell it?

ph

ma

wi
hi

qi
sen
of

on

ii
cor

to

ad

LOBBY INVESTIGATION

231

Mr. PzCKnrEL. I might. have mentioned it; yes.

Senator ROBINSON of Indiana. And mentioned me as one of those

that you had come to see in your lobbying activities?

Mr. PICKnLL. I mentioned that this morning.

Senator RoBiNsoN of Indiana. It was a 2-minute interview and it

was after all of this notoriety of yours was in the newspapers; isn't
that true?
Mr. PIro iELL. I thought it was only proper, in view of the publicity, that I tell to you the fact that I took this letter. and also that
if I prepared anything in the way of material relative to this
phraseology, that you know about it.
Senator RoniSOx of Indiana. You knew I was going into this"
matter at that very moment that. we discussed at length this morn-

ing, did you not?

Mr. PiCKmELL. I don't know whether you were or not.

Senator RoBiNso.x of Indiana. And you came down to see me

purposely, because you knew that.
Mr. PimKELLt. Not necessarily.
Senator RomsoN of Indiana. You wanted to be able to say that
you had seen me. Now that is the whole story?
Mr. PICKRELL. No; that isn't it.
Senator Ronxxsox of Indiaia. That is all for this morning. I
may want to ask you some questions to-morrow.
Senator BLANE. I want to state that the information upon which

I based my interrogatories did not come from Doctor Pickrell, the

witness. t never knew him and never saw him until he toolc the
witness stand this morning and never had any communication with
hiai, and he never had any with me. I think the information was
quite well broadcast among a large number of newspaper representatives, and I am usually not in the business of giving certificates
of character, but I think the act of the witness in presenting the
information and the assistance that lie gave to Mr. Gray was highly
commendable, for a commendable purpose, advocated by the Senator from Indiana. I think the witness, in all fairness, is entitled
to have that statement go into the record.
Senator Ronixsox of Indiana. Are there any other witnesses?
Senator BLAINE. It is almost half past 12. I think we had better

adjourn until to-morrow at 10 o'clock.

(Whereupon, at 12.20, the committee adjourned to meet to-morrow, Wednesday, January 115, 1930, at 10 o'clock a. m.)

Th
('at ra
Pr"
and
II. Hi.

Ali
Se

('I

who
se:
have
oath.
Mr

Se
quest
Mr
se
Cara,
you

a see'
office.
W
Mr
ence.
Se

ence,
Mr
correSe
Mr
soat all

LOBBY INVESTIGATION
WEDNESDAY, JANUARY 15, 1930

UNITED STATES SENXATZ,

SUBCOMMItiP.TI

OF TIEP CoMMrrri*E

ON TI

JUDICAu ,

l11las/dngton, D. 0.

The subcommittee miet, plil'.stllat to adjournmnent, at 10 clock

a. m.. in room 212, Senitte 011ice Building, Senator Tiaddeus H.
Catrawray (chairmnan) presiding.
Presellt: Senators (araialy (clinan), Robinson of Indiana,
and(1 Blaine.
Also preset: John G. Holland, 14Nij., counsel to the committee.
Senator CAAwAY. Mr.Pickrell, come around, please.
FURTHER TESTIMONY OF E. R. PICKRELL
(The witness was previously (lily sworn by Senator Caraway.)
Senator lRojxsox of Indiana. You are the saie Doctor Pickrell
who testified yeslerlay?
11r. PWKIELL. The same gentleman, Senator. I don't think I
have changed overnight.
Senator Romxsox of Indiana. Doctor Pickrell, you are still under
oath.
Mr. PICKnEI. Yes.
Senator Ronixsox of Indiana. I wanted to ask you three or four
questions in connection with your testimony of yesterday.
Mr. PIcnRtELL. Very well.

Senator Ro:Nxsox of Indiana. In answer to a question by Senator

Caraway, yesterday with reference to your office force in New York
you stated "I have two young ladies and a boy in the office. One is
a secretary and the other is a stenographer, and I have a boy in the
office."
What is the duty of these secretaries and stenographers?
Mr. PICKRELL. Well, the secretary takes my private correspondence.
Senator RomNsox of Indiana. There isn't any private correspondence, is there, Doctor?
Mr. PtxcciiR,. Vell, I mean my personal correspondence; the
correspondence thjtt I dictate, I dictate to my secretary.
Senator RoBiNsoN of Indiana. Where is that correspondence?
Mr. PICCK L. Well,whatever it is, it is in the files.
Senator RomNsoN of Indiana. There is not. any here, to speak of,
at allI
78214-

0-Pr 5-17

2033

2034

LOBBY INVESTIGATION

Mr. PcIR.IL. There is customs matters-

Senator RonhoqSO. of Indiana. Isn't it true that you have got a

lot of correspondence that is not here, and that you have not fir.
nished to this committee?
Mr. PIemmuE.U. No. That is absolutely not true.
Senator Rom.i.so of Indiana. And Isn't it true that you have
culled
ot and have
secreted it front this committee?
MrI it
I'Niwitt.
No, sir.
Senator I0IRBNSoN of Indina. You have two youulg ladies and a
boy in the office?
Sir. PIc(CIlELJ,. Yes, sir.
Senator Ronimso.x of Indiana. A secretary and a stenographer,
Are they kept buisy all the time?
Mr. lICKuEFv,. W.S. I have coirt clse.S, anti larepare-lo)k tiI
information and data, and so forth.
Senator Romu.o.x of Indiana. All of that inllves corre4Spohldene?
It is the preparation of
Mr. PICKRELt,. Not correspondence.
statistical data.
Senator RIomi'sox of Indiana. Well, where is all this data that
they prepare, then?
Mr. PIwKitL. Data?
Senator Roni.sox of Indiana. Yes.
Mr. Piciu{IIE. Why, some of it I have tip there. Some of it
probably there were n" Copies nmmde.
Senator RomxsoN of Indiana. Slppoe you get that down here.
Mr. Pi(IcBLL. I would be very glad to. I spent sonie time in p'ePaying this (liltst-

Mr

Sc
keep
Mr
pend,
Se
enee
Mr
Se'
Mr
Se:
of yo
Mr.
Sen
Seof yo
Mr.
submul
Se
sen4di

spore

Mr.

Sel
that

had1:

that i
IxI

Senator Ronlisox of Indiana. )octor Piekrell, haven't younpietr

some time in goillg throtigh your files and getting your corre-

spon(lence out?
Mr. PmCK 1F.r. No, sir.
Senator RIomNsoN of Indiana. How long have these clerks been
working for you there'?
Mr. PiciumL,. They have been there since during 1920.
Senator 1I()ImIo-X. of Indiana. Last January I?rm
Mr. PI'RItELr,. Yes; practically.
Sector Ronmsox of Indiana. All of that time you have been
employed by the General Dye Stuffs Corporation-is that the name
of it?
Mr. PICIELJ,. I have been looking after euistomns matter.s.

Sei
belief
Mr
for.
1Mi'.
frt

te.
SeM
M.
fuSen

furnish

Senator Roiimsox of Indiana. And they paid you $5,000 it year

Sem

and yotir expenses?

Mr. PIIKmI.Lt. That is right.
Senator 1h(a1xso, of Indiana. Did you furmish the .4atements
this InIorning, o1 aire you lwepared to, of your exl)enses?
Mr. IICiEL,. No; I have not. I anm not prepared to furnish
them. I will as soon as I return to New York.
Senator RomnisoN of Indiana. You have got a record of those
expenditures, haven't you?
Mr. PIeKRELL. That I can not positively say. I will have to look
up and see. I did not keepSenator Romuxsox of Indiana. You kept no record of your ex.
penses there?

Sen
conne
Sen
of his
ois

Sent

ested"
Sen
for him
all ex
went
sentat'

BOBBYY INVESTIOATION.2

2035

Mr. Ptcjnn.LT,. No exact record.

Senator Roimuso.s of Indiana. Well. " exact record." If you would

keep any tt all it would be exact, would it not?

Mr. PICE.iLT'. Well, I have some notes, probably, as to my expenditures.

Senator Romuxso\ of Indiana. Where are your notes with referenee to your expenditures?
M'. PiCHl1LL. I will have to 1ook it Ill) in ly office.
Senator RoBixsox of Indiana. Why didn't yot bring them along?
Mr. Pi mimtr. Because I was not asked to (o so.
Senator RoinNsox of Indiana. Oh, were you not asked to bring all
of your records along?
Mr. PICewI..
No, no.
Senator CARAWAY. Well, that is all right. Just be seated, Doetor?
Senator Romxso- of In'diana. We would like to see those records
of 1yo1ir expenses.
Mr. PICKmELL. Yes; I will be glad to prepare then) for you and
submit them.
Senator Ronxxsox- of Indiana. But you are still quite sure that in
sending your statements back and forth there was utterly no corresponideuee betwei'n you and your eillhpoyerl
Mir. PUCKELT,. I gave to Mr. HollandSenator Romnxsox of Indiana. No, no. Yesterday you testified
that voil simply put all olnlOit of money Ol a1 slip of paper, that vo
laId 6eel out, or the aliount. of your expenditures here, 1n( milled
that in to your enmloyers. alnd that they, in t urn, w'itut aod
of

explanation, mailed you a check?

kr. PtinI.L. Yes, sir.
Senator Ronimso, of Indiana. Do you expect this committee to

believe that?
Mr. Pwctuk-I,. That is the fact.
Senator RoBixsox of Indiana. What did you make notes about it
for, thenI
Mr. PICK~rJ,. Well, I made notes of what my expenditures were
from time to time, ill order to l)repare this statement of my expendi.
tures.
Senator Romixsox of Indiana. Those notes you need?
Mr. Pwlvnu.;.. I will have to stie if I have them. Certainly.
Senator Roimxsox of Indiana. Now, you think that you can not
furnish the committee with the exact amount of those expenses?
Mr. POKnELT,. I think I can make it amnost exact.
Senator Ronixso of Indiana. Well, let us have that.
Senator CAnAWAY. Of course, we are asking only for the expenses
connected with this tariff matter.
Senator RonpIsox of Indiana. Oh, yes; but I understand that all
of his expenses in Washington are connected with tariff matters.
Mr. PCIERELL. No.
Senator CARAWAY. Let us understand, because we are not interested in anything except his activities with reference to legislation.
Senator RoBixso-. of Indiana. No; btt I think
,.old it
1)e well
for hint to submit to the committee all expense statements he had;
all expenses he had in Washington since January 1 last. when he
went to work for these various companies and became their representative here to influence legislation.

2036

LOBBY INVESTIGATION

Senator CAAWAY. I hope he will do it; but, of course, we are in.

tereste( only in his legislative activities. You submit anything you
have.
Mr. PicRi:%L. Senator, I came down here and took up matters
with the Bureau of CommerceSenator CARAWAY. I think I understand it perfectly. There is no
doubt about that; but if you have it, and do not object to it, just
file it.
Mr. PIC1E-L. I will be glad to.

Senator RoniNsoN of Indiana. Now. lot us see. Your whole ae.

tivity here since last .Jamntry 1 lIrs beeni in connection with the
tarilt'. hasn't it?
Ml PICKRELL. No.

Se

Val
Ge

E
it c

ofll(

Senator RoniNsoN of Indiana. And in influencing tariff legislation

Mr'. Plelcin..-hh. XO, Sir.EQ

kina

Senator RornNsox of Indiana. That is what they hired you for?

Mr. PVtwKlIL. NKO, sir.
Senator Ronmxsox of Indiana. They would have no use for you
for filly other purpose.
Mr1'. PICitIMIE.
That is not true.

Mr. Ronixsox of Indiana. I understood you to say yesterday, Mr.

Viinesu, that after you left Oregon you went with Uaj. A. C. Vanderveer.
Mr. PicigiLL. That is right..

Senator Romnsox of Indiana. And that you remained with Major

Vanderveer Until January 1, 1929?

sto
we
A
X
it
an(
fla

vii
tha

Mr. PcitiELL. That is right,

Senator RoBiNsoN of Indina. And you knew yesterday, did you

vsi,
wo

Mr. PICIIhRELL. I can't say about that.

for

not, as well as you know tn-day, tht Major Vanderveer was the
attorney for the American I. G.
Senator :Romxsox of Indiana. Mr. Witness. do you mean to tell
this committee that you did not know who Major Vanderveer was
or that he was connected with the American I. . as counselI
Mr. PcKnE.ra,. Senator, I do not know the names of his clients.
Senior Ronixsox of Indiana. Oh, no, but his chief client was
the American I. 0.?
Mr. lICHnELL. That I can not say.
Senator RonixSox of Indiana. 'YIou can not say it, but don't you
know it ?
Mr. PwKInELL. I don't know it to be the fact.
Senator RonsoN of Indiana. What did you do with \'Underveer?

Mr. Pcmitun.J,. What did I do with Vunderveer?

Senator RoBNsoN of Indiana. Yes.

Mr. PICKRELL. I worked on various matters in the office. I worked

-u
on some matterv-Senior ROINisox of Indiana. In working on the accounts in the
office. could you not discover that he was the counsel for the American I. (I.t
Mr. PicKnnm. No. The American I...Senator RoBiNsoN of Indiana. Of course, you know the American
I. U. is the German 1. o.

f
IN

we

Ge
Ge
did
Thi

Bi
of (
-I
c

2037

LOBBY INVESTIGATION

Mr. PICmWEu,. The American I. G. was not formed until 1929,

Senator.
Senator RoINSON of Indiana. Of course not.
Mr. PICmLL. After I left Major VanderveerSenator RoiNSON of Indiana. How is that?
Mr. PCICRELL. It was not formed until 1929, after I left Major

Vanderveer.
Senator RoINrsoN of Indiana. Then he was connected with the
German I. G.?
Mr. PtCKUEJL. Not that I know of.
Senator RoiNsoN of Indiana. Not that you know of. How does
it come other people knew it and you did not?

You worked in his

office and were connected with correspondence and matters of that

kind.
Mr. PICKRELL. I did not see his correspondence.

Senator RoBINsoN of Indiana. You saw some of it, didn't you?

Mr. PICKI ELL. Some of it,yes.
Senator RoBiNsoN of In d ia n a. Why, of course you did. I under-

stood you to say when you went to Europe in 1923 that your expenses
were paid by Mr. Hermann Mentz. Is that true?
Mr. PICKELL. That is correct.
Senator RoBINsoN of Indiana. What did you go to Europe for?
Mr. PICKRE.L. Senator, in the act of 1922 they had special labeling
and standard provisions on coal-tar dyes. I went over there on that

matter, to discus with the shippers abroad relative to those pro-

visionis so that there would be no difficulty. There was a provision

that if merchandise was not marked in accordance with those provisions they would not be permitted entry into this country. They
would be embargoed.
Senator ROBINSON of Indiana. Where did you go in Europe?
Mr. PICKRELL. I was in Paris. I was in Berlin. I was in Frank.
fort.
Senator RonsoN of Indiana. Frankfort is in Germany?
Mr. Picitur . Frankfort is in Germany. I was in London. I
went down to Vienna. I was in Switzerland.
Senator RoBINso- of Indiana. Any place else?
M'. PICKJLL. Yes. I was in Holland; inThe Hague.

Senator RoBINsox of Indiana. How long were you there?

HELTL. I was gone about two months.
Senator RoINsoN of Indiana. When you were in Berlin and in
Germany generally do you still mean to tell the committee that you
did not call on the German I. 0. or any of their officials?
Mr. PxcaxRnvj,. The Germain I. G. was not formed at that time.
There was an independent separate concern.
Mr. PIc

Senator Ronixsox, of Indiana. Did you not call on some of the

BifiSix?
Mr.Pcxnv.L,. I called on one of the Big Six who were shippers
of dyes to H. A. Metz & Co.
Senator RomNSoN of Indiana. You called on H. A. Metz & Co.?
Mr. PixCRELL. No, no. I called on a concern in GermanySenator RoBINSON of Indiana. One of the Big Six?
Mr. PxcREicEL. One of the Big Six.

Senator RoBiNSON of Indiana. That is what I want to know.

2038

LOBBY INVESTIGATION

Mr. PICKIF.LL. Farburke vome Moister Lucius & Breuning. It is

called F. M. L. & B.

Senator Rom.xsoN of Indiana. That was one of the Big Six that

was afterwards formed into a consolidated company known as the

German I. G.

Mr. PicKtEmt. That is right.

Senator Romnisox. of Indiana. Then subsequently the German I. G.
merged with the (le nidmanufacturers of Switzerland and of France,

into the European bye Cartel?

Mr. PlcqdELr,. So I have seen in the newspapers-in the trade

.pri
papers.
Senator 1tonixsox of Indiana. Oh, well, you know that Is true,
don't you? You know that on the foreign valuation arrangement
they can set the price at any figure they desire, so thoroughly do
they control it? Isn't that true-all over the world?
Mr. PwIutHLL. I do not know that to be the fAict.
Senator RomxsoN of Indiana. And the American I. G. was formed
in this country, apparently as an Aiuerican concern, which, however,
is working against what would he American interests by working
for Ainerwain valuation, and it is offlered chiefly by the same people
is the lerman I. (.? You know that, too, don't you?
Mr. PIVmici
1 . I (1o not.
Senator Itonuxsox of Indiana. And you know that Hermann Metz
is connected with the American I. G. and with other concerns in this.
Cartel, and he is your princi )al employer and has been for years?
You know all of that is true, don't you?
Mr. PIcmiELL. No.
Senator Ropixsox*of Indiana. Doctor Pickrell, you said that you
prepared, ns I remember it-you toll Senator Caraway it was q
a doelnent. You would be. glad to give it to the committee. That
was .Nn.iethilni which you called a priner or a digest. or whatever
you wish to c'ill it. YOU(lan suhuiit 1 (0py of that, can you. notl
Mrh. PICHIMiu1Lr. (ladly.
I would like to have the (oninitteo look
it over.
Senator RoInIISox of Indiana. W e would like to have a copy of
that. Yel said yesterday that yol wrote some letters in Senjitor
King's fllice. Have von got Copies of those letters?
Mr. PIC'Itr:LL,. I think not, tlh,..5. they ore in Seiitor King',s offlee.
I haven't copies.
Seitatol' IfoliNs of Indiana. We haven't access to Senator King's
files Iunless lie cares to present them. Have you got. any col)ies?
Mr. PWIctELL. No.
Senator Rosi-sos of Indiana. Did you file your copies of letters
in Senator King's tile?
il'. PICIHEL. T1hiere were a colllpl3 of letters asking for pailphlets
or (loveranuent pamphlet., tliat I had in muy office uJ) ini New York, to

b seit down.

11liether there wiuw- a cop y of the letter mande at thle

time I don't know. I was not interested enough to keep a copy.

Senator RolNsox of Indiana. Did you ever do any long-distance
telephoning from there?
Ar. PICcEIL. I have telephoned to my office; yes..
Senator Ronissox of Indiana. And pala the bills to Senator
Kin?
Mr. PicKtnELL. Yes.

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ph

ilg

if

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.
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Mr.
corn

LOBBY INVESTIGATION

2039

Senator RoinxsoN of Indiana. You are not sure that you have
copes of the letters you wrote from Senator King's office?
C31r. PICRIELL. I don't think I have.
Senator RoBINso, of Indiana. You did not keep copies of any of
yor correspondence, did you?
Ml. PICiRIELL. Oh, yes.
Senator CARAWAY. Just a moment. Were you sending for pamphlets for yourself or for sonie one else?
Mr. PICKu EIM. For Senator King's secretary.
Senator CARAWAY. He wanted some paniplets or Government
piint,
yoU say?
1
Mr. I1CKl Et'LL. Yes.

Senator CARIAWAY. And you had then in your office?

Mr. PihcnlLL. They were some tiat were out of print; old hearings, )ImtI sent for them.
Senator CAIIAWAY. Did they deal with the tariff?
Mr'. PsICR L. Yes, sir.
Senator CARAWAY. Were they sent to Senator King?
Mr. PicKItELL. Yes.

Senator Roistisox of Indiana. Are you acquainted with Samuel

RissellI
All'. PICKRELL. Yes.

Senator Romixso, of Indiana. Former secretary of Senator King?

M[r. PICKRIELJ. Yes.
SIe nator Ronixsox of Indiana. What were your relations with him,
if anyv
M. Piciitrij.. I have known him since 1921, when he was secretary to Senator King.
Senator lRotiixsox of Indiana. During the tariff hearings of 1922
you saw a great deal of him, did you inot?
Mr. PIiH{ELL. I saw him. frequently.
Senator RoinIsox of Indiana. You saw 1m cons.-tantly, didn't you,
Doctor?
Mr. PCHRtEtLL. Xo; I would not say so.
Senator Romjxsox of Indiana. How I
Mr. PWICHuuL. No; I would not say constantly.
Senator Ronmxsox of Indiana. Just what would you say?
.1r. Pic(KinELF,. I saw him. Of course, the tariff was under considperiod
and a. half.
Congress forIta year
eration
r long
friquelitly
I sawis am
ago. Tiat
seven
of tinm.e. byFurthtiore,
many times and when I do not
ding the year and a half. Howm
know.
Senator llomuxsox of Indiana. You saw himi frequently. Where
did you see. him frequently?
Mr. PIcmt:LL. I saw lim probably in Senator King's office.
Senator RoBINsoN of Ind ana. Probably? Isn't that where you
saw him ?
Mr. PICKRIELL. I might have seen him outside, too.
Senator RonrxsoN of Indiana. Oh, once in a while, perhaps.
Mr. PicKiiELL. I do not recall.
Senator RoinsoN of Indiana. I think at this stage of the inquiry,
Mr. Chairman. I will ask the reporter to include in the record as a
committee exhibit this commerce report.

2040

Senator
Senator
Survey of
Senator
cartel?

LOBBY INVESTIGATION'

COAAWAY. What is it, Senator?

RoBINsoN of Indiana. It is Commerce Reports, Weekly
Foreign Trade.
CARAWAY. It has to do with tile organization of this

Senator ROBINSON of Indiana. Yes. It is for American consular

offices; representatives of foreign commerce. It is the July 22 issue,
and it is the entire article on the subject of chelnicals. The dye
cartel, dye exports, and the five major producing countries.
Senator

CARAWAY. Who

wrote it?

Senator Ronnsox of Indiana. It is marked "C. C. Concannon.

Chief, Chemical Dvision."
Senator CARAWAY. Very well. Let it go in the record.
(The article above referred to reads as follows:)
Tits DYE CARTEL AND 1)EI

XIPOtTS OP FIYB

AJOR PRODUCING COUNTRIES

[Exporte of dies from the three participants In agreement were valued at $93.800.000 tar
1928.
asedl on reports from Aamitint C'omnercial Attacl6 Daniel J. Reagan, Paris;
Commercial Attnah Charles E. Lyo., lerne Trade Commissioner William Tr. Daugh.

dy

oti
wo

I
the

ler

cell

ti(
wilt

bell,
for

etty. Berlin: Consul It. W. ileingartner. Frankort on the Maine, and Consul Calvin Mi.
l1teh, Basel)
The formal signing of the sales agreenwnt by representatives of dye manu.
facturers of Oermuy, Switzerland, atd France was one of the outstanding
events of recent International activities, This agreenlontt was signed by the
three Europetin countries whose export trade in coa-tar dyes in 1027 a:counted for more than three-quarters of the quantity of the world's exloerts and
four-tiflis of the value. The significance lies, however. in the fact thalt the

for
It i
tltT
par
me
the
iner

the past three or four years by enlarging and reducing to writing. In other
words, it was the conclusion of negotiations lasting the past live ye:rs.
The participants were the Germana I. 0. Farbeundtistrie, the Freach dye
firms-Etablissements Kuhmanu and the Soclete des Matleres Colorantes de
Saint Denis-and the 8wls, Basler I. U. The Swiss B:sler I. G. comprises
the A. 0. fuer Chenlisehe Industrie (Ciba), Cheinisehe FIabrlk Vornials, Haildo.,
which Is closely connected with the A. 0. fuer Chemnscil' industrie and J. It.
Geigy, A. 0.
It is utnderstood that the Clayton Aniline Co., the English subsdlary of Cilba,
which has consistently Increased its sales it spite of competition front other
Eigllsh cheinical companies, will operate under the terms tiffecting its parent
conpallliy. Other sub.nidiarles of Cibli which are sol likewise to be affected
are the French subslidary at 8aint-Foas, the Polish subsidiary, 8. A. I'ablanithe Italian subsidiary, the Sta. IBergain.
coise pouir I'Industries Climlque, 111341
agea Ir Industriea Chilnlea, Serlate. *
Tile agreement, which was brought about by present market conditions.
refers exclusively to cooperat toll in the sale of 8anlh1e alind other sylnthetle
as
dyes-q-sp clally synthe.-tic indigo. Each country retaitis its independe-ii
cotehll develolmpllt. Much etnphasJs is laid
to capipillxltiol. liprofils. and41

sei
this
Gh,r
for
or

signatures gave permanency to an oral agreelnenlt which had baen iII effect for

upnIl
fit(I)reservtilon of I1(hletjldellee iII

tel 1lal 111341

Voutlulechil details.

Though the agreenient Is referred to its it sits aigreemelit, it Is in reality atn

fro

per

of t

T
by t
of c
fliv&
oflic
Conil
sale
estal
but
the

vrodi

agreement for t-gliulting 11111 st dilizing the prices of standard dye products.
BASIS OF THE ACCORD

it

defln

Although the details have not lieet nilade pttbile, authoritative soure'ms gie
the following its the basis of the accord:
The fixation of prices in the various markets in such it way as to obtain an
average return for the adherents, sifter taking Into colsheratlion the factors
of quantity and quality, trimspolrtathn charges, services, etc.
The establishment of export quotas for the three partielpants.
Tile continuation of Franco-Gernaa collaboration as regards sales at3d the
continued use of common sales bureaus, particularly la the east, with the Swiss
maintaining their independent sales organizations.

(ei-II
Frant
obtaO
meant.
exte
prive
Of
favo
It ha

LOBBY INVESTIGATION

2041

The periodical readjustment of le participation of the ndherents in the

major nuarket regions.
Tim exelchalnge of Information on nethods of production and utilization of
(lye. III vllrlou5 inlustitles.
There Is no indlcltion of a pooling of profits.
PRICB CONTROL1

I'POR

QUOTAS

No details hale been amd, available re.varding tile plan to regulate prices,
is illpVed l that consglillien. hrll-ollarhont tlhe
olier tilln tile statelllelt thit It
1eonomlies to be derived by a common effort to Improve
world will benefit by
ditrllioni by effecting nor' direct deliveries.
pil'king ml to !'alloqllzt
export quotas have been altered to take account o
Tle Frenh aid Gfletina
the Swiss sale.. The 1927 agreement allotted 80 per cent to Germany and 20
participation of England wits
per cent to France. At tht thnt, when thl
undvr consideration, tli quotas drafted were 75 per cent for Germany, 12 per
cent for France, anti 13 per cent for England. l)uring tile negotiatollas in the
fill of 11128 the tenlative quotas for (ermany, France, and Switzerland were
wnderstod to be 70, 20, and 10 per eent, respectively. It Is doubtful, however,
whether France wa.s 1bl1 to maintain it.s demand for this ration, and It is
believed that the sales made since September, 1028, have been more nearly on
the bists of 75 per cent for Germany, 17 per cent for France, and 8 per cent
for Switzerlatd. No official statement has confirmed these percentages, but
It is bellered that they approximate the Present division of export sales under
te agreenwnt Just signed.
The establishment of export quotas and the nllotment of markets among the
participants will have some repercussion upon the production of the Individual
members. In the officlnl statement on the subject, however, the members express
the belief that tils control of exports through the economies effected will
increase their soles, and therefore enable them to Increase production. Aside
from this, the members reserve Complete freedom as regards their production
schedules and salts to their respective domestic markets. If this Is the case
this policy Involves a distinct change from that under which the French and
German previously operated.
''ite original and renewed agreement between these two groups provided
for the maintenance of a ratio of production between the French and the
German dye interests. Sone authorities maintain, however, that this latter
provision has beena retained but has not been extended to Include a restriction
of the Swiss output.
SALM OROANIZATION

The sales.structure as regards the French and German members established

by the original agreement in 1027 will continue. This involved the maintenance
of mnablated sales otfleo. in most foreign markets, with the (lernans operating
tlse sale-s bureaus particularly in the Far EHst, and with the French-operated
offices in a few of tile European countries, particularly Spail ond Portugal.

Contrary to this combination of sales Mffort, the Swi.xs will maintain Independent

sales bureaus in the European countries where they have already been firmly
established. These countries include Italy, Spain, Czechoslovakia, and Poland,

but in several of the European Countries there is an elaslle agreement whereby

the Swiss will accept orders for the
vroducers.
DISTUIMUTIO.

count of the French and German

OPFMAU(KRIS

In the present agreement the distrihulion of morki'ts has been more clearly
deflned than in those signed previously between only the French and the
Germans. Brielly, Germany maintains i predominance in the oriental markets,
France iln the South American and LatI-speaking countries, ad Switzerland
obtaining a privileged position Ili the south European countries. These allotments are not final, and the Franco.German marketing collaboration may be
extended even to those countries Il which at the moment Switzerland holds a
privileged position.
Of the three members of the entente, Germany Is perhaps in the most
favored position in the Asiatic countries, because of the strong position which
it has already acquired there, particularly in Persia and Asiatic Russia, and

2042

LOBBY INVESTIGATION

because of the right whihh Oermanay lilts for the free trau-sit of (Jeramna

goods
through litssis.
((ermnain expmrtm of dyes to Persla amounted to a value of
$150,0O0 and to Russa of $2,160,000 in 1927.)
This privilege was granted recently by the Soviet Government to countries
which have (oncluded a eoiunWercll treaty with Soviet I1hila. Of tile three
particllmnts li this dye cartel, (ernmany Is the only country to have such a
treaty with Soviet Itussi.
Some uncertainty still prevails with regard to the Japanese markets, id
the increase in ln'lduellou of indigo dyes lit that country under the renewed
subvellon of the Japauese Governnent to tile indigo industry is causing soin,
concern to tlhe Germanl producers, who feel that this support weakens the effect
of the Germunn-Jiiattese comnercial treaty. Furthermore. luropean pIrodluers
have been feeling the effect of stronger competition from Americani and English
producers.
It is believed IIow that file inclusion of the Swi. iI the cliulnow.iles offices
in the Far East materilly streingthens (iernany's position itceause the com.
petlillon of Swiss syithetle inligo li the Far Hast, as in several of the HuroIean. countries, Ias cut into the sales of the Gerlan product.
According to the comnunhues which have been issued, this agreement does
not deal with bumbin,Ls carrh'd oi Il til it,;iled States. The ellnthmlalii of the
United States from tile market subdivislon, according to th continental press,
was Intentlonml becau. of fit,, American trust legislation, because the United
States now produces a suffici'enlt quitilty of most dyestuffs, particularly synthetle Indigo, to permit an export surplus, and because the three members wish
to maintain liberty of action there.
EXCHANO OF TECHNICAL IYVOM,
.IIlATIO.
lit view of the fact that Germany, through this agreement. haqs been able to
gain a stronger Isition in the allotment of the export trade (T per cent of
the eombiled trade of Germany, France, and 114witzerand, 1ts compared with
only 80 per cent of the trade of France' and Germany), the Gtrman pre.,m has
laid great emil1s51 upol what it cinliide's a counterbllhtl cltlg section of the
accord, Ianaely. t11he exchange of technical Infornlattion. 'Ihis is said to lielude not only the agreement for the reciprocal exchange of data oil improved
technical methods of production, but alijo the interelnge of expertenee in
the better utilization of diyes, by which It is expected to Improve the relation.
Ito affit an expalll of sales. The
ship with tile colsumning industrhs and
Germatn prem lmaitaills tihltt tile 1. (. hils It ittut'h wider fund of itforimlation,
both as regards lprodittioil iid umt', tillll have tile other
tjrlllelirs. and
tt1
thls cmce.slon should offset the olpparent advantage which tie 1. 0. has gained
lit the, export field, for the reason that the French and Swis lmiembers will
now be able to employ this information to advantage li their hoine markets.

Sw
tie
pr

fro
Tho

1W.
1928

wit
De
are
si
are

gre
tili

E'r

VI.LI'11 O" BIRITISHI NEGOTIATIONS

As ill previoU.4 legotiations between tle French and file (herinluns. reprecltativet of the British industry were 01.o brought 111o the di4Cl.eslon lout,
again, withliut results. before the first Frimco-(ltrmn dye agreement wits
signed in 11)27 certain llBritsilrodducers initiated the tentative accord, but
failed to sgt tile final algi'ntelit in Moveinm'r, 11927. Suiscqu'llt discus.,.,tli.'
were fruitle.
It wolld lldppelr that the suin two ftaetort whihih operated lit thle previous
nf(gollalols ('lotnlltled to result lit the wtlidrawal of tile ilrilish i tills. it lack
of al'qllltC'elitiailllion in tile Britisi indlastry, des.lh, alvatlleCes 311114(t'
lit
that direction during recent year, and the hilsistenice of the British that they
be permitted to retain a privileged losltloll i the Sales to their colonies and
dominions.
WOULD IDYE TfRADE

In view of tie conclusion of tlits fltial agreement, it is interesting to note the

exports of dyes of the three partlellmnlts to tile agreeenlet compared with those
of the Unlted Kingd(.oi arnd the U:nited (States,tile only other larger world
producers ani exporters of coal-tar dyes.
Germany's eoal-tar dye production eaplcity is about equal to that of tile rest
of the world combined, whereas the Utited Rtates, the second largest factor,
produces as much as tile world combined, exclusive of Germany.

Euto

2043

LOBBY INVESTIGATION

In exports Germany fids markets tibroad for oneohnlf of its production,

-sixth, and
Switzerland three-fourths, Fraice one-third, United Kingdom i
the United Slides one-tenth. But disregarding the sale's of these European prodluce.s li Europe, (Jermany, and Switzerland export but one.lifth of their
production tid FranCe and the United Kingilom oi6.seentih each.
The total exports of lyes from tile three irtlellifflats in the agreement rose
from $O5,000;000 Ii 1020 to $73,200,000 In 1927 tnd to $93,800,000 in 1928.
The combined trade of the United Mates indthie United Khgdom also increased, from $8,300,000 to $8,500,000 and to $10,400,000.
Of the three partlclliting countries , MWlizerad's exports rtord a steady
gain, while those of France have declied rather markedly to less than lmlf
the 1920 figure.
Value of exports of d/ea

from

fitcol KiU.
Uli

aermany, ,iritzcrland, Prance,

dora, anit the Un.tcd it atcs

year

(lermany

Iwo
''

.......................... .....0....
.......................... :...........

''

.....................................

Switzerland

United
Kingdom

Ffm

United

states

$17.1006000 $1Zoo0ooo $S%..0 o $2,400.000 $5,000

14400,0W0o 3.100.000 3,9.00, 0 6 6, 000
65,60OO0D
2400, 000
%
is10,0
N4,70,00

A study of the exports of coal-tir dyes by countries of destiitton for th

latest year for which statistics tire utvallahle is presehied litrewlth. As is true
with most ilterntlltlollll statistleail studies, dital tire not enllrely comparable.

Detilled statistles for France tire for the yeir 1 20, while those for the other
countries tire for 11).7. Also, no details by values of couitries of destlntitlon
are publlslised. Ilitle cise of Frnite lind the Uiited Kingdll their coloniall
trade Isof considerable Importance, rtpreseniting its it does ipprxhiltely onesixth (if the former's trade and neatly one-half of tile latter's.
Ini Asia the big cotton-dyeing countries of Iritish Indhi, ('hila, ilild Japan
are the largest consUlmers of dyes, and with the exception of 1witze'rhlid the
greater lportion of each of the exlorting countries discussed itre Is sld lit
this region. Switzerlad, however, markets almost three.fiturths of Its e.xports

In Euroie, its Is shown In the following tble:

Erjorls of dyes from& Germany, Switzerland, Unlted States, and the Ultted
Kin gdom ln. 1927, ai dP'rct h

19211

(Quantity in thousands of poumtiN: valuo in thousands of dollars. 000smod,,tedl

Switzerland

Country
Quantity V'aInte
Total ........................................... 107..)

$., I1

,37
134 2I+.
W1
2,16 1 ,*71

Eutope..........................................

Austrim ........................................................
elgiumr ........................................................
Uleraria....
.....................................
Feoil, LauvId italni ...................................

Quantllity Value

3,11.1 1',72
C4
32
402!
2o'9

Finlitni .....................................................

41,7

2
#;, .
Fr,tnce ......................................................... I
..
............
.
..............................
(ler
................
. ,
i 7
lreeve .......................................................
lunairy
.............................................. ,0,j1 b7t
I...lds...

..... ........................................

X e t e; n-4.2'A
Norway
........................................................
Pola|nd ..............................................
............
lortugad
........................................................
lttutnmia
........................................................t
,lumtla
................................................

.wtden ............................................l
...................................................
SwIterland
Itnlted K(ngdom ....................................

Yugoslavil ...................................

....

:.j

,I

1.531

20.291 $14,C01
1310M I0, r,5

20

707
J.2
127
70
92
1,747
4,4,0
32
1

182

411
98
II1
(14

95
2. 0
2,7,5
27
70

2,417
. M; 11,287
2'.l
1,781
(&'1
16020
1,651
,
, [1,040
1.01

1.

2,510

2,b71

m0

1,219
1Ir:;

2, 713

m3'

121

124-1

418

2044

L.OBY INVESTIGATION

Ealporbs of dy.

from Germany, S.itzerland, United .Rtals, nd the United

Kingdom in 1927, and Prancein 1926-Continued

4UI
tll.

[Qtuantity in tho'as.',ls of pounds; vnluein thousanls of dollars. 000's omitted]

1|o-

Germany

Switzerland

Country

lltl

Quantity Valle Quantity value

North and Central America:
West Indies .....................................................
('n1,:d1i and Newfoundland .....................................
Mexico ..........................................................
1tniltel Slates ...................................................
South America ......................................................
Argentina .......................................................
llrzil ...........................................................
Chile ............................................................
Colombia .......................................................
Ecuador ........................................................
Peru....................................
............
|.ruguaky ........................................................
Venezuela .......................................................
Asia and
.......... .
..................................
Brilish India ................. ..........
.........
.......
hina............................................
Netherilan East Inds . ...........................
Japan................................................
........
Philippine Islands............................. .......
8S3la.............................................
- .:
Australia .................................................
New Zealand............................................
Africa ...............................................................
Egypt ...........................................................

blt

1,473 $1,388

4,312
878
1,02.5
2,i
37
234
37

2,401
1,911
377

110
35
134
43
63

40
62
02,925 28,100
13.
127
38,073
4.083

4,059

37

202
fTO
67
304
m8

451
349
323

332T 232
100
81
1,011
1,073
3
421
158
I0
17
3
3
4
3
t)244
1,20A
8,92)
182
810
1
27
II
8
87
82

12
2
2
3
3
2,117
719
689
114
614
1
18
10
6
37
32

Clip'
le

It

reII
tIll.
'I'll
3't

htg
InkP

of
Wat'

,lit
France

United States

United Kingdom

Country
Quantity Value Quantity

Total .....................................

71o

,930

% 71

Value Quantity Value

$,405

7,(00

$,970

921
64
4,019 ........
1,069
341
Europe.........................................
65............................................
Austria .....................................
68
,370 ........
710
163
156
Belgi
....................................
ei
1
(1)
15
ii
Denmark ani Icland .........................................
72 ........
Estonia, Latvia, Lithuania ..................
1
11........
..................
Finland ..................................... ..........
8
3
218
134
France ........................................................
231 ........
118
31 .............
Germany ...................................
4
2 ..................
Oreee..............................
34.......
15
9
43
47
71 ........
Italy........................................
76 ........
27
62
94
30
Netherlands................................
29
19
Norway ....................................................................... .
4 ........
2
1 ..................
Portugal ....................................
220 ........
3
1 ..................
tussia ......................................
4
27
42
130 ........
6
Spain .......................................
62
42
10
9
Swedlen ......................................................
74
40
1
1
Switterland ................................. 4 .
102 ........
.13
I ...................
United Kingdom ...........................
207
C8........
2,370
1,023
484
North and Central Ainerica, West Indies .......
16
97
38 ........
1,994
s2
Canada and Newfoundland ................. I
.......... 28........
Mexico ................................

United States ..
.......................
South Amerlea ...................................

0..............
:
......... ".. 137
i:
39
162
24
17

Argentina..................................
llr,izil ......................................
Chile................................................
Colombia ........................
...............
Ecuaor ..............................................

Peru ........................................ .......... ........

205
73
24
2
12

15

9
Uruguay............................................
Venezuela
................................. ........ 30
Asia and Oceania ......... :..................... 3,612 ........ 22,924
92 ........
1.613
British India ................................

China ...............................

2,037........

1799

07
12

921
42
24
12
10.............
12..... ........
7 ..... :........

10......... ......

4 .............
15.............
3,031
3,433
I,863
1,624
610
637

1,884

2,832

S1
(g

den

Ne'
S
S,
ness

SI
S

784

........ .
85
10. ......
6..
Nethierland E~ast Indies.....................
85
34
405.........
.3.
2,2t8
Japan ...............................
...........
Philippine Islands ..................................13
488
7
6
Australia ......................................................
9
47
12
9
New Zealand ..................................................
13
8
i6
68
Afttic ......................................... $78
173 ...
...............................
Egypt.................................
3,123
1,380
Total colonial protectorates ...............
I LTes than $500.

to
aetc

do
toa

2045

LOBBY INVESTiMATION

See

s1o cabole review, Elrropet:

uiRTIenllSs4.; (lrmlill

Forelgii tIralh,

.tlilloll

1elglna

collihtfo

nolliI, but with some

favoraily nIffeclcd by olUclO

of reaiflralllon

OloruiI(ls.

'F'uriTffmliid tifi le r(alhtillatol.s: Co.

(o l ith'n ri-guliltlon

govering registra-

lon oIf I 1'ihrleullcllI prelirailoi.; lhallgarhluItaIflamn cimmcrelul treaty;

lltaly tnl.its flitollilll coliolllt.
dily fre t; Matirlihs r'ediwes duly on

spec hl circulrs available: Chem. 278. S1igapotre (um

Chem. 2S0. ''he Markel hI lIohilud for 53ytalletle Orgali

D.invmr Market;

Chtmilcals.

Seitor Rlirms .Xof Ildiana..l)uctor, I would like to ask you

again iext W'e(ielalvhy. I do ot kliow how the other

memlibers of the committee feel aliont it, bitt I will not willit to ask
you Ittiy I11for'e (lttestiolr. before tien.
81t1tl6- (AIRAWAY. W11'.110 wt, 0ir( not intere.sted, 1)oetor, of Cotrtise,
I do not pretend to ]lve lill.V 11itihoriy to go into any. records or
ally iles ofl11y witless excelpt where those ,nay deal wiih legislative
,uinlers, or some propaganda matter touching either executive or
legislative matters, I wish you would bring, if you ples:e, all the
records thal I-oill have hl ot any dealings, and if yol can find ies
of, th lts
.or if you can get from your offlice the letter that you
wrote froail Selinor King s office, briiig that, too.
Mr. Pl'min.
u
. I will gladly (oo so.
Senator CA .AY. Becals we Will sive a lot of time. I will be
very glad, indeed, because that will furnish any mniember of the comnmitlee, if they want to chck your expense account, an opl)ortlmity
to io so. (ive us the nines of the people who paid your expense
aecolillts.
M,'. PICK1.M. Surely.
'Svia(or ('.AwAY. All right. That is all; thank you.
Senator C.ZAwAY. Is Mr. Fletcher in the committee room? Come
around, please.
sonic questions

TESTIMONY OF PETER PLETOHER, LINEN IMPORTER,

NEW YORK, N. Y.
(The witness was duly sworn by Senator Caraway.)
Senator CARAWAY. Will you giVe the reporter your name, residenco and occupation?
Mr. F
mncm
. Peter Fletcher; linen importer; 52 White Street,
New York.

Senator

CARAWAY.

What is your occupation

Mr. FL*.-rciEI,. Linen importer.

Senator CARAWAY. How long have you been engaged in that businessI
Mr. FIWIER. Since I was 10 years of age, in Dundee, Scotland.

Senator CARAWAY. Are you Scotch?

Mr. FLrCiiER. Yes sir.
Senator CARAWAY. how

long have you been in America?

Mr. FJoCER: About 40 years.

Senator CARAWAY. From what countries primarily or principally

do you import your linens?
Mr. FLETrHER. Mostly from Ireland, Scotland, from Belgium;
to a limited extent from Czechoslovakia.

2046

LOBBY INVESTIOATION

Senator ('AWAY. Were you interested, Mr. Fletcher, in the pond.

ing tari' bill?
A[r. FixiXi1kI.Ih Very ni1uch so.
Senator (.RAwAY. As it atected rates on linens, you were interested? Were you interested in any other rates in the bill?
NIr. l?.e
rE'vit. Not Iemsonilly, no, sit.
Senator CARIAWVAY. Well, not personally-welo you in tany way?
Did(I you reresent sonine other p-eople?
NoI('th
%O.I repiresented nobody but our own interests.
Mr
['.
Senator ('AIZWAY. You I'sed the words " not personally." Was
there any signilielaiete ill tllt? )o yoU have ally otlier interess?
O,
S
i1111 generally illterested ill the triffl-l
M[r. .I-71"('lEi0.
bills as every Aiitaeiciiii citizen ought to be in tll%,y legislation.
lit you were ntuO interestedspeilically in the
Seittor (ButttA..
rates except on liineiis?
Mr. l'ix i:iI. Xot except on linen, Sir. Precisely.
W lit. actiVities, if ay, with reference to the
Senatol (',,.iwA..
t t
linein rates lhlave AOlt had
Cornand
Means
the
Waqs
for
it
brief
. p replied
Air. F'lI.
Iarittee, t1n4 ll.-S-istedl ill th l)rel)aration of ailother brief.i all dealing
with S hllile 10, which covers. lien.

pro

wer

dea
tha

line
_

Fie

me-,
S
bit
it

Senator CARAWAY. W1hoiiLdid you assist?

Mr. iI.tTIitl. Tile cltairittili U our lineit gi'oup, 31. Herbert

Young.
Selator (ARAWAY.

1lave yeu it group of importers who were

banded together ill their act1iVities to defeat an increase inl the tariff
oil lillell.
Mr. FLIF1'wI-:lt. Wie haive it group, who have worked together; yes.
Senator CAItAWAY. AWlhen wits it organized?
Mr. FLixcIrimi. The group wits organized, I think, perhaps two
years 1g).
Senator C.RAWAY. What was the purpose originally of its organizatio ?
i1h1. FJ, U'cHER. Of the group?
Senator CARAWAY. YXets.
Mr. FL"I'CIIEIR. The group organization was ani idea that wits
worked' out two or tir', years ago in the N"ational Counei of Irpol'tei.5, flllVy to have the ilterestof these groups centered in the
organization, so that they might realize the fact that we had a gthi
live organization that was doing good work and that might result
in the bringing il of other menlbiers, through the influence of these
oft
.ou th i
e
groups.
Senator CAIAwVAY. But what wits the object of the group? What
purpose did you'hope to accomplish by organizing the group?
r.. FoKc1IEII. I have already said to spread the value of our
O1anizatIon aiong these groups who know people in the same line
ofbusiness much better than the officers could possibly know then.
Senator CARIAWAY. I think perhaps I am not very happy in iy
questions, but what good was to result from that?
Mr. FL rtoUm. An increase in membership for one thing.
Senator CARAWAY. That is what I am trying to get at. What did
you want members for? What good were you going to accomplish?

S
S

3
ollie
111011
ury
01C
S.

agal

itsi
enli
S1
l)OSI

to

1o

tan
thie
knot

LOBBY INVESTIGATION

Mr. FemrohE. Ti

2047

association was organized with the idea of

protecting aind looking after tile interests, as far as customs matters

were concerned, of people im)portinlg foreign merchandise; of people

dealing ill imported merchanldse.

Senator CARAWAY. Your group was to look after any complaint

that
aIn
member had,
growing out of imports?
,Mr.
14Mt~CHER.
lPre~elsely.
.

Senator CARAWAY. And controversies with the department?

Mr. FimmcfnER. With the customhouse.
Seltltor CAtt..\ And to promote thl use in American of foreign
jiteltsI

Mr. FLt'm'ct-. Of course; yes.

Senator C ,IWAY. Xow, was heroo a membership fee required, Mr.
Fletcheh"r
)id you pay so mhich a year or so nmich a month for
membershtlp in this organization?
Mr. Fzicm'T:tR. The annual dues are $50.
Senator CARAwAY. How many members had yOH
.NI. F, I'Icilr:. Ave have niow-.L haven't -0t the precise figures,
but SomewhI'her between live 1111d six hunlretJd mellmbe..
Sitator CAIiAW.Y. At $50, you would raise. something like $30,000

a year.

.Mr. FmJn'ci:,g. Between $25,000 atid $31000.

80nt00r (AIAWAY.

Mr. lemmriMil.

What (o 0you (1O with that 11toney?

We have an organization in Xew York; we have

offices; wo have a Ia(I ieeroeta,,

spa
two assistants; we seld out it
monthly trade paper; we issue bulletins .in connection with Treas-

ury deeisioS am l any other matter deahing with commerce affairs

that might interest our members.

Senator .CAAWA. lDid Vo1 use any of that flnid in your fight

against an increased tariff n linen '

Mr. Fmmm
r(Ilt. No. '1'he council (loes not, as at council, interest

itself in the rates. Tihe council, its a council, restricts its activities

entirely to the administration features of the tariff.

Senator CA AWAY. But did you raise t special fund then to op.
pose the tariff rates?
Mr. F10"1rcmg . The only fluids that ti linen, group raised were
those to pay tie expenses of the chairman of the group to come
to Washilgton on the two or three occasions-two occasions, I
think.
Senator CARAWAY. Do you know about how much you expended
for that purpose?
Mr. FmOrcat. I do not think we spent more than $100 or $120.
Senator CAHAWAY. You maintain no publicity bureau?
Mr. FLj Et'nt. The linen group has no publicity bureau.
Senator CAUAWAY. And you have no propaganda organization of
any kind?
Mr. FLTcHER. Nothing outside of the briefs that we filed.
Senator CARAWAY. So your entire activity toward influencin
tariff rates was containeA in the appearance before committees, and
the publication of a brief?
Ur. FLErcER. Yes, sir.
Senator CARAWAY. How much did your briefs cost you, do you

know?

2048

LOBBY INVESTIGATION

Mr. Fixrciui. No. I au not the chairnin of the group, but it

was a very stiall amount.

Senator CARAWAY. Did you yourself appear before tho Ways and
Means ('oninitteo of the House'?
Mr. FLixuiViiEt. I did,. sir.

Senator CARAWAY. DId YoU confine your arguments to rates, or

did you discus also domestic valuatioti
Mr. FLt
i'rCR. No. I was only down hero on rates.
Senator CARnAwAY. You of course wanted to keep as low a rate as
possible?
Mr. FLE'rII r.Wanted to keep what I considered reasonably
protective rates.
Senator CAIAWAY. Opposing higher rates?
Mr. FLuTHm. Opposing higher rates and embargo rates.
Senator CARAWAY. Did you appear before the Finance Continittet,?
Mr. FLi:brJIR. I appearedl before the Finance Connittee.
Senator CARAWAY,. And tliscluise( the smamematter?
Mr. FIretII.It. And disetiss-ed the samne matter.
Senator C,1iAw,%y. Did you make calls upon Members of the
House and Senate?
Mr. FUrc.mPR. I Saw Mr. Hawley on One occasion.
Senator C.nAwAY. He was chairman of the Ways and Means
Connittee?
Mr. FLE-rCHEn. Yes.
Senator C(ARA, AY. Did you discuss rates with him?
Mr. Fi.-'rctwim. No. I simply discussed procedure. I was rather
a novice at this political game.
Senator CAnAwAY. You would be if you were in it a hundred years,
because it does not follow any set rule.
,n
Mr. FERTcu . I siply asked Mr. Hawley the best procedure for
our group chairman to follow.
Senator CARAWAY. You simply wanted to know when and how to
presentyour case?
Mr. P XCIM
r I . When anti how to present our case properly.
Senator CARawY. Did you see any other Member of the House?
Mr. FLeCHEm. No. That io the oily Member I saw.
Senatbr CARAWAY. Did you see any Member of the Senate?
Mr. FLErcHR. Yes. I have seen one or two Members of the

Senate. I saw Senator Simmons for a few minutes.

Senator CARAwAY. Did you discuss rates with him?

Mr. FLmTwiUR. I discussed rates with him after my brief had
been filed. I discuSmed my brief with him. I saw Senator George.
Senator CARAwAY. And'you discussed rates with him?
Mr. FLETCHER. I discussed rates with him.
Senator CARAWAY. They are both members of the Finance Committee in the Senato?
Mr. FLmwIER. Yes, sir.
Senator CARAWAY. Democratic members?
Mr. FLETOHER. Yes, sir.
Senator CARAWAY. Whom else did you you see?
Mr. FLETCHER. I do not think I saw anyone else.
Senator CARAWAY. Did you see these gentlemen in their officest

there
I
IV

tre

M
S

tart
M
SeIo
81
So

SeAI
So

M
Sei
with

Se
this,
tell

in, a

just
So']

you
group
Mr
Avast,
Set
Mr
of~o

to t8
Mr
Se
Mr
Set
have
Mr

Sell

Se
of thi

Mr

Sen
the c'
Mr.

LOBBY INVESTIGATION

2049

Mr. FLTCIHER. I saw then in their offices.

Senator CARAWAY. By appointment?
n. By appointment.
ir. FlE1im
Senator CARAWAY. '1hey knew what you wanted to discuss?
Mr. FLMtHER. O1, yes.
Senator CARAWAY. Did you tell them you were personally interested?
Mr. FL.cThER. Oh, yes.
Senator CARAWAY. Did you tell them that the group was in-

terestedI
Mr. FLemCHeR. I did.
Senator CAm.WAY. Have you any correspondence touching the

tariff, .with your group or with the members of the Senate Finance
Commite or the Ways andlMeans Conlimittee of the House?

Mr FLETCmRt. Only those that have already been filed with the
Senate Committee and the Ways and Means Committee.
Senator CARAWAY. All the correspondence you had is filed with
those two committees?
Mr. FLErCUER. Except one or two letters that I have sent to the
Senators I have mentioned, confirming my interviews with them.
Senator CARAWAY. You have copies of those?
Mr. FL1TCuER. I have copies of those.
Senator CARAWAY. You have no objection, of course, to filing them
with this committee?
Mr. FLErcHEn. None whatsoever.
Senator CARAWAY. You will know there is nothing personal about
this, but you can tremendously help us and help yourself by just
telling us if there is any activity of any kind that you have engaged
in, affecting or attempting to atect tariffs. Just tell us what it is.
Mr. FLIrCHER. I have iad no activities at all beyond those I have
just replied to.
Senator CARAWAY. Have you any correspondence or reports that
you made to your group or the chairman of this linen-importers
group, dealing with the tariff?
Mr. FLTChER. No; because on both occasions when we came to
Washington"the chairman of the group accompanied me.
Senator CARAWAY. Did somebody pay your expenses down here?
Mr. FrLL.CuE. Well, on this occasion, I imagine I am the guest
of your honorable committee.
Senator CARAWAY. What I meant was when you came down here
to talk business.
Mr. FLrCHER. I paid my own expenses.

Senator

CARAWAY.

No one refunded that to you?

ETER. No, sir.

Mr. FLM
Senator CARAWAY. You will be very sorely disappointed if you
have paid them this time.

Mr. FLECHER. No doubt.

Senator CARAWAY. I have no further questions.

Senator RonuimoN of Indiana. Mr. Fletcher, you are President

of the National Council of American Importers and Traders (Inc.).
%r.FLMcFC.R. Yes, sir.

Senator RoBINsON of Indiana. That means, I take it, that you are
the chief executive of that organization?
Mr. FLF.TCnFR. No, sir.
78214-30-i f-18

LOBBY INVESTIGATION

2050

Senator Ron.xsot

of Indiana. How?

M. No, sir. We ive an executive secretary who looks

Mr. F rHr
after all of the details.
Senator Ronixsox of Indiana. Does the executive secretary have
more authority than the president?
Mr. Fjxcmin. Not more authority, but he does the executive
work.
Senator Ron:x.so.x of Iiidiann. Precisely, but work delegated to
Win by the the president, is that true or not?

Mr. FImr.enils.

Yes. sir.

Mr. Fr0

You Are getting it, sir.

Seuntor Rooixso. of indianna. I am just asking for information.

it.
irc

t
f

Senator R1 .sM.6-ox
of Indiana. Now, therefore, 1'ou take responsibility. I as-sune. for all the exeeuive secretary does.
Mr. F.xwuratnt. I assume nil that responsibility.
Senator lmI .SoN- of Indiana. And that leads to the further ques.

tion, 11r. Witness, is to whether or not you are cognizant of all the
executive secretary does in the interest of the National Importers
and Traders Council.
Mr. Fi, r.r"imn. I am not cognizant of every detail. I could not
po.siI)lv be.
Senator Iom.xso.- of Indiana. Ih, general outline, are you familiar
with the policy of the organization?
Mr.
01'10mt.
Oh. yes. Quite.
Senator Romxsox of Indiafn. Then, you do know that you have
spent a lot of money on this effort. to influence tariff legislation?
Mr. FuiPTOIIt. I have spent no money.
Senator Roix.ox. of Indiana. 'Now, I want to be fair with
.you-Mr.
Yo put that as
)ersonal question to me. You
jump from the personal to the general.
Senator RoBnNo of Indiana. I am speaking of tho National
Council of American Importers and Traders, of which you are

president.

Mr. F.t'rcm.ir. Yes, sir.

Senator Rovxs.ox of Indiana. Always, when I am saying "you"
did this. I mean your association did it. That is what I mean.
Mr. FLETCHER. All right.
Senator Roiuxsox of Indiana. So'that we understand each other.
Mr. FLETCHER. Quite.
Senator Roniso- of Indiana. Now, I am- not talking about - the
linen group at all.
Mr. FLm.TCHr.R. All right; I understand you.
Senator Romnpso, of Indiana. I may have something to say about
that later.
Mr. FLIWHxcE.

I hope you do.

Senator RoImNsox of Indiana. At this time I am talking purely

about the National Council of American Importers and Traders,
finding out first, if you know, about the general policy of this organization of which you are president, and secondly, wAether you take
responsibility for what the executive secretary has done in the name
of or on behlf of this organization.
Mr. FLErCHER. Exactly.

bp

tit
H

LOBBY INVESTIGATION

2051

Senator RowNso" of Indiana. Then you do know, Mr. Fletcher,

that your organization has spent considerable money to influence
tariff legislation, do you not?
Mr. FLEoid. I do not think that it has spent any money to influ-

ence legislation.

Senator RoV so of Tadiana. What was it spent for?

Mr. Fu.'r.efE. Most of the money that weo have Spent has been

for traveling expeinses in connection with visits to Washington of

the customs- committee, who dealt solely with the administrative
features of the tariff.

Senator R nhN'soN of Indiana. Wits not that to influence legislationi?

Mr. FiX.Tcnii. \ot iiesessarily. It was to corect Senator RonIxsox Of Indiana" Why send them here if you do not
want to itftliencd leiseilation ?
Mr. FJmXtn'.ce le were silnply trying to-correct tariff things that
in,! come into this bill that we thought were iin)roper.
Senator RoniNsox of Indimana. Then you (lid want to correct
V,I o-iolus things?
Mr. FI&wToimit. Well, yes; yes.
Senator 1oimaso-x of Indiana. That would influence legislation,

then, would it not?

Mr. FIlI 'a'IIERm. Well. I suppose indirectly it would.

Senator Rojnxsox' of Indiana. Let us not quibble about that. Mr.
Wijtm.ss. That is preeisely what all of these witne..ses havebeen
doing down here.
Mr. FLvwrcnra.. All right.
Senator Ron xsox of Indiana. Now. I will ask von if you know
how much you have spent since .January1-Doctor-pardon me. I
was confo.-mng you with Doctor Pickrell.
Mr. F'rirwn,. I am flattered, as a matter of fact.
Senator Ronixso-x of Indiana. Doctor Pickrell is, however, a mere.
1N.r of your association?
Mr. Fiax-TicEn. He is a member of the National Council; yes.
Senator Ronixsox of Indiana. How much money has your
ils.o(intion spent on these activities since January 1, 1929T
Mr. Fix-rcimq. Senator, I can not give you that information.
The treasurer of our organization is here. He is called as a witness.
He has all the data. There is no use of my guessing at things when
you can get accurate information from tie man in. charge of that
piarticular department.
Senator RoBiNsox of Indiana. Would it surprise you, Mr.Fletcher,
if I would say that your statement shows that the expenses in connection with the tariff bill since January 1, or frorh January 1,
1929. to November 27, 1929, were $18,829.30?
Mr. FLtre1EIRI. Not a bit.
Senator Rontxsox of indiana. Then you did spend some money
down here aside.from the small amont that you mentioned to the

chairman?

.Mr. FL.onHi. I think if you will look up that statement. you

will find quite a large percentage of that was the result of the
etustoms committee expenses in Washington.

2052

LOBBY INVESTIGATION

Senator Ron. so' of Indiana. Yes. We tire going riglit into that

statement. WVe are going into soine detail in connetion. with that.
I Wanlt. to Check up 111l(1 See low IIIh You know about what youlr
orga ization has been1
doing.

Mr. F xr'ni:R. All right.

Senator HoliINS().x Of, Inilitiiit. Wolild it sill'pri.se you to learn

(
1

that froiit Janlry 1, 1029, to November 25, 1929, the receipts of

youlr orgoanizition were %448,889.201

Mr. FJrviwit. 'o. Tlitt is aboit right.
Senator lmaoN'sox of
$44,045.30.
Mr. FvrcuEit. Not a
Senator Bolixsox of
$3,600 a molith.
Mr.IFi.ET4?JtifE. Yes.
Senator RoniNSox of

fii

Iiitiana. And that the disburslements were

th
bit.
Indiaina. That is an average of more than
Indiana. For the year it is.an average of

oxiutintelv $4.000 a 1montlh.

fe. ClIeIi. Or, )tting it another way, about $05 a month per

menlber,
SIenator Itml~ON of lutdiana. Well, I don't k{now about that. I
am looking tit these gross figures. I have lero t letter, that I unllderStand was date( sonletime in M[ay. Let me rend this letter and then
I will let it go iln Us a coiiiiuittee exhibit. It is apparently a blank
letter. [Reading:]
)E.I MI. -- : The lire1It tariff situatloii merits this personal letter in
which I respectfully retquet yoiU hilarest.
''h
Nional Coounll of American linpiorters and Traders (It..) has been

coitlliUously engaged thlls year In I)resenitillg the views of the American ha-

porter to the nuthoritles In Wt.sh;ngtion, its well as to the general liublic, uis
.
effectively im jIo.sh
4le.
'hits has been done through the preparation and
printing of %cultubh, briefs which have been distributed, not only to the
nieniei.lshlp, but to members of both Houses of Congress iind to commercial
bode.4 unl other. Interested throughout the United states. The Nat.otial
Counll hfts been repreqented Iefore the Ways and Means Commilttet and the
Senate Fhluince Coinittee by members of ou customs committee.
Considerable success has resulted from the National Couineil's efforts. Wo
must not imperil our activity. by stolplng this work now, but if we do not
raise additional funds prtIiptly the work must cease. The lack of a few
thoumnd dollars.should not be liermtted to stand In the way.

The annmil due., which suffice to carry on the routine work of the council

do not and were tint intended to cover these unusual expenses, which tire 6n.
avoidable In a tariff y0ar. Tlime character of our work speaks for Itself. 'The
outcome of the tight is vital to all importers, and I, therefore, wish to appeal
to you persoijihly-tosend your cheek to the National Coun.l, for at least $100.

Very truly yours,

Pe
a
its
let
th

fir
ow

ma
pr
pe'

sidl

I'IESIDENT.

You are the same president that signed this letter?

Mr. FLTCHEI. The .same -president.

in_

Senator Roni.sox of Indiana. That was sent out in May?

AMr. IeLM-''1En. Yes, sir.

Senator Rontxso:* of Indiana. Then you did have some interest

in influencing tariff legislation, didn't you#

Mr. IFJ.CH:. I dif.

Senator Ronmwsow of Indiana. This would indicate that. Then,

you put in in pencil "At least $100." Mr. Fletcher, that was back
last May, was it not Y

Mr. 1.P.ETHIR. I think it was; yes, sir.

lea
Ulf

to

LOBBY INVESTIGATION

2053

Senator RoBiNsoN of Indiana. Then you made a second appeal in

October?
Mr. FaTcnEn. I did.

Senator RoBiNsoN of Indiana. At that time you got this letter and
looked it over and sent practically the same letter, did you not?
Mr. FLL wimto. Yes.
Senator RoBiNsoN of Indiana. I note in this letter that at some
time or other, after it was first sent out, you indorsed with a pencil,
or some one did, presumably yourself, between the lines about two.
thirds of the way through the letter, this statement:
Our work Is nonpartisan, and we maintain no lobby.

Mr. FLzETCER. True.

Senator ROBioNsoN of Indiana. Will you please look at this, sir
[handing witness letter]. Isn't it strange that that statement appears just written on with a lead pencil? Wasn't that an afterthought, after this lobby committee got active?
.
Mr. FLECHER. Oh, no. It was a question of revising. This is not
a copy of the letter that went out at all. This is a draft.
Senator RonIsoN of Indiana. Then you revised it to include this
in the October draft, isn't that true, after this committee commenced
its activities?
Mr. FWCHER. No, no. You are mistaken. This was a draft of a
letter. This was a suggestion put in there. Whether it was put in
the final letter sent out I don't know.
Senator RoBiNsoN of Indiana. This was not incorporated in the
first letter sent out in May was it
Mr. FLETCHER. NO. I do not remember the exact phraseology of
our May letter.
Senator RoBINsoN of Indiana. Did you write this in here?
Mr. FLwTroh.
No. This Is not my handwriting.
Senator RonINsoN of Indiana. "Our work is nonpartisan, and we
maintain no lobby."
Mr. FLwocun. That is not my handwriting.
Senator ROBINSON of Indiana. It is strange that it is there in this
printed part.
Mr. FIc Him. Not a bit..
Senator RoBiNsoN of Indiana. But tbat it had to be inserted in
pencil.
Mr. FLETCHER. Not a all. That is a draft of a letter to be considered by a committee.
Senator RonizsoN of Indiana. Well, here is the letter that went out
in October. Do you recognize that? Is that your letter?
Mr. FLrrCHER. That is a draft of it. I think it is probably a pre-

cise copy.

Senator RoniNso. of Indiana. I think it is, too, from what I can

learn.
Mr. FLrcmHn. Very likely.
Senator RoBiNSON of Indiana. Isn't it strange that that same
thing appears there?
-Mr.Fizronm. Not strange at all.
Senator RoBNpsoN of Indiana. You don't know what I am going
to ask you. Wait a minute.

2054
it.

LOBBY INVISTIOATION

Mr. FLtCHER. You have asked the question and I have answered
Senator Ronixsox of Indiana. I have another one.

Mr. FI.E'onVIJER. I will answer that just as promptly.

Senator RoniNsox of Indiana. This is a double-spaced letter.

Mr. FL'R=1En. IS it?
Senator Roniuso.NL of Indiana. This went out in October. That is
after the committee commenced functioning.
Mr. FLrchER. I don't remember.
Senator Ronisox of Indiana. And a lot of newspaper publicity
appeared, anl thiiA letter, apparently inserted as an afterthought ih
a double-spaced letter-you crowd finto thui letter, separately, "br

work is nonpartisim and we ninintain no lobby,"1 within a typewiter.

Mr. FLL'f&ithat. Yes.

pos
tio

w
a

Senator Roimsox of Indiana. And it is crowded in between the

lines and underscored.
Mr. FLr.ki[sn. Yes.
Senator Ronixsox of Indiana. How (1o vou account for that?
Mr. Fix.'TciEni. Is there any significance attached to that?
Senator Ronzxsox of Indiana. I would think there would be a lot

of signifancee.

Mr. FLTcJMIEI. I should like to know what it is.

Senator Ronmxsox of Indiana. Why, send a letter straight through
it
as it was originally written, all in double space, instead of part of
in double.space and then this insertion in there in pencil. That
looks suspicious to start with.
Mr. FULRETOJIE. It may be suspicious to you, but that letter is a
draft. It is not a copy of the letter sent out.
Senator Rouxsox of Indiana. Where is the letter that was sent
out.
Mr. F,..ren:II. Y ou can get it from our files, no doubt.
Senator Ionixso- of Indiana. If this was a draft and it was sent
out in October, (loes it not look all the more suspicious that you had
to ince'pmorate that in this letter?
Mr. FLETCHER. On the contrary, that draft was submitted to a
committee, and the suggestion put'in there and penciled in before the
final letter is sent.
"
Senator Roirxsox of Indiana. Let me read what ill)ears immedi-

lately before that:

at nil ("o'iic'.' vi-orts.

itt
success,.isn't
That is tariff
t iollpar
1P. F'aaIER. Yes, sir.
Senator Rom.Nw of Indiana. That is what you tre talking about.
Mr. Fimi(Et. 1Exttely.
Senator Roiiix.sox of Indiana (reading):

ConslirdIlde .-ticeess bas rcstilted from lhe

Wv must not litlerif tir tellviltles by stopilig the work now, hut If we do
not raise ahitionll funds proniltly the work must cease. The hickeof it few
thousand dollars should not be permitted to stand In the way.

What (to you understand by lobbying activities?

Mr. FLrcnmt. Having a paid lobby in Washington.
Senator RoBINSOV' of Indiana. Well, you did have, didn't you ?
Mr. FeLMCER. We had no lobby in Washington at any time.

Yo<

wit
qic
S
lette

hay

lead

T6

Contll
porte
effee

Wee

but
other
IiCVii

'Em

11Ust

thsou
The

doit
Tho

NlIea
$100.

ta
tht

Mr

2055

LOBBY INVESTIGATION

Senator Ronizsox of Indiana. You had an office here.

Mr. FTrChtE.. Me had ali office merely-Senator RoBi-sox of Indiana. It was set up here for tariff purposes.
Mr. Fixmicm-i. That is not the point. It was not a lobby.
Senator Rom.xsox of Indiana. What was it?
MAl' FLEMIIRE. There was no attempt made to influence legislation.
Senator itom.nsoN of Indiana. Let us see. You first set it up in-the
Washintton Hotel.,
Mr. l.mLitra. For the convenience of peopleSenator RoBINsoN of Indiana. Then it was moved over to the
National Press Building.
Mr. F

MLETUER. Yes.

Senator Roimusox of Indiana. To get better facilities.

Mr FixmIIEII. For what?
Senator Ronixsox of Indiananu. For influencing tariff legislation.
Mr. FL vInE. No.
Senator Ronm.soN of Indiana. Well, we will come to that later.
Mr. FL, iTiRz. Would you like to know why that was opened?
Senator CARAWAY. Just a moment. Jwst, answer the question.
You know you hope to do sone more work after we get through
with this, and so do I, and I would like to get through with it
quickly.
Senator RoalNsox of Indiana. I submit for the record the first
letter, making a notation in the record of the fact that this one I
have just quoted, about maintaining no lobby, appears inserted in
lead pencil.
(The letter, as changed, reads as follows:)
Ds
MR, .. -:
The l .ipset
hlrlff rItuatihn merits thls lprsIK'l
whi'h I re.specltully request your Interest.

letter
,
In

The Natlial Counell of Amerlean inl orders and Tradors (laW.) Iss been
continuously engaged this year It lire.4entliig the vlews of the Aimerhan Ima.
porter to the authorities in Washington, ts well as to the general piblle, as
effectively as possible. This ins been done througit theli)eparathoii a1d lrintJug of suitable briefs which have been distribted, not only to tih(! nelaberpi
lut to Member. of both Houses of ('Wgr(4 11U1 to eO!niuerelalIl1d
ICod!,4'
('oun i has
''he N iolil
others Ilterested throughout the I'ltthd $!llte.
lICTj represeled bprolc lip W 111(1
all Mvala." (:.'ainlltc
id the
tite ,-eamt
1"IliIincc t'otmillte, by llnwlnterso ouI
0l
,llstortis coinlitep,.
('oil~derabh, svl(ee..s hIts re.sulted from tie Nnioinil Ci'lunwll's efforts. We
must not Imperil our uletIvIlle Iy .-tloloig the work now. but If we d4) not
inlse ilditloill fAiuds prdniltly lhe work mus.t eei ae. 'ThIeI lick of it few
thou.alld dollar sholhi nit be iierniltted to stimlld lit the way. Out, work Is

nioinpirtl.anil id we iihlihlllliij1o lobby.

The milII dles whIch s llh'te It cul

fill l ho 0olllI(' work (of tle cullell

do not alnld were not leildetto cover ohw.:( ti l:l ixtil.ses. whh'h tire
uavo'dale i In riff ye.
Tflar cliutrtiler of our work slpeiihs for itself.
The outcome, of tile ight Is vitll to sill lillorters, mid 1, therefore, wish to
appeal to you Iersonally to sNd your cheek to tle Nitllmil Couiell for tit least
Very truly
yours,

Senator CARAwAY. Do you know whose handwriting that is?

that your executive eerelary's handwriting?
Mr. FLTmCett. I don't know. It is not hine.

Is

2056

LOBBY INVESTIGATION

Senator Rom.soN of Indiana. Then, I would like to- pit ill as

another of the comilit(ee's exhibits this second letter Whichi pro'ports to be the same thing, and noting in the record that the saute
words are inserted in ty)ewriter, crowded in between lint's in a
doudle-spaced letter.
(TI'he letter, marked "$250 letter," isits follows:)
Dh, 3hl--- : iThe prest-ait tariff sitttiation nierits this iitrsonal hter in
whicl I re''petfully request your ii0re,t.
The Natlonll (o01ineiI of Alitllca li|ioi'itrs nd ''ritiler. (hu(,.) his been

cont
ron

COntllIInuusI.V elliigtd this %'('atr

III iil'reseNtiig tillviews of tile Ait1e'iut 1st.
porter to till, outlorities inlWslihngtoi, It.- well l.sto tie gelleral public,
its efectively its ijo.llit. Tfi
lits Ieui done thiroutgh tile preparation tinI

sur

and others Itertstel thlroghout tie Citd

goo

prititloig of suitable rletfs which haive WPMail|.Ibtitei, not only to the mein.
bersilp, but to .MAmQber8 of bothll ous.s of ('0olgres4 ild to (ollllln1'ltil bodies
41iiluts. The Nutitoiiu

(oil llts
]11

been repi-seted before tho lVWayslitl 311"1111.4 (owlittee

o
lanl the Sesnate l'Jllitlce
Connuitteo by ittembers or our elisthtni4 (1.inuultteMh.
Conslderaible Sctco.s litsi
resulted trols the National (Outell's eflori.

Vo

must not Imperil our activities 6y stoling the work now, ut if we do lhot
railse udditlofidl fulitis promptly, tlie work must cease. Tito hick of isfew
thousand dollars should not h4 ieer'itted to stind in the way. Our work Is
nonpartisan and we maintain no lobby.
The nitiutil (utes Wilch sufflce to curry oit tle rotiht work of thie ('ouill
do not and were not Intended to cover these unusual expenses, which tire
unavoidable lit a tariff year. The character of our work spetaks for itself.
The outcome of the fight Is vital to sill importers, and I, therefore, wish to
appeal to you personally to send your cheek to the National Counill for at
least $250.
Very truly yours,
1'rcsidcnt.

Senator Rom.Nsox of Indiana. Now Mr. Witness, you sent that

letter out asking for at least a hundred dollars the first time, didn't
you I
Mr. FLf-rf'ln

. Yes.

Senator Rornxsox of Indiana. The second time for $250.

Mr. FLE'roEic . No; I think that-:--.
Senator RoBisox of Indiana. Well, let us see if this is yours,
this letter appealing for $2150 sent to the followingMr. FL'rnstn. We divided the members up. Those that we
thought could afford to pay $250 we asked $250, and the other s we
suggested $100. 'That-is my recollection.
Senator RouINsoN of Indiana. This list, asking for $250, letters
appealing for $2050, sent to theo6llowing:
Win. Iselin & Co., .Tapanese Fan Co., J. V.Levy Corporation, Koh-I-Noor
Pencil Co., Atlantic Import Corporation, Commercial Fibre Co. of America,
Bourjols (Inc.), C. Bruno & Son (Inc.), L. 11. Cohn Co., Cohn & Rosenberger
(Inc.), Coty, Inc., Alfred Dunhill of London (Ine.), Kent-Costlkyan Trading

Co., New York Cordage Co., I. T. Piver (Ine.), Robert Reiner (Inc.), Stein-

hardt Bros. (Inc.), stix-Bcier & Fuller Co., United Cement & Brick Works,
Alex. Lee Wallau (Inc.) Wilkin & Adler
F.
Finc.),
W. Woolworth Co., Berg.
dorf & Goodman Co., Mlbank, Leaman & Co., Fisher, Bruce & Co., Jates A.
Hearn & Son# Brooks Ibrothprs, lolland & Sherry (Inc.), Ovlngton Bros. Co.,
American Ghanzstoff Corporation, butler Bros., Mcrory Stores Corporation,
Raphael Welli & Co., S. Stein & Co., W. 11. S. Lloyd Co., Johnson & Faulkner.

Is that correct?
Mr. FLTc10RR. That is probably correct.
Senator Roniwsow of Indiana. Iut this in the record as another of
the committee's exhibits.
(The list of names is as above recorded.)

goo,

S
Hie,
S1

recol

amo
beMn
81

Se
WoII
M
muclh
Se
ber?

Mrf

Aer
Sl

filing
for?

Mr

Set

Mr

Son

Mr.

Sen
That
legislh
the fiv
Jegisl

LOBBY IN VESTIOATION

2057

Senator RoBINsoN of Indiana. Was the response pretty good to

that letter?
Mr. FtimnR . Not very good; no.

Senator RoBinsoN of Indiana. What would you call good, Mr.

Witnescs
Mr. FE'rH . Well, if 60 per cent of the people we sent out to
contributed what we asked, we would consider that a very good
response.
Senator RoBInsoN of Indiana. Now, to this last letter, would it
surprise you to learn that the response was 117 contributions to the
amount of $8,502.25?
Mr. FLmwrcEu.
Not very much.
Senator ROmNSON of Indiana. And you consider that not very
good?
Mr. FALMIER. Not very good.
Senator ROBxNSON of Indiana. How much would you consider
good
Mr Fjxarctimi. Fifty per cent, I would say.
Senator RonlsoNq Of Indiana. How much would that be?
Mr. FLtrruIn. On the list here? I haven't counted the number.
How many names were there?
Senator RohNsox of Indiana. How was the response to the first
appeal?
Mr. FL'Trcnimr. Not particularly good.

Senator Roniwsox of Indiana. You had, according to your own

records, 189 cont ibutions as a response to the first appeal, il the
amount of $11,065, the total contributions to this special tariff fund
being $20,107.25.
Mr. Fuix ERa. Yes.
Senator RonqsoN of Indiana. That was pretty good, wasn't it?
Mr. FLirim.R. I don't think so.

Senator Ronixsox of Indiana. Well, wouldn't that be all you

would need to influence tariff legislation?
Mr. LwrCuER. Tthe tariff isn't finished yet. W1e don't, know how
much money we will have to sl)end.
Senator ltonixsox of Indiana. That is all you used ip to Novein.
ber? That all came in tip to November. You are still at it, are you

not.
Mr. FLiTOIIF.II. Yes.

Senator CAIIAWAY. You are talking about needing money now to

influence tariff legislation. What do you need it for? 'hlie time of
filing briefs and all that is passed. Now, what do you need money
for?
Ar. F Tcim t. We have these gentlemen down here now.
Senator CAAWAY. What are they here for?
Mr. FLtwctll. At their own expense.
Senator CARA AY. What for?
Mr. FLtfrcIIR. At the request of your committee.
Senator CARAWAY. Oh, well, that is not to influence tariff at all.
'That is to let the public find out what you have done to influence
legislation.

But you said in your response to Senator Robinson that

the fight is not over yet. Are you maintaining any effort to influence

legislation nowI

2058

LOBBY INVESTIGATION

Mr. FLUMCHER. Not that I know of.

Senator CARAwy.. Are you spending a dollar?
Mr. FLnicnn.
Not I.
Senator CARAWAY. Then what would you need the money for?
What I ant coming to is this: I have not been able to get the busi.

ness man's Vlewp6int. What did you need any money for in a tariff
fight other than to prepare yAir briefs anl pay the expenses of the
witnes-ses who appeared before the committee?
Mr. FmLmnoii. Well, we hIad to spend sonto money in convertig
the new rates of duty on wholesale importations into the effect upon
the retail sales price.
Senator CARAWAY. I understand that, but that went to the coinmittee.
Mr. FLm'cHER. That went to the publiCity committee.
Senator C.AAiWAY. Oil, are you maintaining a publicity connittee?
Mr. FLETCIER. Yes.
Senator RomOxSO of Indiana. Are you sending that out to the
public in general?
ir. FLTCHmER. To the public.
Senator CARAWAY. Do you imagine you are influencing legislation
by that?
Mr. FWmcTCHER. I am afraid it has been rather a washout.
Senator CARAIWAY. It has been worse than a washout. I just want
to get the business man's viewpoint, and I am frank to sa you ipress me very favorably indeed, and, being a Scotelnman, I now you
don't want to throw youir money away. What, was it you people
expected to do by soene kind of a campaIgn of publicity?
11Mr. F1ixTIIEit.

To merely show the etfect of the new high rates on

Senator CARAWAY. How were you getting that to the l)ublie

Mr. FILlmcJit. I, myself, did some of that in connection with tie
rice.

Mr. IFoixrucmw. This was all sent to Mr. Le 1outillier, tie elairmn of lie pIblicity Coiniiittee.
Senator CARAWAY. How did lie get it to tle public?
Mr. Fixrur'wi. He got it to the public through the Phoenix publicity bureau.u
a
Semu oi.('-CmLWvt . Yaei have a
Mr. FLeIkrc.n-. We have.
Senator (AIIAw.. Did you. ever, try a star gazer or i palml reader
in an attempt to influence legislation
Mr. FLereiEr. I think next time I shall.
Senator CAWy. Wlell, these publicity bureaus nnust. get their
tips front that source, and you might as wel go to the original source
yourself. How didl yo1r publicity bureau intend to get it out I
MrF'. FJLmeCi.
I-really don't know the details.
Senator CARAWAY. Of all the fakes I have seen, they are entitled
to tie first, place, unless you have one that is different front those we
have exainnned before. bid you see any results front your publicity?
Mr. FLErCHEIR. No.
Senator CARAWAY. How much are you paying for it?

--

Wh
X
I

S
weM

In
lite
bIre
Se
me.
bSire
Sc
se
nOW

retail prices.

inlereases, showing tile lantig cost ald the extra retail

Senator CARAWAY. How did .yoi get it to the IIbiie?

sf s
for n

8U

de
3M.
Sedella0
Mr
tlous
Sen

you (b
y111 e.
Mr.

Sen
vembe
Mr.
Sen

Sen

LOBBY INVESTIOATION2

2059

Mr. FLErCHEr. I haven't the figures

Senator CARAV AY. I thought possibly you knew what the contract

Our treasurer is to
be examined, and so is Mr. Le Boutillier,onthethat.
chairman of publicity.

was.

Mr. FLrChER. No; I can't give the figures.

Senator CARAWAY. You had a contract of s6 much a monthI
Mr. FLET'rcEn. For a limited period, I think.
Senator CARAWAY. Where did you find your publicity man?
Where was he when ou got hold of him?
Mr. FL'roigIt. Mr. Lo Boutilhier?
Senator CARAWAY. Yes.

Mr. FV'tnER. The chairman of our publicity bureau?

Senator CARAWAY. No; the publicity bureau you hired.
Mr. FL TCHER. We found them in New York. You niean how did
we make the first contact with him?
Senator CARAWAY. Yes.
Mr. F.nvwn-u. I happened to meet in London Mrs. Heed at a
luncheon one day, and she told me she. had a publiciv bureau. When
I got back I saw Mr. Ie Boutillier and told him about this publicity

bureau.
Senator CAR.AwAY. The lady you had met?
Mr.

Fu.a'mcima. And that sie had created a very fine impression on

me. That is how it came about..
Senator CARAWAY. Are you still maintaining that publicity
bureau
Mr. FLiEvv'mi. No; that contract expired some time ago.
Senator (CARAWAY. Are you maintaining any publicity bureau

now?
Mr. FUN(CHER. None at all.

Senator CARAAY. You were sending out in November an appeal

for money.
3r. F~m'enu. Yes.
Senator C~inAwxy. And you say! "A few thousand dollars may be
decisive of this fight."
3Mh'. IF,.'ro1tn.
Yes.
.Senator CAuRAxwAY. Tell us how you exje.('te(l to use a few thousand
llars bust November in influeneng tariff legislation?
Mr.' I'irrcn'u. I don't-(ule get that.
Senator CAWAY. TJ ll us owlloyou ex)eCtOd by tli usje
a few
thousand dollars last. November. i' from Novenuber until ofnow,
to
inflnence tariff legislation.
M'. FLrcJimi. Well, we were running pretty close-Senator CAR wY. That is not it. I don't ctire how
you were
friaing. I Want to know what you expected to get outclose
of the money
you expected to spend.
Mr. FiLxviCER. Nothing more than we had ready done.
Senator CARAWAY. WMat were you spending money for in No-

vember?
M'r. FLLFCwnHE.
Senator

Very little money was spent in November.

You! were sending out an appeal.

CARAWAY.

Mr. li'IER. Our funds were very low at that time.

Senator CARAWAY. Aren't you trying to fence with me now?

LOBBY INVESTIGATION

Mr. FLETOHER. I am not. Our treasurer will explain to youSenator OARAWAY. The treasurer will know how much he got and
what he did with it, but you will know what you expected to do with

it. What activity were you financing in November that you hoped

would influence tariff legislation"?

Mr. FLrwnTH.
None at that time that I can think of.
Senator CARAWAY. Then why were you sending out an appeal ask.
ing for money, saying that a few thousand dollars would be decisive?
Mr. FLEmcItEn. Because, as these records will show, we had already
spent more than we had got in on this special fund.
.m
Senator CARAWAY. Evidently, Mr. Fletcher, my questions are not
clear. Here is what I want to know. You were asking the members.
of this importers' society, or whatever it was, in November, to contribute; and you said to them, as I now recall, that a few thousand
dollars might be decisive.
Mr. FLwEtbEiR. Yes.
Senator CARAWAY. What use did you expect to make of a few thousand dollars last November or December? What were you going to
do with it, Mr. Fletcher?
Mr. FLCaEiR. I don't know that we had any definite thing in
mind, except we might have to use more money.
Senator CARAWAY. Now, whatMr. FLINCHER. In sending our customs committee down here.
Senator CARAWAY. What could your committee do then? The
hearings were all closed, and the lill was already reported in the
Senate. It had gotten past the House and it was up to die Senate to
discuss and finally decide the rates. What use for money did you
have then?
Mr. FLETHER. I couldn't say..
Senator CARAWAY. Then, why did you ask for it?
Mr. FLETCHER. Because we were short of funds. I think the answer is quite clear that we had already spent more than we had got
on our first appeal.
Senator CARAWAY. Then let me ask you this; you are a business
mail: Why didn't you say to the members, "We ar4 in debt and would
like you to contribute to wipe out our deficit," instead of saying, "We
have got to have a few thousand dollars more, and it may be
decisive "?
Mr. FLETCHER
. Because we had no deficit. We had only a deficit
so far as the special fund was concerned. It was possibly because this
alpeal might have been more effective.
-X
Senator CARAWAY. Sir?
Mr. FLrciER. It possibly was because I thought this appeal
might have been more effective than to appeal to make up a deficit.
Senator CARAWAY. Of course( it possibly might have been, but you
knew it wtsn't that. I know you know what was in your mnd.
Now, what use did you expect to make of the few thousand dollars
you were trying to collect in November?
Mr. FLETCHER. For any contingencies that might come up.
Senator CARAWAY. What contingencies were you anticipating?
Mr. FLETCiHER. Not any definite one.
Senator CARAWAY. Sir?

iii

111V
1J

bL
wh
eIO
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e
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real
orde

LOBBY INVESTIGATION

2061

Mr. FLmi le,n. Not any particular definite one. We couldn't peer
into the future.

Senator CARAWAY. You told your members it was one of those

S. 0. S. calls, going out for imnediate action, in which you say,
"All of our future depends iUpon it and our past aetivit ies will be'a
failure unless you contribute now -2,000." ,Now, please tell s, because yotu will help yourself and help us, too. what did you expect to
do with this $2,0"
"
TMr. Fi.m'cnet. I really don't know, except to have a sufficient
amount in-the treasTry to meet any contingp.ein.y that miglit arise.
Senator C.IMAWAY. What contingency dhl you think could arise
where you could get anything for your money at that stage of the
game?
Mir. Fl.h-r'r.ci
. I don't know that we had any definite contingency
in mind. We were just trying to raise funds..
Senator CA!,w.%Y. I know that, arnd I just hope you will continue
as you started out, by being perfectly frank, and f think it iuiist be
miy failt now. Here is what I am trying to get at: You are a busijih.ss lan. The people to whom you were stnling this uujpal were
busines- men.
3r. FLErCHER. Yes.
Senato' CAA.W. Y. They must have had in their mind somneway in

wiul. they could influence legislation. Ve know they couldn't have

done it, bet I want to know their viewpoint, and what it was they
expected they could accomplish w'th money at that stage of the
gaune.
Mr. FLLrMvCHER. That is a very difficult question to answer. As I
said, we sent this second appeal out because our general funds were
low, and we had gone into our general funds in connection with
legislation.

Senator C(.uuRwAY. But the language. I am persuaded that you

are perfectly on the square with your associates. I just feel it, and
I know that you were not trying to got their money away from them
ender a false pretense.
MIr. FLETIIJRN. JNO.
Senator CARA.Ai'.Y. You said, "A few thlolsald dollars. may be
decisive of this campaign we are carrying ol to prevent an increase
in the tariff rates. "
How did you expect to use a few thousand dollars to prevent finl
increase?
Mr. FLMErcIEn. I really can't answer that question. I don't think
there was anything specific in our mind, except to build up our
finds anti to take care of the excess money we had already spent out
of the general fund.
Senator CARAWAY. Then, why didnt you say, " Ha v i ng one
through an expensive campaign we have depleted our special fund,
and we want you to contribute to it."
Mr. FEtmrIIEn.*I imagined we would get better results from this
strong appeal.
Senator CARAWAY. Do you realize what that implies? Do you
realize you were making a false representation to your associates in
order to get them to contribute?

2062

LOBBY INVESTIGATION

Mr. FLrCurnER. I don't think I would make that implication.

Senator C.MIIAWAY. I hope that isn't true, but isn't that what it
inlplies. You were asking for money lI one account when you
wanted it for another.
Mr. FiaUmnmiE. No; because as I have said, we had already spent
the money.
Senator CAnAWAY. That is a question of ethics oin which we tire
dividede, btcau.se I think if yoU teieded it to niake
rather h
up a deficit you'should liave a-ied for it for'that purpose. Gn the
other hand, "you said, " We lave a few thousand( dollars and it. mnay
be effective, and the whole effort may be a failu'e without it," and
you get the money tlat way. They don't quite know why they were
paying, and I just can't reconcile that with what I thought your
"ni
whole attitude was.
That is all, Senator Robinson.
Senator ROBiNsoN of Indiana Nowl'. M'.r Fletcher, the Washington
office ran into some expense, didn't it?
Mr. FLErunnR. Yes; a little expense.
Senator Ronsxsox of Indiana. Of course, when you first took the
stand you said you had iho expense antl paid your own down here,
an(d so forth andi so on.
Mr. FLmrcimEu. That is my personal expense.
Senator Rornhso. of Indiana. You were speaking just as the head
of the lineni group.
Mir. FLe-rcnER No; I am not head of the linen group.
Senator Romxso, of Indiana. You were speaking of linens and
nothing else.
Mr. FLerunEi. Nothing else.
Senator RoinNsoN of Indiana. You were not attempting to speak
with reference to tile association of which you are president?
Mr. FEITXCIIEn. Yl%. So far as I am personally concerned, I paid
my own expenses.
Senator Romxiso.x of Indiana. But when you said you had no expense here that you know of, except $50 or something like tlat,
you didn't h. ee reference to this trenendous expense I am reading
about ?
Mr. ,'IIrCHER. I was being interrogated about the linen question.
Senator Roii.is0" of Ifh)ana. I knoW; and you didn't feel like
volunteering anything outside of the strict answer to the questions.
Mir. Fi.u'irmi. I have been asked not to volunteer anything by
your ehairn.n
Senator RoBmsox of Indiana. The traveling expenses were pretty
heavy, too, weren't they
Mr. FLUMCHER. 'Yes; I think it costs about $12 to come down from
New York.
Senator RomxsoN of Indiana. Traveling expenses were mostly
from New York to Washington?
Mr. Fr 'oinm. Yes.
Senator RoinsoN of Indiana. Have you any idea how much you
spent from January I to November 27 in tile interest of your organization for traveling expenses
Mr. FLtCUEr. No; I have no idea.'

to

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LOBBY INVESTIGATION

2063

Senator RoBq.IsoN of Indiana. Would it surprise you if I were

to tell you the figure was $3.320.1"?
Mr. Ii'LVTCUII. How many months?
Senator RoniNsoN of Indiana. From January 1 to November 27.
Mr. FLrTC1iEn. Eleven months.
Senator Ronmxsox of Imliana. Pretty nearly 11 months.
Mr. FLtrTikn. That doesn't surprise me at all.
Senator RomNsox of Indiana. Do you know what your Washing-

ton officeodid cost you?

Mr. Flk.'TIElli. i can't remember offhand. It. was a very small office. I think $100 a month we paid, or something like that.
Senator Ron1xs'ox of Indhina. Would itt surl)rie vou to learn that
vour office expenses it! Washington for those 11 inonli---and you just
had it here during that period, did lounot?
Mr. Fr.-.-rctm.R. We didn't have it ais long as that.
Senator Rommsox of Indiana. You started about when-in the
spring?
Mr. Firwtnv.n. I don't remember when we took on the Washington
office. I don't think we had it more than five or six months.
S(*Iator Rolmsox of Indiana. In any event, the Wa.shington office
Co.st you-it would not surprise you to learn it cost you in the few
months it did operate-it is still in existence, is it not?
Mr. FLETrcnOn. No, sir.
Senator Ronm.sox of Indiana. Wien did you abandon it?
Mr. FLir
mci.Three months ago.
Senator Rorniso. of Indiana. Three months ago. At this time,
November 27?
Mr. FmLE.IcjIK.
01, I think before that.
Senate Runixsox of Indiana. Well, in any event, while it did
funtion it cost you $3,242.40.
Mr. FIT.(rTimTE. Yes.
Senator Ion. so" of Indiana. Here is an item for Davis & Devans,
.3Ji07.115. That is the late Mr. Davis?
lr. FI.r('nEI. Tie late Mr. Davis.
Senator Ronxiso.-x of Indiana. He is deceased now?
3r. Fm.m.'i't:u. Yes.
Senator Ro mxso.x of Indiana. Is that th saime Mr. Davis who
was oximii-rof
,nierchuindi.
6of -hepo-rt 6f Cicag0 ant er pecial agent of the Treasury Department and still later head of the
customs information bureau tinder the Government at New York
city?
Mr. FLE CHrcu. I believe so.
Senator Romxsox of Indiana. And I suppose that is the reason
he would be valuable to your organization, because he had all this
governmental experience
Mr. FL'rcEn. That can be inferred.
Senator RonIxsox of Indiana. And that seems to be the rather
common procedure, doesn't it, to employ men of that type away
front the Government?
Mr. F,'rM[dEr. Yes.
Senator RoInrsoN of Indiana. Back in 1922 he was an expert,
was lie not, a tariff expert for the Government?
Mr. 1"LreTIin. I tlnk so.

2064

LOBBY INVESTIGATION

Senator RoBinsoN of Indiana. Now, he passed away along about

March or April, did he not?
Mr. FL HR. April, I think.
Senator RonisoN of Indiana. Then Mr. Bevans took his place?
Mr. FLLETHER. Yes.
Senator RoiNsoN- of Indiana. As your counsel?
Mr. FLEHcERu. Yes.

Senator Roniwso.v of Indiana. That is, as a sort of representative

down here?

of
P
T

Mr. FLurvIIn. Not here- New York.

Bta

Mr. FLtOIEnR. Oily occasionally, I believe.

tl
I

Senator RomNsoN of Indiana. Well, he came here frequently, did

he not?
Senator Romixso.v of Indiana. How was that?
Mi FLrcihER. Only occasionally.
Senator Ronixsox of Indiana. Well, he did some occasionally?
Mr. FLvCHER. Yes.
Senator RoBNsoN- of Indiana. And this item for Davis & Bovans,
therefore, for 0,67.15, in that brief length of time, has reference to
these two gentlemen I have just named?
Mr. FLETCiER. Yes.
Senator ROBINSON of Indiana. Who were assisting you in your
tariff activities?
Mr. FLE'CHER. Yes.

Wal

Da

of Indiana. Not only to keep the tariff from

Rom-so.x
Senator
being
raised,
but to lower it in some instances. That is trie, is it

Prit
pub
Pe

not I

Pho

Mr. FI-rcitim. No. Mr. Bevans, I believe, had nothing to do with

rates, only with the administration features.

Pos
SunI

Senator 1toBiNso-. of Indiana. Yes; but to influence tariff legis-

lation.
Mir. FL-TCHER. Well, you mentioned rates.
Senator RoniNso-,% of 'Indiana. Let me ask you. That is the same
Mr. Beans, is it, who was employed as an examiner and special
agent of the Treasury Department?
Mr. V LWCIER. I b~lievo he was.
Senator RomisoN of Indiana. You hired him away from the
S
Government, too?
Mr. FLETcHER. Oh, no. He had been out of the Government many
years.
Senator RoBiNso" of Indiana. But that was his chief recommenda.

tion, was it not?

Mr. FL THER. No.
Senator RoBINsoN of Indiana. What was it?
Mr. LETuHEn. Because he was a partner of Mr. Davis we thought
it better that our work should be carried on by his partner.
Senator loerws6& of Indiana. To be sure, but both of them had
been in the Government service in the very line of work in which
it would be important to your organization.
Mr. Fw=cmi. Exactly.
Senator RoBNxsoN of Indiana. Now Mr. Witness, for printing
briefs, and so forth, in your tariff activities, $3,108.15.

Mr. FwrcnE. Yes.

'ota
Res

treat
urer
S
stat
reco
S

ent.
has
the
read
men
I

2065

LOBBY INVESTIGATION

Senator RoBi.sox of Indiana. Publications, tariff bills, and reports

of hearings, $491,05; stenographic reports, $183.14; Phoenix News
Publicity Bureau $5,628.59; postage (special), $45; sundries, $142.605.
That is a total OF $18,829.30.
These were all expenses in connection with your tariff activities,
were they not?
Mr. FLe'ronEn. I believe so.
Senator Roi-Nso. of Indiana. Additional expenses, not separate,
stationery, and postage. That is not itemized.
And your total contributions to this special tariff fund were
20,167.265 in that length of tie.
This is your statement, is it not,
the statement of your organization ? You have just verified it, and
I assume it is. It was in your records.
Mr. FLETCHER. Yes. That is my statement.
Senator Ron-NsoN of Indiana. Then, it imay go into the record,
s a committee exhibit.
(The statement referred to is as follows:)
Novmmzn 27, 1029.
BgpenC8C

hIt cominctlon with tariff bill, January I to November 27 (Ihclusre)

Traveling expenses

------------------------------------ $3, 320.17

2.342.40
Washington office, rent, sidarles, and expenses---------------3,507.15
--------------------------------------Davis & Bevans
----------------------- 3,106.15
Printing, briefs, etc ------------494.05
Publicatios, tariff bills and reports of hearings ----------------183.14
------------------------------------Stenographic reports
5,628.59
--------------------------Phoenix News Publicity Bureau
45.00
----------------------------------------Postage (special)
142.465
Sundries
----------------------------------------------18,829.30
(Additional expenses not separable, stationery, postage.)
(Jontributtons to special tariff fund
Total response to firt appeal (189 contributions) ------------

$11.65.00

Response to second appeal to Nov. 27 (117 contributions) -------- 8,502.25

20,107.25

Senator RonisoN of Indiana. Now, I have the statement of your

treasurer %ere, or what purports to be a statement from your treas.
urer. I will ask you to identify this paper I have in my -hand.
Mr. F.rc,IEa. Would you object If I asked the treasurer?
Senator RoBiNsox of Indiana. Not at all.
Mr. Lloyd identifies this, but suggests lie has a
Mr. FL~otmcu.
statement up to the end of the year which might be better for your
record.
Senator RoBI.soN of Indiana. This will bo sufficient for the pres.
ent. From this statement, January I to November 25, 1929, which
has jlst been identified as the official financial or fiscal statement of
the National Council of American Importers and Traders (Inc.), I
read the footings for that period: Receipts, $48,889.20; disbursements, $44,045.80.
I ask that this go in the record as an exhibit.
78214-0--pr 5-19

2066

LOBBY INVESTIGATION

(The statement referred to is as follows:)

National Counclt of American ln porters and Traders (io.),
November 25, 1029

1&fuary.

......................... ..........

...

fbary....................................................................

_unl e.......
.
.

.....
""' ......
.'"............
.
.....
....................................................

Qe MY .. .......................................................... .........
0
......... .
Octob ........................ ....... ...... 0..... a............ *..

;Uovm*b*er
August ....
0.-.........................................................
............................................... ..............
September..................................................................

January I to

Receipts

Disburse.
ments

7.97.18

$Z32O

782.
0$ es

ZS7.*

3 6.
038~nt
&1818

9,033.89

041.43
3547.09
9'W89
0-141.43

51.00
1,440.31
.689.4

............
Disbursements ............................................................
Balance, November 2 ................................................ .............

toni
ma

th

73 .h

3 ,1th
87 .

. .7339.78
44,0450

was
the

13. 29.40

Senator RoBiNsoN of Indiana. You are the president of this or.

S1

W.

ganization, Mr. Fletcher of course, and therefore testify you are

responsible for its activities.

Tha
M,

Senator Roxxsou of Indiana. Do you know of any money spent

for any entertainment down here?

from
Af

Mr. FLETCHER. Yes, sir.

Mr.FFEIrdnEe.

I do not.

Senator RoBiNsoNx of Indiana. Or in New York?

Mr. FETCHER. Nor in New York, sir.
Senator RomNsox of Indiana. I have here a number of statements
that evidently you can verify, and I will read them to you without
taking a lot of time.
Frank J. Nolan, traveling expenses, February 24-26, and May 5-10.
You recognize Mr. Nolan, do you not?
Mr. FLTroHER. Yes, sir.
Senator RoBINsoN of Indiana. He is connected with you ?
Mr. FETCHER. Yes.
RoInpsox of Indiana. Is that the same Mr. Nolan who was
anSenator
examiner of woolen and worsted imports at the port of New York
for the Government ?
Mr. FLmTCHER. The same person.
Senator RoBINsoN of Indiana. The same man I
Mr. FLETCHER. Yes.
Senator ROBINSON of

Indiana. I have here traveling expenses of

Otto--well, Mr: Nolan's traveling expenses were $54, Ways and
Means Committee, and $56, part.
I have here the traveling expenses of Otto Fix, running from April
to October at different times, amounting to $552.81. That is correct
so far as you know?
Mr. FLTCHER. So far as I know; yes.
Senator RoBnrsoN. of Indiana. Otto Fix is connected with you, is
he ,nott

Sc

S,
M
Se
have
was
M
S
Way

know
Ar
Set
Davii
mere
for t
Mr
Set
to So
that t.
specia
Mr.
Sen
after
Mr.

Sen

and I
to Ne,

LOBBY INVESTIGATION

2067

Mr. FLETOHn. One of our customs committee.

Senator ROBINSON of Indiana. Now, Mr. Witness, is that the same
Mr. Otto Fix who was examiner of cotton goods of the port of New
York and later special agent and assistant to Mr. Davis in the Customs Information BureauI
Mr. FLE'THER. The same gentleman.
Senator RonINsoN of Indiana. The same man, and he is the same
man who was an expert in 1922 on tariff I
Mr. FLwrcHEn. Yes, sir.
Senator ROBINSON of Indiana. I have here Charles T. Riotte. Is
that correctly pronounced?
Mr. FLB IER. It is Riotte. the "e" is silent.
Senator RoBINsoN of indiana. For traveling expenses, running
through, apparently, five visits from February to October, $180.50.
That is correct so fare as you know?
Mr. FLErCnER. So far as I know.
Senator ROBiNSON of Indiana. Is that the same Mr. Riotte who
was examiner of lace and embroidery at the port of New York for
the Government?
Mr. FLETCHER. The same gentleman.
Senator RoBINsoN of Indiana. The same man. I have here Carl
W. Stern, from June to September 25, traveling expenses, $222.06.
That is correct so far as you know?
Mr. FLETCHE. So far as I know.
Senator RoBINsoN of Indiana. These traveling expenses were all
from New York to Washington?
Mr. FrCHER. Yes.

Senator CARAWAY. Were these all in connection with the tariff?

Mr. FLwLrER. All in connection with the tariff.
Senator RoBINsoN of Indiana. Now, as to this Carl IV. Stern, I
have overlooked him somehow or other. That is one you had who
was not connected with the Government is it not?
Mr. FLrCHER. I don't know whether lie ever was or not.

Senator ROBINSON of Indiana. Mr. David Walker, February 24-28,

Ways and Means Committee, $81.50. That is right., so far as you

know f

Mr. FLTCHER. Yes.

Sentor RoBiNsoN of Indiana. Mr. Witness, is that the same Mr.

David Walker who was inspector at the docks, later examiner of

merchandise, passing on a variety of goods, at the port of New York
for the GovernmentV
Mr. FuCHER. I believe so.
Senator RoaimsoN of Indiana., James W. Bevans from April 80
to September 10-17, $205 traveling expenses. I think you testified
that that is the same Mr. fievans who was employed as examiner and
special agent of the Treasury?
Mr. FfwroH. I believe so; yes.
Senator RoBINsoir of Indiana. Mr. H. G. Hunt. He was looking
after your Washington office, was be not?
Mr. FLvwHEB. Yes.
Senator RoBINsoN of Indiana. I have here two items of June 10

and August 19, traveling expenses, the first for $25.10, Washington
to New York and return, and August 19, $27.-0, Washington to

2068

LOBBY INVESTIGATION

New York and return. Vas Mr. Hunt connected with the Govern.
ment in any form or other?
Mr F.zrCHER. I don't think so. I don't think he ever was.
Senator RonIsoN of Indiana. How (lid you happen to hire hital
Mr. FLv.1'CER. So far as I can remember, he was recommended by
Mr. Carl Stern as a man who could take care of the office, and who
knew something about customs procedure.
Senator RoBINso" of Indiana. He knew something about custom

procedure?
Mr. FLE'TrelER. He had tried cases in the Court of Customs and
Patent Apl)eals. He was more ofra patent man.
Senator Romn.sox of Indiana. A New York man?
Mr. FLVRTCIF.R. No; a Washington man.
Senator RoB.Isox# of Indiana. Is he still on your pay roll?
Mr. FETcIEER. NO.

cor

DViv

H.

Senator Ro.xsoqx of Indiana. George C. Davis.

Mr. FLrCIIER. Deceased.
Senator Romxsox of Indiana,. That is the George C. Davis who is
deceased?
Mr. FLETiER. Yes.

Jain

Senator Roimso- of Indiana. And he had also been employed

by the Government. Up to March 26, 1927, there were $294.99
traveling expenses. That is right so far as you know?
Mr. FL'TcllER. As far as I know.
Senator RoBnpsoN. of Indiana. H. 0. Lloyd, February to Septem.
be', $199. Is that correct so far as you know?
Mr. FLETCHER. So far as I know; yes.
Senator RoBIxsoN of Indiana. Now, these are not their total ex.
penses, of course. These are just expenses paid by the national

Geo

council.

Mr. FLETcHER. By the council; yes.

Senator RoBINsoN of Indiana. I will ask that these go in as a
committee exhibit.
(The list of individual traveling expense accounts in part above
referred to are as follows:)
Frank J. Nolan, traveling expenses:
Feb. 24-26 (Ways and Means Committee)
---------------- $54.00
May 5-10 (part) ------------------------------400S
100.00
expenses:
traveling
Fix, W3-25
OttoApr.
------------------------------Apr. 27-28

May 5-9

-------------------------------------

L5.00

May 12-------------------------------------------June 11-14 ----------------------------------------------July 14-10 ......

--------------- -------------------------

59.04

N~at

M
8

i&

4.00
74.00
47.9
41.16

Apr

Sept. 1- ---------------------------------------- --- 4.00

Sept.
-27
---------------------------------------1.0
Oct. 8-5---------------------------------------- -49.00

8
been

Aug. 23-25

-------------------------------------------

47.21

552.81
--- -

zati,
M

LOBBY IN VESTIGATION
Charles 1'. Tiotte, traveling expenses:
Feb. 24-20 (Ways and Means Committee) -..
-------,March 24-25 (part)
-----------------------------------Jule 11-13 (rt) -----------------------------------Sept. 12-14 (part)
------------------------------------Oct. 13-14
-------------------------------------------

2069
$50.00
29.00
7.00
20.00
38.50
180.50

Carl W. Stern, traveling expenses:

June 11-13See. 402
----------------------------------------Fi1nanlce

(!ol"nittee

---------------------------------

July 14-10 Finanice Connittee, self ind part of eonnlitte ------Sept. 22-2
---------------------------------------------David Walker, traveling expi-ises:
February 24-28 (Ways auld Means Committee) ---------------H. 4[. Htmt, traveling expensets:
June 10 (Waslihgton to New York nd return) ---------------Aug. 10 (Wushington to New York utd return) --------------James W. Bevans, traveling expenses:
Apr. 30
--------------------------------------------June 12-13
-----------------------------------------July 15-10
------------------------------------------July 30-Aug. 1 (part)
----------------------------------Sept. 10-17
------------------------------------------

40.00
18. 27

.6

67.13
222.06
81. 50
25. 10
27.150
45.00
30.00
40.00
25.00
65. 00
205.00

George C. Davis, traveling expenses:

Jan. 12
--------------------------------------------Jan. 23
--------------------------------------------Feb. 25-27
-----------------------------------------Mar. 20-27
------------------------------------------

35.00
48.93
15.00
4.00
294.09

H. 0. Lloyd, traveling expenses:

Feb. 24-20, hearing, Ways and Means Committoe (Incldental for
others of committee)
---------------------------------Sept. 17-20
-----------------------------------------Sept. 25-27 -------------------------------------------

73.00
73.00
5 00
199. 00

Senator Romsox of Indiana. Mr. Fletcher, were you with the

National Importers and Traders Council from its inception?

Mr. FLETCHER. From the beginning; yes.

Senator RoBINsoN of Indiana. When was it organized?

Mr. FLETCHER. On March 12, 1921.

Senator RoBiNso, of Indiana. When were you elected president?

Mr. FLErHER. I have been president nearly two years. At the
April meeting, 1928.
Senator RonIsoN of Indiana. Who was your first president?
Mr. FLrHER. Mr. Franklin.
Senator RonsoN of Indiana. But Mr. Frank Van Leer, jr., has
been the executive secretary from the beginning'
Mr. FLETCHER. From the beginning.

Senator RoBIxsox of Indiana. Who sent out the call for organization?
Mr. FLETCIIER. I believe he did.

I am not sure of that.

2070

LOBBY INVESTIATION

Senator RoBivsox of Indiana. And you were one of the organizers

of the council, you, yourself?
Mr. FwOHER. Yes.
Senator RouINsox of Indiana. I have a letter here that I under.
stand was sent out about March 1, 1021. That was about the time
you were organizing this council. Is that true?
Mr. FmErcm . Yes.

wh

Senator RonnsON of Indiana. Parts of it are interesting, and I

me

At tile renluest of a group of hnporter.s interested ini seeing the American

ImpIorters Asksotittlon revived, or it new orgtinization formed, the undersigned
has taken the initiative lit the maiter, mid lins called a iieeting to be field
12, tit 2.30 clock p. in.
In room 812, 1(N) Broadway, 18atttrdiy afteriioon, March
This meeting will be Ihulled to a fow importe-s who iaity be interested In
seeing a moveinvat of this Iind launched. Please understand th1t this In.
volves no obligation -In connection with the llnaefnig of 'the organization.
You tire asked to attend this meeting solely for the liu'piose of giving those
present the lienelit of your views.
The impending tariff action nn(l thei nany other difficulties with which ha.
porters will have to contend during the next few months, make It Imperative
in the opinion of leaders lit the import field, to bring into existence an or.
ganlization of representative importers, which will act as a nlouthpleco for the
Import interest of the country. Domestic iinnufaeturers are well organized,
and well represented ti Washington. Tlhure is no reason why, In a legitimate
and intelligent fashion, American Importers shonhl not have like representation.
It may interest you to know in this connection thtt ain Individual with wide
manufacturing Interests, known as one of the most rabid protectionists in the
country, Is slated for the Tariff Commillon. This would seem to Indicate the
policy which will prevail during the next four years, and emphasizes the need
of some such organization as the one we propose.
Will you kindly advise the undersigned whether or not you will attend this
meeting?
Very truly yours,
i KVAN LEEm Jr.

an

read it, to see if you will remember it. It is entitled "Should Ia.
porters Unite to Protect Their Interests?"
It reads:

A
A

You recognize that letter which I have just readI

Mr. FLETCHnE. No; I never saw the letter.
that meeting.

I was not invited to

Senator Roluxsox of Indiana. The reason I am reading it to you

is because you said you were one of the organizers of this associa.
tion: and it the letter is true, evidently the Counci of Importers and
Traders came into existence as a iarill proposition and to look after
the tariff interests of importers. That was the whole purpose of its
inception, if this letter is correct. I will ask Mr. Van Leer about
that because his name is signed to it.
h'r. Fletcher, reading the roster as it appears on what evidently is
a circular of yours, I find:
Vice presidents: Philip Le Boutililer, 0. 0. Pfeiffer, George MeGeaeliln, and

Hubert E. Heine.

Whose are vieb presidents of your organization I

Mr. FLETCilER. Yes.
Senator RonixsoN of Indiana. N. E. Franklin and Frederick B.
Shipley, honorary directors.
Mr. F,'ronE. Yes.

i
I

B
'

I
B

I
I

13

LOBBY INVESTIGATION

2071

Senator Romsow of Indiana. Treasurer, H. 0. Lloyd; and executive secretary, Frank Van Leer. Customs adviser-that is Mr. Davis,
who is deceasedI

Mr. FLTCHR. Yes.

Senator RoBINSoN of Indiana. He was succeeded by Mr. Bevanst
Mr. FLETChE. Mr. Bevans.
Senator ROBINSON of Indiana. And this contains a list of all the
members of the organizationI
Mr. F rcHER. Not brought up to date, however.
Senator RoMiNsoN of Indiana. Have you a list brought up to date
Mr. Fiz'roiii. I think Mir. Van Leer could supply such a list.
Senator RoBINsoN of Indiana. Well, for the present this tan go in,
and if there is any addenda of any kind it may be supplied later.
I offer this now for the record as an exhibit.
(The list of members and officers above referred to is as follows:)
Tim NATIONAL, COUNCIL or AMERICAN IMPORTERS AND TaADns

Abraltham & Straus (Inc.), 422 Fulton Street, Brooklyn, N. Y.

Acine
Co. (Wyler
& Co.).
AkawoNovelty
& Co. (Ltd.),
205 Fifth
Avenue, New York.
AIljha-Lux Co. (Inc.), The, 102 Front Street, New York.
Altiumin, 1., & Co., Fifth Avenue wd Thirty-fourtib Street, Now York.
Amberg. Schwab & Co. (lnc.), 108 West Thirty-ei ghth Street, New York.
American 1IaS-toff -Corpoti0 )on.
180 Madison Avenue, New York.
Americain Import Co., The, 515 Market Street, Hil] Francisco, Calif.
Atrein, Freudenberg Co. (Inc.), 14 Iast Thlirty-eghth Street, Now York.
Androws, I). . & Co. (Inc.), 27 Water Street, Nw York.
Angel, II. Rleeve, & Co. (Inc.), 7-11 Spruce Street, New York.
Antolini Co. (Inc.), 100 Hudson Street, New York.
Arco I'hectric Co., 112 West Forly-seeondl Street, New York.
Ashmann, C. (., & Co., 401 Fourth Avenue, New York.
Atlntic Import Corporation, 308 West Rtndolph Street, Chicago, Ill.
Ayres, I,.
& C.,
Oo., IXdinnalills, Ind.
liawiniouin, Emmnerihh & (;o. (Inc.), 200 Madion Avenue, Now York.
Baehr. Eugene B., 251-255 Fourth Avenue. New York.
Bhner-Dosther Co., 890 Broadway, New York.
Btker, Carver & Morrell Ship Supplies (Inc.), 37 Water Street, New York.
Ballymena Mnunfaeturing Co., 8T Franklin Street, New York.
Baniberger, L., & Co., 131 Market Street, Newark, N. J.
Banker. Trust Co., 10 Wall Street, New York.
BTrnett, John G., Co. (Inc.), 53 Fourth ,treet. Portland, Oreg.
Barry, Ostlere & Shepherd (Itne.), 205 Fifth Avenue, New York.
basket Importing Co. (Inc.), 6 Union Square West, New York.
Bates, H., & Co., 354 Fourth Avenue, New York.
Betcliel, 1d. 1'., 112 ast Nineteenth Street, New York.
Beekhard, Julius, Co. (Inc.), 95 Madison Avenue, New York.
Beecroft (Ltd.), 15t Fifth Avenue, Now York.
Belfast Lnen Hndkerehlef Co. (Inc.), 108-110 Franklin Street, New York.
Balle; A., & Co., 3T W "-tTwenty-sixth Street, New York.
Bendix Paper Co., 113 Fourth Avenue, New York.
Bergdort & Goodman Co., 2 West Fifty-eighth Street, New York.
Bernard, J. 1., & Co. (Inc.), 81 Bridge Street, Now York.
Bernitz, J. 1., 25 Beaver Street, New York.
Best & Co. (Inc.1, Fifth Avenue tnd Thirty-flifth Street, New York.
Bigeon, H. (Inc.), 00 West Broadway, New York.
Bill & Caldwell 748 Broadwity, New York.
Bing, Fordinami & Co., S'nccessors, 07 Irving Place, New York.
BJelland, Chr. & Co. (Inc.), 110 Hudson Street, New York.
Block Freres (Inc.), 345 Fourth Avenue, New York.

2072

LOBBY INVESTIGATION

Bloch, L. I). & Co., 89 East Eighteenth Street. New York.

Bloomingdale Bros. (Inc.), Fifty-ninth Street anud Lexington Avenue, New
York.
Blumenthal, B. & ('o., 353 Fourth Avenue, New York.
Blumenthal, F. & Co., 43 West ThIrty-sixt! Street, New York.
Bodart, Jacques (1nc.), 385 Madison Avenue, New York.
BollUersCo. (Inc.), 33 Rector Street, New York.
Bonwilt.Tii(r & Co., Fifth Avenue and Thirty-eighth Street, New York.
Bonwit-I'feller & Co., PhleiladelPhia. Pit.
t;oote, Edward, 35 West Twenty-tlilrd Street, New York.
Borgeldt, tieo., & Co., 111 East 8Ixteenth Street, New York.
Borestein, Emil, (Inc.), 537 BroMdwamy, New York.
Bourjols (Inc.), 35 West Tiurty.foUrth Street, New York.
Bowman, Geo. H. Co., 2M4 Euclid Avenue, Cleveland, Ohio.
& (.4,, 208 Fourth Avenue, New York.
nU.
Brand,
Brinsmold Co., 206 Sevenih Street, Des Moines. Iowa.
BrIones & Co. (Inc.), 52 Mone Street, New York.
Bronston Bros. & (o., 3 Washington 1Iav. New York.
Brooks, Brothers. 340 Madison Aveano, New York.
Brown's Shamrock Linens (Lid,), 305 Broadway, New York.
Bruno, 0., & Son (Inc.), 351-433 Fourth Avenue, New York.
Buegelelsen & Jacobson, 5 Union Square, New York.
Bullock's (Inc.). Broadway, 11111 wnd Seventh Streets, Los Angeles, Calif.
Butter Bros., 800 Broadway, New York.
Cohn. I. D., Co., 81 Spring Street, New York.
Carbon (Inc.), 342 Boylston Street, Boston, Mass.
Case & Co. (Inc.), 117 Fifth Avenue, New York.
Caard Ronmano Co.(Ine.), The, 234 Emist Fifty.ninth Street, New York.
'ellas' (Inc.), 427-431 West Broadway, New York.
I'. A tQ.,, 410 Fourth Avenue, New York.
(et ni',
Centur-y Factors (Inc.), 80 Mmllson Avenue, Ne-w York.
China Comnerelal ('o. (Ltd.), 225 Fifth Avenue, New York.
Cba Co., The (Inc.), Cedar and Washington Streets, New York.
Hot Co., R. (Inc.), 358 Fifth Avenue, New York.
('Ci
Clallin, Geo,. L., Co., 70 South Main Street, Providence. R. I.
CIos..on, A. B., Jr., Co., 110 West Fourth Street, Cincinnati, Ohio.
Cohn & Rosenberger (Inc.), 1328 Broadway, New York.
(olt.Cromwell Co. (lite.), 1239 Broadway, New York.
Commercial Fibre Co.of American (Int..), 40 West Thirty-fourth Street, New
York.
Cone, Frederick H., & Co. (Inc.), 181 Front Street. New York.
Copeland & Thominpson (lite.), 206 Fifth Avenue, New York.
Corbett, M. J., A Co., 24 State Street, New York.
Cork, Import Corporation, 344. West Fortieth Street, New York.
Coty (Inc.), 714 Fifth Avenue, New York.
Condurler, Fructus & Descher de New York (Inc.), 16 East Tlirty-fourth
Street, &ew York.
Cresca, The. Co., 1114 Hudson Street, New York.
Crowley, Miner & Co., Detroit, Mich.
Crumpton & Co., W. D.. 8 Bridge Street, New York.
Dahl, Ivan B. (In(..). 881 Fourth Avenue, New York.
Dale, Alidrich J. (Inc.), 107 Water Street, New York.
David & Blum (1nc,), 84 Madison Avenue. New York.
Davison, John (Inc.), 14 Barclay Street, New York.
Descours. Oenthion & Co., 72 Madison Avenue, New York.
Deutz & Ortenbeig (Inc.), 1412 Broadway, New York.
)ezell & Cunninglmm, 58 White Street, New York.
Dickinson, Ed B. (Ine.). 49 West Twenty-thlrd Street, New York.
Dietzgen, Eugeine, Vo. (Inc.), 218 East Twenty-third Street, New York.
Distinctive Writing Paper Co. (Inc.), 87 Walker Street. New York.

Doshi Trading Co. (Ltd.). 9-1 Madison Avenue. New York.

Douglas. J. P., & C'o., 07 Fifth Avenue, New York.

Douglas & Oreen (lite.), 149-161 Fifth Avenue. Aew York.

Dow, Frank P., Co. (Inc.), Seattle. Wash., Los Angeles and San Francisco,
Calif.
Downing, T. D., Co., 88 Broad Street, Boston, Mass.

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LOBBY INVESTIGATION

2073

Ducharne Silk Co., F. (Inc.), 185 Madison Avenue, New York.

Dunhill, Alfred, of London (Int), 11 East Twenty-sixth Street, New York.
Dutton, E. W. (Inc.), 1783 Grand Central Terminal Building, New York.
Eckstein, Albert, & Co., 15 West Thirty-seventh Street, New York.
Edmiston, Hfugh 0., 120 Fifth Avenue. New York.
Ehrman, Samuel, CO., 13, Fifth Avenue, New York.
Ellerman's Wilson Line New York (Inc.). 20 Broadway, New York.
Ely Walker Dry Goods Co., Washington and Sixteenth Streets, St. Louis, Mo.
Engels, F. W.. 28 Warren Street, New York,
Ernstberger, H., & Co., 443 Fourth Avenue, New York,
Ewart & Son, William, N. Y. (Ltd.). 115-117 Franklin Street, New York.
Fabriclus Mercantile Co., 1823 Washington Avenue, St. Louis, Mo.
Famous & Barr Co., Olive and Sixth Streets. St. Louis, Mo.
Ferodo & Asbestos (Inc.), post-office box 155. NOW Brunswick, N. J.
Fashion Park (iN6.), 432 Portland Avenue, Rochester, N. Y.
Field, Alfred & Co., 93 Chambers Street, Now York.
Filene's, William, Sois Co., 420 Washington Street, Boston, Mass.
Finsllver, Still & Moss. 485 Fifth Avenue, New York.
Fischer. Carl (Inc.), 50-02 Cooper Square, New York.
Fish-Schurman Corporation, 45 West Forty-fifth Street, New York.
Fisher, Bruce & Co., 219 Market Street, Philadelphia, Pa.
Fisher, M., Sons & Co., 23 East Twenty-sixth Street. New York.
Folkhard & Lawrence. 19 Madison Avenue, New York.
Foster, A. F. & Co. (Inc.). 8 East Thirty-ninth Street, New York.
Fougern, E., & Co. (Inc.), 90 Beekman Street, New York.
Franklin Simon & Co. (Inc.), Fifth Avenue and Thirty-eighth Street, New
York.
French Kreme Co., The (Inc.), 870 Seventh Avenue, New York.
Friedlaender Co.. The, 4941 West Twenty-third Street, New York.
Frischer & Co. (Inc.), 229 Fourth Avenue, New York.
Galbraith, George B., & Co. (lite.). 295 Fifth Avenue. New York.
Gallagher & Aseher (Inc.), 29 Broadway, New York.
Garneau & de Bruyn (Inc.), 109 Hudson Street. New York.
General Dyestuff, The, Corporation, 230 Fifth Avenue, New York.
Gevaert, The, Co., of America (In&), 123-139 West Fifty-fifth Street, New
York.
Gibson, George B., Co., 11 East Twenty-sixth Street, New York.
Gibson-Thomsen Co. (Inc.), 10 East Thirty-ninth Street, New York.
Giger, H. W., Corporation, of New York. 2 Park Avenue, New York.
Gilbert, S. L., & Co. (Inc.), 425 Fourth Avenue, New York.
Gimbel Bros. (Inc.), Sixth Avenue and Thirty-second Street, New York,
Philadelphia, and Milwaukee.
Kinzkey.Maffersdorf, I, (Inc.), 295 Fifth Avenue, New York.
Glendinning, MeLelsh &Co. (Inc.). 10 West Thirty-third Street, New York
Gobelin Fabrics Corporation, 22 West Thirty-second Street, New York.
Gets, Otto (Inc.), 122 Fifth Avenue, New York.
Goldenberg Bros. & co., 100 Fifth Avenue, New York.
Goldenberg, George H.. 8 West Twenty-ninth Street, New York.
Goldinark, Adolph & Sons, Corporation, 174 Hudson Street, New York.
Gol Slipper Co., 129 Duane Street, New York.
Goodman & Dessauer, 135-141 Madison Avenue. New York.
Grant, D. H., & Co., 225 Fourth Avenue, New York.
Grant, W. T-., Co., 455 Seventh Avenue, New York.
Gratz, William It., Import Co., 126 We.st Thirty-fourth Street, New York.
Great Western Mercantile Co., 912 Tabor Building, Denver, Colo.
Greenwich Linoleum Co., 205 Fifth Avenue,. New York.
aretsch, Fred, Mtnufaeturing Co., The, 80 Broadway, Brooklyn, N. Y.
Oribbon Co. (Inc.), 59-41 White Street. New York.
Oromser Knitting Machine Co.. 250 West Broadway, New York.
Guaranty Trust Co., The. of New York. 140 Broadway, New York.
Ounthel, Alfred B., 65 West Twenty-third Street, New York.
Gntinann, Carl, & Co. (Inc.), 334 Fourth Avenue, New York.
Halle Bros. Co., 1228 Euclid Avenue, Cleveland, Ohio.
Hammel. Riglander & Co.. 200-211 West Fourteenth Street, New York.
Hardy, Jameh 0., & Co., 854 Fourth Avenue, New York.
Harper, F. F. 0., Co., 510 Battery Street, San Francisco, Calif.

2074

LOBBY INVESTIGATION

Haviland China Co. (Inc,), 1107 Broadway New York.

Haviland, Theo & Co., 20 West Twenty-tldrd Street, New York.
Hayden, F. B., U0., 37 Murray Street, New York.
Hearn, James A., & Son. (Inc.)i West Fourteenth Street, New York.
Ileathcoat, John, 44 Co. (Inc.), 105 Fifth Avenue, New York.
llecht Co., Tile, Washington, D.o(.
Ileinrich & Winterllig (Inc.), 49 West Twenty-third Street, New York.
Heigs, Brush & C0. (Inc.), 2 Park Avenue, New York.
Ielwig, 11. V., Co., 17-19 White Street, New York.
Henkels, J. A. (In.), 450 Fourth Avenue, New York.
Honsel, Bruckbainn%& Lorbacler, 290 Broadway, New YOrk.
Ierrmann, A. S. (Inc;), 111-113 East Twenty-scond Street, New York.
Hibben-Ilollweg & Co., 131 South Meridian Street, Indianapolis, Ind.
IHickey-Freeman Co., 11 5 Clinton Avenue, North Itochester, N. Y.
Hindle, 1. & 0. (Ltd.), (Inc.) 253 Church Street, Now York.
Hirsch, Louis (Ins.), Morbrfdge Building, New York; also, 556 Gregory
Avenue, Weehawken, N. J.
lIlrsch's, 0. Sons (Inc.), 417 Fifth Avenue, New York.
loch, Herman, 118 Fast Twenty-eighth Street, New York.
Hodges, William, & Co.. 109 Arch Hireet, Philadelpliia, Pa.
Iloffman.Iluber & Co., 203 Fourth Avenue, New York.
Hlohn, Charles E., 2 Park Avenue, New York.
Moliner, M. (Inc.), 114 East Sixtetnth Street, New York.
Iolland & Sherry. 1140 Broadway, New Xork.
Holland & Bois, 389 Fifth Avenue, New York.
Hollins, William, & Co. (Ie.), 380-388 Fourth Avenue, New York.
Holsatia Import Co. (Inc.), 10 West Twventy-third Street, New York.
Holton & Adams (Inc.), 29 East Twenty-econd Street, New York.
Horne, Joseph, Co., Pittsburgh, Pa.
Houbigant (o. (Inc.), 539 West Forty-fifth Street, New York.
House of Coinoy (Inc.), 342 Madison Avenue, New York.
Iowse, Mead & Sats (Inc.), 9-11 East Thirty-seventh Street, New York.
loyle, Joshua, & Sots (Ltd.), (Ind.), 40 Worth Street, New York.
Hudson, J. L., Co., The, 1200 Woodward Avenue, Detroit, Alich.
Hurley-Johnson Corporation, 25 Walker Street, New York.
lilfelder, B., & Co., 315 Fourth Avenue, New York.
International Forwarding Co. (Inc.), 0 State Street, New York.
International Merchandising Syndicate (Inc.), 232 Madison Avenue, New
York.
Iselin, Willhiam, & Co., 857 Fourth Avenue, New York.
Italian Hat Importers (Inc.), 858 Fifth Avenue, Now York.
Jacquin, H., & Co., 470 Fourth Avenue, New York.
Japan Paper Co., 109 ]East Thirty-first Street, New York.
Japanese Fan Co., 141 Fifth Avenue, New York.
Jasper, E. W. S., 71 Murray Street, New York.
Jeffer~on Import Co. (Inc.), 1328 Broadway, New York.
Jenkins, W. J, & Co., 10 West Twenty-second Street, New York.
Jenney & LuX (Inc.), 131 State Street, Boston, Mass.
Johnesain, Wales & Sparre (In.), 250 Park Avenue, New York.
Johnson & Faulkner (Inc.), 35 East Seventeenth Street, New York.
Johnson Bros., 39 West Twenty-third Street, New York.
Jones, MeDuffee & Stratton Corporation, 33 Franklin Street, Boston, Mass.
Judkins & McCormick Co., 385 Madison Avenue. New York.
Kaplan Bros., 46 West Eighteenth Street, New York.
Kustor, Adolph & Bros., 1237 Broadway, New York.
Kaufmann's "The Big Store," Fifth Avenue, Smithfield and Diamond Streets,
Pittsburgh, Pa.
Kay & Ellinger (Inc.), 67 Irving Place, New York.
Kayser, Julius, & Co., 853 Fourth Avenue, New York.
Kean, Wateon & Medar (Ltd.), 70 Franklin Street, New York.
Keller-Dorlan Paper Co. (In.), 110 Fifth Avenue, New York.
Kennedy, John R., 908 West Nineteenth Street, New York.
Kent-Costikynn Trading Co. (Inc.), 485 Fifth Avenue. New York.
Khourl, A. N., & Bro., 115 East Twenty-third Street, New York.
Kienzle Clock Co., The, 221 Fourth Avenue, New York.
Kieln-Messner Co. (Inc.), 255 Church Street, Now York.

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LOBBY INVESTIGATION

2075,

Kny-Schaerer Corporation of America, 10 West Twenty-fifth Street, New

York.
Koch, F. A., & Co., 524 Broadway, New York.
Koh-I-Noor Pencil Co., 84 East Twenty-third Street, New York.
Kohlberg, A., 235 Fifth Avenue, New York.
Koho, Jacob & JoSeIph & Mundus (Inc.), 1 Park Avenue, New York.
Krehblel, J. J., 381 Fourth Av'entue, New York.
Kresge, S. S., Co., Detroit, Mich.
Kress, S. II., & Co., 114 F ftlh Avenue, New York.
Kridei, J., Sons & Co,, 390 Four ti Avenue, New York.
Krone-Jacobson (Inc.), 254 Fourth Avenue, New York.
Krueger-Tobln Co. (Inc.), 2 Park Avenue, New York.
Krulwich, Beinard & Co., 20 West Fourth Street, New York.
Kuehnlert, A., & Co., 2 Park Avenue, New York.
Kuppenhielmer, B.. & Co. (Inc.). Congrem and Franklin Streets. Chicago, Ill.
Kupper, Herman 0C. (Inc.), 39 West Twenty-third Street, New York.
Kurner. 1., 2 Park Avenue, New York.
Kuttroff, Pkckhardt & Co. (lia.), 1150 Broadway, New York.
Kurzman (Inc.), 601 Fifth Avenue, New York.
DulIds & Co., 104-112 East Twenty-fifth Street, New York.
Lagerloef Trading Co. (Inc.), 52 Vanderbilt Avenue, New York.
La Man, Azema & Farmin, 301 Washington Street, New York.
Lomb. Finlay & Co., 52 White Street, New York.
Limnbert. H. P., Co. (Inc.), 114 State Street, Boston, Mass.
La gfelder, Ilomma & Hayward (Inc.), 915 Broadway, New York.
Lazarus & Rosenfeld, 08 Fifth Avenue, New York.
Legg. George, & Sons, 125 West Fortieth Street, New York.
Lehman, J. & D., Co. (Inc.), 0-8 East Twentyveventh Street, New York.
Leltz, I'). (Inc.), 60 East Tenth Street, New York.
Leseu Bach &Co., 215 Fourth Avenue, New York.
Levi, Sondheimer & Co., 221 Fourth Avenue, New York.
Levy, J. W., Corporation, 8 West Thirtieth Street, New York.
Levy, Maurice, 120 West Forty-first Street, New York.
Lewis & Conger, Forty-fifth Street and Sixth Avenue, New York.
Lewis & Locke, 100 Fifth Avenue, Now York.
Leyland, Perey N. (Inc.), 184 Fifth Avenue. New York.
Liddcll, William, & Co., 51 White Street, New York.
Liilentil & Grossman (Itc.), 251 Fourth Avenue, New York.
Linoleui Manufacturing Co. (Ltd.), 205 FifthAvenue, New York.
Lion Itibbon Co., 118 East Twenty-fifth Street, New York.
Lippincott Johnson & Co., 1021 Walnut Street, Philadelphia, Pa.
Lippmann, Spier & Hahn, 8 West Thirtieth Street, New York.
Lloyd, W. 11. S., Co., 48 West Forty-eighth Street, New York.
Lisk, S., & Bro., 14 East Fifteenth Street, New York.
Lisner, D., & Co. (Inc.), 305 Fifth Avenue, New York.
Loser, Frederick, & Co. (Inc.), Fulton Street, Brooklyn, N. Y.
Lord & Ttvylor, Fifth Avenue and Thirty-eighth Street, New York.
Lufrl Go. (Inc.), The, 12 East TIventy-second Street, New York.
Lynx Corporation, 225 Fourth Avenue, New York.
MacDomld, J. M., & 0)., 208 Fifth Avenue, New York.
MacDonald, William II., 11 White Street, New York.
Macy, It. Il., & Co. (Inc.), Thirty-fourth Street and Broadway, New York.
Maddock & Miller, 89 West Twenty-third Street, New York.
Mater, Henry. 2 Park Avenue, New York.
Mail, Henry W. T., & Co., 257 Fourth Avenue, New York.
Malinson Importing Co. (Inc.), George H., 205 Fifth Avenue, New York.
Mandel Bros., 1 North State Street, Chicago, I1.
Manner & Weill, 239 Fourth Avenue, New York.
Marburg Bros. (Inc.), 00 West Street, New York.
Market & IHamnmadler Co., 104 West Street, New York.
Malter, Henry, &-Co. (Ltd.), 45 East Tventieth Street, New York,
Maus, George II. (Inc.), 44 Market Street, Amsterdan,-N. Y.
Mauthe Clock Co. (Inc.), 171 Madison Avenue, New York.
May Co., The, Cleveland, Ohio.
May Department Stores Co., The, 1115 Broadway, New York.

2076

LOBBY INVESTIGATION

Mayer, Charles. & Co., 29 West Washington Street. Indianapolis. Ind.

Mayer, Franz, of Munich (Inc.), 1014 Woolworth Buihling, New York.
Mayer, Max, & Co., 2 PArk Avenue, New York.
Meakin & Ridgway (Inc.), 129 Fifth Avenue, New York.
Megroz, J., & Sons, 16 East Thirty-fourth Street, New York.
Melsel, C. (Inc.), 4 St. Marks Place, New York.
Mekelburg Specialty Co. (l10.), 3 West Eiglteenth Street, New York.
Menke, Kaufmann & Co. (Inc.), 83 East Tfrty.third Street, New York.
Menzel & Co.. 424 Greenwich Street, New York.
Mesquita & Lange, 381 Fourth Avenue, New York.
Meteor Transp0rt & Trading Co., Miami Beach, Fla.
Metz. H. A., & Co. (Inc.), 122 Hudson Street, New York.
Meyer Co., M. J. & H. J., 182 Franklin Street, New York.
Meyer & Lange. 434 Greenwich Street, New York.
Michaels, A. J. Co. (Inc.), 43 Leonard Street, New York.
Michels, Peter J., 1857 Catalpa Avenue, Brooklyn, N. Y.
Milbank, Leaman & Co., 2 West Forty-sixth Street, New York.
Miller Bros., 11 East Twenty-sixth Street. New York.
Miller, Iherman, Clock Co.. Zeeland, Mich.
Milliken, T. X, & Sol, 350 Broadway, New York.
Mills, Duflot & Co., 357 Fourth Avenue, New York.
Mogi Momonol & Co. (Inc.), 105 East Sixteenth Street, New York.
Meter, Van B., Co. (Inc.), The, 200 Fifth Avenue, New York.
Moore & Fisher (Inc.), 104 East Twenty-fifth Street, Now York.
Morimura Bros., 55 West Twenty-third Street, New York.
Morton Sundour Co. (Inc.). 70 West Fortieth Street, New York.
Moss, David L., & Co., 80 Wall Street, New York.
Mueller, L. H., 450 Fourth Avenue, New York.
Mutual China Co., 128 South Meridian Street, Indianapolis, Ind.
McBratney, Robert & Co., 121 Franklin Street, New York.
Mecreery, James I Co., Fifth Avenue and Thirty-fourth Street, New York.
Mcrory Stores Corporation, 1107 Broadway, New York.
McCrum, Watson & Mercer, 13-15 White Street, New York.
MeCutcheon, James & Co., Forty-ninth Street and Fifth Avenue, New York.
McKeag, W. 0., Co., 108 Franklin Street. New York.
National Bead Co. (Inc.), 12-14 West Thirty-seventh Street, New York.
National Department Stores (Inc.), 112 West Thirty-eighth Street, New York.
Neuman & Schwiers Co., 152 Franklin Street, New York.
Neumann, Aaron, 475 Fifth Avenue, New York.
New Antwerp Corporation, 103 Park Avenue, New York.
New York Cordage Co., 162 South Street, New York,
New York Merchandise Co., 27 West Twenty-thlrd Street, New York.
Nippon Import & Trading Co. (Inc.), The, 230 Fifth Avenue, New York.
Noe, Wiin. R., & Sons, 43 East Tenth Street, New York.
Nolan,. M. J. (Inc.), 15 West Thirty-seventh Street, New York.
Northwestern Importing Co,, 215 West Randolph Street, Chicago, Ill.
Oberlaender, H. J. (Inc.), 114 East Thirty-second Street, New York.
O'Caliaglatn, l4. H., 43. West Thirty-third Street, New York.
Old Bleach Ijlnen Co., The, 44 East Twenty-fifth Street, New York.

ONelil & Co. (ite.), llharles and Lexington Streets, Baltimore, Md.

Oppenim, collins & Co. (Inc.), :L' West Thirty-fourth Street, New York.
Oppenhleimer, A., & Co. (Inc.), 104 Fifth Avenue, New York.
Olenhym, William, & Sons. 95 Madison Avenue. New York.
Orlik. Alfred (ia.), 101 West Thirty-seventh Street, New York.
Ovlngton Bros. Co., 437439 Fifth Avenue. New York.
i'astene, P., & Co. (Tie.), 102 Frankli Street, New York.
Peek & Peck, 1587 Fifth Aveiue, New York.
Pelican Works-Gunther Wagner (Inc.), 34 East Twenty-third Street, Now
York,
Plerhnan, Schal & Stern (Inc.), 49 East Twenty-first Street, New York.
Personeni, Joseph (ite.). 490 West Broadway, New York.
Pfaltz & Batter (lie), 300 Pearl Street, New York.
Philippine Refining Corporation of New York, 50 Broad Street, New York.
Pitcairn, William S., Corporation, 104 Fifth Avenue, New York.
Pitkin & Brooks, 8 East Lake Street, Chicago, I1.
liver, L. T. (Inc.), 118-120 East Sixteenth Street, New York.

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LOBBY INVESTIGATION

2077

I'oltros Blrhrwood Corporation, 232 Mudisoni Avenue, New York.

looldl Steel Coi.porntioi of America, 245 West Eighteenth Street, New York.
I'orter, 'T. J., - Sols, 354 Fourth- Avenue, New York; 119 South Fourth
Street, Philadelphia, Pa.
Preuder Cutlery (I5c.), S Union Squre, New York.
l'rochaska, harry (ic.), 13.15 lttst 'Twenty-seconld Street. New York.
Pryvm, Wlliham, of America (Inc.), 10-20 Wet Nineteenth Street, New York.
Qunlintaue, W. lI., 440 Poittln Avenue, New York.
It. 1. V. Co. (11w.), 2450 West Fifty-s.elitlh Street, New York.
lalig, F. A., (o., 110 ifth AM jce, New 'York.
Ieihsteluer, Wilter, 13.4 Jou|'tl Avenue, New York.
liteliard-Coul ston (InO.), 95 MStllson Avenue, ew York.
]tchhiebucli & Co.. 4118 Fourth Avenue, VNew York.
Iteliter, Itobert (
05i0,),
05. (tregory Avenue, Veetliwken, N. J.; also Marbridge Ilullding, New York.
Renold, Hons (Inc.), 200 Hudson Street, New York.
Rhenish Rubber & Celiuloil Co., 45 East Seventeenth Street, New York.
Itich-Stix 1). (. Co,, St. Louis, 'Mo.
tlohinson, H. W. &
1ro.,
Whitehall Street, New York.
RobinSzon & (ololher, 22 West Twenty-ilrst Street, New York.
Roger & (hillet, 709 Sixth Avenue, New York,
Rtogers, 11. I., (o, (il.). 10 Fiftl Avenue. New York.
Itogers, M. H. (lie.), 1 Piark Avenue, New York.
Rogers Peet Co., 842 Broadway, Now York.
Rohiner, 0elrig & Co. (Inc.), 44 Whiteluall Street. New York.
Rolland Freres (Inc.), 1 West Forty-seventh Street, New York.
Roaneo, F., & Co. (Ine.), 374 Washlington Street, New York.
Roncallo, I. F., 528 West Broadway, New York.
Rorabaugh-Brown Dry Goods Co., 213-21 Main Street, Oklahoma City, Okla.
Rosen, Lowy & Llpschutz, 2 Park Avenue, New York.
Rosenthal China Corporation, 149 Fifth Avenue, New York.
Ross Bros. (Inc.), 112 Franklin Street, New York.
Royal Textile Co., 159 Madison Avenue, Now York.
Rubens & Meyer, 315 Fourth Avenue, New York.
Saks & Co., Herald Square and Fifth Avenue Store, New York.
Salomon, A. L., & Co., 33 East Sventeenth Street, New York.
Sandoz Chemical Works (Inc.), 240 Water Street. New York.
Schaller, Carleton & Co., 50 Union Square, New York.
Schiller, Arthur & Son, 17 North Wabash Avenue, Chicago, III.
Scimid, Julius (Inc.), 423 West Fifty-fifth Street, New York.
'Schmidt, H. H., Glove Co. (Inc.), 268-2T0 Fourth Avenue, New York.
Schnabel Bros., 80 Fifth Avenue, New York.
Schneider's, Peter, Sons & Co. (Inc.), 607 Fifth Avenue, New York.
Schrader & Ehlers, 239 Fourth Avenue, New York.
Schroeder Bros. (Inc.), 53 Park Place, New York,
Schumacher, F., & Co,, 60 West Fortieth Street, New York.
Schuster, Edward, & Co. (Inc.), 755 Third Street, Milwaukee, Wis.
Schwab, David s.,& Co. (Inc.), 152 Fifth Avenue, New York.
Schwars,F. A. 0., 803 Fifth Avenue, New York.
Sea Island Mills, 53 Worth Street, New York.
Seydoux & Mlchau Co. (Inc.), 79 Madison Avenue, New York.
Shapiro Glove Co., 200 Madison Avenue, New York.
Sheldon, 0. W., & Co., 220 State Street, Chicago, Il1.; 115 Broad Street,
New York.
Shipley, F. B., 200 Fifth Avenue, New York.
Shure, N.. Co., 237 West Madison Street, Chicago, I1.
Slegelman, Jullus 0., 20 East Thirty-first Street, New York.
Silverman, Carl, 48 East Thirteenth Street, New York.
Simmon Ackerman Clothes (Inc.), 70 Fifth Avenue, New York.
Simon, Healy & Oollisteln, (Inc.), 97 Fifth Avenue, New York.
Simson & Frey (Inc.), 257 Fourth Avenue, New York.
Singer Bros., Importers & Exporters Co., N0 Broadway, New York.
Smith, James P., & (o 29-33 Hubert Street, New York.
Solomon, L., & Son, i109 Wooster Street, New York.
Sosy (Inc.), 160 Fifth Avenue, New York.
Spence Bryson (Inc.), 30= Broadway, New York.
Spencerlan Pen Co., 849 Broadway, New York.

2078

LOBBY INVESTIGATION

St. Oeorge Textile Corporation, T0 Madison Avenue, New York.

Stahel, Edward P., & Co., 354 Fourth Avenue, Now York.
Stauff, August F., & Co., 44 Whitehall Street, New York.
Steeb. J, T., & Co., Douglas Building, Seattle, Wash.; Portland, Oreg.; Ta.
coma, Wash.
Stein-Bloch Co., The, 104 St. Paul Street, Rochester, N. Y.
Stein, S., & Co., Fifth Avenue and Twenty-sixth Street, New York.
Steiner Paper Corpiration, 50 Franklin Street, New York.
Steinhardt Bros. (Inc.), 1372 Broadway, New York.
Sterm & BIllhaupsen, 354 Fourth Avenue, New York.
Stern, S. & A., 87-SO Fifth Avenue, New York.
Stern Bros., 41 West Frty-second Street, New York,
Stern Hat Co., The. 1150 West 'hird Street, Cleveland, Ohio.
Stern & Stern, 130 Madison Avenue, New York.
Stern, Stiner & Co. (Inc.), 2 Stone Street, New York.
Sterzelbach, A. & Sons Co 242 Fourth Avenue, New York.
Stlefel. J. K., & Co., 128 Ffth Avenue, New York.
Stix-Baer & Fuller Co., St. Louis, Mo., and 1440 Broadway, New York.
Stoffel & Co., 354 Fourth Avenue, New York.
Straub, Paul. & C.. 105 Fifth Avenue. New York.
Strots, Nathan, & Sons (Inc.). 110 Fifth A~enue ut Nineteen Street, New
York.
Strauss Bros. & Co., 114 East Twenty-third Street, New York.
Strauss, D., Co. (Inc.), 130 Madison Avenue. New York.
Strnuau-Eckardt Co. (Inc.), 45 East Seventeenth Street, New York.
Strawbridge & Clothier. Market, Eighth and Filbert Streets, Philadelphia, Pa.
Streb, Charlem H., 200 Madison Avenue, New York.
Strohelm & Romimn, 728 Fifth Avenue. New York.
Strolhmeyer & Arpe Co.. 180-141 Franklin Street, New York.
Strype, Fred, Co.. 140 Lafayette Street, New York.
Sumner & Co., 108 Worth Street, New York.
Sussfeld, Lors.h & Schinmel. 153 West Twenty-third Street, New York.
Syndicate Trading ('o.. 240 Madison Avenue, New York.
Synthetic Nitrogen Products CorpOration, 285 Madison Avenue, New York.
Talyo Trading Co., 101 Fifth Avenue, New York.
Talens & Son (Inc.), O85 Springfilld Avenue, Irvington, N. 3.
Taylor, Son & Co., The William, Cleveland. Ohio.
Taylor, NV. A.. & Co., 04 Pine Street, New York.
Tharaud, Justin 4lte.). 24 West Twenty-third Street, New York.
The Losen, W., 65 Madison Avenue. New York.
Thorp, J. f.. & Co. (Inc.), 250 Park Avenue. New York.
Tiedemann, F. H., 71 Murray Street, New York.
Tobler Bros.. & Co. (Inc.), 105 Fifth Avenue, New York.
Tootal Broadhurat Lee Co., 387 Fourth Avenue, New York.
Trafford, M. N.. Co., 180 Madison Avenue, New York.
Tranhatlantlo Clock & Watch Co. (Inc.), 17 East Sixt.enth Street, New York.
Turtle Bros., 89 White Street, New York.
Umans Bros. (Inc.). 818 East Thirty-second Street, New York.
United Cement & Brick Works, 424 Whitney-Central Bank Building, New
Orleans, La.
United Hardware & Tool Corporation, 50-52 Howard Street, New York.
Vanetta Velvet Co. (Ie.), 205 West Thirty-ninth Street, New York.
Van Ranlte Co., 295 Fifth Avenue, New York.
Vedovl, 0. A. & Co., 15 East Twenty-sixth Street, New York.
Velt, Son & Co., 11 West Forty-second Street, New York.
Velth, A. & H., 9 East Thirty-eighth Street, New York.
Venon, J. H. (Inc.). 104 Fifth Avenue, New York.
Vietor & Achells, Fredk., 38 East Twenty-fifth Street, New York.
Von Bremon, Ascho & o., 110 Hudson Street. New York.
Waldburger & Huber, 907 Broadway, New York.
Wallau, Alex Lee, 1182 Broadway. New York.
Walters, Edgar B., Organization, 245 Fifth Avenue, New York.
Warne, Frank V., 7 West Twenty-second Street, New York.
Warwick Velvet Co. (InC.), 20 East Thirty-first Street, New York.
Week. Edward, & Son (Inc) 206 Broadway, New York.
Wedgewood, Josiah & Sons (inc.), 25 Fifth Avenue, New York.

D.

A
F
J
A
J,

J,

LOBBY INVESTIGATION

2079

Well, Leon (Inc.), 47 West Thirty-fourth Street, New York.

Weill, Raphael, & Co. (Inc.), Sutter Street, Grant Avenue,
and Post Street,
San Francisco, Call, (White House).
Weiss & RHlieller (Inc.), 84 Broadway, New York.
Weisoh & Culley, 440 Fourth Avenue, New York.
Werthejmer & Levy (Inc.), 27 West Thirty.third Street,
New York.
Wester Bros., 250 West Broadway, New York.
Westergaard, B., 8; Co,, 189 West Ninth Street, Brooklyn,
N. Y.
Westminlster (Ltd.), 273 Fifth Avenue, New York.
Wetterwald & Pfister Co. (Inc.), 270 Spring Street, New
White, James F., & Co. (inc.), 154 Worth Street, New York.York.
Welner Bro..., 148 Madison Avenue, New York.
Wiener. William 'R. (Inc.), 389 Fifth Avenue. New York.
Wile, Julius, Sons & Co., 10 Hubert Street, New
York.
nilkin
& Adler (Inc.), 500 Seventh Avenue New York.
Wilkinson Bros., & Co. (Inc.), 410 Broome street New
York.
WIllis W. P., & CO., 607 Fifth Avenue, New York.
Wilmerding & Blsset, 254 Fourth Avenue, New York.
Wintelbacher & Rice, 1111A Broadway, New York.
Winsor & Newton (Inc.), 31 East Seventeenth Street. New York.
Witcombe, MeGeachin & Co 1 West Fift,-second
Wolf, Louis & Co., 215 Fourth Avenue, Neew York. Street, Now York.
WVolt, Strauft & Co., 15 fndlson Avenue, New York.
Wolfr, H., & Co., 10 East Thirty-third Street,
New York.
Woodward & Lothrop, Tenth, Eleventh, bl, and
0 Streets NW., Washington,
D.C.
Woolworth, F. W., Co., Woolworth Building, New York.
Wyle, J. J., & Bros. (Inc.), 18 East Twenty.-seventh Street,
New York.
Wyler & Co., 100 Fifth Avenue, New York.
Yardley & Co. (Ltd.), 118 Palisade Avenue
City, N. .
York Street Flax Spinning Co 107 FranklinUnion
Street,
Young, Thomas (Inc.), 42 White Street, New York. New York.
Zeiss, Carl (Inc.), 485 Fifth Avenue, New York.
Zendman & Goldsmith (Inc.), 31 East Thirty-first Street,
New York.
Zunio-Altman (Inc.), 17 Union Square, West, Now York.
Zurcher Handkerchiefs (Inc.), 45 Seventeenth Street, New
York.
MAR0l!, 1029.
OFFICERS

President: Peter Fletcher, Lamb, Finlay & Co.

Vice presidents: Philip Le Boutillier, of Best & Co.; 0.
0. Pfelftr, of Geo.
Borgfeldt & Co., George McGeachin, Witcone,
Mefleacbin & Co.; Hubert E.
Heine, Ribben, Holweg & Co., Indianapolis, Ind.
Honorary directors: N. B. Franklin, Frederick B. Shipley.
Treasurer: H. 0. Lloyd, of Julius Kayser & Co.
Executive secretary: Frank Van Leer, Jr.
Customs adviser, George 0. Davis.
DIRECTORS

For the term ending April, 1020

Addrick, 1. Dale, New York.
AV. F. Carman, Chine Commercial Co., New York.
E. Child, H. Reeve Angel & Co., New York.
Frederick H. Cone, Frederick H. Cone & Co., New
J. Frankel, of Franklin Simmon & Co., New York. York.
Adolph Kastor, Adolph Xastor & Bros New York.
John A. MeCutcheon, of James MeCutcheon & Co., New York.
F.

H. Tledemann, New York.

For term ending April, 1080

John B. Chevalier, Bankers Trust Co., New York.

Win. M.Friedlander of the Friedlander Co., Now York.

Col. H. A. Metz, I. . Metz &Co., New York.

2080

LOBBY INVESTIGATION

M. B. Sehmidt, of B. ilfelder & Co., New York.

Henry Simpson, of Brooks Bros., New York.
S. Wimelbacker, of Wimelbacker & Rice, New York.
0. S. Welch, Perfumery Importers' Association, New York.
I. S. Wolf, Wolf-Strau.s & Coo

of

For term coding April, 1031

E. M. Baum, of the Hickey-Freeman Co., Rochester, N. Y.
II. B. Closson, of the A. B. Closson, Jr.. Co., Clnclntati, Ohio.
L. S. lineman, of Theo. Haviland & Co.
H. II. lolton, of Holton & Adonis (Ine,). New York.
W. hlowell, of I'ltkin & Brooks, Chicago, Ill.
George OHara, La Manna, Azesa & Fiirnan, New York.
A. 0. Iitchie, Olendlnuing. MeLelsh & Co., New York.
Edgar B. Walters, New York.

e
leg

Mcmber.x of the customs committee, all of whom are directors

Charles T. Rlotte. of Stern & Stern.
Ernest K. Halbach. of the General
Co.Dyestuff Corporation.

II. 0. Moyw. of Julius Kyser &

It. W Meconioele. of Bonwlt, Teller & Co.

F"raink J. 'Miln, of Milank, Leninan & Co.
Dr. R. R1. Pickrell, Synthetic Nitrogen Products Corporation.
Carl W. Stern, of 31. J. Corbett & Co.
David Walker, of Morliura Bros.

yo
Ba
A
tltr

Sta

Senator Ronixsox of Indiana. Now, you remember when Mr. N. E.

Franklin was president, do you not I

Mr Fz -'cJI~n. Oh, yes.

Senator RoB N "ON
ot Indiana. Did you succeed him?
En. I succeeded him.
Mr. FL
Senator CARAWAY. Has it had only two presidents?
Mr. FLETHEn. Three. I beg your lardon, I did not succeed Mr.
Franklin. Mr. Shipley was president after Franklin.
Senator Ronixsox of Judiana. Franklin, then Shipley, and
then yourself?
Mr. FLETCrHER. Myself.
Senator RoBINsoN of Indiana. I read from one of the circulars,
evidently of 1922, the (late is not on here. I asunte you can identify
it. It has all the officers and directors of the National Council of
Americarn Importers & Traders on it. It is your publication, is it

the
go
nag

Mr. FLt.CiIER. Yes; that is one of our publications.

Senator Ronwxsox of Indiana. I read just one paragraph from this
publication:

S
M
poss]

not, or one of yours?I

exis

S
hi

EDUCATIONAL CAMPAIGN AGAINST AMERICAN VALUATION

For many months the National Council has waged an Intensive fight against
the American valuation, section 402. of the proposed Fordney tariff bill. As a
national organization, it was able to obtain facts and figures from every section of the United 8tates, and Its success In presenting them clearly at Washington has resulted In revealing to Congresq and the American public the
dangers of the proposed American-valuation scheme. The officers of the
National Council have appeared before the chambers of commerce and business
organizations in many of the large Atnerican cities to arouse opposition to this
pernicious legislation and have been Instrumental In bringing many organizatIong into the ranks of those opposed to it. This work will be continued until
final disposition of the tariff bill.

So

Mf
Se

M
81
year

81
M
Se
cont

2081

LOBBY INVESTIGATION

Is that what you mean by administration features?

of the administration features you have reference to?
Mr. FixftHER. Oht, yes.

Is that one

Senator Roni'sox of Indiana. You were working for the foreign

valuation ?
Mr. FLBrCHER. This is going back to-

Senator RoBINsoN of Indiana. I know. This was in 1922.

.%r. FLroEn. I was.
Senator Roni.'so. of Indiana. This organization came into exist-

et%. -.

Mr. FLm'cim.. Yes.

Senator Ro xsox of Indiana. -- to assist you in influencing tariff

legislation. I have just read it from there. That is true, is it not?

Mr. FLm'wEIn. If you care to put it that way. You may have
your own way alout it.
Senator RoBmIsoN of Indiana. I thought you would concede that..
Back in 1922 1 was only showing how you were working, and it
has been working ever since in that direction.
Now, Mr. Witness, this time, in 1029, on the administration feattii'es, you 'were working for the foreign valuation, were you not?
Mr. JF"C,
MER. We were working against the American or United
States valuation.
Senator RoBxsox of Indiana. Exactly. Well, that means foreign
valuation.
Mr. FIXrCHERn. Precisely, a continuation of the system that has

existed for a. great many years..

Senator RoBIxsox of Indiana. You publish a magazine regularly?
Mr. FL'rrCHER. Monthly.

Senator Rom.xsox of Ldiana. The American Importer?

Mfr. Fi,ET.HR. Yes.
Senator Roi.NsoN" of Indiana. Not to take any time with it, but

this is a copy of your magazine, is it not?

Mr. FLriTl[IER. Yes, that is & copy.

Senator RoniNsoN of Indiana. I see no occasion to place this in

the record, unless sonic other member of the committee wants it to

go in. That is characteristic or similar to all the issues of your
magazine, published monthly?
Mr. FL,rcuER. We try to make them as dissimilar as possible.
Senator CARAWAY. Try to do what?
Mr. )"LETCHER. Make them as dissimilar and interesting as
possible.
Senator CARAWAY. Have you a paid subscription list?
Mr. FJBTOHER. That goes out to all the members.
Senator CARAWAY. And that is included in the membership fee?
Mr. FETHER. Included in the membership fee.
Senator CARAWAY. How much does this publication cost you a

year?

Mr. F PCHER. I really can't tell you.

Senator CARAWAY. Who is the editor of it?
Mr. FLMTCHER. Mr. Van Leer.
Senator CARAWAY. Who is the publisher of it?

Do you have a

contract with some publishing company to publish it?

78214-30-T 5-20

LOBBY INVESTIGATION

2082

Mr. Fwric=R. I don't know who he is. I think probably lie is

mentioned there.
Senator CAaIWAY. I beg your pardon.
Mr. FLwronjm. I don't know who publishes it.
Senator CARAWAY. Well, we will get that from Mr. Van LeerI
Mr. Fxvozmm. Yes.
Senator RoBINsoN of Indiana. Now, Mr. Fletcher, you have been
sending out a good many circular letters and bulletins to your menibership with reference to the tariff, haven't you?
Mr. FLE

E. Yes.

Senator Ror-sox of Indiana. I have one here dated May 8. Do

you remember this one, in which this paragraph appears? It is on
your letterhead, signed by Frank Van Leer, jr., executive secretary:

t
t

th
th

The customs committee and the board of directors of the council will go

over the proposed administrative features carefully. Council experts are fa

Washington watching the situation carefully. Members will be advised wlitJ

resepct to developments Just as quickly ts possible.

When you say council experts, you mean experts of the council

ofMr. FLmHERIt. Customs committee.

Senator Romnxso.- of Indiana (continuing). The American Importers and Traders?

.
Mr. FLemnER. Yes, sir.
Senator RoBi.soN of Indiana. And you had those council experts
in Washington watching the situation carefully. What counci ex.
perts did you have here
Air. FLEtHER. Those you have just mentioned.
Senator RonizsoN of Indiana. I have named those, but from this
letter it would seem you had council experts here constantly.
Mr. FLwrChER. Oh, that isn't so. We never had council experts
here constantly.
Senator RoBiNsoN of Indiana. But you did have an office here
from May 8?
Mr. Fi=LTCHR. I don't know that we had an office from that
date.
Senator Roni.Nsox of Indiana. Isn't it true that members of your
organization returning from Washington told in open meeting of the
council 'of the splendid work the Washington office was doing, and
what a great thing it was to have it lere?
Mr. FLETCHER. I believe somebody got that impression.
Senator Ronxxso-. of Indiana. You got it, didn't you ? I have a
telegram here, Western Union, dated June 14, 1929. See if you
recognize this, Mr. Fletcher:
Our customs committee Just returned from Washington reports that despite
vigorous protests by National Retail Dry Ooods Association, Marshall Field
& Co., and others, there is great danger that the Senate Finance Committee
will adopt the United States value as major basis of valuation. This means
duty will be levied old wholesale selling price in America, Instead of wholesale
foreign values in country of origin, making it impossible for to compute (sic)
costs and determine selling price until after goods have arrived and been
appraised upon the new basis. Pretext is to prevent fraudulent undervaluation

which we know are infinitesimal and is an insult to every decent Importer in

the country. The effect would be enormous increase in duty. Urge you to telegraph the Senators In your State in strongest language you care to use protestig against this radical and revolutionary innovation.

i4

te
th

th

co

tin
di

LOBBY INVESTIOATION2

2083

Did you send that, Mr. FletcherI

Mr. FLEtCHER. I sent it.

Senator RoBIzsoN of Indiana. You. meant thatI

Mr. F ToHER. Every word of it..
Senator RoBxNsoN of Indiana. And when you said they should
telegraph their Senators in the strongest language they cared to use,
what kind of language would you have suggested?
Mr. FmronRm. I suggested they use the strongest they eared to use.
Senator CARAWAY. Who was this telegram sent to, Mr. Fletcher?
Mr. FL EMR. I think it was sent-we have got a list Of it. I

think it was sent to about 20 or 25 of the larger houses throughout

the country.
Senator OARAWAY. Importers?
Mr. FLuvrIoER. All importers;, yes.
Senator CARAWAY. Wiee they expected, then, in turn, to communicate with their customers, the merchants that bought from
them?
Mr. FLETcHER. They could make any use they chose of it. My
idea, was that they communicate with their Senators.
Senator CARAWAY. I know, but did you expect them to ask their

customers to communicatel You had some plan.

Mr. FuiLETIR. The plan was simply to warn them against what
this thing would do in the way of increasing the cost to the consumer.
Senator CAR IVAY. Now, the plan was to have them wire Representatives and Senators, we knowMr. FumcnR. Yes.
Senator CARAWAY. What I was going to ask you was, Did it contemplate that they should telegla li, then, to the local merchants in
the variotds towns that bought imported goods and have them telegraph their Senators?
Mr. FLETChER. No; that was not in my mind at all.
Senator RonIxsoN of Indiana. Mr. Fletcher, this campaign you
speak of-that word hits been used frequently by others who have
testified-that campaign is the campaign with Congress to influence
tariff legislation. That is what you mean by campaign?*
Mr. FL TCHER. Well, I could also say it is a campaign to show
the InequalitySenator Ronrxso.v of Indiana. I know; but finally with Congress?
Mr. FL .TcERn. With Congress.
Senator Ronixsox of Indiana. To influence legislation. That is just
a name given to It, a campaign.
Al. FLMTCHER. Yes; itis a slogan that is all.
Senator ROBiNSON's of Indiana. Mr. Fletcher, as president of the
corporation, you knew the Phoenix News Publicity Bureau (Inc.),
didn't you ?
Mr. FLR%

ER.

I have met two of the members, I think, about three

times.
Senator RowINsoN of Indiana. You made a contract with them,
did you not?
Mr. FLWOER. Not personally
Senator RoBINSON of Indiana. I know, but you are responsible.
Mr. FLVCHER.

committee,

Yes. The contract was made by our publicity

2084

LOBBY INVESTIGATION

Senator CARAWAY. Who is the publicity conmildttee?

Mr. FLcrICHER. Mr. Pilip Le Boutillier is the chairman.
Senator RoniXisox of Indiana. He is here, is lie not?

Mr. FLrmCnr. I think he was asked not to come.

Senator Ronhisox of Indiana. Oil, he is coming to-morrow.
Mr. FL'('cWtI.
Yes.
Senator CARAWAY. Who were the other men? You started to
tell us. You said the chairman was-Mr. FLErcnim
u. I don't know the other members, offiland.
Senator Rom.sox of Indiana. Mi Le Boutillier made arrange.
inents with that publicity concern, did lie not?
Mr. FV Trnigi. He did; yes.
Senator Roisi'sox of Inmiana. Did you know what was going on?
Mi. FraT'reItiI. Oh, yes.
Senator Ronxsox of Indiana. And you were responsible for all

lie did?

Mr. FLEC'CEn. I accept the resl)onsibiiity.

Senator Rlommso.N of Indiana, I have here a letter from the
Phoenix News Publicity Bureau, 342 Madison Avenue, dated June
0, 1929. This purports to be a sort of plan of campaign and at the
sanie time a sort of contract to be ratified.
It. is for the attention of Mir. Peter Fletcher, 52 White Street, New

York:

ESTIMATE FOR NATIONAL COUNCIL OF AMERICAN

JMPORTr S & TRLDERS

The Phoenix News Publicity Bureau (Inc.) submits the following plan for a
publicity campaign for the National Council of American Importers & Traders

(Inc.) for the purpose of exposing to the American consumers the evils of the

proposed new tariff.

The basis of this campaign would be to plan a direct news and feAture articles
In the newspapers to educate the consumer anid general public, so that citizens
will know how much more they will have to pay for certain specific articles If
the proposed tariff schedules are adopted by Congress.

Then, the plan of campaign:

The Phoenix bureau would organize a publicity campaign covering 800 of the
largat morning and evening papers of. the country. The material, data, statlsties, facts of all kinds collected by the National Council of American Importers
& Traders .(Inc.), would be used as the basis for carefully written feature
articles, news stories, and editorials. Our plan wduld be to reach as many
different departments of the newspapers ns possible.
Interviews: The bureau would get Interviews from leading jurists, economists,
merchants legislators, stylists. etc., getting their expert opinion on the evils to
the American consumer of the proposed new tariff.
Motion pictures: Over a period of three or four months campaign It would
be po.ible for us to plan and build up a news event which would be important
enough to put Into the news reels at one time during the publicity campaign.
It takes a great deal of time and a good deal of Ingenuity and a wide acquaintance with cameramen to do this, but the bureau In the past has been
very successful with this particular branch of publicity, and If the organization
wanted it in this case it could lie arranged so that there would be no extra
charge for a flash on the news reels. which would be worth nmany hundreds of
dollars if the organization tried to buy the space.
General publicity plan: A concentrated effort would be made to reach a circulation of not less,; than 40,000,000 over a period of three or four months. The
chief means of doing this would be the newspapers of the country. We would
build up a special list of newspapers and also work with teiAssociated Press
and the United Press In an intensive campaign. An effort will be made to
reach the large summer resorts where people have more leisure during the

But
:1s8

of
Ira
be
of
lie,

gra

till
thai
tha

oug
it t
COW

T
Pho
Yor

D
and
prop,
traw,

may
five
to-da
As
outl"
we
Pala
for
fod

It
St

only
A

Si

m
Se

didn'
M

2085

LOBBY INVESTIGATION

summer months to read and digest their hometown newspapers. We could

also hell) with valuable suggestions as to the placing of speakers on programs
of women's club meetings In October whet the club season starts if this seems
praticable.
costs: The bureau's fees for directig and planting such a campaign would
ho $800 per month for the period of the service. This fee Includes the services
of writers necessary, clerical work and ill costs of preparing and distributing
newspaper copy, all traveling expenses. cost of stereotyped material, photographs and messengers are not included In the above.mentioned fee.
Respectfully submitted.
Pntol .zx NEWS PUICIITY BUREAU (INC,),
IUTH BYEs lEED, Presidellt.
Mir. FLE'CHER. Yes.

Senator Rom.Nsox. of Indiana. You. know of that letter?

Mr. FLEWHER. Yes. I got a copy of it.
Senator Ronixsox of Indiana. You accepted their proposition?
Mr. FL'rcjiIa. I think it was somewhat modified.

Mr. Le Bou-

tillier can give you the details of it.

Senator oiuNsoX of Indiana. It was not modified much, was itl
Mr. FLETC

REn.
I am afraid it was modified so that it cost us more

than $800 per month.

Senator
3oInsoN of Indiana. That is right. It was modified in
that respect. But this original arrangement was not modified.
Mr. FLETmIEI. Those were only suggestions.

Senator Ronivso-x of Indiana. I have got a. lot of these I perhaps

ought to take up with Mr. Le Boutillier, but I am only mentioning
it to you because you are the president of the organization and, of
course, knew what was going on.
Under date of June 18, 1929, addressed to Mrs. Ruth Byers Heed,
Phoenix News Publicity Bureau (Inc.), 342 Madison Avenue, New
York, I find a letter:
DrA MRS. Hmm: On behalf of the National Council of American Importers
and Traders (Inc.), following our conversation to-day, they will accept your
proposal of June 0, to handle a sroPos(4l campaign for $800 per month, plus
traveling expenses, etc., as itemized, with thp understanding that later on we
may add the proposals for booklets or Ipatnphlets, or radio, or special representative at Washington, or all three In accordance with the estimated costs given
to.day.
As discussed, the first thing to be done and tost Important is to prepare an
outline for the campaign and submit it to us for discnm-don. It is understood
we will make available to you our flh. of the previous very successful campaign, that Mr. Van Leer will be the dhect contact for us ansad Miss Mandeg
for you. and that relea,ses before Issuance will he sent to mue for 0. K. or
modification.
Sincerely,
PJtLIp Lin BOUTILLIR,

chairman.

It has at the bottom: "Copies to Mr. Frank Van Leer."

So, you accepted the agreement that this company proposed, the
only modification being made latertr. FLETCIHEI. Yes; that is the idea.
Senator RoBmNsoN of Indiana. When it cost you more money?
Mr. FLrTChER. That is the idea.

Senator RoBnnsoN of Indiana. And it cost you considerable,

didn't itt
Ur. FLeTCiER. Yes.

2086

LOBBY INVESTIGATION

Senator RoBiNsox of Indiana. Now perhaps you won't be able

to answer this, but as president, if it happened during your administration, you can answer it. I read from Mr. Lo Boutillier's letter:

Se
of a
in si

It is understood we will make available to you our files of the previous

very Sumcessful campaign.

gooe

What did he mean by that?

Mr. F,LIjn. I assume, not having written the letter, or even
seen it. before, he probably rofer"red to tho publicity campaign that
Mr. Lo Boutillier had in the last tariff.
Senator Rom.Iso% of Indiana. In 1922?
Air. FLTroM.iRu. In 1922. That is indotlbtedly what he meant.
Senator Romxso-x" of Indiana. 'That you consider a very successful
campaign
Mr. JFLE'roii.n. Well, Mr. Le Boutillier seenied to think so. He
was the chairman of it.
Senator RoBnjsoN- of Indiana. What do you think of it?
Mr. FL'xIIEn. I wouldn't like to express my personal opinion.

Senator Rontsox of Indiana. There is a great deal of this here,

Mr. Fletcher, that I.think I will talk to Mi. Le Boutillier about.
I am sure the committee is grateful to you for your courtesy and
kindness. Senator Blaine, have you any questions?
Senator B6AJ19. No.
Senator Ronixsox- of Indiana. Then that will be all for the present. Mr Kridel is here, I understand, and wants to get away.
Senator BLAINE. Just come forward, Mr. Kridel.
TESTIMONY OF SAMUEL KRIDEL
(The witness was duly sworn by Senator Blaine.)
Senator BLAINE. Will you give your name, business and address,
Mr. Kridel I
Mr. KnDEL. 390 Fourth Avenue, Nlew York City, commercial
banker.
Senator Roimnso of Indiana. Mr. Kridel, what do you mean by
commercial banker?
Mr. KniDEL. We are in the factoring business, if you know what
that means. That is, that we have accountsSenator RomBoN of Indiana. You. do business on commission.
You are factoring all the time?
Mr. KmDEL. Factoring, exactly.
Senator Ronixso.,q of Indiana. Where is your business located,
you say?
Mr. knmD. 800 Fourth Avenue, New York City.
Senator Ropmaso, of Indiana. You deal on a commission basis
with imports that come into this country?
Mr. KMDEL. Imports and domestic.
Senator RoBnrzsox of Indiana. You also deal with domestic manufacturers of goods?
Mr. KRmID. Oh, yes.
Senator RoBmoN
of Indiana. Mr. Kridel, you are interested to
a considerable extent in silk, are you not?
Mr. KVIDEL. Yes, sir.

M
Se
tileM
Se
that.
of In
Se
of thi
Sec

done
M~r

Sestarte
intere
Mr
is, as
Sell
you n
Mr.
Sen
Mr.
Sen
since*
Mr.
Sen

your
TMr.
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I wou
to Co
the pr
reduce
cernee
Senl
Mr.
Senf
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they?
Sir.
Senn
they IN
the ad
Mr.

LOBBY INVESTIGATION

2087

Senator RomNsox of Indiana. If It is not violating any confidence

of ay kind, can you tell the committee how much business you do
in silk a year-gross?
Mr. KWDr.L. Well the business is manufacturers who consign their
goods to us, either domestic or imported.
Senator Ronr.so-x of Indina. Do you know how much the volume

would be a year, in silks alone?

MI. KnIDF.L. Yes; $17,0,000.

Senator Roni.sox of Indiana. Mr. Kridel, you are a member of
the National Counoil of American Importers & Traders (Inc.)T

Mr. KinD.L. Yes.

Senator lIoTRxso. of Indiana. And as a member of that asociathat you have been interested in this tariff legislation, of course?
Mr. KRTD.L. I have. Not as a member of the American Council
of Importers & Traders.
Senator Romxsox of Indiana. Well, you have been as a member
of that. too,- havein't yoi?
3h'. KwID:L. Well, possibly, if you wish to put it that way.
Senator 1Ron.xso. of Indiana. The membership ratifies what is
done by the executive officials?

Mr. 1111TI.rL. Ye.e.

Senator RonyJsox of Indiana. You say not as a member. You

started to say that and then qualified the answer. How are you
interested? Are you interested in some bther way? .
Mr. KitDEL. Notlng more than when they organized they asked
us, as they did other firms, to become members.
Senator Ronrxsox of Indiana. At the time they organized. Do
you mean back in 1921f
Mr. KnuM.L. Yes.
Senator Ron xsoN of Indiana. Did you join at that time?
Mr. Knim.L. Yes.
Senator Ronixsox. of Indiana. Have you been a member ever
since?
Mr. KnIDEL. Yes.
Senator Ronjmsox of Indiana. What has been the character of
your activities in connection with tariff legislation?
Mr. KRI EL. Nothing more than I was called upon by several
manufacturers of silk, importers and traders as well, to see whether
I would be Identifled in forming an organization that could submit
to Congress briefs and any other information with a view of having
the present rates maintained in the tariff law, but not to have them
reduced in any way whatsoever, so far as the silk schedule was concerned.
Senator Romxso- of Indiana. No change?
Mr. KRIDrF).
No change.
Senator Rommiso. of Indiana. Tie silk importers would not object to a change? They would not object to lower duties, would

they?

Sir. KRImDL. I SuP)ose they wouldn't.

Senator Roimusox of Indiana. No, of course not. And of course,
they were chiefly anxious to continue foreign valuation, so far gs
the administrative features were concerned?
31r. KnIDEL. I assume they were.

2088

LOBBY INVESTIGATION

Senator ROBINsoN of Indiana. Now, this committee then organ.

ized, did it?

Mr. KBIDFEL. Yes.

Senator ROBINSON of Indiana. You called that, if I remember

rightly, the silk defense committee?

Mr. KRID.L. Yes.
Senator RoiBIsox of Indiana. And you became chairman of the
silk defense committee?
Mr. KRwEJL. Yes.
Senator ROBINSON of Indiana. What is the silk defense commit-

tee?
Mr. KniDE.L. Nothing more than a nominal name that was given.
We had it so called in 1921, and that was organized as a defense
against rates that would be detrimental to the silk industry in
general.
Senator RoBINSON of Indiana. Is this silk defense committee apart
entirely from the National Council of American Importers and
Traders (Inc.) I
Mr. KnIDEL. It is a private organization a little organizationSenator RoBISoN of Indiana. That is what I am getting at. The

silk defense committee has no relationship directly with the American

Council of Importers and Traders?

fie

vei

mo
tit

fi

du
f.r..
act

Mr. KitmI
. Absolutely none whatever.
Senator RoBiNsoN of Indiana. Who composes this committee be-

sides yourself
. Mr. KIrnL. No one any more than a call was made to several
people to join in the organization.
Senator RoBINsoN ofIndiana. When was that call made?
Mr. KImDE. I have a record of the call, and I will read it to you
if you like.I

Senator RomNsoN of Indiana. Let me see it flist, and maybe we

can dispense with the reading of it, and not take up that much time.

I think you can read that.

Mr. KRIDEL. [Reading]:

I have been asked by several domestic manufacturers of silks, traders, and

factors, to hsorgani e the silk defense committee which so) suceftfully prevented
prohibitive rates of duty in the present tariff, for the purpose of submitting to
the Ways pnd Means (omunittee of the House of Representatives at Its con.
templated hearings, as well is to the Senate Finance Committee, arguments and
briefs to opxpose any higher rates of duties for the future tariff bill than those
existing uider the pri-sent law, but not to advocate any lower duties.
In order to reorganize the personnel of this committee, and to arrange for
the collection of funds for the payment to Mr. A. 0. stapfer, its expert, for
the nieesarvy compilution of statistics, and to defray the expenses for the fre.
quent visits of the committee to Washington, as well its for clerical work,
printing, etc., you pre hereby Invited as amn interested party. to attend a meeting

to bt, held at my office on Friday afternoon, January 11 at 2.80 o'clock.

As the matter Is of great Importance, I trust you will find it necessary to be

present.
Senator RoBiNsoN of Indiana. Now, let me see it a moment. That

is your letter?

Mr. KraL. That is my letter, yes.

Senator RomIsoN of Indiana. You sent that out under date of

January 9, 1929?f

Mr. KwItDEL. Yes, sir.

gre
ene
in

ili

di

li

def

lab

F,

1
ac

LOBBY INVESTIGATION

2089

Senator RoBI.soN of Indiana. You say in this, Mr. Kridel (reading):

I have been asked by sewral domestlc manufacturers of silks, traders, and
factors, to reorgraiize tMe silk derewose cmnnfltttee which so suceewfully prevented prohibitive rates of duty ini the present tariff.

How did that silk defense committee work so successfully?

Mr. KumtJL. Why, because the rate

Senator Ronvisox of Indiana. How did they? What was the

modus operandiI
Mr. KitntL. Only by submitting briefs to Congress at the time.
Senator RoimNsoN of Indiana. But there must have been something special done in 1922g.
1l. Knw.M.

Nothing more than that, sir.

Senator RoBixsox of Indiana. But yott say, "which so successfullv-"..

Air. KRDEL. Yes; and an act eventually was enacted which pro.
deed such rates as did not prohibit the entire importation of goods
from abroad. That is all.

Senator RoBINsox of Indiana. But you evidently considered the

activities and the results of this silk defense committee in 1922Mr. KnIDEL. I do; yes.
Senator ROBnNsoN of Indiana. Signally sueeessful.
Mr. KiDEL. Yes; I do, Senator.

Senator RonINsox of Indiana. Now, I am asking you what you did

in 1922.

Mr. K~nDET,. Nothing more than submit our briefs, and by the

great amount of statistics that were compiled, showing the differences in costs between labor abroad and in this country, and presenting various examples of all grades of domestic silks produced before
Members of Congress-that is all we did.
Senator RoBinsoN of Indiana. That was an organization of silk
people engaged in the silk innianufacturers in the silk industry,,pol.eggdlttesl
n
dutstry?
Mi. KRn.L. People engaged in the silk industry ; yes.
Senator RoBIxsox of Indiana. That was in 192?
Mr. KRiDEL. Yes.

Senator RoixssON of Indiana. You were chairman of the silk

defense committee at that time?
Mr. KUIDEL. Yes.
Senator RomaxsoN of Indiana. Is that the first time you ever acted
in that Capacity?
Mr. KnwF. Yes.
Senator RoBINsoN of Indiana. And you are chairman this time?
Mr.KniDL,. Yes.

Senator RoBntsoN of Indiana. In 1922 who else was in the silk

defense group with you?
Mr.InE,.Now
Senator RonINsox of Indiana. No. In 192 who were your col.
laboratorst Who worked with you In 1922?
Mr. Kum.L. Very much the same people who acted this time.
Senator RomsoN of Indiana. All right. Who are they this time?
I don't. want a list of all the people in the silk industry: You have
a committee. Who composed the silk defense committee?

2090

LOBBY INVESTIGATION

Mr. KRIDL. This very question was asked of me by Mr. Bingham,

the chairman of the subcommittee, and it is all in tile record.
Senator RoBiNsox of Indiana. I know, but you won't object to

answering hereI

Mr. KD]EL. I don't object at all.

Senator RoBIaNsoN of Indiana. First, tell the committee how many

were oh that committee?

Mr. KnIDEL. Five or six.

Senator Romnxsox of Indiana. Besides yourself give the commit.

tee tile nantes. Mr. Witness, don't vou klow odhiand who live or
six of your close friends in this iMdustry are?
Mr. KmDEL. Yes. I have. got them now.
Senator Rornnsox of Indiana. I supposed you knew them without
reading then.
Mr. KRwEi. J. C. Viberf, P. T. Molony, A. E. lVoolsehlager,
J. Barbet, Robert Hurhniann, M. Arronet, U. A. Schiele.

Senator Romxsox of Indiana. That is at list of those on the

committee l

M[r. IIIE,. "l.es.

Senator Roixsox of Indiana. Now, in this successful effort you
made in 1022, were these sanie nien associated with you whose writes
you have just read?
Mr. KnIDL. I don't remember exactly, but some of them were.
Senator Ronixsox of Indiana. But you were the chairman?
Mr. KminI. Yes.
Senator Rontxsox of Indiana. You say further in this letter:

In order (o reorganize the persomtel of this committee, nud to arrange for

the colhtiuln (of funds-

Mr. Knm ar. Yes. sir.

Senator Romxswx of Indiana. Was that meeting held?
Mr. KnE1. YXes. sir.
Senator Ro ixsox of Indiana. Where was it held?
Mr. KiuoEI. At my ollice.
Senator Roinxsox of Ilniana. And did you arrange for the collection of fitldsl?
MI, KlitD:L. YeS. Sit.
Senator Ronmxsox of Indiana. How much did you arrange to
collect"
Mr. KloEm,. We arranged to collect sufficient to carry out the arrangement we made with our expert statistician.
Senator Roiixsox of Indiana. Who was heI
Mr. Kmti: 4. Mr. A. ('. Stapler.
Senator ltomuxsox of Indiana. And the nioney was to be paid to
Mr. A. C. Stafferf
Mr. Ktma, . It was.
Senator RoiN-sox of Indiana. Is lie still working with you?
Mr. ICK111E. Yes, sir.
Senator Ronmxsox4 of Indiana. He is still your expert?
Mr. KnDitw. Yes, sir.
Senator RouINsoN of Indiana. That is, your tariff expert ?
Mr. KRIM.L. Yes, sir.
Senator RomNsoN of Indiana. And how much money did you ar.
range to raise for this defense fund?

Ia

to
no
P
Co
lii
W,

at

spi

LOBBY INVESTIGATION

2091

Mr. MUDEL. We arranged to give him $12,500, plus expenses of

all we could collect over and above the amount we received from the
contributions
we would receive from people hiterested enough to
pay
it.
Aenator RoBzIsoN of Indiana. The silk defense committee of the
industry is a separate organization, and as such, was to pay Mr.
Staffer, your tariff expertA r.Ifil,.Yes.
Senator RoniNsoN of Indiana. $12,500?
Mr. KmtIDE,. Yes, sir.
Senator Ro.ixso." of Indiana. For what length of time?
31r. KnIwmr,. For the entire progre.s of the .1ll thk'ough Congress.
Senator RoBhN-SONq of Indiana. $12,500. If it took three nionths it
would be $12,500; if it took three years it would be the same amount?
Mr.KRIDEL. ExaictlV.
Senator RoBINsox Jf Indiana. And you have kept that agreement
wit him ?
Mr. KRIDEL. Yes, sir.
Senator RoBIxsox of Indiana. What were the terms of payment?
Mr. KInDEL. Whenever he would ask for it, in amounts that were
reasonable.
Senator RoBI.soN of Indiana. How much have you paid him,
about?
Mr. KnwwID.
I don't know exactly what expenses he has had.
Senator RoBiNsoN of Indiana. We will get to the expenses after a

moment. I am now speaking of the retainer, $12,500. How much

have you paid him of the retainer you agreed to pay him?
Mr.i KmDEL. $3,000, I believe.
Senator RoBi.soN. of Indiana. But lie can have more any time he
wants it?
Mr. KUIDERL. He can.
Senator RoaizsoN of Indiana. Then he can have the whole $12,500
any time lie wants it?
Mr.KRIDEL. Yes.
Senator ROBI soN of Indiana. So that is money in his pocket?

Mr. K UIDEL. Yes.

Senator Ronixsox of Indiana. Now,about his expenses. He was

to have full expenses, an unlimited expense account'l
Mr. KRiDEL. We were to give him $12,500Senator Roix-sox of Indiana. I have got that, but I am speaking
now of expenses.
Mr. KmDm,. His expenses were to be as much as lie would have to
pay out of that fund of $12,500, if the amount we received from the
contributors was not above the $12,500.
Senator RoBI.soN of Indiana. Exactly. That is, lie had an unlimited expense account?
Air. KnDDwZ. Yes.
Senator RoBnmsoN of Indiana. He could use his judgment.

If he

wanted to entertain somebody down here and spend $100, that was
all right?
Mr. KIDE. He could do anything lie liked with it.
Senator RoBimsoN of Indiana. Exactly. Now, how much has he
spentI

LOBBY INVESTIGATION

2092

Mr. Knm,.I don't know exactly.

Senator RoBINsoN of Indiana. Have you got a record?
Mr. KiDJ,. I haven't got a record.
Senator RoBunSON of Indiana. But you are the chairman of the

silk defense fund?

Mr. KRiDEL. I am. That is as far as it. went. I am the nominal
chairman. I didn't keep charge of the fund.
Senator RoBIso.N of Indiana. Who does keep charge of the records?
Mr. KmDF.L. Mr. Vibert.

Senator RoBImoN

of Indiana. Who?
Mr. KkID. Mr. Vibert.
Senator RoBINsox of Indiana. What is Mr. Vibert's address?

Mr. KiDELJ. 244 Madison Avenue, New York.

Senator RomNsoN of Indiana. But you are the clairnian of the
silk defense committee?
Mr. KnDEr. Yes.

Senator ROBINSO of Indiana. And you called them together in

your office ?
Mr.KiDELJ. Exactly.
Senator Romxso'x of Indiana. To get a fund together for this
tariff activity
Mr. KrDE.

No; I went further than that; that I was to write

the briefs, and I wrote them myself.

Senator ROBINSON of Indiana. But you say in that letter for the
collection of funds for the payment ol Mr. X. C. Stapfer.

Mr. KUIDEL. Yes; exactly.

Senator RoBInsoN of Indiana. Of course, as chairman of this com-

mittee you must have some notion of how much money it has colelected.
Mr. KID.L. Why, certainly I have.
Senator ROBINSON of Indiana. How much has it collected?
Mr. KIIIDE. It has collected about $18,000.

In

cc

th
be
p
P

st

an
th
ti
til

Senator RoBixsoN of Indiana. And as chairman of this silk-de-

fense committee you must have some notion, Mr. Kridel, of how
much the expenses to date have been of Mr. Stapfer.
Mr. KitIDEL. No; I haven't. I don't keep the funds and I relieve
myself of further responsibility. I am not custodian of that at all.

si

penses have been ?

Mr. KRiD.L. He is here to-day. You can ask him.
Senator Romzsox of Indiana. I recognize that, but I want to
find out from you, because you are chairman of the whole thing.
Mr.KUIDEL. Yqs; but that is so far as it goes. I am chairman.
I have nothing to do with the collection of the funds, and nothing
to do with the distribution of them.

Mi

Senator Ro.NsoN

of Indiana. Youn have no idea what his ex-

Senator RoBmsoN of Indiana. Mr. Witne.,

(did I understand yon

to say a moment ago that you prepared the briefs?

Mr. KmD,. Yes, sir; I wrote both briefs to the Senate Finance
Committee and to the Ways and Means Committee.
Senator RonINsoz of Indiana. You yourself
Mr. KiDEL. Yes.

th'

de

inc

LOBBY INVESTIGATION

2093

Senator RoBINsoN of Indiana. Did you present them yourself?

Mr. KRnDL.. Yes, sir.

Senator Roiniiso of Indiana. Before the Ways and Means Committee and the Finance Committee?
Mr. KmtRE,. Yes, sir.
Senator RoImso. of Indiana. That was with reference to silk?

3r. KpiDEL. Yes, sir.

Senator RoBINsoin of Indiana. And as chairman of the silk-defense

committee?

Mr. KRnoEL. Yes, sir.

Senator RoBI-soN of Indiana. Then, what was Mr. Stapfer to do?

Mr. KiDE,. Mr. Stapfer's services as an expert in every phase of

the silk industry was such as to have commanded that figure for the
benefit of our confmittee, in knowing in what manner we could

prepare our briefs and submit them in the proper manner, with the
proper. absolute information exacted from every possible source.
Senator RonINsoN of Indiana. I gathered from what you said he
did not appear before either committee.
Mr. KmDEL. I didn't say anything of the kind. He did.
Senator Ronixsox of Indiana. That is my mistake. I misunderstood you. I wanted to get that cleared up. I understood lie was
employed as your expert.
Mlr. KItiDEL. Yes.
Senator RoBINsox of Indiana. Then, It would seem strange to me

that you would prepare your briefs and present them yourself.
Mr. KwDEL. Yes.
Senator RomsoN of Indiana. Did he prepare briefs and present
them before the committees?
Mr. KIIIEL. How?
Senator RoBIsoN of Indiana. Did he prepare briefs and present
them before the committees?
Mr. KmDEL. He was called as a witness.
Senator RoBIxsoN of Indimna. He was your witness?
Mr. KIIDEL. Yes; he was one of our witnesses.
Senator Romso- of Indiana. He was an expert witness for the
silk industry before the Ways and Means Committee?
Mr. KIRDEL. Yes.
Senator RoBIxsoN of Indiana. That is one of the things for which
you paid him ?
Mr. KRiDE.. Yes.
Senator Romnisov of Indiana. What other expense has your committee been to?

Mr. KRIDE,. None other.

Senator RoBINsoN of Indiana. How much did it cost you to make

this signally successful effort you spoke about in 1922, the silk
defense committee?
Mr. KRIDEL. I believe at that time the same amount.
Senator ,oisoN of Indiana. $18,000?
Mr. KUW&... Yes.
Senator RoBINsox of Indiana. You collected $18,000 from the silk
industry and spent $18,000?
Mr. K&IDRI,. Yes.

2094

LOBBY INVESTIGATION

Senator RoBpIso- of Indiana. And that was to influence legislation. Well, it is refreshing, Mr. Kridel, to see you at least state
frankly what your money was spent for.
Mr. Km.

. Exactly.

Senator RoBINsoN of Indiana. Some witnesses have not been so

candid. Have you any questions, SenatorI

Senator

BLAINE. No.

Senator RoBINsoN of Indiana. Have you anything to volunteer,

Mr. Kridel, that you think this committee ought to know about your
activities?
Mr. KrDEL. None other, Mr. Chairman, than that whatever we
did in that respect was for the good of the domestic industry in
this country. We have shown and can show conclusively in all the
briefs we have presentedSenator ROBINSON of Indiana. Your motives were all altruistic
from the start?
Mr. KrIDEL. It is not a question of altruism at all. I have very,
very many reasons why the rates in the tariff bill at the present time
should not be disturbed.
Senator RomINsO of Indiana. Oh, I know that.
Mr. KnmD
That has been before Congress, before the Senate
Finance Committee, in every way. Whatever has been presented
from the Government reports as we received them.
Senator RoBINsoN of Indiana. What I am trying to say, Mr. Witness, is that I was pleased with your attitude in that connection. You
frankly spent $18,000 in 1922 to influence legislation, and you spent
it this year again, or expect to, and you are frank enough to say so,
and I commend you on that.
Mr. KIDErL. Exactly. Whether you wish to call it influencing
legislation or not.
Senator RoBI-soN of Indiana. In the end it amounts to that. And,
of course, that is lobbying, and in that respect there is no difference
between what you have done and others.
Mr. Knwr,. Exactly.
Senator ROBINsON of Indiana. All the committee is interested in,
Mr. Kridel, is to get both sides of every question and present the
facts to the American people, so that they can be the final judges on
the question of the right or wrong of what is being done.
Senator BLAINE. Mr. Kridel, you used the words "to influence
legislation." Do you mean by that that you paid any sum to any
Member of Congress ?
Mr. KRIDEL. Not one cent. No; not in any way, shape or manner.
Senator BLAINE. Did you pay any money to any employee of any
Member of Congress?
Mr. KiDEL. None to any employee. To no one in connection with
the Government whatsoever; not a cent.
Senator BLAInE. To any employee of any department of the Government?
Mr. KRIDEL. None whatever.

Senator BLAIN. Then what did you pay the money fort
Mr. KmUDEL. Simply to present to Congress the exact views of the
constituentsSenator BLARNE. State it a little more concretely.

LOBBY INVESTIGATION

2095

Mr. KnEiDL. Nothing more than to get from the greatest expert I
consider in the silk industry the proper compilation the proper
knowledge, in a manner in which we could present our brief* and if
from his information we had found it was not such as would command our representation, we should not have made it.
Senator BLAINk. You did not get my question. I will put it a
little more definitely. You paid Mr. Stapferl
Mr. KIIDEL. Yes.

Senator BLAINE. For what purpose.

Mr. KRiDEL. For the purpose of giving us information we could
properly present in: our briefs.
Senator BLAINE. Did you pay Mr. Stafer to pay somebody else to
influence legislation I
Mr. KR D1L. Not a cent; nothing whatever.
Senator BLAINE. You paid for printing briefs?
Mr. KIDEL. Yes.

Senator

BLAIN .

For what other purposes did you pay it?

Mr. KIIDEL. The expenses of these gentlemen who came down

to Washington.
Senator BLAINE. You paid what?
Mr. KnD)EL. The expenses of this committee. Or Mr. Stapfer's,
whenever lie camie down here to Washington. Traveling expenses
only, and the printing of these briefs.
Senator BLAINE. Hotel bills?
Mr. KXzII.L. Hotel bills.

Senator BLAIVE. Railroad transportation?

KIDF.L. Railroad transportation.
Senator BLAIXE.. Tax fees?
Mr. KRIM.L. Yes. Whatever expense any member of this committee had at the time the hearings were held before the Senate and before the House of Representatives.
Senator BLAINE. So that in so far as expenditures for these purposes have influenced legislation, then, of course, you have influenced
legislation?
Mr. KnnIEL. If you take it in that way; yes.
Senator BLAINE. I wanted to know how you took it.
Mr. K"nDEL. No; that is not influencing legislation.
Senator BLAINE. It is quite a distinction between employing experts and printing briefs and paying transportation charges and paying money to influence legislation?
Mr.

Mr. K.IDEL. Yes.

Senator
Mr.

BLAINE. I mean in
KRIDEJ. I don't take it

the popular mind, and technicallyin the same light as Senator Robinson

has indicated.
Senator BLAINE. Well, your answer appeared that you had actually paid out money in a way directly to influence legislation.
Mr. KRJD .L. Not a bit; because my answer wasSenator IILAINE. I simply wanted the facts as to the purposes for
which the expenditures were made.
Mr. KIIDEL. It was the Senator's inference Senator Robinson's
Inference,
that it was paid to influence legilation. He put that
phase on it.
Senator Roiixsom of Indiana. Well, of course, that is true. There
isn't any doubt about it.

2096

LOBBY INVESTIGATION

Mr. KRIDEL. That is a point of view that you might. take.

Senator RoinhsoN of Indiana. Wait a minute. If you hadn't desired to influence legislation, you would have been $18,00) ahead,
wouldn't 3loul
Mr. KIUDEL. Not at all.
Senator Roin.sox of Indiana. You could have put it in your
pocket. But you did want to influence legislation and you spent
$18,000 to do it.
Mr. KimnD.L. We did.
Senator Ron.xsox of Indiana. Then, don't qualify it. Let me
ask you another question. Tiis Mr. Stapfer you spoke of is the
same Mr. Stapfer, is lie not, who was an examiner of silks at the
port of New York(
Mr. Kmnpp. I think lie was, many years ago.
Senator Ronixsox of Indiana. Of course lie was. And that is one
of the chief reasons you hired him, as all these rther Government
experts have been hired I
Mr. Km:DJ,. No; you are entirely mistaken.
Senator RoUNIso.N of Indiana. That had nothing to do with it?
Mr. KnEL. Absolutely nothing.
Senator Ronm.so" of Indiana. What did you expect Mr. Stapfer
to do, exactly?
Mr. Kit:Iw,. He is one of the best-informed men in the manufacture ofSenator Roimuso.x of Indiana. But what you wanted eventually
was votes in Congress for the kind of legislation you desired?
Not that we employed hin for that purpose at all,
Mr. KuiDEtI.
and not that he could influence any member of Congress on account
of his being employed by the Government at any period. t
Senator Ronmiso- of Indiana. The interesting thing we want to
know is how much yot have spent, and you have toldus that, and
that is what we would like to have the people know, how much these
various agencies have been spending in connection with influencing
legislation.
Senator BLAIXE.. Mr. Kridel, I would like to get down to specific
facts. When did you employ Mr. Stapfer?
Mr. KRIDEL. When was the date of that?
Senator Rom.vsoN of Indiana. This letter was dated January 9th,
when you summoned your folks in to contribute.
Mr. KRIDEL. Right after that meeting.
That wao in 1929?
Senator Bjiuv,,.

Mr.

KnDEI,.

Yes.

Senator Bt,AIv.E. Was lie employed in 1921 by your organization

or committee?
Mr. KRIDEL. Yes, sir.
Senator BLAINE, In the same capacity in which lie was employed
in 1929?
Mr. KnmE,. Yes.
Senator BLAIXE. When was he an official of the Customs Department?

Mr. KIDEL. Oh, it was prior to 1921.

Senator BLAINE. But when, do you know I
Mr. KEIDEL. That I really don't know.

Sil

slp'
the
81
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erly

81
S
Silk
P
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8.
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they
i

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Sel
silks

L4BBY INVESTIGATION

2097

Senator BLAINE. Prior to that?

Mr. KlRIF.. Yes.
Senator BLItil-. Mr. Stapler -Aill testify as to that?
Mr. KEmDPL. He will tell you all that.
Senator BLAINE. Has he been employed in the customs department
since 1921?
Mr. KiIDMU. NO.
Senator BLAITE. Did you attempt to influence any vote by the payinent of any money to any Member of Congress?

Mr. K1CDnE. Not a cent.

Senator BrAINE. I have no further questions.
Senator RoBINsoN of Indiana. That is all, Mr. Kridel.

TESTIMONY OF ARKAN 0. STAPPER

('rie witness was duly sworn by. Senator Blaine.)
Senator

BLAlX.

Give your name, address, and business, Mr.

Stapler.

Mr. STArFEt. Arman C. Stapfer, 149 West Thirty-sixth Street.

Senator BLATN-:. What is your business?

Mr. STAPFER. General manager of a silk concern.
Senator BLAIne. Just describe what that position involves.

Mr. Sr,%PFR. As general manager and president my duties are to

supervise the whole business, manufacturing, selling, and supervising
the mill.
Senator B.%unE. How long have you been engaged in that
business?
Mr. STAFFER. I just started this position January 1. I was formerly vice president of the Piedmont Silk Co.
Senator BLAINE. January 1, 1930?
Mr. ST AFFR.

January 1, 1930, this year; yes.

Senator BLAMNE. You were vice president of the Piedmont

Silk Co.?
Mr. STArFFn. Yes, sir; general manager and vice president of the
Piedmont Silk Co. for six years.
Senator BLAInE. Are you still general manager of that company?
Mr. STAPFF . No. I resigned from that position and have taken

this new position.

Senator BLAINE. What was that company engaged in?
Mr. STA FEn. Manufacturing silks, too; manufacturing broad silks
and garments.
Senator BLA.114

Domestic manufacturing?

Mr. STAPFIR. Yes sir.

Senator BLAINE. bid they do any importing of silks?

Mr. STAPFiR. Our sales agent imported some silks in a very small
way, but I had nothing to d-o with that. That was his business. He
was the selling agent.
Senator BLAzNz. Did the Piedmont Co. fabricate broad silks that
they manufactured, or did they sell the broad silks?

Mr. STAER. Well, we manufactured and sold it direct to the

trade.
Senator BLAINE. Both fabricators and manufacturers of broad
silks?
78214-30-nU---21

2098

LOBBY INVESTIGATION

Mr. ST,%.F It. Manufacturers from the be inning to the end. We

received the raw silks and manufactured tfie goods.
Senator BLAINE. Did that position as manager take all of your
time
Mr. STA'FIF.n. Practically.
Senator BLAIUL. Did You have any other business during the
six years you were with the Piedmont Co.?
Mr. STAPFiatn. Well, I had this tariff engagement.
Senator BJ.AxI.:. You had this tariff engagement? What do you
mean by that?
,
Mr. SrAi'iIl. Well, I was engaged by Mr. Kreidol, as tariff expert, and as such I prepared briefs, and Mr. Kreidel rut the finish.
ing touches on it, and I gathered a lot of statistics, am lso forth, and
submitted such statistics before the Ways and Means Committee and
the Senate Finance Committee.
Senator BLAIN-. What were your duties as manager of the Piedmont Silk Co.?
Mr. STArFEi. My duties were-I was responsible for the business
of manufacturing the silks.
Senator BIAINg.. Were you familiar with the entire silk industry?
Mr. STAPFPEB. Absolutely.
Senator BLAxE. From the manufacture of broad silks down
through the fabrication of those broad silks into garments and
wearing aplprel I
Mr. SuT.F- g. I am considered an authority in the silk manufeaturing. I am familiar with the silk business and all of its phases.
Senator llAJiLm . What was your business before you went with
the Piedmont Co.?
Mr. STrPPtE. Before I went to the Piedmont Co. I was general
manager of the Washington Silk Co.

Senator

BLAINE.

bu

if
Go
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it
Th
an(
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81

$12,

Where is the Washington Silk Co. located?

Mr. STAPFEU. They were located in Pennsylvania.

figti
S
ex

Senator BLAINE. What was the business of that company?

Mr. STA PP
I.n. Manufacturing silks.
Senator BLAINE. What class of silks?
Mr. STAPER. Broad silks.
Senator BLAxEt. How long were you with that company?
Mr. STAPPElI. Three years.
Senator BLAiNt:. That takes you back nine years ago?
Mr. STAirkn. Yes, sir.
Senator BLAINE. What was your business before going with the
Washinton Silk Co.?
Sl
Mr.6TA1PF.R. Before going to the

St
pis

8v

$4.0(
M
se
exle

Silk Co.I
Tashington
was con-

nected with a jobbing concern that went out of business, where I had
the department of domestic silks and imports both.
Senator BLAINE. Where was that.?
Mr.'STAPPEI. It was Henry Goodman.
Senator BLAINH. Where was it located?
Mr. SA]PFk.
New York Oity.,

S
draw

Mr
SI
at leMr

Reflator BLAlNE. You were located there?

Mr. STAPiPEI. I was located there.

,Renntor W.AmE. Row.long were-yoiU with that compalyI
:r'STAiJPE. Thrie years with that concern.
'"

.. ,I '." .. ' ' .?"

Se
Mr

LOBBY INVESTIGATION

2099

Senator BLAINE. That takes you back 12 years. What was your
business before that?

Mr. Sr,%PFEn. Before that I was examiner of silks at the New York

Customhouse.
Senator BLAINE. In the employ of the Federal Government?

M. STAI'FER. I was examiner of silks and prior to that analyst of

textile fabrics in the Customs Service.

Senator BLAILE. What was your training for that position?

Mr. STAPFEn. I graduated from the 'Textile College in Zurich,
Switzerland. I spent considerable tihne also in Japan, mianutacturing goods in Japan, and I am familiar with the marketing of silk.
Senator BLAINE. Then as I figure it, you were in the employ of the
Government how long-12 years?
Mr. STArPER. About nine years. I left the Government service in

December, 1910.
Senator BiAINP.. That will be 14 years next December?
Mr. STAPPEtn. Yes, sir.

Senator RonixsoN of Indiana. Mr. Stapfer, how much money have

you received to date from your employers?
Mr. STAI'FER. I received so far about $8,000, including expenses.
They gave me a drawing account, a guaranteed minimum of $12400
and whatever more they would collect, they would give it to me, and
they set no limit to my expenses. Of course, naturally I wanted to
keep the expenses down. Otherwise it comes out of my own pocket.
Senator Romx.sox.- of Indiana. Now let us see just a moment. How
much have you drawn from the drawing account, the gross of which
should be ultimately $12,500?
Mr. STAPFnE.

About $8,000.

Senator Roni-so- of Indiana. You have drawn $8,000 of the

$12,600 stiplahtted?
Mr. ST.%IrFEn. YQes. It is just about that. I haven't got the exact
figures.
Senator Ronmx.sot" of Indiana. How much have you drawn for
expases I
ifr. STAPrERn. For expenses I have drawn about $4,000.
Senator Ronm-sox of Indiana. Youhinave drawn, therefore, $8,000

plus q,&000, or $12,000?

Mr. 8TAVI:EI. No, no. $8,000, including the expenses.

Senator RoNsoN- of Indiana. That is to say, you have drawn

$4.000 out of the $12,500 set apart?

Mr. STAPliER. Yes.

Senator Ronmxso of Indiana. And you have drawn $1,000 as
Cees

Mr. STAPlFE.

About $4,000.

Senator Rontxsox of Indiana. Which you get in addition to the

drawing account of $12,500?

AMr. STAPFRn.

Yes.

Senator Ronm.stxo of Indiana. So that you are sure at present of

at least $12,500?
Mir. STAPFER. Yes, sil.

Senator RoniNsom of Indiana. If you have no more expense?

Mr. STAPFEn. Yes, sir.

LOBBY INVESTIGATION

2100

Senator ROINSONx of Indiana. You went to work for this concern

whein-for this silk defense committee-when?
Mr. STA IER.For the silk defense committee in January last year,
when this tat'ilf proposition was started.
Senator RoBI.sox of Indiana. Had you ever worked for them

fa

before I
Mr. STApi-m. In 10922, vs sir; the last tariff fight.
Senator Romuxsox of indhana. How long were you examiner of

Co

silk.s at the port of New York for the Government?

Mlr. ST,.rav.. Iwas exatilnor of silks for six or seven years, and
twoyears analyst of textile fabrics.
Senator Rojmuso" of Indiana. When did you leave the Gov-

ernmient
Mr.

fac

'.

STAPFEIt.

In 1910.

Senator Romxsox of Indiana. How much did you receive from

the (Goveritent inialury for Voilr work?
At that time ,000 it year.
Mr. K'rmi-rU.
Senator Roi.xgox (if Indiana. $2,00) i year?

coi

lr. ST.nIymI|. Yes, sir.

Senator Roiuxsox of hdiana. How mnuch were you receiving when

you left the governmentt in 19101

Mr. ST.%,Fim. When I left the Government?

Senator Roinxsox of Indiana. Yes.

Mr. STA'IRF. My salary at that time was $2,000.
Senator Rom-sxox of Indiana. $'2. 00?

Mr. STAPFER. Yes, sir.

Senator Romxsox of Indiana. The ntost you ever received from
the Governent was $2,000 a year during all that period of years?
Mr. STui n... Yes, sir.
Senator Rornxsox of Indiana. When you served as an experts
Mr. 8rMI'TE. Yes, sir. That is why I left the Goverunient.
Senator Roix-sox of Indiana. I think you testified you are a native
of Zurich, Switzerland? 0
Mr. STAPF.. Yes, sir. I was born in Zurich, Switzerland, and
graduated from the textile College of Zurich.
Senator Rom.xso- of Inliatia. When did you come to this country?
Mr.' STAPFER. 1903.
Senator RoBIsox of Indiana. And went with the Government.

then?
Mr. STVFER.

No, no.

Senator RoBrxsoN" of Indiana. When did you go with the Government?

Mr. STAPFr. With the Government, I went in 1909 or 1908.
Senator RoernsoN of Indiana. Now, have you any business besides
acting as tariff expert for the silk defense committee?
Mr. STAPFER. No; except my own business of manufacturing.
Senator RomuNsoN of Indiana. Are you a manufacturers
Mr. STAPFER. I am a manufacturer myself.

Senator Rousox of Indiana. Where?

Mr. STrAPER. In Rhode Island now; formerly in Pennsylvania.

Senator ROBINSON of Indiana. Do you own a factory?
Mr. STAP~nx. Yes, sir.

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LOBBY INVESTIGATION

2101

Senator RonjxsoN of Indiana. Do you manufacture silk?

Yes.
Senator RoncsoN of Indiana. How much capital have you in that
factory?
Mr. ST. rkR. Well, I haven't got all the details. I juhst started in
with a new concern January 1. I was formerly with the Piedmont
Mr. STAPFE.

Co.

Senator ROBisoN of Indiana. I know that, but you have a silk

fac t ory I underst ood you to say?
Mr. KTrFER. Yes.
Senator RoBiNsoN of Indiana. A manufacturing concern.
Mr. ST.PrEn. Yes.
Senator RoniNsoN of Indiana. You are a fabricator of gilk?
Mr. ST.APFFn. Yes. I an engaged as general manager for this
concern. I am not a manufacturer myself.
Senator Rom.xsoN of Indiana. You are general manager?
Mr. STAPFER. I am general manager.
Senator RoBINSox of Indiana. Have you any stock in the concern.
Mr. STAPFEaR. No.
Senator Rontxsox of Indiana. You do not own anything connected
with it?
Mr.

STAPPEIR.

NO.

Senator Ronixsox of Indiana. You are employed on a salary

basis?

Mr. STAPPER. Yes.

Senator Ronixsox- of Indiana. How much do they pay you?

Mr. STAPFER. Is it necessary to answer that question?
Senator RoimqSox of Indiana: I think it is, under the circumstances.
Mr. STAPPER. Well, it is around $20,000 a year. I have a profit.
sharing arrangement.
Senator RouiRo. of Indiana. Around $20,000 a year?
Mr. STAPFER. Yes, sir.
Senator Romnxsox of Indiana. And you have a profit-sharing
arrangement?
Mir. STAPFER. I have a profit-sharing arriangement. I am not
sure how much. I might make $20,000 or .35,000. It depends on the
profits. And I have a guaranty.
Senator RonIxsoN of Indiana. Well, that is an increase since you
left the Government service, of course.
Ar. S'rmFn.i. Well, of course it is.

Senator Romxsox of Indlana. What is the name of this concern?

Mr. ST'Avpr.. Tito Central Falls Silk Co.
Senator Ronixsox of Indiana. Do you receive a salary? Do you
have a drawing account there?
Mr. STAPFrll I have a guaranteed salary, plus profits.
Senator RonIxsoN of Indiana. What is the guaranteed salary?
Mr. STmPpEtt. Around $18,000.
Senator RoNxsox of Indiana. Well, isn't It $18,000?
Mr. ST.PFEr. To be correct, $17,600, but I would not want to have
that published.

2102

LOBBY INVESTIGATION

Senator RonINsoN of Indiana. And then besides that, you also

have a profit-sharing arrangement?
Mr. S'r.%vFE1i. Yes, sir
Senator RoBmisoN of Indiana. You are general manager of that
concern?
Mr. STAPFER. Yes, sir.
Senator RoBmIson. of Indiana. Where are you living at present?
In Rhode Island?
Mr. STAPFEII. No.

P
het
if

I am living in New Rochelle.

hei

Senator Ronixso.x of Indiana. I am trying to reconcile the two

employments. That is what I am getting at. You receive $12,500
from these other people, and expenses?

the

Mr. STAPFER. Yes, sir.

an.

Senator RoBlNSON of Indiana. And you have drawn $4,000, to date,

for expenses?

Senator Rom.asox of Indiana. And you receive as general manager

of the concern in Rhode Island $1',500, with a profit-sharing arrangenientlt
I am wondering how you divide up your time. How
mul-h time do you spend in Rhode Island?
.
Mr. STAPFEI, I would not have any time for tariff after this. I
mean very little.
Senator Roiimixso of Indiana. Well, how much time have you
given- to the tariff during this past year, from January 1, or during
your' employlienlt?
Mr. STAi'r:nt. This is 4he second visit this year.
Senator ]oni-xso of Indiana. This is the second visit you have
made to Washington?
Mr. STAIVE'I..Yes, sir.
Senator RoixIsox of Indiana. You were here once before?

gre

Mr. STAPFER. Yes, sir.

Mfr. STAIPEIt. Yes,

sirl.

Senator lon.-.%o of Indiana. How long were you here?

Mr. STAPFFn. I was here for a day.
Senator lloimvIo of Indiana. Just for a day?
Mr. ST,%vvEm. Just a day; yes, sir.
Senator lJomnxsox of indiana. What did you do as their expert
on this' silk defense committee?
Mr. S'r.su'm:. Well. I submitted facts and figures giving the conversion costs and facts and figures-I mean the relation of imports
to dontestic prodnction, and so forth, and pointed out various stateInentsSenator Roixsox of Indiana. In that time, in the one year's time
you spent $44,000 for expenses?
Mr. STAIFER.Yes, Sir; a1o1)1t.
Senator RiomnsoN of Indiana. What did that go for?
Mr. ST,%,t'E. Well, that includes traveling,
Senator Ronixsox of Indiana. TravelingfMr.. STAPFER. Yes.
Senator RonnoS
of Indiana. Where?
Mr. STAP'FER. Oh, I came down to Washington.
Senator RoBixsONe of Indiana. Oh, but once.
Mr. STmipE.t. I mean I am speaking of this year.

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2103

LOBBY INVESTIGATION

Senator ROBIvsox of Indiana. Oh I beg your pardon. You mean

you have been to Washington twice in 1930?
Mr. STAPFEI. Yes.

Senator ROBINsoN of Indiana. Well, how much time did you spend
here in 1929f
Mr. STAMRn. In 1029 I think I must have been down here about
fifteen or eighteen times.
Senator RoBmNsoN of Indiana. Where did you stay when you were
here
Mr. STAPFER. Well, I stopped at different places. Generally in
the Mayflower.
Senator Rouxsox of Indiana. Did you have any headquarters
anywhere in particular?
Mr. STAPFER. No. In fact, I came here from my mills-I had a
mill in Chambersburg, and it was on my way.
Senator RoBInsoN of Indiana. Did you call on members of Con-

gress of either branch?

Mr. STAPFm. Yes, sir.

Senator
Mr.

RoBINsoN of Indiana. Whom did you

STAPPEn. I saw Congressman Chindblom.

see?

Senator RoniasoN of Indiana. Chindblom, of the House?

Mr. STAPFR.

Yes.

Senator Roni'soN of Indiana. Who else?

Mr. STAPFER. I think I saw the chairman, Congressman Hawley.
Senator RoBINsoN of Indiana. Whom else?
Mr. STAPPEV.Well, I don't know of anybody else. I think Ramsever.
Senator RoInausoN of Indiana. Whom did you see on the Senate
side?
Mr. STAPMER. On the Senate I saw Senator Smoot once or twice,
and I saw Senator Blaine once or twice and once I saw Senator La
Follette.
Senator Ronwxsox of Indiana. Senator La Follette and Senator
Blaine?
Mr. STAMER. Yes.
Senator RonIxo

of Indiana. Whom else did you see?

Mr. STAPIPR. That is all, to my knowledge.

Senator RoBixsox of Indiana. Is this a fair statement, Mr.
Stapfer, to say that you receive from the silk industry at the )resent
time a total of $17.600 and $12,500, or a total of $10,000 in salary
and compensation plus a profit-sharing arrangement, whatever may
accrue from that?
Mr. STA rrE. Well, those two things have no connection one with
the other.
Senator RonIsoN of Indiana. I recognize that, but it is all paid
by the silk industryI
Mr. STAPE . I made my tariff commitment long before I was
engaged in this position.
Senator BLAINE. This last position only began January 1, 1030?

Mr. STAPE. Yes.

Senator ROBINSON of Indiana. You mean that you have only been
in the Rhode Island position since January 1, 1930?
Mr. STArr. Yes, sir.

2104

LOBBY INVESTIGATION

Senator RoBINsoN of Indiana. You did not work there last year

tin

Mr. STAPFER. No.

gr

at allI

Senator Ronimsow

of Indiana. You gave your whole time last

year to the silk defense committee

Mr. STAPPFE. No, sir.
Senator RoBINSoN of Indiana. With whom did you work in 1929?
Mr. STAPFEJ. Last year I was general manager for the Piedmont
Silk Co.

gre
on
silk

Senator RonBNSON of Indiana. The Piedmont Silk Co.I

Mr. STAPFF.R. Yes, sir.

Senator RoniNsoN of Indiana. Throughout the year?

Mr. STrFER. Throughout the year; yes.

Senator RonizsoN of Indiana. Where are they located?

Mr. STAPFER. They have an office at 244 Madison Avenue, New
Pa.
York City, and mills in Chambersburg, Pa., and Shippensburg,
you?
pay
ley
di
salary
much
Senator Ronixsox of Indiana. How
Mr. STAlFER. They paid me $12,0500 plus a profit-sharing arrangement.
Senator RoBINsON of Indiana. Then last year you received, bedefense commitsides a drawing account and expenses from the silli
tee, $12,600 plus a profit-sharing arrangement from the silk industy?
Mr. STAPFFR. Well, call it that way.
Senator RoBINsoN of Indiana. You were with the silk industry
last year?
Mr. ST,;PFE1i. Neither proposition interferred with one another.

Senator Ronrsxsox of Indiana. Why not? How could you give

your time to one concern when you were also obliged to give itto
the other? Do you mean to say that your work down here for the
silk defense committee was important work also for the people you
Were working for, for the $12,00_
Mr. STAPF. I made a few trips down to Washington, and it was
not much out of the way. Whenever I went down to the mill, instead of going back the same way, I would go back by way of Washington, and I spent a few hours in Washintgon, and I did not waste
any tine here.
Senator RoBixsoN of Indiana. But you spent enough time to spend
$4,000 in expenses. I am still wondering what the rest of that was
spent for.
Mr. ST,%rFr. Well, the expenses included some stenographic work.
I engaged some public stenographers and the printing of the briefs
and all of that. That is all included]. That includes two briefs
which were printed, before the Ways and Means Committee and be,
fore the Senate Finance Committee.
Senator RonixsoN of Indiana. Did you testify before the Coinmittee on Ways ind Means in the House?
Mr. SArFFER. Yes.
Senator Ronixsox of Indiana. And before the Senate Finance
Committee?
Mr. STAITR. Yes, sir; I did.
Senator Ronixsox of Indiana. How long do you expect to incur
expenses in this mutter for the silk defense committee; until the
tariff bill is passed?

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81

LOBBY INVESTIGATION

2105

Mr. STAPFR. Well, I expect to be through. I haven't got much

time any more, because my present positionn occupies me to a very

great extent.
Senator RonxsoN of Indiana. I believe that is all.

Senator BLAINE. In this contest before the respective committees

on the tariff bill, who is the chief proponent of increased tariffs on

silks?
Mr. STAFeR. It was Mr. Cheney.
Senator BLAIUX. He is a domestic silk manufacturer?
Mr. STAPFiR. Yes, sir.
Senator BLAINE. You do not know how much time he has spent
in Washington, do you?
Mr. STAPFE. W61ll, I have seen him down here whenever I was
down here.
Senator BLAINE. When you were with the silk defense committee,
did the Piedmont Silk Co. object to your employment with the silk
defense committee?
Mr. STAPPER. No. It was understood and agreed that I could
give a certain amount of time, provided it would- not interfere with
my duties as general manager; and it did not.
Senator BLAINL-. I presume it is immaterial, because this committee
is not trying any case between the silk defense committee and the
Piedmont Co. as to what time you devoted with respect to each.
Mr. ST.%iFEn. I spent nights and Sundays on these statistics, and

the only time I wasted was when I came down to Washington occasionally, and then I arranged it so that it fit in with my trips.
Senator BLAINE. You can account for that to the Piedmont Silk
Co. If they are satisfied, I am satisfied.
Mr. STA'FFR. Well, that is all.
Senator BLAINE. That is all. Thank you.
Senator Ronixsov of Indiana. Is Mr. Kridel here? I would like
to ask him a question or two.
FURTHER TESTIMONY OF SAMUEL KRIDEL
(The witness was previously duly sworn by Senator Caraway.)
Senator Ronixsox of Indiana. I think perhaps we can shorten
this inqtiry in connection with silk and the Silk Defense Committee
if you can submit a statement from your treasurer, certified properly,
is to the receipts and disburenments.
Mr. KintEL. Very well.

Senator Ronixso- of Indiana. And what the disbursements have

been for, itemized carefully-both receipts and disbursements, an

itemized statement. Con you do that?

Mr. KhmEr,. Well, you would have to get- -as I see, the expenses

were given only to Mr. Stapfer. No other disbursements were made

except to him.
Senator Ronrxsox of Indiana. I recognize that and I an also certain that we are never going to get out. of Mr. Stapfer what he
spent the money for, because we have tried to do that. I do not
sup)oso lie has a detailed statementHave you a detailed statement of your expenses, Mr. Stapfer?
Mr. STAfiFv. No, sir. I never bothered about it.

2106

LOBBY INVESTIGATION

Senator RomNsoN of Indiana. All I am trying to get at is to save

the necessity of a trip by your treasurer. I think we can make it

unnecessary for him to come personally if he will submit; that statenient.

Mr. KRIDFL. If you desire a statement of the receipts, we can give

it. to you. The disbursements we will give to you.
Senator Ronhxsow of Indiana. And iteinize it as far as you can.
Mr. Kiuw. Yes.
Senator RoBnusoN of Indiana. That is, you know who your contributors were.
Mr. Kiumi.r,. Yes.
Senator Roni.xso. of Indiana. And how much, and what the total
was?
Mr. KnrnEL. Yes.
Senator RoluxsoN of Indiana. And you know at different times
when you paid exl)ense accounts for Mr. Stapfer or anybody else
who had an expense account?
Mr. KEIDE. Surely.
Senator RowrxsoN.- of Indiana. And what the amounts were?
Mr. Knnmm. Surely.
Senator Ronixsox" of Indiana. I despair of ever getting exactly
what it is for.
Mr. KRtIDEL. That part of it you would have to get from Mr.
Stapfer.
Senator Rom.-so- of Indiana. Yes; and I say I despair of ever
being able to get that.
Mr. KInrr.. But we can furnish you with the receil)ts from the
various contributors.
Senator ROr.%-soN of Indiana. Will you do that and get that
statement in here?
Mr. KRnDEL. Within the next few days.
Senator RoniNsox.- of Indiana. Of cohnrse. have the statement sworn
to.
Mr. KmnDFr.. Yes, sir.
Senator Ronixsox. of Indiana. When can you have it here?
Mr. Kunnr., Within three or four' days.
Senator Roiuxsox of Indiana. You get that in here and I think
it will save our calling tie treasurer. Thank you.
hankk you very kindlyv.
Mr. Knnnui.
Senator 1hAuxi:. Is the treaiisurer here this morning?
I[r. Klitwu.
No. He was not called.
Senator Br.AINF. YOU send4that (own as soon ns possible, within

(
I

I
nec
I

S
:

los
Plo

the

whir

the next two or three (11s.'

MI'. Knwr,. I'will be glad to do that.

Senator BLAINMn. The ('onnuittee will stand in recess until tolnorrow morning at 10 o'clock.
(Whereupon, at 12.05 o'clock p. in.. the committee adjourned until
to-morrow, 'I'hursday, January 16, 1930, at 10 o'clock a. ni.)

Pie'
Pic'
S

coul

LOBBY INVESTIGATION
THURSDAY, JANUARY 16, 1930

UNITED STATE ES SENATE,

SUBCOMmITTEE OF THlE COMMITTEE ON TIEk JUDICIARY,

"Washi*ngton,D. 0.
Tile subcommittee met, pursuant. to adjournment, at 10.20 o'clock
a. in., in room 212, Senate Office Building, Senator John J. Blaine

presiding.
Present: Senators Blaine and Robinson of Indiana.
Also present: John G. Holland, Esq., counsel to the committee.
TESTIMONY OF FRANK K. BOAL
(Tile witness was duly sworn by Senator Blaine.)
Senator BLAINE. Give your name, address, and occupation.

Mr. BOAL. Newspaper correspondent.

Senator BIAINE. For what association?
Mr. BOAL. With the Harrisburg Telegraph at the present time.
Senator BLAiNiL. Where do you reside?
Mr. BOAL. 4200 Eighteenth Street.
Senator RoniN.so-a of Indiana. Mr. Boal, awhile ago you were con-

nected with some Pittsburgh paper, were you not?

Mr. BOA,. Yes, sir.

Senator Ronimsox of Indiana. What wais the name of that paper?

Pittsburgh Post-azette.
Senator RonixsoN" of Indiana. When did you leave that paper?
Mr. BOAL. November 80.
Senator Ronixo'x of Indiana. And went with your present. emplover?
Wr. Bo.%L. Yes.
Mr. BoAt,.

Senator Roixsmox of Indiana. Mr. Boal. I will ai.k you to sflte to

the committee wlthcr at any time you Called oi Doeor Piekrell,
who has been 6,fore (his committee, seeking an interview?
Mr. Bo3A,. I did.
Senator Rolinisox of Indiana. When was tiat ?
Mr. Bo.r. The latter part of September.
Senator Rom.msox of Indiana. Where did you go to (.1ll on Doctor

Piekirel?
to'

Mr. BoA . The'oflice of Senator King.of Utah.

Senator Ropixsox of Italifns. How did you happen

ing's office?

C)go

en-

Mr. BoAr,. I was told tint Doctor Pichrell, when in Washington,

could be found in Senator King. office.

2107

2108

LOBBY INVESTIGATION

Senator RomNsox of Indiana. Do you care to divulge the source

of your informationI
Mr. BOAL. No.

Senator Ronixsox of Indiana. Or, let me put that in a different

way; was that the general understanding?
Mr. BOAL. It wasr known among a number of newspapermen in
the gallery.
Senator RointsoN of Indiana. Among newspapermen?

tm
le

D
H_

Mr. BOAL. Yes.

of Indiana. This is Dr. Eugene Pickrell, you
Senator Rom msoN
are sp eaking of?
h. BoAL-,. Yes, sir.
A
Senator RoNxsoN of Indiana. Did you nace an aplpointment with
Doctor Pickrell at Senator King's office be.^ore you went there the

first time?
Mr. BOAL. I first called Senator King's office oil the telephone from
the Senate press gallery and asked if Doctor Pickrell was there. He
was put on the line.
Senator Itonxsox. of Indiana. He was put on the line?
Mr. BoAL. Yes. I asked him if I might come over and talk to

him about the tariff, and he courteously said certainly.

Senator Romxsox of Indiana. Said what?
Mr. BoAxL. Certainly. So I proceeded to his office at. 4 o'clock
il the afternoon. Meanwhile I had received a telegram from my
newspaper which necessitated my making a trill to the Department
of Justice before it closed at 4.30. I explained this to Doctor Pickrell
anti asked if I could have an appointment for the following day.
Senator Rommxsox of Indiana. Just a moment. Before you get to
that. When you &alhld ill) by phoie, (10 yOu want this committee
to understand that ho told you to come over there?
Mr. Bo.mL. Yes, Sir.
Senator Rolalixsox of Indiana. About 4 o'clock?

to
in

vie'
tha

to

3r. Bo.r,. Yes, sir.

Senator Rom.%xsox of Indiana. And that you went at 4 o'clock?

Mr. Bo,,. I did.
Senaotor Ro0,,'so, of Indiana. State to the committee what you

saw whten you went at 4 o'clock.

Mr. BoAr,. I as.ecI for l)o.tor Pickrell. IItt wls l)ijltvIY
me andihe came over and addressed me.
Senator RmoIxsox of Indiana. Thlis was in SenatorMr. 13o . On the third floor.
Senator Romxsox of Indiana. Of this building?
M'. BALt . This bulilding.

aft

olit to

Senator Rlonxsox of Indiana. Senator King's office?

Mr. Bo.r,. Yes.
Senator Ronimsox of Indiana. Did Doctor Pickrell come toward
you then I

Mr. BOAL. Yes, sir.

Senator ROnysOx of Indiana. What was he doing at the time?
Mi. BOAT,. Ile was standing there with some correspondence in his
hand. He had his coat off, as I recall, and appeared to be dictating
"
a letter to one of the stenogrol)hers in the office.

the

him
A
S
wit
A
Pie

S
S

him

LOBBY INVESTIGATION

2109

Senator RonixsoN of Indiana. Then, what was your conversation

with, him?
3Mr. Bo.%L. I told him I was the newspaper correspondent who had
talked to hini on the telephone, and I came over to discuss tariff
legislation with him. I asked him if I could have un interview, and
he said, "Yes." I then told him of my necessity of going to the
Department of Justice, anti asked if I could meet him the next day.

He said I could. I asked him the hour, and he said 11 o'clock, and
that ended the conversation for that day.
Senator RoBiNsoN of Indiana. Did you return the next day for
that interview?
Mr. BOAL. Yes, sit'. I went tip to Senator King's office at 10.45
the next morning. I asked for Doctor Pickrell, and they told me he
had gone to New York.
Senator lRoDxsoN of Indiana. Did you make additional attempts
to find him there after that?
Mr. BoAr.. Yes; I called several times.
Senator Roinixsox of Indiana. You never were successful after that
in finding him there?
Air. BOAT,. No, sir.

Senator Ronixsox. of Indiana. I think that is all.

Senator BLAINE. Mr. Boal, were you very anxious to have an inter.
view with Mr. Pickrell?

Mr. BOAL. Yes, sir; I was.

Senator BLAINE. And you say that it was generally understood

that he was at Senator King's office frequenlty?
Mr. BoAL. Yes, sir.
Senator BLINEi. You understod that?

Mr. BOAL. Yes, sir.

Senator BLAiNE. And after lie had failed to keep this appointment
to which you referred, did you then seek an interview with him?
ir. BoAL. Yes; I called the officeSenator BIAL'TE. By calling Senator King's office?
hr. BoAL. I did.
Mr. BLAINE. Did you ever find him in Senator King's office thereafter?
Mr. BOA,. No.
Senator BLAINE. Did you ever go over to Senator King's office
thereafter?
Mr. BOAL. Once thereafter.
Senator B.Aixi:. Did you find Mr. Pickrell there?
Mr. BOAL. Ie was reported as being still in New York.
Senator BLAINE. Was he i XNew York at the time you first sought
him out until to-dayl
Mr. BOAL. I couldn't say about that.
Senator BLAINE. Well, have you endeavored to get an interview
with him since the appointment he did not keep?
Mr. BOAL. Within 10 days after my first meeting with Doctor
Pickrell I made several attempts to locate him.
Senator BLINE. Several attempts?
Mr. BOAT,. Yes, sir.
Senator BLAINE. And your attempts were always made to reach
him through Senator King's office?
Mr. BoA&T. Yes, sir.

2110

LOBBY INVESTIGATION

Senator B.Arxt. And you didn't fid hint in Senator King's office?
31'. Bou,. No, sir.
Senator BJix . So you niust have seared him out with your re.
quest for a! interview. Is that your view I

to

lie was not-

to

Mr. BOAh. I don't think that is for me to say, Sonator.

At least,

Senator BLAINE. Did you frighten him so lie never returned to

Senator King's olilee agin, because you requested an interview?
Mr. Bo.,. I would t take that credit.
Senator BLAnUE. Was there any reason for dodging an interview
you Inj,.ht want with anyone?
Mr. BoA.. I don't see why, because I didn't disclose what I wanted*
to talk about.
s:. Did Vol have anything of a startling character
youSenator
wantedBI.AI
to interview
'him about?
[n'. BOAL. I vantcd to know whether he made Senator King's
office his Wa.hhington headqnurters. I wanted to know if that was

no,

for'
his
i
i

truie.

Senator BiAINx. But.you found that out after you didjit lIi~e
your interview with hin?
Mr. l1o,.. I didn't bring it ont. no.
Senator BI
1"11:.didnit find it (lilt?
"ilt
)idnt von find out hto
was not tit Senator King's office after you had ihat interview at 4

o'clock?

Mr. BMo..
lThat is right.
Senator Bmenn. Then you found out, did you not, all you wanted
to know of him? You found out by your own experience that he was.
not, at Senator King's office, after you saw him there at 4 o'clock
p. in., the first (lay you went there I
Mr. 1eOAL. Yes.
P
Senator BJAMxP:. Then, you found out through your own experi
ence exactly what you wanted to find out from ihn through the
interview, didn't you?
Air. Bo.A,. Well, I didn't aceomllsh the interview.
;
,enntor BLAINE.. N O; you didn't. havo your interview. blutyour
interview was to ascertain whether or not he made his oflieo in Sonator King's office. That was the purpose. Now, you found out lie did
not make his office at Senator King's office, because you were unable

to reach him there.

Mr. BOAL. He did not make it his headquarters after I talked to

him.
Senator BLAIN:. Yes. After you talked to him at 4 o'clock inthe
afternoon of that date.
Mr. 1oAt. Yee.
Senator BnAINE.. Did you say anything to him that would putt fear
into his heart, to cause Mm to run away from Senator Kings office I
Mr. BOAL. No.Senator ULA,
!1E. You didn't say anything of that kind?
Mr. BOAL. NO.
Senate& BLAXE.. You didn't frighten him?
Mr. BOAL. I don't know whether I did. He got out of town.
Senator BLAINE. He left town?
Mr. BOAL. Yes, sir.

Me
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ord!
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LOBBY INVESTIGATION

2111

Senator BLAINE'. What did you say to him that would cause him
to leave town?
Mr. BOAL. I have told you what I said to him. I asked for an
appointment the following day.

Senator BLAINE. And you think he did it because ho did not want
to have that engagement with you the following dayI
Mr. J3oAL. I don't think Ie would want to talk to me or any other
newspaper man at that time.
Senator BLAIN:. Why?
Mr. BOAL. Because we wanted to find out if Ite was-get his word
for it that lie was making Senator Kilg's office his headquarters.
St.nator BLINEM.. Well, if le were ma
11uIg Senator King's ollce
his headquarters, couldn't you ascertain that fact from the clerks in
Senator King's ofice, Its well as fromt Mr. Pickrtell?
Mr. Bo.t,. They were very close-mouthed.
Siinator I13lAiIN. Couldn't you have gone to Senator King and
inquired of him?
Al. Bo0A,.
I (lid.
4
Senator l..i:.
What did lie tell you ?
3Ih. Bo3AL. lie ISaid Ito.

Bz,ix:. And did you take Senator King's word?

Mr. Ilo.u. Surely.
Senator bLA~i,..' That is till.
Senator

TESTIMONY OF HARVEY 0. LLOYD

('le witness was duly sworn by Senator Blaine.)
Senator Bij.ux:. 3r. Lloyd, will you give your name, address, and
occupation, or busine?
Mr. Li.oY. lharvey O. Lloyd, i353 Fourth Avenue, New York
Clt, nanager foreign department, .Julius Kayser & Co.
Senator BI.AU:. Juihus Kayser?
Mr. LI~o. Julius Kayser & Co.

Senator BLAIN.R. Is Julius Kayser & Co. a member of the National

Council of American Importers & Traders (Inc.)?
Mr. LLoyi,. Yes, sir.
Senator Batixta. What is your position with this company?
Air. Loy,. I am manager of the foreign department.
Senator BLAm NE. What are your duties as manager I
Mr. Liorn. To take care of all customs matters relating to imports,
export merchandise, and, in fact, all the details in connection with
imports, including litigation.
Senator B.AIN. Are you an attorney?
Mr. LLoYo. No, sir.
Senator BLAINE. You make the nee.ary investigations andl consultations that would assist a lawyer in respect to any litigation
that might arise?

Mr. Lom. Yes, sir; and I take care of some of the matters which

ordinarily a customs lawyer would take care of, through my experi.

ence and knowledge of customs matters by having been n the employ
of the United States Government.

2112

LOBBY INVESTIGATION

Senator BLAINE. When were you in the employ of tile United

States Government?
Mr. LLoyn. From 1895 to 1920.
Senator BIAINE. With whom (lid you take employment after 1020t
Mr. LLoy). With Julius Kayser & Co.
Senator BLAINE. After you left the Government service?
Mr. LLOYD. I left the Government and went with Jihus Kayser
and have been there ever since.
Senator BLAIIx. What salary were you receiving as tan employee
of the Government?
Mr. LLOYD. $3,500.
Senator BLAI E. And how much was the salary you received from
Julius Kayser?
Mi. LLoYD. What is it?
Senator BLAINE. No when you left the Government.
Mr. LLoYD. When I left the Government I received $5,000 a year.
Senator BLAINE. I ant not interested in what it is now, merely as
an employee of Julius Kayser. Have you interested yourself in the
tarifflegislation that is before the Congress?

Tb
me
tar

in
.

the
A

Mr. LLOYD. Yes, sir.

Senator BLAIXNE. When did you become interested in that piece of

legislation?
AMr. LLOYD. From the start.
Senator ltofnisox of Indiana. Mr. Lloyd, you are the treasurer of
the National Council of American Importers & Traders (Inc.)?
M .. LLOYD. Yes, sir.
Senator Roinxsox of Indiana. How long have you been treasurer?
AMr. LLoyp. Since the organization started.
Senator Ronlxsox of Indiann. In 1921?
Mir. LLoyo. 1921; yes, sir.
Senator Ronixsox of Indiana. You left tile service of the Government in 1020?
Mr. LLoY). 1020, August 1.
.
Senator Ronixsox of Indiana. Almost immediately after that you
became identified with the National Council of American Importers
& Traders?
Mr. LLOYD. Well, the following year.
Senator Uonixsox of Indiana. WFrt time in 1920 did you leave
the service of the Government?
Mr. LLOYD. August 1.
Senator ltoiiixsox of Inliana. What time in 1921 did you go with
the. National Council?
Mr. Li.oy. I think it was in Al ril, 1921.
Senator Ronixsox of Indina. Mr. Lloyd, you are also the chairman of the fabri-glove group of the National Council of American
Inilorters & Traders (Inc.)?
Mr. LLOYD. Yc. sir.
Senator Ronixsox of Indiana. How many are composed in thit
group--all of the glove dealers, importers?

of

e?
vet

thil'
hig
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S
tore
feit
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LOBBY INVESTIGATION

2113

Mr. LLOYD. There are about 10 active members in the group.

There are about 40 merchants importing. I say merchants because
those men are not. exclusively importers. They handle domestic
merchandise as well as inmported merchandise.
Senator Rornxsox. of Ihiana. What was your interest in the
tariff, Mr. Lloyd?
Mr. LLOyw . I opposed the exorbitant rates asked for by certain
people.

Senator Ronixsox of Indiana. What do you mean certain peop?

Mr. LLOYD. Well, 1)eop who had attempted(luring the war to
make these gloves, and attempted through a )rohibitive rate to
prevent the Inlorttltaloll of the gloves into the United States.
Senator Romixsox of Indiana. Was that in 1921 and 1922?
Mr. LLOYD. Yes, sir.
Senator Romxsox of Indiana. 1)id you oppose the rates adopted
in the present Fordney-AkCumber billI

Mlr. LToYi). Yes, sir.

Senator Ronixsox of Indiana. This year you have been opposing

the continuation of those same rates?
Mr. LL)YD. Yes, sir.
Senator ROBINSON of Indiana. You have been here in the interest
of lower rates oil gloves?
Mr. LLoYD. I was here opposing an increase of rates.
Senator Ronixsox of Indiana. And you were also, if you could,
endteavoring to have tile rates lowered?
M'. lUA yo. Only to offset the requests that had been made for a
very high rate of duty.
Sg nator RonIxsoN of Indiana. But. you were interested yourself
in lower rates?
Mr. LoY. I would have been entirely content with the rates as
they stand in the present law.
Senator Romnxssox of Indiana. I thought you said they were too
high.
Mr. LoYD. Tley were. too high-1 per cent.
Senator Ronuxsox of In(iana. And that was too high ?
Mr. LLOYI). Ytsi; t lowe' rate would have been better.
Senator Ronxsox of Indiana. Now. Mr'. Lloyd. you are also interesteI in the foreign value arrangntients in the admininstrative
features?
Mr. LLOYD. Yes, sir.
Senator JiousoN of Indiana. In this fabric-glove group, of which
you are the chairman for the National Importer., have you any
sum of money raised for tariff activities in that groui)?
Mr. LwmY. Not one cent.
Senator ROmNSON of Indiana. As a group, it has paid no money
for the efforts that have been made to influence legislation?
Mr. LLOYD. Not a penny.
Senator Rontxox of Inlhiana. The inoney has been prorated from
this group to the National Importers, I assume, for the expense
involved.
Mr. LLoyn. No, sir.
78214'10--"'rr-22

2114

LOBBY INVESTIGATION

Senator Ronimsox of Indiana. Who paid your expenses?

tiv

Mr. LLOYD. Julius Kayser & Co.

Senator RowzI-so- of Indiana. Those expenses you expect to be

charged, however, to the group of which you are a member, and of
whiCh you are chairman, dto you not?
Mr. Li.moD. At the conclusion of the bill, when it is finished, I
probably will, but up to date they have been so small it doesn't seeoi
as though we should do it. It is $300 or $400, something like that.
Senator Rom.iso" of Indiana. I understood you to suit in your
letter of December 12 to John Holland here-it is this John 11olland here, is it not, the investigator for the committee?
Mr. LLOYD. Yes, sir.
Senator itonix'so.N of Indiana. I quote:

S
'ril

Although i y travel lllg 0XliISeS ill ollllce'ihll willh Colton gloves 1s15lil
paid by Julius iKnyser & Co., (hey will bo prorated aind collected fro the olher
dealers comprlhig this group.

Mr. LLOYn. Yes, sir.

Sentator Ronixsox" of Indiuna. lhen, the group is to pay your ex.
pelse5s and will have some expenses?
Mr. LLOYD. It sees hardly conleivable that a concern of our intportunce would sent out bills for twenty-five or thirty dollars to a
a
W
usixiber of other nieniber..
Senator lRonixsox of Indiana. it!, %r.Witness, till I an asking
is whether you neant what you said in that letter?
Mt'. LLoYD. I did.

Senator RTonixso- of Indiana. Do you wish to change that?

That is yor privilege, if you desire it?
Mfr. LLOYI). It is not positively fixed in my mind whether I will
or not, the amount is so small.
Senator Iontxsox of Indiana. Well, ]low much is the amount?
M'r. LLOY. As I say. it is probably three or four hundred dollars.
Senator RouBiso.N of Indiana. Have you a copy of it?
Mr. LLOYD. I think I gave Mr. Holland1 a statement of my expenses
Up to date.
Senator RomsoN of Indiana. I wonder if those items would refresh your' memory:
Jan. 30-31

---------------------------------------------------

May 14-5----------------------------

---

---

-----May 22-23 -----------------------------June 13-17 --------------------------------------------------

June 24-27

dill
her

hg'

IA

N
U11

pre

S
fe3

$32.58
re

2. 00

03. 10
7. 38
43.00
20. 73

-----------------------------------------------------------------------------------------Nov. 10-20
-------------------------------Sept. 17 --------------Mr. LLOYD. I should have gone a little further there, Senator, and

stated who pays these expenses. Some of those expenses are paid
by the-National Council, when I come down here as a member of the
committee.
Senator ROBINSON of Indiana. That is precisely what I was asking

you a moment ago. Understand, I ant not trying to get you to say
something you don't want to say. I am just asking for the facts.
Mr. LLOYD. All right, Senator.

bae

In this statement I gave Mr.

Holland I gave my traveling expenses, which includes also expenses

VW~

;Kit
S
Cel
N

por

LOBBY INVJESTIOATION2

2115

paid by the National Council when I come down here on administra.

tivo matters, and which had nothing to do with cotton gloves.

Senator ROBINSoN of Indiana. flow much of your total expenses
has been in this effort you havo made to influence tariff legislation in

any shape or form? That is what the committee would like to know

and I think we can shorten the hearing so far as your testimony is

concerned.
Mr. LLOYD. I should say about $105 of that applies to cotton
gloves.
Senator RoBINSoN of Indiana. Well, we have a statement here
showing $199.
.t.
Nhr. 1LOYD. IS that it? I didn't know I had given that statement.
Senator RoIxsox of Indiana. That is for the council $109.
your traveling expenses, under your own grouping. They are
Tlenl,
(ilreroit dl.tes, are they not? For instance, in the grouping we have
here there is no showing of February 24-20, of $73.
Mr. LLOYD. I can work that out.
Senator RoBmsoN of Indiana. The difference is small. Can't you
fignire how much your total expenses have been and save a lot of time?
1Mr.,LOYD. My total expenses?
Senator RoBINsON of Indiana. Yes.
Mr. LLOYD. $417.
Senator Ropixsox of Indiana. That was partly traveling expenses
back and forth from Now York to Washington?
Mr. LLOYD. Exclusively.
Senator RoimNsov of Indiana. And, of course, your expenses here
in Washington?
Mr. LLOYD. Yes, sir.
Senator RoBmsox of Indiana. That is all the money, so far as you
are concerned, that has been spent in any effort that you might
l)ersontilly have made?
Mr. LLOYD. Yes, sir.
Senator ROBIN'SON of Indiana. In this tariff legislation?
Mr. LLOYD. Yes, sir.

Senator R OBINSO. of Indiana. You were hero yesterday when your

president, Mr. Fletcher, was examined, were you not?
Mfr. LLOYD. Yes, sir.

Senator ROBiNSON of Indiana. And you head his testimony with

reference to the amount received?
Mr. LLOYD. Yes, sir.
Senator ROBINSON of Indiana. Were these amounts correct?
Mr. LLOYD. I have them brought up to the end of the year, because
you asked Mr. Fletcher had we received anything more in connection
with the tariff. These are tho statements tip to the end of the year.
Senator ROBINSON of Indiana. This shows from January 1 to December 31, receipts of $50,090.69.
Mr. LLOYD. Yes, sir.
Senator RoBINsoN of Ihfdiana. And disbursements of $40,064.62.
Mr. LLOYD. Yes, sir.
Senator ROBINSON of Indiana. National Council of American Importers and Traders (Inc.). That is correct, is it?
Mr. LLOYD. Yes, sir.
Senator RoBINSO of Indiana. Let this go in as an exhibit.

2116

LOBBY INVESTIGATION

(The statement referred to is as follows:)

National Council of American Importers and Traders (I,
81, 109

January I to December
Receipts

Disburse.

ments
n a....................................................$7,071.15
KbuF
. ...............................................
Search..............
............................

:.. ........

-%

$,7.

. ..
. .......
........
, .
......................................
...................
. 3"':' 1
Jun .......................................................................
0,417.43

Jue
...."
August

...................................... 3,5.7.09
, 440. 31

]3

$2,732.0
$2,3M02

3,3:.4
3. 0%12

0187.3o
3,
W7
. 06

8,607. 2nMD4 %044.03

0,737.21
Deember................................................................... 1,1933.40
2720.4
I,127.(03
2,
025. 48
Total ......................................................................
_6%0X 69
40,664.02
B3alanoe January
Reei~pts
......................................................................................
..............................................
: 4OK 9
Disbursements ................................................................................. 40,6 .62
Balance, December 31 ....................................................................
11,882.63

Mr. LLOYD. If you will permit. me, Senator, I would like to classify
those receipts.
Senator RomNsoN of Indiana. We will permit it, excepting some
of your collaborators or colleagues would like to get back to New York
this morning, and we are going to try to hear them all and get through
with them, just to acconmodato them, as a matter of fact. But I
think we ought to have this qualification you speak of.
Mr. LLOYD. You have it in one of the statements I gave you there.
Senator RoBixso.N of Indiana. Now, expenses in connection with
tariff bill, from January 1 to December 31, inclusive. That is 1920?
M|r. LLOYD. Yes, sir.

hi
P

Senator ROBINSON of Ihiana. Total expenditures, $18,009.55?

Mr. LLOYD. Yes, sir.

Senator ROBINSON of Indiana. Is that correct?

Mr. LLOYD. Yes, sir.

Senator RoBihsox of Indiana. Response to the first appeal, 189

contributions for the special tariff find, $11,005.
Mr. LLOYD. Yes, sir.
Senator ROBINSON of Indiana. Response to the second appeal, 118
contributions, $8,552.55.
Mr. LLOYD. Yes, sir.

Senator RoBINsoN of Indiana. Total contributions to the special

tariff fund, $20,217.25.
Mr. LLOYD. Yes, sir.

Senator ROBINSON of Indiana. Is that correct?

Mr. LLOYD. Yes, sir.
Senator RoBNsoN of Indiana. Let this go in as an exhibit, too.
(The statement referred to is as follows:)

di

2117

LOBBY INVESTIGATION

DxEcsMEn 31, 1029.

Rxpenses in connection with tariff bill January I to December 81, inclusive
Traveling expenses
--------------------------------Washington office: Rent, salaries, and expenses --------------Davis & Bovans, writing briefs and appearances -----------------Printing briefs, etc
------------------------------------Publications, tariff bills, and reports of hearings -----------------Stenographio reports ------------------------------------Phoenix News Publicity Bureau ---------------------------Postage (special) ----------------------------------------Sundries
---------------------------------------------Total

---------------------------------------------

$3, 373 17
2, 342. 40
3, 67. 15
3, 121. 90
518. 05
183. 14
5,076.09
45. 00
142. 65
18, 969. 55

(Additional expenses not separable: Stationery, postage.)

Contributions to special tarifffund
Total response to first appeal (189 contrlbutions) -------------- $11, 0665. 00
ltesponso to second sppeal (118 contributions) ------------------ 8552. 25
,Total

-------------------------------------

20, 217. 25

Senator RoBiNsoN of Indiana. That is all the money that was

received by the National Council of American Importers and
Traders (Inc.)?
Mr. LLOYD. Yes, sir.
Senator RoBIhsoN of Indiana. For the tariff campaign, so called?
Mr. LLOYD. Yes, sir.
Senator RoBINsON of Indiana. And the total disbursements?
Mr. LLOYD. Yes, sir.
Senator RoBiNsON of Indiana. During the calendar year 1029?
Mr. LLOYD. Yes, sir. You might note, Senator, there is a little
lalanca of about $1,300, and we are using up between four and five
hundred dollars for our appearance before the committee this week.
Senator ROBIN o N of Indiana. You want this to go in, too, I suppose, Mr. Lloyd; receipts, total $50,090.59; expenses, $46,064.62.
Mr. LLOYD. Yes, sir.
Senator loBI,,soN of Indiana. I .suppose the item you wanted
particularly to bring to the attention of tho committee is that listed
as "Current banquet and members' lunch, $27,095.07; account
tariff, $18,069.55." Ii other words, you wanted to separate those
disbursements to show it was not all spent in the tariff effort. Is
that what, you wanted to show?
Mr. LLOYD. YeS, sir.
Senator ROBNso. of Indiana. Very well, let this go in, too.
(The statement referred to in as follows:)
Receipts8:
Dues and interest on bank balance -------------------------

$27 312. 44

Account, anntial )anquet and luncheon-------------------2,507.00

Contributions to tariff funds -------------------------Total

-----------------------------------------

Expenses:
Current, banquet and members' lnch ------------------Account tariff Total

--------------------------------------

20 217. 25
0,090. 69

27, 695. 07
9----------------------------55
40,604.02

2118

LOBBY INVESTIATIOIN

Mr. LLOYD. I wanted to show that our receipts from dues covered
our current expenses in maintaining an office and force in New York,
that in that amount were the expenses or payments made for the
banquet in New York, and that the contributions to the tariff fund

were only $20,217.

Senator RoBINsox of Indiana. Your flim, Julius Kayser & Co.,

contributed dues $50 to the council?
Mr. LLOYD. Yes, sir.
Senator RoBINsoN of Indiana. They contributed, first appeal, $50?
Mr. LLOYD. Yes, sir.
Senator RoBIsoN of Indiana. And second appeal, $100?
Mr. LLOYD. Yes, sir.
Senator ROmINSON of Indiana. That is $200?
Mr. LLOYD. Yes, sir.
Senator RoBIsoN of Indiana. And your firm, Julius Kayser, is
also a member of the American Tariff League?
Mr. LLOYD. I believe theyr are.
Senator ROBINSON of Indiana. Dues $100?
Mr. LLOYD. Yes, sir.
Senator RoBINsoN of Indiana. You pay tribute both ways?
Mr. LLOYD. It looks as though we carry water on )oth shoulders,
but we are a diversified interest, each man running his own
department.
Senator BLAINE. I understand you said you had about $,300 left
in the fund.
Mr. LLOYD. There was until we came down here.
Senator BLAI m. And that cost $400 or $500?
Mr. LLOYD. It is running that way. We have been down here
since Monday night, a half dozen of us.
Senator BLAm. That is, your traveling expenses?
Mr. L.yYD. They will be paid by the council.
BLAINE. What is that?
Mr. LLOYD. They will be paid by the council.
Senator BLAINE. I mean, your hotel bills are running

Senator

that?

Mr. LLOYD. Our railroad fares and hotel bills.

Senator ROBINSON of Indiana. You were here about nine times
during the year, yourself?
Mr. LLOYD. Whatever this list shows, Senator.
Senator Rom.soN of Indiana. Well, that is what your list shows
here, the expense items. You were here in January, twice in May,
l'
twice ii June, olive in NoV0ei1i)er an(d twice in Septemher.
Nfr. LLOI). Well, those are not separate days. The time I was
down here, for instance, that last time, I was down here front Septombor 17 to SoI)temher 20.
Senator RoBt mso of Indiana. And you were here from September
25 to 27, were you not?
Mr. Liovu. O.h, yes. I was called lack here again on that. I
haven't got that in ily other list.
Senator Romxso.x of Indiana. I think that the material matters
we wanted to examine you about., Mr. Lloyd, were elicited yesterday
from your president, M '. Fletcher. Therefore I think we can excuse
you.

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LOBBY INVESTIGATION

2110

TESTIMONY OF OTTO FIX

(Tho witness was duly sworn by Senator Blaine.)

Senator

BLAINE.

Mr. Fix, give your name, residence, and occupa-

tion.
Mr. Fix. Otto Fix, 111 East Sixteenth Street, Now York City,
customs manager, George Borgfoldt & Co., importers and dealers in
domestic merchandise.
Senator BLAINE. Were you over in the employment of the United
States Government?
Mr. Fix. I was in the employ of the United States Government
from 1891 to 1022.
Senator BLAINE. In what capacity?
Mr. Fix. I went into the service as a clerk, became an examiner of
merchandise; that is, handled cotton yarns and cotton goods, linens,
and so forth; then became a special agent, and then became Assistant
to Mr. Davis, in charge of the C. V. R. Bureau, which is eon.paratite,
value and rate, and then was put, in charge of the comparative valup
and rate bureau; was assigned in 1009 to the Senate Finance Committee, and then assigned to the Ways and Means Committee in
1920 and in 1021, and to the Senate Finance Committee in the preparation of the present act.
Senator RonmtsoN of Indiana. Andservice?
what wits your
. salary front the
Government at the time you left the
Mr. Fix. My salary at the time I left the service was a little over
$4,000.
Senator RomNsoN of Indiana. And you went then into what
employment?
Mr. Fix. Customs manager for George Borgfeldt & Co.
Senator ROBINsoN of Indiana. Immediately after leaving the
Government service?
Mr. Fix. Immediately after leaving tho'Oovernment serdceo.
Senator ROBINSON of Indiana. And what is the, business of the
company?
M. Fix. They are importers and dealers in domestic merchandise.
Senator Ro~iNsox of Indiana. And at what salary did you enter
their eiploy?
Mt.Fix. $6,000.
Senator RonINN of Indiana. Mr. Fix, you were the tariff export
for the Government on the Ways and Means Committee and the
Finance Committee in 1922?
Mr. Fix. I was aligned by the Treasury Dlpartment to the
Ways and Moans Comitteo and to the Finance Comnittee.
'"
Senator RonvisoN of Indiana. In 1922?
Mr. Fix. In 1920 in tho preparation of the emergency act, and in
the preparation of tm"dumphig" act, and hi the preparation of the
present act.
Senator RoixsoN of Indiana. That was 1021 and 1022?
Mr. Fix. Yes; but it was 1920 that the "dumnping" bill was
passed.
Senator Ronixsox of Indiana. When did you accept your present
eopilo)'tllCnt?
S1r. lFix. October 16, 1022.

2120

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. October 15, 1922?

Mr. Fix. Yes, sir.
Senator ROB1NSON of Indiana. When was the tariff bill passed?
Mr. Fix. September 21 1922..
Senator ROBINSON of indiana. Is the committee to understand,
then, that you were an expert assisting in writing the tariff bill in
1922, up to September 21, and that immediately thereafter in October
you accepted your present employment?
Mr. Fix. I want to qualify that "in writing." I had nothing to
do with the writing of the bill.
Senator ROBINSON of Indiana. Oh, no, no; but you had a great
deal to do with the rates in the bill.
Mr. Fix. Nothing to do with the rates.
Senator ROBINSON of Indiana. As an expert that is what you were
there for.
Mr. Fix. No, sir. I had nothing to do with the rates of duty.
Senator RoBINsoN of Indiana. Then what were you there f6r?
Mr. Fix. I was there as an expert on -the administrative features,
particularly with regard to valuation.
Senator RoBunsoN of Indiana. And weren't you consulted at all
about rates on any subject?
Mr. Fix. Not as to rates of duty.
Senator RoBINsoN of Indiana. What if anything do you do with
the National Council of American Importers and Traders (Inc.)?
Mr. Fix. I am simply, or was, I think last year, made a member of
the customs committee.
Senator ROBmNSON of Indiana. Aren't you the chairman of the
toy and a member of the pottery and glassware group?
Mr. Fix. No, sir.
.
Senator RoBiNsoN of Indiana. When you left the service of the
Government and entered your present employment, how much did
your now salary become?
Mr. Fix. It became,'as I stated, $0,000.
Senator RonixsoN of Indiana. I am sorry. I didn't hear you say
that. Mr. Fix you have been down here a number of times during

the writing of

dhsI
bill, haven't you?

Mr. Fix. Yes, sir.

Senator RonisoN of Indiana. You are still interested in the
administrative features?
Mr. Fix. Yes, sir.
Senator ROBINSON of Indiana. What value-Mr. Fix. The foreign value, the same as I proposed and defended
in 1022 and 1921.
Senator RoBiNsoN of Indiana. In 1922 you proposed and defended
the foreign valuAtion?
Mr. Fix. Foreign valuation, and I do to-day.
Senator ROBINSON of Indiana. And that valuation was written in
the bill was it not?
Mr. k1x. Yes, sir.
Senator RoINsoN of Indiana. And immediately after the bill was
passed-I am asking now only for information-immediately after the
bill was passed providing for foreign valuation, you then went with
your present employer?

I 1111111111

11

1 11

II I

I I

2121

LOBBY INVESTIGATION

Mr. Fix. Yes, sir; but I did not know the firm I went with when the
bill was passed. I never had been in their office. I did not know a
member of the firm, and I knew nothing about the fact that I might
possibly receive employment outside the Government service.
Senator RomNsoN of Indiana. How did you happen to go with
them?
Mr. Fix. Mr. Dougherty, who was assigned at one time to the Ways
and Means Committee, and who was in charge of the Assistant
Attorney (General's office in charge of customs, was my predecessor.
He came to me about October 10 of 1922 and said to me, "Fix, would
you like to change your position?" There were certain reasons
why I did, and he said, "I am going to go with Myron DeVries, who
was chief justice of the Customs court of Appeals, in partnership
as a firm of lawyers, and if you would like to have my position, I
mention your name to George Borgfeldt & Co." He did so. I had
an appointment, and went over to that firm and that was the first
time I ever was in that house, and the first time I over met any man
connected with that concern.
Senator ROBINSON of Indiana. Had your predecessor ever been
connected with the Government?
Mr. Fix. Yes, sir.
Senator RoBNsoN of Indiana. That is, they employed your
predecessor?
Mr. Fix. Yes, sir.
Senator ROBiNSON of Indiana. Who are your employers now?
Mr. Fix. George Borgfeldt & Co.
Senator ROBINSON of Indiana. George Borgfeldt & Co. first employed your predecessor, this Mr. Dougherty?
Mr. Fix. No; not my predecessor. He had nothing to do in my
official position. He was my predecessor in my present position.
[ jt4
t to get it straightened
Senator ROBINSON of Ij
out, if I can, in my owz.!mh4.

Is
Mr. Fix. All rigih.
Senator RoBw iNS-.W

iv

t,
1

ever connected
Masb.,ty,

.
,j
with the Governiojtt
Mr. Fix. Yes
',
Senator R
-of Indi ,(-;And hes, s ppl6yed
George Bo
0.?
M
FIX6
,"4 11. .. . "":: " A ."'
.
'
,o"ot.,qIQ
Senator

by

i.

emlloyeshMr. Fix.
M r. Fix.Y s
on:,4
OUl-.

G~t

i-.0
. &I by. ge.rge Borg .',
Of...
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r ...

0
Fix
Mr.~~
~
~

.trying to find

"Y'" "

Y e,

Senate

Co., one

w~

..
.rlRol~l,

na

li i111

"hit

Mtyn

ofn

2122

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. And you did go with George

Borgfeldt & Co. in October, immediately after the tariff bill had been
written?
Mr. Fix. Yes, sir.
Senator ROBINSON of Indiana. You were then defending foreign
valuation, and you are now?
Mr. Fix. Yes, sir.
Senator RoBiNsoN of Indiana. That is what you were down here
for this number of times you were down?
Mr. Fix. Yes, sir.
Senator ROBINSON of Indiana. How much money did you spend
down here, Mr. Fix?
Mr. Fix. You have the tabulation.
Senator ROBINSON of Indiana. I have the tabulation, but I am
asking you.
Mr. 1ix. I didn't think it was necessary-I think it was $500 for
my expenses.
Senator ROBINSON of Indiana. You have listed here ten visits to
Washington during the year, running through April, May, June, July,
August, September, and October, and your total traveling expenses
are listed as $552.81. Is that all you spent?
Mr. Fix. That is all.
Senator RoBINsoN of Indiana. You say in your letter to the investigator of the committee:
I interviewed Senator Walsh of Massachusetts, Senator King of Utah,
*

to,
wi

co
me

we

no
be

va
for

* * and possibly others, whom I can not now recall.

You were interviewing those Senators in an attempt to gain support

for the foreign valuation. Is that what you mean to say?
Mr. Fix. On the general administrative features, including valuation.
Senator RoBiNsox of Indiana. Were you interested to any extent
at all in rates?
Mr. Fix. No, sir; not at this time I saw those gentlemen.
Senator RoBINsoN of Indiana. Weren't you throughout the making
of this tariff bil, and at the present time?
Mr. Fix. Except as to toys.
Senator ROBINSOx of Indiana. You are interested in reference to
toys?
Mr. Fix. Yes, sir.
Senator RoBINsoN of Indiana. Aren't you the chairman of the toy
group for the National Importers?
Mr. Fix. No, sir.
Senator RoBINso" of Indiana. Were you ever in such capacity?
Mr. Fix. No, sir.
Senator RoBimrsON of Indiana. Who is the chairman?

Mr. ixS.M. B.Stc-midt.

Senator ROBINSON of Indiana. You appeared before a subcommit.

tee of the Committee on Finance for the toy group, did you not?
Mr. Fix. Before the sundries committee.
Senator ROBINSON of Indiana. Before the Senate?

Mr. Fix. Yes, sir.

Senator ROBINSON of Indiana. About June 20?

Mr. Fix. Yes, sir.

I I

ha
th
chs
nui

01.
eff
in

Ier
the

2123

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. That was for lower duties on toys?

Mr. Fix. It was to point out certain new phraseology placed in the
toy paragraph which would effect a tremendous increase in rate
without changing the rate of duty.
Senator ROBINSON of Indiana. What you were interested in, of

course, in the long run, was to get a better rate on toys being im-

ported into this country?

Mr. Fix. It was not to got a better rate, but to point out the

inequalities of the phraseology in the paragraph.

Senator ROBINSON of Indiana. Well, what is the difference?

Mr. Fix. There is a good deal of difference.
Senator RoBINsoN of Indiana. You were trying to get a lower rate,
weren't ou?
Mr. Fix. No, sir.
Senator RoBINsoN of Indiana. You didn't want a lower rate, then?
Mr. Fix. I didn't try to get a lower rate. I was indicating to
the committee that the rate of 70 per cent that was in the bill was
not the rate that would actually be imposed, but the rate would
become 150 per cent.
Senator ROBINSON of Indiana. Isn't that the complaintMr. Fix. That is the complaint.
Senator ROBINSON of Indiana. Of those who stand for the American
valuation? Isn't that the complaint of that group with reference to
foreign valuation?
Mr. Fix. It has nothing to do with valuation, Senator.
Senator ROBINSON of Indiana. That foreign valuation permits them
to import into this country and to set any price they desire?
Mr. Fix. Oh, Senator, that is a very debatable question, and I
hardly think that is a question you can ask me.

Senator BLAINE. What was the phraseology that you wanted

changed?
Mr. Fix. The phraseology in the paragraph?

Senator BLAINi. Yes.

Mr. Fix. First of all, in paragraph 1513, which is a new paragraph

number-

Senator BLAINE. The sundry schedules.

Mr. Fix. The phraseology has been put in the paragraph that
provides, first, that goods provided for under a special provision in
other paragraphs shall be included within the toy paragraph. The
effect of that is this: That those goods that are enumerated by name
in other paragraphs of the act will become dutiable at the rate in the
paragraph of 70 per cent. In other words, there are many goods that
heretofore paid 30, 40, and 50 per cent that will now be drawn into
the toy paragraph.
Senator BLAINE. Do I understand that those goods are still in some
other paragraph of the tariff act?
Mr. Fix. Yes, sir.
Senator BLAIN. And by this phraseology they are also carried
over into the sundry schedule?
Mr. Fix. Yes, sir.
Senator BLAIzNE. Under paragraph 1513?

II II

II

2124

LOBBY INVESTIGATION

Mr. Fix. Then, in addition to that-

Senator BLAINE Does the bill propose to impose a double rate?

Where they are specifically provided f6r, does it impose an additional
rate in this paragraph 1513, or whatever the number is?
Mr. Fix. Yes, sir.
Senator BLAINE. Do I understand then a double rate is imposed?
Mr. Fix. No; not a double rate, Senator, but it withdraws it from
a paragraph in which it is specifically enumerated and throws it into
the toy paragraph at the higher rate.

Senator BLAINE. At a higher rate?

Mr. Fix. Then, in addition, it says if any of the goods hereinafter

provided for shall, in the absence of this paragraph, pay a higher rate,
they shall be exempted from this paragraph.
n other words, there
is a proviso of inclusion and a proviso of exclusion. If the rate is
lower because of any specific inclusion, it throws it into the higher
rate of the para raph. If there is a higher rate anywhere in the act,
it takes it out of it. In other words, it makes a minimum of 70 per
cent on toys, and a maximum of anything that might be in the act.
That is the thing I indicated to the committee, and that is a thing I
think it is proper to indicate to any committee.
Senator ROBNSON of Indiana. In any event, Mr. Fix, if a change of
phraseology had been made as you wanted it, it would have made
power rates from your standpoint?
Mr. Fix. I beg your pardon?
Senator ROBINsoN of Indiana. If a change had been made in the
phraseology, it would have made lower rates?
Mr. Fix. It doesn't mean any lower rate than the existing rate,
Senator.
Senator ROBINSON of Indiana. I know but aren't we just arguing
about terminology? You would have had a lower rate on your
imports brought into this country if the phraseology were changed?
Mr. Fix. No.
Senator ROBINSON of Indiana. You could bring them in for less
money if you changed the phraseology?
Mr. Fix. No, sir.
Senator ROBINSON of Indiana. Then, what difference did it make
to you what the phraseology was?.
Mr. Fix. The difference was an increase in the rate from 70 per
cent to 150per cent in the present act. That is certainly a difference.
Senator ROBINSON of Indiana. I know, but it is understood you
did not want the rates increased. I know that. There is no doubt
about that.
Mr. Fix. Certainly not.
Senator RomNsoN. And at the sanie time I was under the impression that this phraseology, if changed, woufd give you a lower rate.
Mr. Fix. No, sir.
Senator RoBiNsoN of Indiana. I think that is all.
TESTIMONY OF 0. To RIOTTE, GENERAL MANAGER AND PRESI.
DENT CHELSEA SALES CORPORATION, NEW YORK CITY
(The witness was duly sworn by Senator Blaine.)
Senator BLAINE. Give your name and business. address and
occupation.

LOBBY INVESTIOATIO -N2

2145

Mr. RIoTrm. C. T. Riotte. I am general manager and president

of the Chelsea Sales Corporation, 105 Fifth Avenue, New York City.
Senator BLAwE. What is your business in connection with that
association?
Mr. RIOTTE. My firm are jobbers of laces, ladies' underwear, and
novelties of the same general character.
Senator BLAINE. Imported commodities?
Mr. RiOTTh. Some. We formerly did import. Up to about a year
ago we imported some of the goods we sell.
Senator BLAINE. Now you are jobbers in either imported or
domestic commodities?
Mr. RIoTm. Either. Principally domestic.
Senator BLAINE. Does your organization belong to the National
Council of Importers and Traders?.
Mr. RroTTr. I am connected with the National Council. My firm
is not a member of the National Council, but I am connected with
the National Council as chairman of its customs committee.

Senator BLAINE. Do you know whether any of the lumber interests

or pulp wood interests are members of the National Council of

lIllporters and Traders?
Mr. RiorrE. I don't know, but our secretary is here, and I dould
got. that information for you in just a minute, I think.
Senator BLAINE. You don't need to give it. He has not testified
yet..
Mr. RtoTTE. No, sir.

Senator BLAINE. Have you over been in the employ of the Federal
Government?
Mr. RIoTTE. Yes, sir.

Senator BLAINE. When?

Mr. RIoTrE. From 1896 to 1018.

Senator BLAINE. In what capacity?
Mr. Riorrz. As a clerk, and-subsequently as an examiner.
Senator BLAINE. What was your salary when you left the employment of the Government?
Mr. RioivE. $3,000.
Senator BLAINE. Then into what employment did you go?
Mr. RiorT. I went with the firm of Stern & Stern.
Senator BLAINE. At what salary?
Mr. RiorrE. $5,000.
Senator BLAiNE. What was the business in which Stern & Stern
were engaged at that time?
Mr. RIoT. They were dealers in imported and domestic nettings,
veilings, laces, chiff6ns, and things of that kind.
Senator BLAINE. How did you come to leave the Government
service and go into private employment?
Mr. Rior's. About 1014, if you will recollect, the purchasing value
of the dollar went down and continued to go down so that when we
o t Wlong'around 1916 or 1017 my salary, which was formerly $3,000,
had a purchasing value of about half. My faM
mily was requiring more
and my salary would not go around. I just simply had to do some.
thing, and I got out of the service..
Senator RoiNsoN of Indiana. Mr. Riotte, how many times were

you down here in connection with the tariff bill?

Mr. Ror. Eight or nine times.

2126

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. How much money did you spend

hero on travehng expenses and in various expenses?
Mr. RIOTT. I haven't the exact figures, Senator, but I will dare
say it is less than $400.
Senator RoIpnsON of Indiana. Did you represent the Chelsea

Sales Corporation hero or the National Importers, or both?

Mr. RIolTrm. Both-I am sorry. I did not mean that. I represented here the Lace and Embroidery Association of New York, of
.t
which the Chelsea Sales Corporation is a member.
Senator ROBINSN of Indiana. What is the Lace and Embroidery
Mr. RIoTr. That is an association which started, I guess, 20 or

Association of New York?

more years ago, and their object is to further the use of laces in the
United States, and also, whenever'a matter of tariff has been on have
been interested in tariff rates.

Senator RosINsoN of Indiana. They are largely importers of laces

and embroideries?
Mr. RoTr. Yes, sir.
Senator RoBINsoN of Indiana. What position, if any, do you hold
with that association?
Mr. RIoTrE. The Lace and Embroidery Association? I am vice
president of it.
Senator ROBINSON of Indiana. What amounts of money, if any,
has this organization spent in connection with the tao .ff bill? .1
Mr. RioTrTi. They have paid my expenses on the few occasions I
was down for that association. There are two public appearances I
made here. I think I came down once more to call on the Tariff
Commission. Those are the only expenses that they have had except
a contribution which the association made to the National Council of
American Importers and Traders.
Senator RoBINsoN of Indiana. How much did they contribute?
Mr. RIOrrE. $500.

Senator ROBINSON of Indiana. They were working with the

h
tar
was
vidt

Th
the
em

at t
at

a
w
l
A
in
tha
S
S

St
of t
1
y
you
I
offic
act.

National Council of Importers and Traders?

Mr. RIOTrE. To this extent, that most of the members of the
Lace and Emboridery Association were also members of the National
Council. The call went out for funds which you read yesterday with
which to carry on this so.catled tarid campaign.

S
th
Is t
io
tion

the Lace and Embroidery Association are also individual members

il
of the National Council?
Mr. RborTE. Yes.
Senator RoBINsoN of Indiana. So that they doubtless contributed,
as individuals, and then inaddition to that, the Association of Lace
and Embroidery Importers, or that association which you have just
mentioned, contributed $500, in another name?
Mr. RtoTrr.. N6, sir. That was not in addition. As members of
the council they paid yearly dues of $60. The response of the lace
trade to the request for funds from the p resident of the National
Council of American Importers and Traders was made by a .co$500.
tribution by the lace group, amounting tothat
amounts to the sime
* Senator ROBINSON of Indiana. Well,
thine, does It not. The lidlviduial. members of the Lace and li
of the national council, paid
broldery Association that were memhbeis
their individual dues to the national association?

thin

Senator RoBINSON of Indiana. But, those individual membersof

act,

tnc
act?
M
,
asol

T
M

exp
brol;
not

the

LOBBY INVESTIGATION

2127

Mr. Rioiri. Their yearly dues which had nothing to do with the
tariff. I thought you were referring to the tariff.
Senator ROBINSON of Indiana. They also doubtless paid whatever
was required of them in response to this call, did they not, as individuals?
Mr. RIoTm. Oh, yes.

They contributed that $500.

Senator ROBINSON of Tndiana. Then this $500 was in addition.

That is what I was trying to say. When did you leave the service of
the Government, did you swy?
Mr. RioTrm. August 1, 1918.
Senator RoBINsoN of Indiana. And you were inspector of lace and

embroideries, were you not?

Mr. RioTrm. No, sir. I was an examiner.
Senator ROBINso

of Indiana. Examiner of laces and embroideries

at the port of Now York?

Mr. RIOTTE. No.

I had not been an examiner of laces.

I never

was an examiner of embroideries.

Senator RoBINsoN of Indiana. Well, were you ever examiner of
laces at the port of New York?
Mr. RioTrT.

I was one of the examiners of laces from 1900 to 1011.

In 1911 I was given the line of women's wearing apparel, and I held
that until 1918.
Senator ROBINSON of Indiana. 1918?
Mr. RioTrT. Yes, sir.
Senator RoBINsoN of Indiana. That is when you left the service
of the Government?
Mr. Rioirp. That is when I left the service of the Government.
Senator ROBINSON of Indiana. In your letter to our investigator
you say in one place:
I spent quite some time with the Tariff Commission's expert detailed to the
office of Senator Walsh of Massachusetts on various phases of the administrative
act.
Mr. RioTrE. Yes, sir.

Senator ROBINSON of Indiana. That is to say, you discussed with

the Tariff Commission expert the question of foreign valuation?

Is that what you were interested in?
Mr. Rioirip. As chairman of the customs committee of the National Council, I was interested only as to the entire administrative
act, and I did discuss with him valuation propositions, among other
things.
Senator ROBINSoN of Indiana. You say that you also spent some
time with Senator King on sections 340 and 402 of the administrative
act?
Mr. RIOTTE. Yes, sir.
4
.Senator ROBINSON of Indiana. You say further in your letter:
I represented the Lace and Embroidery Association of America (Inc.), which

association was incorporated about 20 years ago, as its vice president.

That you havi testified to.
Mr. Riom. Yes, sir,
Senator ROBINSON 6f Indiana. Do you know of any other money
expended by either the customs committee or the Lace and Em.
broidery Atsoeiati6n or the Chelsea Sales Corporation'that you have.
not mentioned here, thatb hs not been itenized, in connection with.
the tariff?

2128

LOBY INVESTIGATION

Mr. Rioir'. I know nothing of the payments made by the National Council of American Importers and Traders, other than that
the members of the customs committee got nothing other than their
actual traveling expenses for the bills they submitted.
Senator RomNsox of Indiana. I notice in the minutes of the
meeting of the board of directors of the National Council of American
Importers and Traders, hold at the iotel Astor on March 28, 1929,
there is this statement:
Both Mr. Riotto and Mr. Davis made rather extended remarks regarding a
recent visit to Washington and to conferences with the Treasury and other
officials. Theso remarks are of a confidential nature and ga to those present
some idea of what might be expected in the administrative provisions of the
proposed now tariff law.

What was the confidential business yon had with the Treasury
officials?
Mr. RIoTTrE. Senator, let me explain that that is not my phraseelegy.
Senator Rom.,sox of Indiana. No; I know it isn't.
Mr. RIotrE. Those minutes are not verbatim reports. They are
a r~sum6 of what the secretary saw fit to put into his minutes. As
far as their being confidential is concerned, that really means, I
presume, our report, as to whom we had seen and as to whom we
ad spoken. Apart from that I can not imagine that there is any-

thing confidential. I might go further and state this, Senator that

in my activities with the National Council I have been absolutel
restricted in every instance to facts and figures and sound logic.

1%

have absolutely no political affiliations. I do not think there is such

a thing as political pull in the whole organization.
Senator RomsoN of Indiana. But you are looking for your interests in rates and in the administrative features of the tariff bill.
I don't suppose it is a question of politics as far as anyone is concorned, with the tariff bill. It is a question of what they want,
isn't that it?
Mr. RioTm. We certainly are desirous of protecting the import
interests. That is what we are formed for. There is no question
about it.
Senator ROviNSON of Indiana. I was going to say these minutes
are sighied by Mr. Van Leer, executive secretary, and witnessed by
Mr. Zobel, so they are evidently accurate, are they not?
Mr. Rio'rrB. Mr. Zobel is a stenographer in the office who transcribed the minutes.
Senator ROBINSON of Indiana. But they are witnessed by him.
That means something. You do not mean to say that the minutes
are not accurate do you?
Mr. Iom. 6h, Ido not mean to say that they are not accurate,
Senat0i RoviNSON of Indiana. I would like to know what those
remarks were, regarding the recent visit to Washington and conferences with the Treasury and other officials: "Those remarks are of
a confidential nature." All of this is confidential as far as those
engaged in influencing the tariff and the tariff legslotion are conthe committee desire, to show to toe op~le o the
earned. isWhat
hbw these various !obbyits work, and thlrodre w.hae
country
not blitat&t to go into the confidentiol matters e#fOnD tlhe oraties themselves, feeling that the pople have a agh, to kdiww now
the lobby works. What were those confidential matters?

M
are
boin
81
thre
bure
M
the
the

C
tact .
your

yestc
expel
tacts
M

"con

Sowillill
what
M
We c

Sol
code
o
Thor
eonc
Son
comn
Mr
minu
Son
trying
were

that
Mr
Son
official
Mr.
times
ment.
posit
ut
utes i
that c
you
Mr.
Sn,
Mr.
as this

LOBBY INVESTIGATION

2129

confidential
there-are
say that
RyoT.
secretary,You
as
by thematters.
into thenominutes
was put
a wordI that
areMr.
using
being of a confidential nature. I have never at any time had any
contacts in Washington. I have gone to see SenatorsSenator ROBINSON of Indiana. Well, you had an office here for
three or four months, an l you had a tremendously big publicity
bureau. We will go into that to-morrow.
Mr. Rio pr.That is another story. I don't know anything about
the publicity.

Senator RoBiNsoN of Indiana. But, you say you had not any con-

tact.c hero, and you had contacts constantly in Washington. In

your minutes hero in another place or in one of your circulars read
yesterday, it was stated, "Our. representatives are there and our
exports, constantly watching this thing." Of course you had contacts. You were one of the contacts, were you not?
Mr. Rioirr. Senator Robinson, I don't think I used the word
"contacts."
Senator ROmNSoN of Indiana. Well, what did youesay? I am
willing to leave to the reporter's notes, but perhaps you can tell me
what you did say.
Mr.RioTTE. I don't like to use the word "contact." That is all.
We certainly met Senators. We met Treasury Department officials.
Senator ROBINSON of Indiana. I am wondering what your con.
fidential business was with the Treasury and other officials, that
could not be reduced to writing. That is all.
Mr. RIOrE. Well, I say that we had no confidential matters.
There is not a thing that I know of, as far as our organization is
concerned, that the whole world could not know.
Senator RomNsoN of Indiana. Well, you can not enlighten the
committee on what this means, any further?
Mr. RioTrr. No. If I know I would not hesitate to tell you, in a
minute.
Senator ROBINSON of Indiana. As a matter of fact, you were
trying to got an davance interpretation of the administrative features,
were you not?
Mr. RiOTTh. I was not, sir.
Senator RonitsoN of Indiana. Did you ever make any attempt tin
that direction?
Mr. RlioTr. No, sir I never did.
Senator RoBiNsoN of Indiana. Just what did you see the Treasury

officials about then, in that connection?

Mr. RtoTr.

Oh there might have been different things at different

times that I have ad occasion to go down to the Treasury Department. You are asking about a thing of last March, and I can not
possibly answer you.
Senator RomsNSOr; of Indiana. I am asking you what these minutes mean when they speak of confidential statements made by you
that could not be printed. That is what I want to know and I think
you ought to toll us, even if it was back last March.
Mr. Rtoirr. I haven't any idea of what he could have referred to.
Senator RoBINsoN of Indiana. You have forgotten, is that it?
Mr. RtoTra. But I do say that they were not confidential, as far
as this committee was concerned.
78214-0--n' 5-23

2130

LOBBY INVESTI(ATION

Senator ROBINSON of Indiana. They were not confidential as far

as the national council was concerned?
Mr. RioPr. They were not confidential as far as anyone was
concerned.
Senator ROBINsoN of Indiana. But they are confidential as far as
the rest of the world is concerned?
Mr. Rio m. No, sir.

W1du
Bc

Senator ROBINSON of Indiana. That is what the committee would

like to know about. I think that is all, Mr. Riotte.

Mr. RioTr. Thank you sir.
Senator ROBINSON of Indiana. Is Mr. Nolan here? Come around,
Mr. Nolan.

sin

TESTIMONY OF FRANK 1. NOLAN, MILBANK, LEAMAN & 0O.,

NEW YORK CITY

(The witness was duly sworn by Senator Robinson of Ibdiana.)

Senator RdpBiNSON of Indiana. You are Mr. Frank J. Nolan; is
that right?

sin

Mr. NOLAN. Yes, sir.

Senator ROBINSON of Indiana. You are connected with Milbank,

Leaman & Co.?
Mr. NOLAN. Yes, sir.
Senator ROBINSON of Indiana. And chairman of the wool fabrics

group of the National Council of Importers and Traders.

Mr. NOLAN. Yes, sir.
Senator ROBINSON of Indiana. That is all correct?
Mr. NOLAN. Yes, sir.
.1
Senator ROBINSON of Indiana. Mr. Nolon, how many compose the
wool fabrics group of the National Council?
Mr. NOLAN. Offhand, without looking at the roster-I did not
analyze it-it is composed of department stores and jobbers, importers
and clothing manufacturers. There is quite a number in that roster,
but, if you want me to generalize, I can save you a lot of cross-examination. At the instigation of the tariff we thought the better plan
to handle the matter in accordance with the group idea of the National
Council was to appoint these groups and in our own instance we
had "everal meetings at our headquarters in Now York. At each
meeting probably there were 30 or 35 members, pincpally in New
York, and it did not involve any of those outside of New York
although our membership goes from coast to coast. As a result of
these meeting, without any solicitation on my part, I was appointed
chairman of that group, probably due to my education, government
experience, and present experience in the textile business, with which
I have been associated all my lifo.
Senator RorBsOi of Indiana. You might tell us, Mr. Nolan, how
long you were in the Government service.
Mr. NOLAN. I was in the Government service from July 11, 1911,
until the middle of February, 1919 and after getting out fhat I took
a couple of weeks off and started in with my present firm about
February 10, 1919.
Senator ROBINSON of Indiana. How much salary were you receiving
from the Government when you left?

pr
ra

pr
on
ra
of

edi
7
tec
as
for
wa
hei

Inc
tir

LOBBY INVESTIGATION

2131

Mr. NOLAN. At the time I was receiving $2,500 a year and was
offered the maximum of $31500 a year to stay in the service. That

wa- as a result of work which I had been doing here in Washington

during the war. I was assigned temporarily to the War Trade
Board, and at the instigation of Vance McCormick and President
Wilson, it was suggested that I be given the maximum in the service.
I turned it down.
Senator ROBINSON of Indiana. How much did you receive whel
you went to work for your present employer?
Mr. NOLAN. $5,000.
Senator RoINsoN of Indiana. And you have been with them ever
since?
Mr. NOLAN. I had an offer to go with this firm in 1014, but the
war came along and stopped it.
Senator Ronixsox of Indiana. You have been with them ever
since?
Mr. NOLAN. Ever since, as manager.
Senator RoBIvsoN of Indiana. lou were down here in connection
with the tariff in 1922?
Mr. NOLAN. Yes, sir.
Senator ROBINSON of Indiana. And you have been active in this
present tariff legislation?
Mr. NOLAN. Yes.
Senator RoBixsoN of Indiana. Has your position been to keep the
rates where they are, or lower?
Mr. NOLAN. The attitude of our group was to be satisfied with the
present rates in the present act. We are unalterably opposed to
increases in the rates, feeling that they are prohibitive and border
on the line of embargo.
Senator ROBINSON of Indiana. But you were opposed to incioasdc~
rates in the present bill?
Mr. NOLAN. Absolutely.
Senator ROBINSON of Indiana. You were also, I take it, in favor
of foreign valuation?
Mr. NOLAN. We are.
Senator ROBINSON of Indiana. Mr. Nolan, you were examiner of
wool and worsted imports, at the port of New York, were you not?
Mr. NOLAN. I was.
Senator ROBINSON of Indiana. That is what you meant by the
education you had had along this line, while you were in the Government service?
Mr. NOLAN. That is the way I became inducted into the service.
The appraiser's board at the port of New York decided there wore
technical men needed for technical positions in the appraiser's stores,
as a result of which they held a competitive examination, principally
for the examiners in the textile schedules, as a result of which I
was inducted into the service, under those conditions.
Senator ROBINSON of Indiana. How much did you spend down
here in your tariff activities this past year?
Mr. NOLAN. I have been active on the tariff practically since the
inception of the bill, and came back and forth twelve or fifteen
times altogether.
Senator RoINsoN of Indiana. Twelve or fifteen times altogether,
from New York?
-

2132

LOBBY I.VESTIOATJTA

Mr. NOLAI.

correct.

I can not state accurately, but that is approximately

Senator RoniNs 6 N of Indiana. Do you know approximately how

much money you have spent in that time?
Mr. NOLAN. I have spent between fourteen and fifteen hundred
dollars. I will amplify that statement. That money was contriblted-the contribution was divided.up among about eight of us,
One of whom was my own firm, and we each contributed $200; one
firm contributed $150, making $1,550 in all, and that has been spent
entirely in the printing of briefs and these traveling expenses back
and forth. I have made it my job to be down here not only to appear
before the respective committees, but I also wrote briefs and gat ered
data. I am not an attorney. We did not hire an attorney, and they
put me in as chairman of the committee, feeling that I could put over
the facts that we wanted.
Senator RoBim.soN of Indiana. Yes. That was money spent by the
wool-fabrics group?
Mr. NOLAN. By the wool-fabrics group, separate and apart from the
national council, although the group members were members of the
council.
Senator ROniNSON of Indiana. Yes. I think that is all.
Mr. NOLAN. Thank you, sir.
TESTIMONY OF DAVID WALKERt, NEW YORK CITY
(The witness was duly sworn by Senator Robinson.)
Senator RoINSoN oflIndiana. You are Mr. David Walker, No. 53
West Twenty-third Street, Now York City?
Mr. WALKER. Yes, sir.
Senator RoBINSON of Indiana. Connected with Morimura Bros.?
Mr. WALKER. Yes, sir.
Senator ROBINSON of Indiana. And chairman of oriental groups,
National Council American Importers and Traders (Inc.)?
Mr. WALKEr. No, sir.
Senator RonNsoN of Indiana. What is your connection with the
National Council?
Mr. WALKER. I am a member of the customs committee.
Senator ROBINSON of Indiana. The customs committee?
Mr. WALKit. And a director, because all members of the customs
committee are directors.
Senator ROBINSON of Indiana. You are not -chairman of the
oriental goods group?

Mr. WAtKER. I did not know there was such a group, Senator. I
don't see how there could be such a group.
Senator ROBINSON of Indiana. There were groups of a number of
other commodities.
Mr. VALKEII.-

Yes.

Senator ROBINSON of Indiana. You say there is none on this

commodity?
could be.
Mr. WALKER. I don't see how there
ust ask ng for the facts. I
am
I
Indiana.
of
ROBINSON
Senator
do not know whether it is or not. We have it in our notes that
you were chairman of such a group.
Mr. WALKER. No, sir.
I

II I

not

S
out
ing
orb
dres

I
I
er

nisS
S
of t
1c
8
ent
cn
sf

Be
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Thus

Al

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Unks

Aft on
China,

Culler
Fabric
Chew

wpho
ow

2133

LOBBY INVESTIGATION

Seantor ROmNSON of Indiana. You cat, state whether you are or

not.
Mr.WVALKER. No, sir. I did not know there was such a group.

Senator RoBINsoN of Indiana. This is a bulletin evidently gotten

out by your organization, issued September 11, 1929, under the heading of"Attention of directors and group chairmen."
Below is a list of the groups within the National Council of American Importers and Traders (Inc.), together with the group chairmen and their addresses. This is for future reference and will be corrected from time to time.

It. is signed by "Frank Van Leer, jr., executive secretary," and

among the groups is one marked "Oriental goods; David Walker,
Mojimura Bros., No. 53 West Twenty-third Street, New York."
I will ask you to look at this and say if that is not one of the
council's publications?
Mr. WALKEIR. I know of no such group Senator.

Senator RoBINsoN of Indiana. But, is the Secretary in the habit of

niaking mistakes Of that kind?
Mr. WALKERt. Not that I know of.
Senator RoBmsoN of Indiana. This is a mistake, however?
Mr. WALKER. If he puts me as chairman of it; yes, sir.
Senator RoBiNso. of Indiana. Well, look at it and see if that is one
of the bulletins from your council, and whether it is a mistake or not.
Mr. WALKEJI. I do not know anything about it, sir, so help me God.
I can not make it any stronger.
Senator ROBInXSOX of Indiana. No; you can not.
Well let this go in the record as a committee exhibit. Put the

entire bulletin in, for it shows the group chairmen of all of these
committees.

(The list referred to was received as a committee exhibit and reads

SEPTMER 11, 1929.

as follows:)

ATTENTION OF DIRECTORS AND oROUP CIn.tmqA

Below is a list of the groups within the National Council of Atneircan Inporters
and Traders (Inc.), "ogether with the group chairmen and their addresses.
This is for future reference and will be corrected from time to time.
FRA.K VA% LEER, Jr.,
Erectie ,&creiary.

nianulaeturers
Anterlefil'
t
hien s clothing.

Addr'es$

Chairmen

Groups

iM M. Haun, llickey-Freeinan Co.... 20 Fifth Avenue, New York.

Steel ........................ W. F.Carnan China ('oiner Co.. . 25 Fifth Avenue, New York.

Banks....................... John ". Chioviter, htakers Trust Co. 01 Fifth Avenue, Now York.
7-11 Spruce Street, New York.
Paper gos .............. Child, 11. ltave An el& C2o.......
Jh t;Ater Street, %'wYork.
J. )talo lin.)
.J
ile. (Aiidrich
Z4molers ah'es..;. .A.....
Art ndiinetal ........... Win.St. Friedlaeuder, [he Friedlien . 49 1est 'rwenty-third Street, New
York.
der ('o.
q. Ilinnian, 'Thee. ilaiviland & Co. 20 West Twenty.thlrd Street, New
Chinaware ............. I,.
York.

Culler. ................. Adolph Koslor, Adolpoh Kastor & l1ro. 1237 hBroadway, New York.
Pabri love. ........... . 0. Lloyd, Julius Ka Mr & Co..... 353 FourthItvenue. New York.
122 Hudson street. Now York.
A. Mez .o........
Cheinckiis nnd dyeluffs ... . A. ,Melt. It.

Fifth Avenue and Thirly-eighth

Street, New York.
Upholstery .................. Oeo. Metlachin, Witombe, Me. I West Fifty.second Street, New
York.
Ueachin & Co.
Retailers .................... I. W. Meconnochle. lIonwt'Teller..

Wool fabrics ................ F. J.Nolan, Milbank, LeMaan & Co.. 2 West Forty.sixth Street, New
Food products .............. aeo. O'wara, LeMannta

aFnan.

II

Atroma &

II I

York.
40 Worth Street, New York.

II

I III

2134

LOBBY INVESTIGATION

Groups
Velvets.......

Chairmen

Addresses

H. 5. Radcliffe, M. N. Trafford Co...

0. r. Riotte, Chelsea Sales Corpora.

180 Madison Avenue, New York.

1-5 Fifth Avenue, New York.

A. 0. Rltchie, Olendinnlng, MeLelsh

& Co.
.FO .. ............. IM, B. Schmidt, B. lilfelder & Co....
Frederio
B. 8hlpley
..........
A.
Q. Smith,,
F. U5.......
Woolworth
Co...
Celluloid ................ o....
Wax candles ................
.. ..............................
Hard rubber articles ........ F. H. Tiedemann ....................
Oriental goods .............. David Walker, Morlmura Bros.....:

1o West Thrty-third Street, New

laces............

Handkerchiefs ........

Men's clothing ..........

tion.

York.
315 Fourth Avenue, New York.
200 Fifth Avenue, New YOrk
Woolworth BuUAng, New York.
Do.
71 Murray Sirer4, New York.
53 West Twenty.lhird Street, New
York.
245 Fifth Avenue, New York.

Z. B. Walters, Egar B. Walters

OrganI.Ation.
Perfumery .................. 0. S. Welch ...........................
-940 St. Nicholas Avenue, New
York.
Leather gloves .............. S. Wimelbacher Wimelbather & Rico. 1150 Broadway. New Yorkt
Tie sliki .................... 1. a. Wolf, Wolf4 Strauss & Co ..... .. 65 Madison Avenue, Now York.
Decorative flowers .......... (. M. Altman, Zunlno.Altman (Inc.). 17 Union Squre, New York.
Men's straw hats ............ B. E. Bronston Bronstonflrg ....... 3-5 Washington 'lace New York.
Wood furniture.
A. S. Urusselerd. Blng & Co.......
67 Irving P1ace New York.
Bristles and raw products... F. 1i. ('one. Fred. II. Cone & Co..... lII Front Street, New York.
Rayon ...................... .. W. l)utton, E. W. Dutton (oe.).. 1733 Grand C'entral Terminal
Building, New York.
Cement ..................... L. P. R. Giffroy, United Cement & 424 %hitney.Central Bank Bull dI
Brlck Works.
Ing, New Orleans.
Woven labels ............... Ueo. It. Ooldenberg ................... 3 West Twenty-ninth Street, New
York.
Musical instruments ........ Win. J. llaussler, M. Ilohner (Inc.)... 114 East Sixteenth Street, New
York.
Footwear .................... A. llellbrunn, Goo Slipjer Co....
129 Duane Street, New York.
'rinsel goods ................ A. lrscb. .llrseh's song .........
417 Fifth Avenue New York.
Beads ....................... I. Jonas A. & 11. Veith (Inc.) .......
9-11 East Thirly-elghth Street,
New Y -k.
Avenue, Now York.
Spun silk yarn ........... lienr IV. Lange Mes ulta & Lange.. 381 Frt
Enameled ware ............ It. Lesing Mtarkit & Ilammaher..
194 V est Street, New York.
Floor coverings (rugs) ....... J. Al. Macbonald, J. M. MacDonald 298 Fith Avenue, New York.
& Co.
Millinery ................... R. MoRse. Tudklns & McCormick.... 33 Madison Avenue, New York.
Corda . a.....
...
W. L. Rochester, N. Y. Cordage Co.. 162 South 8treet. New York.
Novolly Jewelry......... 0. Rosenerger, Cohn & Rosenbeiger. 138 Broadway. New York.
Plate glass.................. A. Solomon, I. Solomon & Son ....... 19 Wooter Street New York.
Glassware ad ear thernware. Paul A. Straub, Paul A Straub & Co.. I Fit Avenue, New York.
Brushes ..................... 0. L. Thomsen, Olbson-'Thomsen Co. 10 ast Thirty.ninth Street, New
York.
Hosiery ............ A. L. Wallau, Alex. L. Wallau (IN.).. 1182 Broadway, New York.
Clocks .............
eo. 0. Wurthmann. eo. Borgfeldt.. Ill East Sixteenth Street, New
York.
Linens ....................
Iferbert Young, 'homas Young (Inc.)- 42 White Street, New York.
Chocolate .................
U. Hamstra, U. Hamstra &Go ....... 2. West Eighteenth Street, New
York.

Senator ROBINSON of Indiana. Mr. Walker, how many times have

you been down here on this legislation, during this present tariff
legislation?
a
Mr. WALKER. I should say six or seven times. I did not keep any
exact records.
Senator ROBINSON of Indiana. How much money have you spent?
Mr. WALxER. Oh, about five or six or seven hundred dollars.
Senator oBINqsoN of Indiana. How?
Mr. WALxE.. About six or seven hundred dollars. I did not keep
any exact record.
Senator Ronilsou of Indiana. You were also active during the
writing of the tariff bill of 1922, were you not?
Mr. WALKER. More or less.
Senator RoBINsom of Indiana. When did you first meet Mr. KochFrederick L. Koch?
Mr. WALKER. Oh, I should say away back in 1910; somewhere
along there. He was examiner at Baltimore when I was examiner at
New York, and we had official relations.

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LOBBY INVESTIGATION

2135

Senator RoBINsoN of Indiana. When did you leave the Govern.

ment service?
Mr. WALKER. November 3, 1917.

Senator

ROBINSON

Senator

ROBINSON

of Indiana. November 3 1917.

What salary

were you receiving when you left the sirvice of the Government?
Mr. WALKER. $1,400.
Senator ROBINSON of Indiana. What salary did you receive with
your new employers?
Mr. WALKER. $5,000.

of Indiana. With whom did you go when you

left the Government in 1917?

Mr. WALKER. Morimura Brothers, New York.
Senator ROBINSON of Indiana. And you have been with them
ever since?
Mr. WALKER. Yes.
Senator ROBiNSoN of Indiana. What is their business?
Mr. WALKER. Importers of oriental merchandise.
Senator ROBINSON of Indiana. You were an inspector at the docks
at one time, were you not?
I don't think I was ever inspector on the docks.
Mr. WALKE.
I was a temporary inspector for a time, but I did not go much on the
docks, but I was only a temporary inspector, and for a very short
time.

Senator

ROBINSoN

of Indiana. You were later examiner of mer-

chandise?
Mr. WALKER. Later I was examiner of merchandise.
Senator ROBINSON of Indiana. What was your business for the
Government in 1917 when you left the service?
Mr. WALKER. I was examiner of merchandise in the third division.
Senator ROBINSON of Indiana. What is the third division?
Mr. WALKER. It is a metal, and generally what we might call
metal and furniture line. I had sporting goods and a nuscellaneous
line of merchandise.

Senator

ROBINSON

Senator

ROBINSON

of Indiana. Oriental goods?

Mr. WALKER. No, sir. None.

Senator ROBINSON of Indiana. You say back in 1910 you were
examiner at one of the ports?
Mr. WALKER. I was never examiner at any other port than New
York.

of Indiana. What was the work at that time of

Frederick L. Koch?
Mr. WALKER. He had a line at Baltimore. I don't remember just
all of his merchandise.
Senator ROBINSON of Indiana. Your acquaintance with him began
then?
Mr. WALKER. Yes. I met Frederick L. Koch first in the appraiser's
stores at New York.
Senator ROBINSON of Indiana. In his testimony before the lobby
committee Mr. Koch said in answer to a question by Senator Walsh
of Montana, "How long have you known im? "-that is, yourselfMr. Koch said, "I remember meeting Mr. Walker for the first time
in the tariff readjustment of 1921 and 1922."
Mr. WALKER. Yes. I know he testified to that.

2136

LOBBY INVESTIGATION

Senator ROBINSON of'Indiana. "I might have met him before, but
I do not remember the circumstances."
Mr. WALKER. He evidently made a better impression on me than
I did on him.
Senator ROBINSON of Indiana. You are quite sure that you knew
him back in 1010?
Mr. WALKER. 'Very positive. I remember distinctly, and so does
he to-day.
Senator ROBINSON of Indiana. But he did not remember seeing you
until 1021 or 1922 when the emergency tariff was on, and afterwards
the Fordney-McCumber bill,
Mr. WALKER. We were thrown together considerably during the
preparation of what was known as the Reynolds report.
Senator ROBINSON of Indiana. Of what?
Mr. WALKER. The Reynolds report. That was a report got. up
by James Reynolds.
Senator ROBINSON of Indiana. When?
Mr. WALKER. For the Finance Committee at that time, but that
was before any activity on the bill. It was a prepared statement.
Senator ROBINSON of Indiana. But you were thrown together
throughout the discussion of that bill were you not? ._c
Mr. WALKER. Not gso much. I only remember during the preparation of that Reynolds report I was thrown in contact with him.
Senator RoINSON of Indiana. When did your close friendship with
Mr. Koch begin?
Mr. WALKER. About that time. Wo were all thrown together
down here.
Senator Roniwsow of Indiana. But he goes to your home, does he
not, as your guest?
Mr. WALKER. He has been in my home occasionally; yes.
Senator ROBINSON of Indiana. And that close friendship began
then?

Mr. WALKER. Yes.

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Senator ROBINSON of Indiana. Now, does it not seem strange to

you, Mr. Walker, that as close friends as you and Mr. Koch are, there
would be such a wide discrepancy in your notions of when you be.
came acquainted with each other?
Mr. "1VALKER. He remembers my meeting him.

I asked him after-

wards. I said "You remember my meeting you"

Senator ROBmNSON of Indiana. I am only going by his own testi-

houc.
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Gov
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mony.
Mr. WVALKER. Well, that is all right.
Senator ROBINSON of Indiana. Have you been working for Mori-

cone
X.

Mr. WALKER.. I think I made one trip at the request of the National
.Council, but only one.

wha

mura Brothers down hero or for the Council of Traders and Importers?
Senator ROBINSON of Indiana. I think that ist all.
Mr. WALKER. Thank you.

TESTIMONY OF JAMES W. BVANS, NEW YORK CITY

(The witness was duly sworn by Senator Robinson of Indiana.)
Senator ROBINSON of Indiana. Were you here yesterday when
the testimony of Mr. Fletcher, president of the National Importers ,
and Traders Council, was taken?

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LOBBY INVESTIGATION

2137

Mr. BEVANS. No, I was not.

Senator ROBINSON of Indiana. You are Mr. J. W. Bevans 45 East
Seventeenth Street, customs adviser, National Importers and Traders
Council?
Mr. BEVANS. I ant Mr. Bevans, but that is not my address. My
office is 74 Trinity Place, New York.
Senator RoBINsoN of Indiana. We have it wrong.
Mr. BEVANS. Yes. That is the address of the council that you
have.
Senator RoBnIo, of Indiana. Mr. Bevans, you were employed as
an examiner and special agent of the Treasury Department, were
you not?
Mr. BEvANs. No,.sir
Senator RoBiNsoN of Indiana. Never at any time?
Mr. BEVANS. No, sir.
Senator ROBINso' of Indiana. Were you ever employed by the
Government?
Mr. BEvAN.S. Yes, sir.
Senator ROBINSON of Indiana. What was your position?
Mr. BEVANS. I entered the division of customs, as it was then
known-Bureau of Customs of the Treasury Depaitment-in 1004,
in a competitive examination, as a Ia clerk, I remained in the department until October 22, 1918. From 1014 to 1918 1 was assistant
chief of that division, now deputy commissioner the position is
styled.
Senator ROBINSON of Indiana. What is your business at the present time, outside of being customs adviser to the National Council
of Importers and Traders?
Mr. BpVANs. I am a customs attorney of New York. My firm
is styled Davis & Bevans.
Senator RoBINsON of Indiana. Did you begin the practice of law
in New York City as-soon as you left the service of the Government?
Mr. BFvANS. No. I resigned from the service to go with a drug
house, McKessen & Robbins (Inc.). They were manufacturers of
pharmaceutical preparations and also wholesale druggists.
Senator ROBINSON of Indiana. How long were you with them?
Mr. BEVANS. From October 22, 1918, until November 1, 1024.
Senator RoBINsoN of Indiana. What was your salary with the
Government when you left?
Mr. BEANS. $3,000.
Senator ROBINsON of Indiana. What was your salary with the drug
concern?
Mr. BEVAN. $6,000 for the first year and $7,500 thereafter.
Senator RoBiNsoN of Indiana. You might state to the committee
what money you have spent in connection with this tariff legislation.
Mr. BEVANS. I haven't listed the expenditures separately, because
we bill those to the clients along with the fee charged or compensation.

Senator

ROBINSON

of Indiana. But

ou have a straight salary,

haven't you, with the National Council?

Mr. BBvANs. My salary with the National Council has nothing
whatever to do with any activities-you can call them activities-in
connection with this tariff. I am paid a retainer from the National
Council as customs adviser.
Senator RoBiNsoN of Indiana. Did you not succeed Mr. Davis?

2138

LOBBY INVESTIGATION

Mr. BEvANS. Yes, sir. That was also true of Mr. Davis. He
received a retainer, and on his death I succeeded him.
Senator RoBINsoN of Indiana. Did you fit into the same contract
he had with the National Council?
Mr. BEvANS. I did.
Senator ROBINSON of Indiana. Then you have received $125 a day.
Mr. BEVANS. No. One hundred dollars a month.
Sen tor ROBINSON of Indiana. Was not Mr. Davis to receive $125
a day?
Mr. BEvANs. Under a special contract with them; yes. I did not
succeed to that contract.
Senator ROBINSON of Indiana. I asked you if you succeeded to
that contract.
Mr. BEVANS. Not to that contract, no; but as customs adviser, yes.
Senator ROBINSON of Indiana. You did not get the $125 a day?
Mr. BEVANS. Not under the contract. I do when they choose to
employ me.
Senator ROBINSON of Indiana. When they choose to employ you
or you come down here on anything in connection with the tariff, that
was the tariff contract? You were to receive $125 a day and your
expenses?
Mr. BEvANs. That was my charge, but not a contract. I will
explain that in this way: Mr. Davis had a contract at that. When
Mr. Davis died the council did not care to renew that contract with
me, but stated "Whenever we want to employ you we will call on
you and you make the same charge"; but there was no different
contract. They did call on me several times, particularly in connection with the administrative features.

Senator

RoBINSoN

of Indiana. When they called on you you re-

ceived $125 a day and expenses?

Mr. BEVANS. And expenses, yes.
Senator ROBINSON of Indiana. Now, what is your salary with the
council?
Mr. BEVANS. $1,200 a year; $100 a month, as customs advisor.
Senator ROBINSON of Indiana. How many days during the last
year did you work for the council in this tariff capacity?
Mr. BEVANS. Well, I received a total of $1,781 66, which included
$125 a day and expenses to Washington an also any printing expense of any briefs that I might attend to the printing of.
Senator ROBINSON of Indiana. How many days iid you spend
down here?
Mr. BEVANS. I was in Washington, not entirely for the council,
but for other matters, 10 times. Four of those times I came down
to argue eases before the Court of Customs Appeals and spent a portion of the time on other matters, for which the salary or compensation and expenses were prorated.
Senator ROBINSON of Indiana. Then for your tariff activities you
have received $1,700?
Mr. BpvANS. $1,781.68 from the council.
Senator RoBINsoN of Indiana. Did you represent anybody else
here in connection with this tariff legislation besides the council?

Mr. BEVANS. Yes, sir.

Senator ROBINSON of Indiana. Whom else did you represent?
Mr. B wss. I represented the woolen clothing importers.

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LOBBY INVESTIGATION

2139

Senator ROBINsoN of Indiana. How much salary did they pay you?
Mr. BEVANS. The charge was made to them on the same basis;
that is, the regular charge we make for out-of-town work.
Senator RoBiNsoN of Indiana. $125 a day and expenses?
Mr. BEVANS. Yes, sir. They have paid me to date, which included
the preparation of briefs, $1,300.
Senator ROBINSON of Indiana. Whom else did you represent down
here?
Mr. BEVANS. In connection with the tariff; no one.
Senator ROBINSON of Indiana. Just those two clients?
Mr. BrYANs. Yes, sir; but I prepared a very large number of
briefs; but they presented them themselves. There are quite a number of briefs here.
Senator RoBINSON of Indiana. Let us see about that.
Those briefs were prepared for others besides those two clients
whom you have mentioned?
Mr. BEVANS. Oh, yes. Many clients.
Senator ROBINSOx of Indiana. For what other clients did you prepare briefs?
Mr. BEVANS. The briefs are here. There were four briefs prepared for importers interested in tinsel wire and tinsel thread.
Senator ROBINSON of Indiana. What was the name of that
organization?
Mr. B ASs. One of them was J. H. R. Grant, 4506 Fourth Avenue,
New York. One for the Hy-Sil Manufacturing Co..of Lynn, Mass.;
one for Mr. Stanley Wertheim, president of the United States Rayon
Corporation, with mill at Delmar, N. J. One for George Franke
Sons, also interested in the tinsel thread. I can tell, Senator, exactly
what compensation was received for that. $200.
Senator RoBNsoN of Indiana. For all those briefs?
Mr. DBEANS. Yes; an entirely too small amount, but that is what
was received.
Senator RoBINSON of Indiana. For all those briefs you received

$200?

Mr. BEVANS. Yes; and there was some dispute about that.
Senator ROBINSON of Indiana. How do you account for the fact
that for this work of preparing briefs to be presented to the Ways and
Means Committee and the Finance Committee, you received only
$200, and for the work for the importers' council you received $125
a day and expenses?
Mr. DEVANS. Well, you see the importers' council briefs were much
more comprehensive, and further, I appeared here and testified before
the Finance Committee on the administrative features. We wrote
several briefs on the administrative features, and in this case these
Smporters-in fact my arrangement was with Mr. Grant. He said
that after the briefs were prepared, he had furnished all the information and all I had done was to approve them, and he thought that
was very high compensation for merely looking at something.
Senator RoBINsoN of Indiana. What position on the tariff did you
take here?
Mr. BEVANS. On the administrative features, do you mean?
Senator ROBINSON of Indiana. Yes.
Mr. BEVANS. I opposed any change in valuation from the foreign
value to domestic value, or American valuation, or whatever they

2140

LOBBY INVESTIGATION

choose to call it, and I opposed a document that was filed here, called

a bill of rights.
Senator ROBINSON of Indiana. That is to say, that as far as the
administrative features were concerned you were*opposed to changes
from foreign valuation to American valuation?
Mr. BEVANS. Yes, sir.
Senator RoBINsoN of Indiana. And you were also opposed to any
increase in tariff rates?
Mr. JEVANS. Now, are you speaking of my activities with the
council?
Senator RoBiNso. of Indiana. Yes.
Mr. BEVANS. No, no. I made no representations and did no work
for the council in connection with the rates of duty.
Senator RoiNrsox of Indiana. Your representations here for the
Council of Importers and Traders had to do exclusively with the
administrative features?
Mr. BEVANS. With tho administrative features; yes, sir.
Senator Roniso.4 of Indiana. That means foreign valuation?
Mr. BEvA.Ns. Well, that is one of the features, but there are other
*
features.
Senator ROBINSON of Indiana. What others?
Mr. BRVANS. The so-called flexible tariff.
Senator RomrxsoN of Indiana. Were they opposed to the flexible
provision?
Mr. BEVANS. .To the flexible provision as it is, yes. That is that
provision which gives the President. the rightSenator ROBINSON of Indiana. They were opposed to giving the
president the right?
Mr. BEvANS. Yes. They thought Congress should do that.
Senator RoBiNsoN of Indiana. They were having you use whatever influence you could bring to bear to cause Congress to incorporate
in the bill a provision elminating-the.present flexible arrangement?
Mr. BEVANs. No, I would not put it that way. I did not sell then
any influence, because I did not have any.
Senator RoINSo of Indiana. Oh, I know.
Mr. BEVANs. But they were employing me to present my argument.
Senator RoBINsoN of Indiana. They were opposed to the flexible
provisions. is that it?
Mr. B1EVANS. Exactly.
Senator ROBINSON of Indiana. All right. Then we understand
each other. Did you receive any other money from any other sources
for work in connection with tariff legislation?
Mr. BEVANs. For the preparation of these briefs. I only mentioned one set of briefs. There are a great many others here.
Senator ROBINSON of Indiana. How much money did you receive
from various clients for your work before the Ways and Means Committee and the Senate Finance Committee on the tariff?
Mr. BzvANs. The total amount I received, including expenses,
and where I attended to the printing of the briefs, the cost of the
printing, amounted to $0 073.00.
Senator RomNsoN of Indiana. That is the total amount received?
Mr. BIvAxS. Yes; about $10,000.
Senator RoBINsoN of Indiana. From additions sources or from all
sources?

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LOBBY INVBBTIOATION

2141

Mr. BE"vANs. From all sources.

Senator ROBINSON of Indiana. Including the council?
Mr. BEVANS. Yes, yes.
Senator RoBINsoS of Indiana. Well, that simplifies it. That includes the expenses, too?.
Mr. BEVANS. Yes. It is approximately $10,000, and that includes
traveling expenses. The traveling expenses generally ranged $40
for a single trip to Washington; $38.50 or $39.

Senator

ROBIZsON

of Indiana. You are present customs adviser to

the national council?

Mr. BEVANS. Yes, sir.
Senator ROBINSON of Indiana. I think that is all.
What other witnesses are here from New York who wanted to
testify to-day? I am afraid, gentlemen, you will have to come back
to-morrow. Is Mr. Le Boutillier here? The committee will stand
adjourned at this time until 10 o'clock to-morrow. I will ask Mr.
Stern and Mr. Radcliffe to come back for a brief examination, and
Mr. Le Boutillier.
(Whereupon, at 11.45 o'clock a, m., the committee adjourned until
to-morrow, Friday, January 17, 1030, at 10 o'clock a. m.)

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LOBBY INVESTIGATION
FRIDAY, JANUARY 17, 1980

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY

Waehington, 1. 0.
Tho subcommittee met, pursuant to adjournment, at 10 o'clock
a. m., in room 212, Senate Offico Building, Senator Thaddeus H.
Caraway (chairman) presiding.
Present: Senators Caraway (chairman), Robinson of Indiana, and
Blaine.
Also present: John G. Holland, Esq., counsel to the committee.
TESTIMONY OF HARRY 8. RADCLIFFE
(The witness was duly sworn by. Senator Caraway.)

Senator CARAWAY. Will you give the stenographer your name,

residence, and occupation?
Mr. RADCLIFFE. Harry S. Radcliffe, my residence is 1 Hawthorne
Street, Montclair, N. J.; occupation importer of pile fabrics.
Senator CARAWAY. What kind of fabrics?
Mr. RADCLIFFE. Pile fabrics, velvet, velveteens.
Senator CARAWAY. You yourself are an importer?
Mr. RADCLIFFE. Yes sir.

Senator

CARAWAY.

Have you taken any interest in this pending

tariff bill?
Mr. RADCLIFFE. Through the chairmanship of the group of the
National Council of Importers.

Senator

CARAWAY.

National Council of Importers?

Mr. RADCLIFFE. Yes.

Senator

CARAWAY.

You are chairman of some

Mr. RADCLIFFE. I am chairman of what is called the velvet group,

but in reality this is a combination of three or four groups. We are
divided into three divisions, the velveteens or cotton pile fabrics, and
silk velvet division, and the velvet ribbon division.
Senator CARAWAY. As I understand, your association had committees appointed for each line or quality or kind of merchandise?
Mr. RADCLIFFE. Yes, sir; the different commodities.

Senator CARAWAY. And you are chairman of one of those groups?

Mr. RADCLIFFE. Yes,.sir.

Senator

CARAWAY.

Did you, yourself, come to Washington to

appear
before the Committee
Ways and Means of the House?
Mr. RADCLIFFI4.
I appearedonbefore
the Committee on Ways and
Means on three occasions, and before the Committee on Finance also
on three occasions.
Senator CARAWAY. Was your appearance at your request or were
you called back by the conmmttees?
2143

2144

LOBBY INVESTIGATION

Mr. RADCLIFFE. It was at my request on three different schedules,

the cotton schedule, silk schedule, and rayon schedule.

S
whe

Mr. RADCLIFFE. Yes, sir; we were advocating a slight reduction in

the present Fordney-McCumber rates, a 5 per cent reduction.
Senator CARAWAY. Did you disclose to those committees your
personal interest in the matter when you were before them?
Mr. RADCLIFFE. I simply told the committees I was representing
a group of 32 wholesale distributors of pile fabrics.
Senator CARAWAY. Did you tell them youyourself were an importer?
Mr. RADCLIFFE. I don't recall I mentioned that, but I was acting

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Senator CARAWAY. You were advocating lower duties?

as the spokesman for the group.

Senator CARAWAY. Were you paid for it?
Mr. RADCLIFFE. No, sir.
Senator CARAWAY. Were your expenses paid?
Mr. RADCLIFFE. Yes sir; the exponsos were paid.
Senator CARAWAY. Who paid those?

Mr. RADCLIFFE. The group.

Senator CARAWAY. Did you have other people appearing before
the committees?
Mr. RADCLIFFE. There was one before the Committee on Ways
and Means, a Mr. McDonald, who appeared on the subject of velvet
ribbons.
Senator CARAWAY. Was he an importer?
Mr. RADCLIFFE. Yes, sir; an importer of velvet ribbons.
Senator CARAWAY. Did you employ anybody here in Washington
to represent your group before the committee?
Mr. RADCLIFFE. We employed no one in Washington, sir, but we
didSenator
have legal
assistance. We employed a lawyer.
ARAWAY. What did you want With a lawyer?
Mr. RADCLIFFE. To help us draw our briefs. We were novices,and
were totally unfamiliar with the procedure.
Senator CARAWAY. Did he do anfything for you except write your
brief?
Mr. RADCLIFFE. No, sir. He wrote briefs and came to Washington
with us when we made our appearance.
Senator CARAWAY. Did he appear before the committee?
Mr. RADOLIPFE. No, sir.
Senator CARAWAY. He came down here merely as your adviser.

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Mr. RADCLIFFE. Yes, sir.

Senator CARAWAy. How much did you pay him?

Mr. RADCLIFFE. I have a statement here. We paid him, as near as
I can recall $11,000 to date.
Senator ANRAW/.Y. Are you still paying.him?
Mr. RADCLIFFE, We arranged to pay hin a total of $15,000, and

we paid on account $11,000 to date.

Senator CAAWAY. And he was just to write your brief?
Mr.*RADCLIFFE. I might mention that our group has been working
since April 4, 1028. We had prior to this pending legislation a revision
of the tariff and an ap location pending before the Tariff Commission.
Senator CARAWAY. Did he represent you before the Tariff Commission?
Mr. RADCLIFFE. No, sir; he didn't represent us, but he gave us
advice.

IRecel
DisbV
I

LOBBY INVESTIGATION

2145

Senator CARAWAY. Well, somebody ought to give you advice,

when you are paying lawyers that way to write a brief, when you
know nobody reads them.
Mr. RADCLIFFE. This was a matter of several briefs.
Senator CARAWAY. I know. It is a curious thing to me that anybody imagines that all those things are going to be read by anybody.
No IMember of Congress could read one-tenth of them, you know.
Mr. RADCLIFFE. We realize that.
Senator CARAWAY. And you just throw your money away. What
other expenses did you incur?
Mr. RADCLIFFE. Just the printing and mimeographing and postage.
Senator CARAWAY. Of your brief?
Mr. RADCLIFFE. Yes; the printin f the brief.
Senator CARAWAY. Is that the only thipg you printed?
Mr. RADCLIFFE. No; we printed-subsequent to the briefs we
printed a summary of facts from the record, a series of three summaries of facts from the record, where we made a digest of all the
testimony on either side.
Senator CARAWAY. And mailed that to Members of Congress?
Mr. RADCLIFFE. Every Senator and to every member of the Committee on Ways and Means.
Senator CARAWAY. You didn't mail it to every Member of the

House?
Mr. RADCLIFFE. Some of my own Senators, the New Jersey
Senators, I mailed a few to.
Senator CARAWAY. Now, did you make any effort to get your
contention into the newspapers?
Mr. RADCLIFFE. No, sir.
Senator CARAWAY. You had no publicity bureau?
Mr. RADCLIFFE. No, sir.

Senator CARAWAY. What has been the total expense of your

group?
Mr. RADCLIFFE. Approximately $16,800.
Senator CAHtAWAY. And you have told us now that these expenses
were incurred for a brief.
Mr. RADCLIFFE. I have made a statement. It may be of assistance.

Senator CARAWAY. Well, I will just let you file that with the

stenographer, and he can incorporate it in the record.

The statement in question is as follows:)
WASHINoTON.,

D. C., January 18, 1980.

Temporary financialreport, April 4, 198, to January 1, 1980

Receipts:

Contributions from 26 members-------------------------

Disbursements:
Legal services

-------------------------------------

Washington visits -------------------------------------

Printing and mhncograph ------------------------------------------------------------Telegrams and Postage

Stationery and publications -------------------------------Stenographic services ----------------------------------------------------------------Incidentals

Approxima t el ------------------------------------Balance abou----------------------------------IMpORuTERS VZLVs

78214--o-1T 5-24

$17, 600

$11, 000

, 500

1,600
800
100
100
100

'16,800

700

GRouP.

2146

LOBBY INVESTIGATION

Senator CARAWAY. Now, that covers your every expense?

Mr. RADCLIFFE. Yes sir.
Senator CARAWAY. When you were here, did you go to see any

wi

ve

Members of the House?

Mr. RADCLIFFE. When I first came down I went to my own Congressman over to the House to ask him how I could arrange to appear
before the committee, and he, I think, wrote a letter to the Committee on Ways and Means, and then they wrote me that at his.
request I was scheduled for a certain time.
Senator CARAWAY. You didn't discuss rates with him?
Mr. RADCLIFFz. No sir.
Senator CARAwAY. ou didn't go to see any other Member of the
House?

gr

in

Mr. RADCLIFFE. He took me and introduced me to Congressman

Bacharach.

Senator CARAWAY. From your State?

Mr. RADCLIFFE. And told Congressman Bacharach I was to appear

before the committee, and it was merely that.

att

Bacharach?
Mr. RADCLIFFE. No, sir.
Senator CARAWAY. Understand, now, I think you have a perfect
right to do it.
Mr. RADCLIFFE. Well I didn't do it.

wo

Senator CARAWAY. Did you discuss the rates with Congressman

Senator

Mr.
brief.

CARAWAY.

RADCLIFFE.

The question carries no implication-

wo

I left with Congressman Bacharach copies of my

Senator CARAWAY. There is no implication that there was any

impropriety in your doing it. I was just asking for information.
Mr. RADCLIFFE. That wouldn't have made any difference in my
answer.

ex

Senator CARAWAY. Did you see any member of the Senate?

Mr. RADCLIFFE. Only Senator George.
Senator CARAWAY. YOU discussed rates with him?
Mr. RADCLIFFE. No, sir; I didn't discuss rates with him. I went

fin

Cc
m(
. wh

to him during my appearance before the textile subcommittee, of

which he was a member. A question came up regarding the elimination of testimony by one of our opponents, and I went to Senator
George and told hin I would be i the committee room the next
mornmg if he thought the matter would require my reappearance on
the stand. I told him I didn't want to volunteer to reappear on the
stand but if he thought it required it, I would thank him to suggest
that I be called agaii..
Senator OARAWAY. Did that group have any other person down
here except menibers of the group who themselves were importers?
Mr.

RADCLIFFE. No

mi
tar
Pei
it

sir

mo

Senator CARAWAY. Nou carried on no campaign of publicity?

Mr. RADCLIFFE. No, sir.

Senator RomNsoN of Indiana. This work of yours was done

independently as a Spup?
Mr. RADCLIFFE. Yes, sir; entirely independentaSenator ROmNSON of Indiana. Independent of the National
Council of American Importers and Traders?
Mr. RADCLIFFE. Yes, sir.

no
aft

LOBBY INVESTIGATION

2147

Senator ROBINSON of Indiana. You were chairman of a group

within the importers that had charge of velveteens, silk velvets,

velvet gibbons, and things of that sort?

Mr. RADCLIFFE. Yes, sir. I might explain we were organized as a

group before we came into the council.

Senator ROBIS.1o

group?

of Indiana. How many concerns are in the

Mr. RADCLIFFE. About 32.

Senator RoBNSOq of Indiana. How much money did you receive

in contributions for this work? Is that on the statement?
Mr. RArCLIFFE. Yes, sir.

Senator ROsINSON of Indiana. What was the amount?

Mr. RADCLIFFE. $17,500.

Senator ROBINSON of Indiana. And you have spent to date $16,800?

Mr. RADCLIFFE. Yes sir.

Senator ROBINSON of Indiana. That only includes $11,000 to the

attorney that you have had down here?
Mr.

ADCLIFFE. We didn't have him down here.

Senator ROBINSON of Indiana. Well, he has been doing your tariff

work.
Mr. RADCLIFFE. Yes, sir.
Senator ROBINSO of Indiana. And he has still coming $4,000?
Mr. RADCLIFFE. Yes, sir; that is true.
Senator ROBINSON of Indiana. That would mean your expenses
would be at least $20,800, when he is paid?
Mr. RADCLIFFE. Yes sir
Senator ROBINSON of Indiana. For the tariff?
Mr. RADCLIFFE. Yes, sir.
Senator ROBINSON of Indiana. What do you estimate your total

expenses will be for the tariff effort you have made in your group?
Mr. RADCLIFFE. The total expense?
Senator ROiwsox of Indiana. The total expense when you have
finished- yes. I understand you are continuing your work.
Mr. IADCLIFFE. I think the expenses in connection with the Tariff
Commission application in 1928, which required the printing of a
memorandum, and so forth, ran into about a thousand dollars of this
whole total here.
Senator ROBINSON of Indiana. But what I am getting at is how
much do you estimate your total expenses will have been in your
tariff activities after you have ceased working here.
Mr. RADCLIFFE. Well, it, of course, depends on how long the matter
pends before the Senate.
Senator RoBINsoN of Indiana. I know, but at present it appears
it will run $20,800 at least.

Mr. RADCLIFFE. Surely.

Senator ROmNSON of Indiana. Do you have any idea how much

more it will be than that?
Mr. RADCLIFFE. Well I should think that is about all of it.
Senator ROBINSON of [ndiana. You think so?
Mr. RADCLIFFE. I think so.
Senator CARAWAY. YOU are not engaged in any other activities
now? You are not spending any money now on the tariff?
Mr. RADCLIFFE. Except waiting in Washington from Tuesday
afternoon until to-day.

2148

LOBBY INVESTIGATION

Senator CARAWAY. Well, we called you.

anything for the. tariff now.

You are not doing

Mr. ADCLIFPE. That will come out of the group's treasury, unless
somebody pays it.
Senator CARAWAY. Well, you are not spending any money now

trying to circulate any propaganda for the tariff?

Mr. RADCLIFFE. No, sir. We may mail some more copies of these
summaries of facts.

Senator ROBINSON of Indiana. As I understand it, your effort has

chiefly been to get a reduction in the tariff of approximately 5 per

cent on these articles?
Mr. RADCLIFFE. Yes, sir; to offset the effort for an increase.

Senator RomNsox of Indiana. That is an average decrease of 5

ir
t

h
a

c
0

per cent in the tariff on the commodities in which you are interested?
Mr. RADCLIFFE. That is true.
Senator ROBINSON of Indiana. From the present Fordney-McCumber Act?
Mr. RADCLIFFE. That is true.

counsel who has been assisting you?

Mr. RADCLIFFE. J. Raymond Tiffany.
Senator ROBINSON of Indiana. I think that is all.
TESTIMONY OF PHILIP LE BOUTILLIERt
(The witness was duly sworn by Senator Caraway.)

5:

address
occupation
. Mr. Nand
BOUTILLIER. Philip Le Boutiflier, 3064 Fourth Street, New
York City, president of Best & Co.

P,

Senator RoBINSoN of Indiana. Will you give us the name of your

Senator CARAWAY. Will you give the stenographer your name,

Senator

CARAWAY.

What is that company?

It is a retail specialty store, dealing in wo-

Mr. LB

BOUTILLIER.

Senator

CARAWAY.

men's and children's fashions and apparel and accessories.

Senator CAqAWAY. Are you an importer?
Mr. Lz BOUTILLIER. Yes.
porting business?.

IV

fi
t

How long have you been engaged in the i.-

Mr. LB BOUTILLiER. I personally, or the store? Ever since I have

been a merchant I have been in retail business since I left Princeton

in 1000 and the concerns with which I have been connected have
always had a certain amount of import merchandise.
Senator CAIRAWAY. Very heavy importers?
Mr. Ls BOUTILLIER. No. The general average or percentage
of import merchandise handled by stores is less than 5 per cent, as the
National Retail Dry Goods Association has shown repeatedly.

All

Senator CARAWAY. You were interested, of course, in getting a

ni

Mr. LE BOUT LmjR. No, sir.

el

reduction in tariffs?

Senator CARAWAY. Or, at least, preventing a raise in the duty?

Mr. LB BouTILL.Bt. I have never appeared for rates one way .,o,

another, except our interest is to have fair rates, fair tariffs.

Senator CARAWAY. You are interested i the rates, not that you
came before the committees, but you are interested in them.
Mr. LB BoUTILIER. We are interested in the whole tariff subject.

We have to be, being distributors.

f
I

LOBBY INVESTIGATION

2149

.Senator CAHAWAY. And particularly you are interested in the line

-of merchandise you handle.

Mr. LE BOUTILLIEn. Yes.

Senator, I don't understand that. We

are 95 per cent interested in domestic goods and about 5 per cent
interested in import merchandise.

Senator CAUAWAY. You will understafid that there is no implica-

tion or criticism. I was merely trying to find out what made you
have any activities with reference to the tariff bill at all. You have
a perfect right, you know.
Mr. L, BOUTILLIER. I understand that. I just wanted to make
clear what our position is. Our interest in the tariff is in its general
effect. on American prosperity. We believe that the concealed rates,
difficulties in importing merchandise, barriers, monopolistic rates, are
against the general prosperity of the country.
Senator CARAWAY. Well, we are not interested in your reasons for it.
We were just merely ascertaining that you did have an interest.
Mr. L; BoUtTILLIEi. 1 think you asked what the reason is. I
think the reason is important.
Senator CAAWAY. I want to find out what your interest is. You
say you are interested merely as an American citizen; all right. I
wanted to know whether it was that, or whether you were interested
also because you were an importer of foreign merchandise.

Mr. Li. BOUTILUIER. Our ,chief interest is on the basis of maintaining general prosperity and opposing things that we think are
inimical to that.
Senator CARAWAY. You were head of the publicity group, were you?
Mi. LE BOUTILLER. In the national council I was chairman of the
publicity committee.
Senator CARAWAY. What method did you adopt to get publicity?
Mr. LE BOUTILLIER. We received front some of the group chairmen
figures on their different merchandise, and we prepared the effect of
those rates for release.
Senator CARAWAY. Did you have a publicity bureau?
Mr. LE BOUTILLIER. Yes; the Phoenix News Bureau of Madison
Avenue, New York:
Senator CARAWAY. How much did you pay them?
Mr. LE BOUTILLIER. I have that here. Have a detailed statement

here. They were paid for services, $4,350; postage, $171; printing,
$387; expenses, $768; or a total of $5,676.
Senator CARAWAY. What were the expenses? What was included
under that?
Mr. Lip BOUTILLIER. Well, they were incidentals.

I can't tell you

exactly what they are.

Senator CARAWAY. Did some member of that bureau travel over
the country for you to gather information? You know you renumerated you paid them for services so much, and paid tfiem for
printing ana paid them for postage, and then you say you paid for
expenses $700.

Mr. LE BOtUILLIER. $768. I can't liveyou the details of that,

Senator. The National Council can do it. Lgot this statement from
the National Council's office.
Senator CARAWAY. You have no idea what is embraced within that?
Mr. LV BOUTILLIER. Well, they had telegrams and things like that,
I suppose.

2150

LOBBY INVESTIOATION

Senator CARAWAY. Were traveling expenses to come to Washingtkon

included in this?

Mr. LB BOUTILLIER. No; the, never came down here.

Senator OARAWAY. Your publicity bureau cost you between five

and six thousand dollars?

Mr. LE: BOUTILLIER. Yes.

Senator CARAWAY. Is it still working for you?
Mr. LB BOUTILLIMi. No.
Senator CARAWAY. When did the contract expire?
Mr. LB BOUTILLIER. We discontinued it about November 1, the
week commencing October 25.
Senator CARAWAY. That had to do with the tariff?
Mr. LB BOUTILLIER. Yes.
Senator CARAWAY. This publicity bureau represented, of course,
that they could get your matters before the American people in newspapers and magazines?
Mr. LB BotTILm R. Yes.
Senator CARAWAY. What other expense (lid you incuro with reference to the tariff? You didn't come before any of the committees.
Mr. LB BOUTILYLMR. Are you speaking in connection with the
council or the National Retail Dry Goods Association?
Senator CARAWAY. Which ever one you acted for. Either. Did
you come to Washington while the bill was pending?
Mr. LB BoUTILL 'n. I appeared on behalf of the National Retail
|DryGoods Association before the Senate Finance Committee.
Senator CARAWAY. One time?
Mr. LE BOUTMIER. Once.
Senator CARAWAY. You were not paid for that?
Mr. LE BOUTILLIER. No, sir. They paid my expenses down and

back.

Senator CARAWAY. That was all?

Mr. LB BouTmmLLE.

Yes. I don't get paid for any of my work

on this.
Senator CARAWAY. Well, you look like you were prosperous and
don't need it. Do you have anybody employed here in Washington?
Mr. LB BOUTILIJER. The National Retail Dry Goods Association
maintains a permanent office in Washington, but I had nobody employed here' no, sir.
Senator 6 ARAWAY. Well, I am talking about your association.
When I mention you, I mean your association.
Mr. Lm BOUTILLI.R. Oh, yes. We had an office here for years.
Senator CARAWAY. Your association has an office here all the time?
Mr. LB BO'UTLLIPER. Yes, sir.
Senaotr CARAWAY. What is the purpose of having this Washington office?
Mr. LB BoUTilLIER. Well, I don't know that I am entirely
qualified to state tjiat, except that it is to keep a general sort of ear
open and eye open to what is going on, as to what may affect the
retail trade in general.
Senator CARAWAY. Well, has it any politicalMr. LB BOUTILLIER.i. Oh, no.
Senator CARAWAY. Why, then, is Washington a good place to
keep an ear and eye open?

fin
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bu

21VESTIOATION
2151

LOBBY

Mr. LB BOUTILLIER. Well, this is where legislation and taxes and

finances and all sorts of things originate.

CARAWAY. Then, it has to do with legislation, hasn't it?

Mr. LE BOUTILLI.R. Oh, well-I didn't understand you-yes.

Senator

Sonator-CARAWAY. Does it have anything to do with rulings in

the customs court?
Mr. LE BOUTILLIER. I have never heard of any; no, sir.
Senator CARAWAY. Any departmental activities, going before the
Secretary of Commerce, or anybody dealing with trade, adjusting
matters with the departments?
Mr. LE BOUTILLIER. Not that I know of. The office here I
imagine, keeps in constand contact with the different things that
go on, and the association issues a bulletin onceoa month and dicusses, of course, legislation that may affect the whole retail trade.
Senator CARAWAY. How much does the Washington office cost

you?

Mr. LE BOUTILLIER. I don't know that.

Senator CARAWAY. How many people are employed here; do you

know that?
Mr. LB BOUTILBIER. I think there are two, Harold Young and a
secretary. I don't know of any others.
Senator CARAWAY. What does the Washington office cost you a

year?

Mr. LB BOUTILLIER. That I do not know.

Senator CARAWAY. Senator Robinson, you want to-ask the witness

questions?
Senator BLAINE. Whore is it located?
Mr. LB BOUTILLIER. It is in the Munsey Building.
Senator ROBINSON of Indiana. Mr. Le Boutillier, what is your
relationship to the National Retail Dry Goods Association?
Mr. LB BOUTILLIER. I am a director and chairman of the tariff
committee.
Senator ROBINSON of Indiana.

Does this association embrace dry

goods stores, retail dry goods stores, all over the United States?
Mr. LB BOUTILLIER. Yes, sir. There are about, now, 3,000
member stores.
Senator RornNsoN of Indiana. You are familiar with the budget of
that association, are you not?
Mr. LB BOUTILLI1R. In a rather general way.
Senator RomIxsoN of Indiana. I have here what purports to be
the estimated income and the estimated expenditures of the association, showing an estimated budget for the year ending February 28,
1030, of $295,108.82. Is that approximately correct, so far as you
know?
Mr. LB BOITILIER. Is that in the report from the office?

Senator RoBINsoN of Indiana. Yes.

Mr. LE BOUTILLIER. I think that is probably correct.
Senator ROBINSON of Indiana. That is an income of $295,108, and

a
an estimated bitdget of the same amount.
Mr. LB BoUTILLmn. Well, I would think that was correct.
Senator ROBINSON of Indiana. This income is largely from contributions from your constituent members, is it not?
Mr. LB BOUTILLmiR. Not contributions, no; memberships.

* 2152

LOBBY INVESTIGATION

Senator

ROBINSON

Senator

ROBINSON

of Indiana. Well, I mean memberships.

Mr. LE BOUTILLIER. Oh, yes.

of Indiana. That is where practically your

aCt

Senator ROBiNsoN of Indiana. This budget ilso shows an item for

Wa
Dr.

whole income is derived?

Mr. LP BOUTILLIER. Yes.

the Washington office, estimated for the year ending February 28,
1930, of $16,000.
Mr. LP BOUTILLIEn. Yes.

Senator ROBINsoN of Indiana. That is, so far as you know, correct?

Mr. LB. BOUTILLIER. I %illassume that is correct.
Senator RoBINsoN of Indiana. This office is continued here the

year around?
Mr. LE

BOUTILLIE

. Yes, sir. I don't know how many years it

has been here, but I think it is quite a number of years.

Senator ROBIxSON of Indiana. Now, in addition to that we have a
statement here, Mr. Witness, which purports to be expenses in connection with the tariff for 1929 of the National Retail Dry Goods
Association, signed by Channing E. Sweitzer, managing director. Do
you know Mr. Sweitzer?
Mr. LB BoUTLT.IEB. Yes sir.

Senator RoBiNsoN of Indiana. Showing a total of expenses in con-

nection with the tariff, to date, of $3,792.84.

9. Is that correct, so far as you know?

That is up to December

Mr.-LB BOUTILLIEU. I will-asstme that is correct.

Senator ROBINSON of Indiana. Mr. Sweitzer is in position to state

not
recc

tra(
ace
sor
S

wer
%
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Na
X

ac

val'
cert

of it

it correctly?

sell
be

York.

the

Mr. LE BOUTILLIER. Oh, yes. He is the managing director in New

Senator RoBINSoN of Indiana. Then, your Washington office is

available for a service of this kind also?

Mr. L. BOUTILLIER. Oh yes.
Senator ROBiNSON of Indiana. That is, for tariff activities?
Mr. LB BOUTILLIER. Yes.

Senator ROBINsoN of Indiana. This, I understand from the

correspondence with our investigator, is an additional amount of
money that has been expended?
Mr. LB BOUTILLIER. Yes.
Senator ROBINSON of Indiana. Outside of the $16,000 sent to the
Washington office?
Mr. LP BOUTILLIER. Well, Senator, the Washington office goes on
whether there is a tariff or not.
Senator RoBmIsoN of Indiana. Yes; I recognize that.
Mr. LB BOUTILLIR. Because of the importance of the industry in
general. The .. ember stores employ five or six hundred thousand
people and with the families counted in they number probably
3,000,00 people, and whether there is a tariff up or not the office
goes on, and should go on.
senator RosI.som of Indiana. But the only reason you have an
office in Washington Is, as you have stated, to keep an ear and an
eye open on the legislative activities in Washington.
Mr. LB BOUTILLIER. Sure.

Senator ROBINSON of Indiana. And I say, therefore the $16,000

shown in the budget for the Washington office is in addition to the
amount I have just read?

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repr

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LOBBY INVESTIGATION

2153

Mr. LB. BOUTILLIBit. The $3,000 is a special thing.

Senator RoBNsoN of Indiana. That was for the special tariff
activities?
Mr. LE BoUTILLIEn. Yes.
Senator RonixsoN of Indiana. That would make a total for the
Washington office, then, of approximately $20,000 in the National
Drygoods Association?
Mr. LE Bou'rILLIEIR. I should think so.
Senator RornxsoN of Indiana. The other items in this budget are
not related to tho tariff in any sense of the word?
Mr. LE BoUTIL IEit. No. The associaton, as was stressed in the
recent Hoover conference down hero, with regard to necessity of the
trade gOting together and working out their own problems, covers
accounting and merchandising and insurance and delivery and all
sorts of things.
Senator RoilrNsoN of Indiana. Do you know how many bulletins
were released by the association in connection with tariff activities?
Mr. LB BOUTILLIER. I have them here.
Senator RoBncsoN. of Indiana. I am speaking now only of the
National Drygoods Association.
Mr. LE BOUTILJIER. There were four briefs and bulletins, and then
a couple of pages showing the effect of the proposed United States
value or domestic value on the rates of the Hawley bill. This took
certain items in common use and the rate of duty and the percentage
of increase in duty under tho bill and translated tliat intoeho retail
selling price, showing increases of from 41 to 130 per cent that would
be brought about if this concealed-the United States or domestic
value were put into effect, and to that we are opposed. We represent
the consumer, and, as far as I know, we are the only group that does
represent the consumer.
Senator RobNs0 of Indiana. Now, Mr. Le Boutillier, I have here
what purports to be the minutes of the tariff committee of which you
were chairman, dated September 6, 1929, from which I read:
Mr. Clark stated he thought that Mr. Lo Boutilfor, Mr. Young, and other
members of the tariff committee should go to Washington in the near future and
confer with Members of the Senate who were sympathetic with our point of view,
In order that we may learn their vlews and plan what procedure will be best for
us to follow in opposing the administrative features in the bill.
Mr. Lu BOUTILVIEi. Yes.
Senator RomNsox of Indiana. Did you and Mr. Young and other
members of your committeo come to Washington at that time?
Mr. LB BOUrTILLIEn. I didn't.
Senator ROumNSON of Indiana. Did other members, as a result of
that discussion?
Mr. LE BoU'rLLIEn. Not that I know of. Mr. Young is down
here all the time.
Senator RoBIxsoN of Indiana. Did any others?
Mr. LB IBoUTILLI9n. I don't know whether Mr. Clark did or not.
To my knowledge no other member of the committee came.
Senator RonizsoN of Indiana. Do you know what Senators, if any,
they talked to?
Mr. LP HOUTILLIE. No, sir; I don't. I don't think anybody
came. I didn't come. The suggestion was made
Senator RoBisoN of Indiana. You remember this meeting?

2154

LOBBY INVESTIGATION

Mr. LB BOUTILLIER. Yes, sir. The suggestion was made that it

would be a good thing if I would come down here and bring copies of
our material and present it to the Senators.
Senator RoBiNsoN of Indiana. flow many times were you down
here?
Mr. LE BOUTILLIER. Once, before the members of the Senate
committee.
Senator ROBINSON of Indiana. You were not here personally any
other time?
Mr. LE BOUTILLIER. No, sir. I was down hero last week to see
Senator Norris on an amendment that he proposed.
Senator ROBINsoN of Indiana. I read further from this suggestion:
That Doctor Doughton was to prepare a primer, in question and answer form,
to be used as an educational means.
Mr. LE BOUTILLIER. That is correct.

Senator ROB1NSON of Indiana. Was that circulated widely?

Mr. LP BOUTILLILn. It was circulated to Members of Congress.
Senator ROB1NsoN of Indiana. All Members of Congress received
.
.
a copy?
L. BOUTILLIER. I believe so, and I might say that I am
surprised to hear the chairman say that nobody reads these briefs.
I wish I knew that before, because I think the briefs presented by the

National Dry Goods Association---

Senator CARAWAY. Don't take that too Jiterally.

Mr. LE. BOUTILL-E . Maybe you are right, Senator.

Senator CARAWAY. Evidently some of them are read, because I

hear them referred to, and I think myself some of them contain
valuable information, and everybody has a perfect right to prepare
them and present them. I think they do well to do it. I was rather
too general in my statement.
Mr. Lie BOUTILLIER. Well, can I say that in the brief we desired
to put our position in writig so that it could not be misunderstood,
and our interest in this tariff, our general interest in the tariff, is in

the consumer and the general prosperity as stated in words of one

syllable in these briefs. There is nothing doubtful about our position
in the whole matter.
in
Senator ROBibsoN of Indiana. The question was not so much
explanation of the briefs. It was. whether it was really sent to
Members of Congress.
Mr. LP, BOUTILLIEIR. I believe it was.
Senator ROBINSON of Indiana. Of both Houses?
Mr. LB BOUTiLLIER. Yes.
Senator RomNsoN of Indiana. Who is Doctor Doughton?
Mr. LB BOUTIJUTE. Dr. Carroll W. Doughton, an economist with
the Massachusetts Institute of Technology.
Senator RornsoN of Indiana. And he became consulting economist in your tariff activities?
Mr. LP BOUTiLLIER. Yes, sir.
Senator RoBINsoN of Indiana. How much did you pay him?
Mr. LB BOUTILLIER. I didn't make the arrangement, but I believe
the understanding was $50 a day when he worked, and hi expenses
to and from New York if necessary. He was here when I appearedM
before the Senate Finance Committee. Do you want these bulletins
we issued?

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LOBBY INVESTIGATION

2155

Senator RoBiNsoN of Indiana. No; it won't be necessary.

Mr. Lio BOUTILLIEn. They are very interesting.

Senator ROBINSON bf Indiana. I read, too, from these same minutes
of that tariff committee:
Chairman Le Boutfiller also suggested the association should continue to
conduct an active campaign each month of a national character in the pages of
the bulletin in order to keep the matter before the minds of our members. The
plan had the unanimous approval of other members of the tariff committee.

Is that the bulletin of the National Retail Dry Goods people?

Mir. LE BOU'rILL! R. Yes, sir; issued each month.
Senator ROBINSON of Indiana. The bulletin was their official
organ?
Nr. LE BOtTILLIER. Yes.

Senator ROBhnxsoN of Indiana. And the-se articles with reference

to the tariff you spoke of were to be )laced in the bulletin?

M{r. LE BOyTILLIER. Yes. These briefs I believe werg printed in

the bulletin also.
Senator RoBINso. of Indiana. That was what I was getting at.
It states also in these minutes:
Mr. Young stated lie had been requested by a representative of the National
Democratic committee to secure retail prices of certain articles of merchandise
for the ear 1022, prior to the passage of the Fordney-MeCmner Act, and
retail prices on identical articles after the passage of thiat act. lie asked the
committee for permission to get those prices and turn them over to the member
of the Natiom l)emopratlo committee. The members gave thpir approval
and assent.

Was that done?

Mr. LF,BOUTILLIER. I believe so. That is in these printed sheets.
Senator ROBINSON of Indiana (reading):

Mr. Young asked permission of the Tariff Commission-

That is your committee, I take it?

Mr. LE iOUTILLIER. The tariff committee.
Senator RomiNsoN of Indiana (continuing):
To call a meeting of the Retail National Council at an early date in Washiington in order to secure the cooperation of the council in our opp6sition to
the tariff bill. The committee readily gave its assent to the calling o a meeting
in Washington.

You remember those proceedings?

Mr. LE BOvTILLIER. I don't know whether that was ever called.
I didn't hear any more about it. I never attended, and I don't
know whether it was called.
Senator ROBINsON of Indiana. But it was approved unanimously?
Mr. LE BOUTILLIER. We approved it; but whether it was done
or I ot is another story.
Senator RoBIxsox of Indiana. Leaving the National Dr Ooods
Association for the present and your connection with it Mr. Witness,
I invite your attention to the Phoenix News Publicity Bureau.
That was the organization that conducted the publicity for the
National Council of Importers and Traders?
Mr. LB, BOUTILLIER. Yes sir.
Senator RoBINsoN of Indiana. And you were chairman of that
publicity bureau?
Mr. LB BOUTILEm. Yes, sir.

2156

LOBBY INVESTIGATION

Senator RoBiNsoN of Indiana. You made the agreement for tile

council with tile Phoenix News Publicity Bureau?

Mr. LE BOUTILL9IIt. I did. I have iAhere.

Senator RoBmIsoN of Indiana. I think we put this in the record

the other (lay when Mr. Fletcher, president of the council, was hero.
so we can Save time by not going into the terms of that contract.
'r. LE BOUTILII.

Yes.

Senator RoBiso, of Indiana. I understand, however, that the

agreement was entered into. I don't know if the (late was given the
other day, but it is marked hero June (1, 1929. Is that about the
time you entered into this general agreement for publicity?
Mr. LE BOUTILLIE.n. I think I can give you the exact (lato, Senator.
No. Their proposal was of June 0,_ and the agreement was made
June 18. That is when the thing began.
Senator Ronivso. of Indiana. Yes, I think I have it here. June
18 is when tou accepted their proposition?
Mr. LE: 1OtILLI:.It. Modified. And then the thing ended the
1st of November, as we pointed out.
Senator Roiso.v of Indiana. Lot me read from that letter to
Mrs. Reed. Mrs. Ruth ]Byers Hced was the president of the Phoenix
Publicity News Bureau, was she not?
Mr. Lm BOUTILLIEI. Yes, sir.
Senator RoBnLsoN of Indiana (reading):
DEAR MRS. lHERD: Oil behalf of the. National Council of American Importers
and Traders

(Io.), following our conversation today, this will accept your

expenses, etc., 0s itemnized, with the understanding that later on we anav add the
proposal for booklets or pamphlets or radio or special representative at.Washing.
ton, or all three in aceordile with th estimated costs given to-day.
As disenused, the first thing to ho done and 1iost, Important, is to prepare an
outline for the campaign and submit It to us for discussion.
It understood we
will make available to vou ourfiles of the previous very successfulIscampaign,
Mr. Van Leer will be the direct contact for us and iss Mandego for you, that
and
that releases before Issuance will be sent to ine for 0. K. of modification.
prOposal of June 0 to handle a proposed campaign for $800per month, pills traveling

That was signed by yourself as chairman?

Mr. LE BOUTILLIFIR. Y)es sir.
Senator RoBiNsoN of Indiana. You remember that letter?
Mr. LE BOUTIoLIX-R. Yes sir.
Senator ROBINso, of Indiana. Their proposal was not modified
in any important degree,
was it, Mr.. Witness?
Mr. LE BOUTILLI1I . Well, it was modifid, that we did not start
in on the radio and pamphlets, and a whole lot of things that were
proposed in their original letter.
Senator RoBizso. of Indiana. But you could add those propositions at any time?
Mr. LP 13OUTILIEt. Oh, yes.
Senator ROBINSONT of Indiana. I will ask you the same question we
asked the president of the council the other day, Mr. Le Boutilier,
since you had charge of it; what did you mean in ourstatenient that
you would make available your files of the previous very Successful
campaign? Was that the campaign of 1022?
,
Mr. LP. BouTyLIHnm. Yes, Sir. When American valuation was pro.
posed the National Council of Importers and Traders appeared
down hero and submitted briefs in opposition to that proposal,, and
as it, was finally defeated, we Senator OAHIAWA. Took erqdit for it?

it. on

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LOBBY INVESTIOATION1

2157

Mr. LE BOUTILLIBII. No, sir. We took credit for helping to defeat

it. only.
Senator Ronix soN of Indiana. You considered that a very successfill campaign?
Mr. LE OUTILLIER. Absolutely, successful for the country, too.
Senator CARAWAY. I have statements in my office printed by
associations, sent out by its members, in which they take credit for
electing two speakers and for writing most of the legislation that
was put. on the statute books for the last 10 or 15 years.
Mr. Li BOUTILLIEp. Senator, I am not interested in getting
credit for anything, but I believe that the campaign that was conducted before was of benefit to the entire country.
Senator CARAWAY. I am not questioning that.
Senator RoimsoN of Indiana. Under date of June 26, in your
files here, Mr. Witness, appears a letter. I suppose it is from the
Phoenix concern. It is signed P. E. Mandogo, addressed to Prof.
James Angell, The Cedars, West Chop, Marthas Vineyard, Mass.
I read from this letter:
Just at present we have undertaken a piece of work for the National Council
of Importers and Traders who would very much like a statement from you as
the tariff xpert at Columbia, which might be given out to the press as to the
dangers from such a high protective tariff as proposed in the Hawley-Smoot bill.

That was the part of the campaign to get educators to write

stories of various kinds, or get interviews, and put those out through
this publicity bureau?
Mr. LB BOUTILLIEn. A questionnaire was sent to-and this will
explain what I did not recall, Senator. I am sorry. There is an
item here in the expenses of $50. A questionnaire was sent to about
1,000 economists through the country asking whether they would
give their views on the proposed Hawley-Smoot bill. When those
opinions were received, I think-this may not be accurate-but I
think replies were received from about 300, and of those replies it is
my recollection that 90 per cent were opposed to the administrative
positions of the Hawley-Smoot bill.
Senator RoBiNSON of Indiana. Well, we will get to that in just a
minute, Mr. Witness. I have the questionnaire here which you
sent. out.
Mr. LE BOUTILLIER. All right, sir.
Senator RoBNsoN of Indiana. I an now referring just to the letter
to Prof. James Angell. That was sent With your approval?
Mr. LB BOUTILLIEU. I never saw the letter before, but I approve it.
Senator RoBNsoN of Indiana. Did that letter come from Professor
Angell, do you know?
Mr. LB BOUTILLnR. I don't know.
Senator RoimNSoN of Indiana. A letter also from your publicity
bureau addressed to Mr. Leo Pasvolsky, Institute of Economies,
Washington, D. 0. I quote a paragraph or two from it:
I'm on a begging exi;edition.

I am doing a public. relations job for a publicity

house-which handles the Carnegie Endowment for International P64ce, the

Town Hall, the Republican State Committee etc.-in behalf of the National

Council of Imnorters and Traders on a tariif. The object is to educate and

arouse the dear pubilo as far as possible concerning the pendtig tariff bill, to which
this council Is bitterly opposed.

We wish to obtain the opinion of some leading economists, opposed to the

Hawley-Smoot bill.

As you know, I have been intimidated by economists.

2158

LOBBY INVESTIOATION

I wondered, therefore, if you would help me, and send me five or more intellfgent scientiflo questions to ask in interviews, and to send out in the mail? It
would be a tremendous help mid relief to me, and I'd b. enormously grateful,

Senator CARAWAY. Who wrote that?

Senator RoBiNsoN of Indiana. That is from the bureau,

the

Phoenix Bureau that was handling the publicity of the National

Council of Importers and Traders.

Mr. LE BOUTILLIER. I never saw it before.

Senator ROBINSON of Indiana. You approved that, however?
Mr. LE BOUTILLI R. Not then. I see no objection to it now, but
I[never saw the letter before.
Senator ROgiNSON of Indiana. But the point I am making is this
letter starts out by telling of the public relations job this bureau is
doing for the Carnegie Foundation, for International Peace, the
Town Hall, and the Republican State Committee and others.
Mr. LE BOUTILLIER. Yes.
SenatorRoniNsoN of Indiana. In connection with that, they want
a statement for the National Council of Importers and Traders.
Mr. LE BOUTILLIER. Well, I didn't write the letter, Senator.
Senator ROBINSON of Indiana. You were handling this with the
publicity bureau for the National Council, were you not?
Mr. LE BOUTILLIEU. I was chairman of the publicity committee.
Senator RoBiNsoN of Indiana. That meant you were responsible
to the council for what went on?
Mr. L, BOUTILLIER. Yes.
Senator ROBINSON' of Indiana. And Miss Alandego was handling
this matter with you constantly, or taking these matters up with
you constantly for the bureau, was she not?
Mr. LB BOUTILLIER. Yes but obviously I haven't got the time to
go over all the work they do, the correspondence that they write to
different people. I had nothing to do with that.
Senator CARAWAY. You do not disapprove of the letter? You
would not have disapproved it if you had seen it?
Mr. LB BOUTILLIER. Well, I don't know that I would write it In
just that tone if I were writing it myself.
.

Senator

CARAWAY. No;

I don't think a publicity agent would,

but you do not disapprove it, in the results you were seeking?
Mr. L BOUTiLLmi.
No.
Senator ROBINSON of Indiana. Here is an article written by Mr.
Van Leer, executive secretary, in writing to the Phoenix News
Publicity Bureau, he stated in his letter:
I am attaching this other article, and if you approve it can be released Immediate to the Times and some of the other papers.
This was the alleged interview with Mr. Van Leer, commented
upon editorially in the London Times, calling for a tariff war with the
United States.
Commenting vesterday upon the editorial in the London Times calling for a
tariff war with the Uuited States, Frank Van Leer Jr., editor of the American
Importer, stated that this brought up a question which was really more serious
totih exporting interests of the country than to importers. Ir. Van Leer pointed
out that the entire importing community of the country was now aggressivelv
working with a view to bringing about modification In the proposed tariff rat6s
and the elimination from the administrative provislos of the law of any referonce to United States as a substitute for foreign valuation In the appraisal of
Incoming goods.

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2159

LOBBY INVESTIGATION

The London Times article emphasizes the seriousness of the tariff situation, he
said, and should bring sharply to the attention of Congress the fact that foreign
trade flows both ways, and that any tariff legislation embodying prohibitive
rates is going tO prove extremely harmful.
Mr. an er pointed out that importers will have paid to the United States
Treasury in the fiscal year ended June 30 approximately $587,000,000 in customs
duties, but that If the proposed tariff law Is enacted by Congress this total will
be materially reduced during the next fiscal year, due to the inability of merchants to bring in many lines of goods now imported.

That was published in various newspapers was it, this interview?

Mr. Lr BOUTILLIBR. Not to my knowledge. I don't know. I
hope it was.
Senator ROBINSON of Indiana. You approved that?
Mr. LE BOUTILLIER. I never saw it before. I think it is just about
right.
Senator ROBxNSON of Indiana. Do they not submit most of these
matters of policy to you?
Mr. LB BOUTILLIER. PolcOy yes. The method, if I might explain,
Mr. Van Leer has a perfect right, under the organization, to put out a
release like that without my seeing it at all, and did it frequently
and does it now, no matter what the thing is. In the Phoenix News
Bureau the practice was for them to send me every release that they
proposed to put out, for my criticism or comment, and if I had any
criticism or comment I would call them up on the telephone right
away and tell them. It is my recollection that I did not have very
much criticism at any time. Then the release would go out. I

have here-

Senator ROBINSON of Indiana. I will come to that in just a moment.

Mr. L, BOUTILLIER. Pardon me.
Senator RoBINsoN of Indiana. Do you know Dr. Valeria Parker?
Mr. LB BOUTILLIER. No.
Senator RoiNsow of Indiana. I have a copy of a letter sent by the
bureau to Dr. Valeria Parker:
Dr.

VALERIA PAICKR,

JuLY 5,

1020.

New York City.

MY DF.An DOCTOR PARKmEt: The Phoenix Bureau is working against the new
Hawlev-Smoot bill now before Congress, and Miss Mandigo, before she left for
Westport asked us to send you the enclosed interview, to ask you if you would be
kind enough to allow us to issue it under your name.
It would mean a great deal to the women of the country if you would sign It.

Miss Mandigo felt it would save you a lot of trouble if site got together these facts.
They aro only suggestive. If there is anything you want to add, or if you want
to treat the subject entirely differently, that will be for you to decide.
Thank you so much for helping us out in this matter.
Very truly yours,

P. S.-We hope to release this over the Universal Service this coming week.
Did you know that interviews were being prepared and other
people were asked to sign 'them?
Mr. Ln BOUTILLI R. Well I never saw that letter, but I can. tell
you who Doctor Parker is. Ahe is a member of the consumers comnittee to investigate living costs. Aside from that, I do not know who
she is.
Senator ROsiNSON of Indiana. The idea was for this interview to
be prepared by the Phoenix Bureau, who were working, of course, for
the National Council of Importers and Traders.
Mr. LB BouTiLuE. Well, I can not answer that.

LOBBY INVESTIGATION

Senator RoBIsoN of Indiana. And to be released under the

signature of Dr. Valeria Parker. Do you approve of that?
Mr. Lt BOUTILLIER. I would say that I do not disapprove it,
because it has been my observation that quite a few releases in different lines are prepared for the people whose names appear on them,
whether i Washington or in Now York. Obviously, I would think
that if this Doctor Parker did not approve of the sentiments, she
would say so.
Senator RoBINsoN of Indiana. Here is a letter to Mr. Jeremiah W.
Jenks, of the Alexander Hamilton Institute, which is characteristic
of a number of other letters that I have here. I will just quote a
paragraph from it:
Representing the National Council of American Importers and Traders of
which Mr.- Peter Fletcher, of Lamb Finley & Co. is president, we are fighiing
the Hawlev-Smoot bill by means of newspaper publicity. Through news and

feature articles released to New York City papers, to the Associated Press,
and the United Press, we hope to arouse public opinion against the extreme
efforts of the proposed new tariff bill.
Just now we are preparing a newspaper release which will be a symposium of

opinions expressed by Nes Xork economists, and by professors of economy In

New York University and In Columbia University. Your name itas given tis by
the National Fregn Trade Council as a possible contributor to this symposium.

Can you help ..out?

Mr. Lr.BOUTILLIER. I guess he was one of those thousand economists.

Senator RoBINSoN of Indiana. Here is another letter to Mrs.

Elizabeth May Craig, of Washington, D. 0. Do you know who

Mrs. Craig was?
Mr. LE BOUTILLIER. No, sir.
Senator ROBINSON of Indiana (reading):
Your note to Maxine Davis in regard to material for one article on the tariff
has been turned over to me as I asked Miss Davis for it in the beginning. It is
important for a particular article that we get facts as to how it Isproposed to
levy a dutv on articles which are not produced in this Country. I would like a
suggestive'list of such articles and a statement from some member of a sub.
committee or some tariff authority In l ashington as to how this will be done.
I want it from a disinterested source.

The idea was not to issue these statements over the name of the
Phoenix News Bureau or the Council of Importers, but apparently
from a disinterested source.
Mr. LB BOUTILLIER. Do you mean: the men himself?
Senator RoBImso of Indiana. Stories of various kinds that were

su ested. That was n.t quite frank with the public was it?
Sr.LB BoUTILLIER. I think it adds more strength to it. If Mr.
Jenks or whoever it is comes and says he does not beievo in so and so,
I think it is being more frank.
Senator RoniNsoK of Indiana. Would it be entirely disinterested
if he were solicited to do this by the National Council of Importers
and TrAders?
Mr. Ln BOUTiLL*R. Why not?

Senator RoamNso of Indiana. Well, I am asking you. I am not

undertaking to answer your questions. I am asking you for your
own opinion. I am not attempting tO criticize you at all.
Mr. Ls BOUTILLIER. It all depends on the interpretation you put on
material that is prepared for the use of Congress or for reading in the
press. If you list it all as propaganda, then the whole thing is thrown

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LOBBY INVESTIGATION

2161

out, but I believe that it is educational work, and as far as the propaganda goes, I am not interested in it. As far as bringing light in on
the tariff and the administrative features and what they will do to
the American public, the consumer, that is educational work.
Senator CARAWAY. Pardon me.

It was the next paragraph that I

think you had in mind. You say:

I will pay you for this piece of work, but before you start, I think it would be
wise for you to write me and tell me how much you will charge. If the price is
within our budget. I will wire you immediately to go ahead,

The thing I wanted to ask you about was this, you wanted to getyou say "I want it from a disinterested source." That means anparently somebody just writing because he was interested in the public
good and yet you wore promising to pay him for it. You would
hardfy approve that, would you?
Mr. Li BOUTILLIER. No, I would not. I do not understand that
is the way the material was collected.
Senator CAIAWAY. That is the reason I wanted you to read it.

Mr. L . BOUTILIER. It is my understanding that. the thing was

sent to about a thousand economists, and they sent in their replies.
They got no pay for it.
Senator ROBNSON of Indiana. This was sent to Miss Elizabeth
May Craig.
91r. L, BOUTILLIER. Who is she? I don't know her.
Senator CARAWAY. Apparently a writer.
Senator Rob-non-hi Ivdiina, I dn't know ler, I am sure.
Mr. LH. BOUTILLIER. I would not approve that at all.

The letter

is there, but I do not think it was done with the letters that were
sent out. It surprises me. I would not condenm all thd work of
the bureau because of the one letter.
Senator ROBINso04 of Indiana. But that is what you were paying
these people for, was it not?
Mr. Lr, BOUTILLIERI. Oh no, no.
Senator RoBIwsom of Indiana. Well lot us read this report. Here
is a report from the Phoenix News Publicity Bureau:
Attention Mr. Philip Lo Boatllifer, chairman of publicity committee, National
Council of American Importers & Traders (Inc.).
PUBLICITY REPORT OF WORK OF PHOENIX BUREAU FROM JUNE 18 TO JULY 10

The Phoenix News Publicity Bureau has been doing intensive work under the
direction of Mr. Lo Boutilifer on the compilation of material for news stories,
special interviews, symposiums, feature stories and editorial material. A com.
plete file of the stories which have resulted front the collection of this deta has
men sent to Mr. Van Leer. The material hag been issued in the following way:
A special interview with Mrs. Theresa Norton, Democratic Congressman from
Now Jersey, waa published in the Evening Telegram of July I and later distributed
over the Scripps.Itoward syndicate.
Aspeech on the tariff was made before the Americatn Home Economics Assoiation at their annual meeting in Boston, June 28. Through the contacts of the
Phoenix bureau this material vas distributed under the name of the American
Home Economics Association to 00 of the most Important evening Papers
throughout the country.

That is plain that this was a speech that had been made but was
distributed under the name of The American Hoie Econohiks
Association. That was not distributed under the name of the
council of importers at all. You know about that?
78214-"0--

--- 25

2162

LOBBY flV06TIGATION

Mr. LB BOUTILLIER. I never heard of it.

Senator ROBINSON of Indiana. This is sent to you. It says

"Attention Mr. Philip Le Boutillier," July 10.
Mr. Lu BOUTILLIFR. Then I got it.
Senator RoBiNsqN of Indiana. So that you would know just what
was going on. This is their report to you.
Mr. L. BOuTILLIER. All right.
Senator ROBINSON of Indiana (reading):
A story was also published in a New York evening paper tinder date of July 3.
A special interview was procured with Miss Rose Schneiderman, president of
the National Women's Trade Union League and distributed over the Universal
Service.
A story on the fact that business women of this country are protesting the
tariff was sent out to 150 of the largest morning papers throughout the country

pr
thl
co
off

thi

an over 100 dailies In the State of New York.

giv

Things of this nature not tinder the name of the American Council,
these were all sent out as news; just news; not as propaganda at
Nit
all.Mr.
LE BoUTILLIF4 II. Well, isn't
it news?
Senator Roticsox of Indiana. Well, it is a question of whether it
ii news or propaganda, or whether it is honestly done or dishonestly

bef

done.

[Continuing reading:]S

A symposium of the opinions of exporters and a prominent economist, Mr.

Virgil Jordan of the National Industrial Conforence Board, was compiled and
pit ished itthe Sunday morning papers of July 7 In New York City.
A special interview ias been )rocured and will be distribured this week over
the Universal Service signed by Mrs. Raymond Brown, mnanaging director of the
Woman's Journal. This is the publication issued to the National League of
Women Voters, representing hundreds of thousands of women all over the country and is one of the most important guides to public opinion among women in
.the United States.

These are all articles that have been paid for out of your budget,
are they not? There are letters in hero offering to pay for these
various articles, and they wore all bought and paid for?
Mr. LE BOUTILLIB.R. Well, I would not judge by that one letter,
when I told you a questionnaire was sent out to a thousand economists.
Senator RoBiNsoN of Indiana. I am trying to save time by not
reading the various letters where the news bureau was writifig to
different people asking them to write this and that, and that they
would pay for it.
Mr. LE BOUTILLIER. Did the bureau offer to pay the economists
for their opinion?
Senator ROBmNSON of Indiana. Yes; for various stories that were
within their budget, and so forth and so on.
Mr. LB BOUTILLIER. Well, I would challenge that. I do not think
the bureau did anything of the kind. They may have done it with
this one woman.
Senator RoBigsoN of Indiana. The Phoenix Bureau? I just read
that one letter to you.
Mr. LE BOUTILLIER. But that is one out of a thousand. We did
not even know who the lady is.
Senator RoBINsoN of Indiana. I may be mistaken, but I think
there are several others in there.

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M
S

of t
M
Doe
gas a

M,

LOBBY INVESTIGATION

2163

Mr. LE BOUTILLtER. I can not conceive that any economist of

prominence is going to give an opinion for a few dollars.
Senator RoBINsoN of Indiana. Oh, we have had that evidence in
the record in connection with other lobbying activities before this
committee.
Mr. LE BOUTILLIER. That is news to me. If there was any money
offered for these opinions, this is the first I have heard 6f it.
Senator CARAWAY. And you do not approve of it?

Mr. LE BOUTILLIER. No. Certainly not.

Senator CARAWAY. As far as you know, that is the only letter of

that kind? There may be others?
Mr. LE BOUTILLIER. No more than I would approve going to a
merchant and asking him to give an opinion on the tariff and then
giving him $100 for it. You do not have to. There are too many of
them ready to talk without it.
Senator CARAWAY Now that is not your only reason?
Mr. LE BOUTILLIER. OrAinarily it costs about as much as 50 cents
a line. Most of us are glad to talk for nothing.
Senator CARAWAY. I never knew why dry goods cost so much
before.
Mr. LE BOUTILLIER. The tariff has something to do with it.
Senator ROmNSON of Indiana. Dr. Nicholas Murray Butler made
a statement on the tariff:
The Phoenix Bureau sent a representative to the Majestic on July 9 to meet
Dr. Nicholas Murray Butler, president of the Carnegie Endowment for International Peace.
Senator CARAWAY. I am sure nobody has to pay him for an
opinion.
Mr. LE BOUTILLIER. His opmiion is worth a great deal, if I may
say so. His statement on the tariff, when he returned to this country,
was worth reading.
Senator CARAWAY. I remember his statement after the Cleveland
convention, in which he said there was a great deal of corruption,
and then he admitted he must have been very nervously strained.
Mr. LE BOUTILLIER. That is another story.
Senator RoBiNsoN of Indiana. Let us proceed with this:
The Phoenix Bureau sent a representative to the Majestic on July 0 to meet
Dr. Nicholas Murray Butler, president of the Carnegie Endowment lor International Peace.
The Carnegie Endowment is one of the clients of the Phoenix bureau and it
was planned to get a statement from Doctor Butler, to be sent out as a Carnegie
Endowment release, on the tariff situation.
Do you approve of that?

Mr. Lp. BOUTILLIEI. Well, I don't think that was done,

Senator ROamNSON of Indiana. Well, would you approve a procedure

of that kind if it were done?
Mr. L . BOUTILLIER. Well I think it is unnecessary. Anything
Doctor Butler says will stand on its own feet.
Senator RoBJNAoN of Indiana. The point is it was to be sent out
as a Carnegie Endowment release and not as a National Council
release. That is the point I am making.
Mr. L BoUTILLIER. Well, I don't know.

LOBBY INVESTIGATIONS

2164

Senator RoBiNSON of Indiana. The statement was evidently made,

because it says:
This statement was distributed to the Associated Press, covering over 1,000
newspapers; the Chicago Daily News, and all Now York City papers.

Mr. LE BOUTILLIEn. Did it appear in the papers under the Carnegie Endowment?

Senator

ROBIN

o6N of Indiana. This report sent to you states that

pa
an
Wal
sa
Or'

it was. I don't know. I am asking you.

Mr. LB BOUTILLIER. I have Doctor Butler's speech here, which I
simply have in my papers to study.
Senator ROBINSON of Indiana. Let me read this again. I don't
want to take up a lot of time in repeating, but this says:
The Carnegie Endowment is one of the clients of the Phoenix Bureau and It

new

Endowment release, on the tariff situation.

tole

was planned to get a statement from Doctor Butler, to be sent out as a Carnegie

This statement was distributed to the Associated Press, covering over 1,000
newspapers; the Chicago Daily News, and all Now York City papers.

And this"is her report to you.

Mr. LE BOUTILLIEn. That does not affect whether Doctor Butler

made the statement at her request or made it on his own initiative.

The fact is that after conferring with Mr. McDonald, as I understand it, in London, he returned here and made a speech in Southampton in the Parish Memorial Hall, which treated of the tariff, and I
do not think the bureau had any more influence on that speech than
I did.

day

Der
Ster
Con
whil
11
Rut

on

don
don
s
this
s

You may

this

Mr. LE DOUTILLIER. I believe-I do not know whether they were

quo

Senator

CARAWAY.

I want to ask you one question.

have no knowledge of this, but this publicity bureau says that the
Carnegie Institute is one of its clients. Of course, we understand
that it had hired the bureau, from their statement. Do you know
whether that is true or not?
a client then, but they had been, if my recollection is right. When
we looked them up to engage them, the Carnegie Endowment, the
Republican State committee, and other organizations that you
mentioned, Senator, were given in the list that they had represented.
Senator OAIAWAY. Well what I am astonished at is that the
Carnegie Endowment should employ any publicity bureau. I was
just astonished at that statement, and I was wondering if you knew
whether it was true, because I can -not conceive of why it wants a
publicity bureau.

Mr. LE BOuTILJJIEn. Well they put out a big football release the

other day, did they not on What is tho matter With American football?

Senator CAnAWAY. kihat is what I am getting at. What it ptits

Is
1st
St
I

eeon
Pr
Pr
D
M
NatiM
with
not c
I

thou
Io

out it does not have to hire somebody to got, does it?

Mr. Ln BOUgbLIEn. Whether you put it out through a bureau or
whether you put it out direct, you have to pay money for the
machinery to send it through the papers.
Senator CARAW-AY. Weol, I was just simply curious about that
statement. I didn't know whether you knew about it.

In
with
sy t
down
of an.
Tl

ploy a publicity bureau to take that machinery off their backs.

That is, it consists in putting the release in form for use by news-

M
S(
after

Mr. LP BouTILLIER. I think the Carnegie Endowment might em-

Doe

2165

LOBBY INVESTIGATION

papers and distributing it to the United Press, the Associated Press,

and other newspapers. Whether you pay a bureau or notSenator CARAWAY. Oh, I am not arguing
it with you. I just
wanted to know whether you knew it was a fact.
Mr. LB ]BOUTILLIER. I think they did employ them, but I can not
say authoritatively.
Senator ROBINSON of Indiana. To proceed with this report:

In addition to the work outlined above which Is already

the hands of the
newspapers of the country, the bureau has ready for release inwithin
next 10
days a statement by Mrs. Caroline O'Day, vice chairman of the the
New York
Democratic State Committee;- anews story from the statement made by
W.
Stern, customs attorney and customhouse broker, before the Senate Carl
Committee, and a very important statement from Senator Robert Finance
which declares that a new tariff bill will be written on the floor of the Wagner
Senate.
We are enclosing an interesting telegram which
bureau received from Mrs.
Ruth McCormick, Congressman at Large fromthe
the State of Illinois. This
telegram came in response to a request from the bureau
that she issue a statement
on the tariff.
Respectfully submitted.
PeoENIx Nsws PUBLICITY BURE
AU

Mrs. THOMAS D.

HEED,

(I[NO.),

President.

That is the first report, evidently, that you had on what was being
done by this bureau.
Mr. LB BOUTILLIER. That is under date of July
Senator RoBiNsoz of Indiana. That is Juno 18 10.
to July 10, that
this was to cover.
Senator CARAWAY. I thought you told me that you employed
this bureau in October.
Mr. LB BOUTILLIER. June 18. And we discontinued them the
1st of November.
Senator ROBINSON of Indiana. On July 15 you
another
letter from Mrs. Thomas D. Heed, president of thisgot
bureau. I
quote as follows:
I am sending you the consensus of opinion of the following well.known
economists:
Prof. William E. Weld of Columbia University.
Prof. Albert B. Wolfe of Ohio State.
Prof. Charles H. Cunningham of N. Y. Univesitv.
Dr. Nicholas Murray Butler president of Columbia University.
Mr. Virgil Jordan nationally known economist, now connected with
the
National Industrial conference Board of New York.
My understanding with Mr. Jordan is that we omit from all stories sent
with his natne, his connection with the conference board, inasmuch as he out
could
not commit this organization to his personal views.
I think you will be Interested In this material. This is the data which
I
thought might be printed and put In proper shape to send to members of the
committee. If vou think this a good Idea, Mr. Van Leer and I can got iub.
this
Into some sort of shape for tile printer to-morrow afternoon.
In reference to your letter of last week, suggesting that we arrange If possible
with Dr. Nicholas Murray Butler to give a tariff talk on the radio, I regret
say that I am hfriad this will be Impossblo. Doctor Butler Is not very to
and has returned from E:uropo In oder to rest and recuperate. Ho has well
gone
down to his home at Southampton and I am sure will make no public appearances
of any kind until the university opens in the fall.

That seems to 'corroborate your statement that you tried to get

Doctor Butler to make a speech and ho did not make it.
Mr. Lm BOUTILLIER. Well, he made a speech down there.
Senator RoBINsoN of Indiana. He made a speech down there
afterwards.

2166

LOBBY INVESTIGATION

Mr. LB BOUTILLIER. Yes sir. I do not know what date, but it

was early in September.

I have got a copy of it here somewhere.

Senator RomrqsoN of In(iana. Now, on July 17, the bureau sends

another report to Mr. Frank Van Leer, jr.:

Following the plan we made'yesterday, I am sending you the data for your
weekly letter to the directors.
The Phoenix Bureau for the week of July 14, has worked out the following

copy:

1: An interview with Mrs. Franklin D. Roosevelt, wife of the Governor of

New York State.
2. Symposium of opinions of economists and-educators.
3. SpecIl
interview with Senator Copeland, Now York State.
4. Interview with Mrs. Rose H. Davis, head of the women's Investment
department, Craig & Nelson, securities. Chicago.
5. Material procured from Senator Wagner to be used later as editorial mate.
rnal for papers in Connectlcutt, Pennsylvania, and New York.
The bureau is working on a symposium of what women in different professions
and occupations think of the p)roposed Hawlev-Sinoot tariff. This symposium
will be ready the last week in Jily. The symposium just finished of economists
and educators will be supplemented by a second consenisus of opinion of promi.
nent economists in August when the 6111 Is up for diseh54li in the Senate.
In order to reach the editorial opinion of papers in eastern Mates, we have
procured material from Senator IaVgner which we feel will find its way directly
to editorial columns of salnal papers in Important country districts lit New York,
Connecticut, and Pennsyvania.
We wish to call attenion to the fact that we feel that the small country paper
in the next six weeks will hohl ' the key to the most strategic position as far as
public opinion Is concerned on this (question of the tariff. The large metropolitan centers can afford correspondents in W\ashington and wire services. The
small country papers published every week reaching the great rural and small
town po ulailton must depend upon material sent to them from other sources.
We feel that the importance of reaching the small town citizen can not 1)0 overestimated at the present moment. Senator Copeland in his statement Issued
recently to the Phoenix News Bureau said: "The housewife, the great consumer,
must make her needs heard and felt. Sie must write not only to her Senator
and Congressman but the President of the United States and mako it quite clear
that she does not want. such an excessive measure passed. It will have Its
effect."
The Phoenix Bureau suggests for the next six weeks all Intensive newspaper
campaign (or the smallpapers of this country.
Very truly yours,
-

ver
eve

role
8

Aug

A
edit,
Anagv
cols(
we hl
La
be V
Re M
W

V
to h
an

whii
Jou

ace(
to b

Mrs

on

S
is a
was

and

Now, on July 26, a letter evidently to Mr. H. H. Stansbury, Uni-

kno,

Florence Farley,
I am sending oe an Interview on this tariff question with
Mrs. Bradley
with
and
vice ehairmpn orthe Democratic National Committee
Cunningham of Chicago, a well-known political leader and authority on economic
subjects in Chicago.
I hope that these articles are being useful to you. I have wanted to come and
talk to you about them but unfortunatelv 1 has become necessary formeto
take an unexpected trip and I will not be able to see on for a couple of weeks.
Miss Campbell will come down to see you next week about Wednesday and If
you havo any AUggestions as to different kind of material or If you want her to

tio
tion

versal Service, New York City, from the Phoenix Bureau:

get up facts lor you, she Is entirely at your service in this matter.

I can not tell you how very much I appreciate you cooperation and help. It
means a great deal to me at this time because I have undertaken to really get
at the feminine point of view all over the country and I believe that it Is beg n.
ningto have an effect.
Very soon we should have ready a symposium of what important women In
this country think of the tariff.
With all beat wishes to you for a very happy summer and looking forward to
seeing you on my return.
Sincerely yours,

print

all
N

men

you

ver
or

other
S
tieu

and

of r

LOBBY IN VESTIGATION

2167

Mr. LB BouTzLLIER. Who is he? I never heard of him.

Senator ROBINSON of Indiana. Mr. H. H. Stansbury, of the Universal Service. These interviews were to be used as news whereever possible.
Mr. LE BOUTILLIER. Yes. That is the mechanical method of
release.
Senator RoBiNsON of Indiana. Here is another letter to you of
August 5, from your publicity bureau:

MY DIAt Mlt. in iBOUTILI.uIt: You will doubtless be Interested iII seeing ie

editorial which the Wonian's Journal printed for us this month.
Also, we have an (pi)ortulity to write an-editorial for the (Glden, the offirlal
inagazino of the Women's INational Repiblican Club. It will have to Ie very
conservatively worded, as they arc very hidebound Reuiblicans In this club, so
we have worked it out very carefullY.
Later we can have it reirinted anid sent to all Members of Congress. It will
le carefully read by them because of the standing of the Women's Natiouni
Re ublicani Club inI ater conservative circles.
Will you look this over and make what changes you desire?
Very truly yours,

Was that sent out?

Mr. LE BOUTILLIER. I don't know. I assume so. I just happen
to have a copy of the Woman's Journal here, for October, 1920.
Senator ROBiNsoN of Indiana. This was in August, 1929. It was.
an editorial that was prepared and given to the Woman's Journal
which they printed as having been an editorial of the Woman's
Journal and not having come from the National Importers Council,
according to this letter to you, and the same kind of an editorial waw
to by prepared for this other journal in accordance with that statement.
Mr. Ln BOUTILLIER. If that is so. I think that is correct. If
Mrs. So-and-so made a statement, why should not her name be puit
on it?
Senator RoBiNsoN of Indiana. Well, this is not a statement. It
is an editorial, expressing the editorial opinion of the Journal, but it
was written, according to this letter to you, in your publicity bureau
and given to the publication, and it was printed then as their editorial.
Mr. L. BOUTILLIEB.. Well, probably they believed it. I don't.
know. I can not conceive of an editorial staff of the Woman's Journal
printing anything that they do not believe in.
Senator ftoDixsoN of Indiana. I am just bringing it to your attoui
tion. I am not attempting to criticize you or anything of the kind.
I am just suggesting what has taken place.
Now, this questionnaire to presidents of women's clubs that you
mentioned a moment ago, I take it this is the questionnaire?

Mr. LB BOUTILLIER. Yes.

Senator RoBixsoN of Indiana. This questionnaire was sent out by

your bureau to all wonien's clubs in the United States, was it not?
Mr. LB BOUTILLIEn. Well, I don't know about all. I think there
were 500. 1 am not sure, but I think it was sent to 500. I guess
there are about 10,000 women's clubs altogether. I don't know..
1
Or maybe 50,000.
Senator RoBmIsox of Indiana. I do not see that there is any particular value in this. It is a questionnaire asking about the tariff
and these things. You were consulting their opinion on the question

of raises in rates.

Mr. LEB BOUTiLLIER. Yes.

2168

LOBBY INVESTIGATION

Senator Roniwsow of Indiana. And whether they should or should

not be raised?
Mr. LE BOUTILLIER. Well, I don't know. Does it say anything
about rates?
Senator RomiNso, of Indiafia. I will read it.

pic

QUESTIONNAIRE FOR PRESIDENT OF WOMEN'S CLUBS

en

1. Do you know-or care-what the tariff Is doing to the cost of the food you
put
on your
mustpay
for table,
both,? to the clothes you buy,
"whand to the Income out of which you
2. Hao you any access to plainly stated
facts showing:

on

(a)What high, low, and no tariffs have actually done heretofore to the cost of

what you have bought and to the Income from which you have paid?

(b)What low and high tariffs have done to your ability to buy foreign made
goods from your local dealer?
3. Do you regard "the consumer" and "the producer" as two different persons? If so, how do you class yourself?
4. Are you thinking about or talking about in your home or club the proposed
tariff changes in the pending tariff bills? If so, Is the subject discussed generally
from the viewpoint of consumer? Producer? Both?
5. Are you thinking of the proposed tariff law as a factor In maintaining the
peace and prosperity of the world? iave you the facts as to tho formal declaration of other nations concerning the proposed tariff laws?
Concerning previous tariff laws?
Concerning the tariff policy of each of the nations submitting a memorandum
on the subject?
0. Do you want facts on these subjects?
7. Do you personally regard the tariff question:
(a) As a well defined and fixed political party theory, applicable to the country
as a whole and having in the main uniform results, or,
(b) As a specific for a condition-subject to change and confronting a varying
number of Industries in different sections of the country?
8. What is your present source of tariff information?
Mr. LE BOUTILLIER. That does not mention a single rate, but the

obvious purpose is to arouse the interest of women in the tariff.

What is it al about? If any of them could answer it, I think it would

un,
a

he
00

M
Ball
their
intr
of c
mat
ladi

to

6e pretty good.

Senator RoINSox of Indiana. I am asking if that is the questionnaira you sent to the women's clubs?
* Mr. Lig BOUTILL19E. I believe so.
Senator Ronixso, of Indiana. Now, in your publicity bureau's
activities in sending these questionnaires, were these women's clubs
informed that the National Council of Importers and Traders were
paving for this publiity and for this questionnaire?
v , know
O UT
I 1 .U
they were or not. You
whether
don't
*Mr. L IBoUTLL1u1. I L
brought out here that the economists were, or certain other groups
were.
Senator lRou S.ox of Indiana. I am asking you, though.
Senator CAIIAWAY. Just answer the questions, please. If you
don't know, say o.
* Mr. Lt-: lou'nrjIU:it. I don't know.
Senator Ro &tso.*
of Indiana. On September 25 you increased the
compensation of tls bureau, apparently. I read your letter to the
bureau, to Mrs. Heed:
;Following your request of yesterday, this confirms agreement whereby comweneing September 25, the Phoefix Nows 1ablicity Bureau's compensation will
be at tMe rate of $1,400 Per month, phis traveling expenses, etc., as Itemized previously, It being understood that this rate will cover all services.
lorthe week Seltember 18 to 25, we will pay you $200 as agreed.
Yours very truly.

gro
pai1

meni
inc
IN
S
tha

talk
tl
atSI
of t
8
to t

LOBBY INVESTIGATION

2169

Signed by yourself as chairman?

Mr. L! BOUTILLIER. Yes.

Senator ROBINSON of Indiana. That is when the $1,400 per month

plan began?

Mr. LB BOUTILLIER. Yes.

Senator ROBINsoN of Indiana. You sent speakers around to different meetings to speak on the subject of the tariff and your position
on the tariff, did you not?
Mr. L,

BOUTILLIF.R.

Well, I can not specify where they went or

who they were.

Senator RoBINsoN of Indiana. Did you ever know of any that went
under your direction?
Mr. L, BOUTILLIER. We arranged a meeting in Baltimore before
a woman's club there, where Mr. David Walker was to speak, but
he did not get there.
Senator ROBNSON of Indiana. I was just reading this letter of
October 23. Perhaps that is the one you refer to, addressed to
Miss Mandigo, of the Phoenix News Publicity Bureau:
Replying to yours of October 0, the speaker for tho Housowives Alliance, of
CId.,
on November 21 will he Mr. David Walker 53 West Twenty
third Street (Gramercy 3850). Ills speech will be "'Tho Tariff," and he can be

Baltimore,

Introduced as a United States customs expert, formerly United States examiner

of customs at Now York City.

Will you please send him full details. Ito is an excellent speaker, and will
make a very interesting talk to this largo and important group of Baltimore
ladies.
Very truly yours.
Mr. LB BOUTILLIER. Correct.

Senator ROBINSON of Indiana. That is the Mr. David Walker who

was here?

Mr. L,

Senator

BOUTILLIER.
CAnAWAY.

to pay him?

Mr. Lm

YOs.

Did you pay him for the services or were you

BOUTILLIBEn.

No.

It is not my understanding that we

were to pay the expense.

Senator ROBINSON of Indiana. He was chairman of one of the
groups?
Mr. LE BOUTILLIER. No. He volunteered. He was not to be
paid for making the speech.
Senator RoBiNsoN of Indiana. He was not to be introduced as a
member of the Importers Council, but ho was to be introduced as a
United States customs expert., formerly United States customs examiner at Now York City?
Mr. Lo BOUTII'II91. Wel, no: I don't think so, exclusively.
Senator ROBINSON of Indiana. These ladies were not to be told
that ho was appearing as a part of the propaganda?
Mr. LB BOUTILLuiit. There was nothing to conceal at all. They
talked through the publicity bureau.
Senator ROBINSON of Indiana. It is not a question of concealing
at all.
Mr. LB BOUTILLIER. You are inferring that we were putting out all
of this stuff without anybody knowing it was the National Council,
where the record shows that they did know it.
Senator ROBNSON of Indiana. You thought it important enough
to tell them how to introduce him.

2170

LOBBY INVESTIGATION

Mr. LE BOUTILLIER. Certainly.

Senator ROBINSON of Indiana. At any rate, you did not mention
the fact that he was identified with and connected with the National
Council of Importers and Traders?
Mr. LE BOUTILLIE. I don't know whether it would have been
mentioned or not.
Senator RoBINsO. of Indiana. I am only talking about your own
letter. You said, nothing about the National Council of Importers,
but you did dwell on tffe fact that he was an expert and a former
Government man.

Mr. LE

BOUTILLIER.

So he is. That is the important thing.

Senator CARAWAY. That was the selling point in his speech. That
was the thing to make him attractive?
Mr. LE BOUTIL,19R. Well, I think if a man is a Senator it is more
important than if he is a husband, and when you naturally introduce
him you lead from strength.
Senator CARAWAY. Well, I say, that was to show the audience who
he was, and in what line he was an expert?

Mr. LE

BOUTILLIEl.

Mr. LE

BOUTILLIER.

Certainly.

Senator RoBiNsox of Indiana. You knew what was going on daily

at this bureau, did you not?

I would not say I did; no, sir. How could I?

Senator RoBiNsoN of Indiana. Lot me read another report which

seems to have been asked for by Mr. Van Leer, under date of Oc.
tober 23:
DRzAI Ml. VAx Trat: Miss Chisholn tells me that you do not know exactly
what we are doing and I hasten to give you a general report, although Mr. L:b1hr
Boutllller has been informed daily.
Mr. Lu BOUTILLIEn. Well, I did not talk to them daily. No.
They did not talk to me.
Senator ROBINSON of Indiana. This is their statement.
Mr. LE BOUTILLIEI. Well, I am not responsible for their statement
in that respect.

Senator

ROBINSON

of Indiana (reading):

We have not kept you Intouch with all the details because I understood from
vou that vou were working very hard on some other matters and did not have
timo to give to it.
In the first pace, we have been arranging a luncheon for next Monday, of
which I enclose a program.
Then, we have secured as a restt of a great deal of correspondence, the nmes
of the presidents of 3,000 women's clubs in the middle west, to whon we have
sent the enlosed questlonialre.
She says 3,000.

Mr. Lr BOUTLLLI.w.

My error then.

Senator ROBINSON of Indiana (continuing reading):

We have been working with the faculty of Hmith College on surveys, which
have been given out to the press.
Also, It took a great (teal of our time with New York University in connection
with their questionnaire. A copy of this survey was mailed to von.
Also, a tle-ul) has been effected with the National Housowtves' Alliance by
means of which they devote sonie timo in their radio hour every week to a dis.
cussion
of our
of theis tariff
done Individually with women to persuade them
dealside
of work
being issue.
A great
to see important members of Congress or to wrife to thlem.
Tito general run of the news service I suppose you know all about.
Then, too, Mr. Lo Boutillier re, nested hat we prepare and send out a letter
to all members of the Itetall Dry Goods Association, asking for contributions to
this committee. Ills reasons for having this done you, of course, know.

at

sug
Inc
an
R09
whi
req

Dr
Thi

req
Go
cor
Tb
Go
yo,

an
raih
if t

Ik
h
eXp

to

tha

the

tha
Is

es

the

fun

LOBBY INVESTI(IATIO2

2171

What were those reasons?

Mr. LB BOUTILLIPu. The publicity bureau recommended that the
Women's Consumers Committee or something or other, to investigato living costs, be formed, and that was formed, as you probably
know. Mrs. George Orvis was the chairman. I approved the
suggestion, and they went ahead and got these women together. I
mean they invited them to come on the committee, and, as I recall,
and Ithink my recollection is correct, the question came up "Suppose the Women's Consumers Committee has expenses." I said
'Well, lot them go ahead and raise their expenses. If their work is
going to continue, and be any good, let them organize themselves";
which it is my understanding was done.

Senator

ROBINSO N

of Indiana. But this letter states that you

requested this bureau to send a letter to the members of the Retail

Dry Goods Association, asking for contributions to this committee.
This bureau was seeking contributions on its own account, at your
request. Now, why should the bureau ask the National Retail Dry
Goods Association to send the bureau money?
Mr. LB BOUTILLIER. Well, I think she misunderstood it or it is not
correctly stated.
Senator ROBINSON of Indiana. I am just reading what it says here.
Mr. LB BOUTILLIER. Well, that is the consumers' committee.
That is not the bureau.
Senator RoniNsoN of Indiana.. Then the National Retail Dry
Goods Association, as you interpret the letter were being solicited by
your press bureau, that is the Bureau of the National Importers and
Traders Council, to send conrtibutions for the women's committee
an independent committee presumably, over the country, is that itl
Mr. L BOUTILIIER. I do not read it that way at all.
Senator RomNsoN, of Indiana. How do you read it?
Mr. LE BOUTILLIER. I read it that the women's committee, to
raise funds, wanted the names of people to go to, and the retail stores,
if they were solicited-I do not know how many were or were not.
I know we were. They sent me a request for funds and I sent them
a hundred dollars.

Senator CAUAWAY. The women's committee was going to incur

expenses, as you presumed, and you told them to send their request
to members of the Retail Dry Goods Association? You suggested
that as a source from which they could get revenue?

Mr. LB BOUTIJLIEI.. I do not think I ever requestedSenator CARAWAY. No. I say yrou suggest it.
Mr. Lg BouTrLLIE. I suggest It, yes.

Senator CAIAWAY. You suggested that as a source from which

they could possibly raise funds?
Mr. LP BOUTILLIER. Yes.

Senator CARAWAY. Well, I think we all understand it. I think

that is what Senator Robinson asked you.
Senator RO INSON of Indiana. No. I do not yet get it exactly.
Is this committee of women a committee of the National Housewives
Alliance?
Mr. LB BOUTILLIBI. No, no. The consumers committee to investigato living costs. I was asked if we would be responsible-if
the council would be responsible for any expenses that that committee
incurred, and I told them they had better go and raise their own
funds; that the council would not be responsible.

2172

LOBBY INVESTIOATION

Senator RorINsoN of Indiana. There is no mention of a committee

here at all. I don't see where you get the idea from anything in here
that there was a women's committee. Let me read two or three
paragraphs preceding:
Also, a tieup has been effected with the National Housewives' Alliance by
means of which they devote some time in their radio hour every week to a discussion of our side of the tariff issue.
A great deal of work is being done individually with women to persuade them
to seo Important members of Congress or to write to them.
The general run of the knows service, I su)poso you know all about.
Then, too, Mr. L Boutillier requested that wo prepare and send out a letter
to all members of the Retail Dry Goods Association, asking for contributions
to this committee.

What committee? What is the antecedent of the word "committee"? There is no mention of a committee there anywhere. What
committee are you talking about?

His reasons for having this done, you, of course, know.

That is addressed to Mr. Frank Van Leer, executive secretary of

the National Council. What committee is it? I do not understand
it.
Mr. costs.
LB BOUTILLIER. The consumers' committee to investigate
living
Senator ROBINS0 of Indiana. Where is there any mention in that
about the consumers' committee?
Mr. Le BOUTILLIER. Well, there does not seem to be.
Senator ROBiNSON of Indiana. What I would take this to be would
be the committee that is handling your publicity.
Mr. LE BoUTIJIER. Well, that is not the case. I will contradict
that right hero. It is absolutely not the case. It may appear so,
but it is not so.
Senator RoBiNsoN of Indiana. The National Dry Goods Associa.
,
tionMr. LE BOUTILLIEn. Has no connection with the National Council
of Importers at all.
.
Senator ROBINSO of Indiana. Exactly. We have gone into the
amount they spent in connection with this activity. That was independent of the National Council. Now, we are trying to find out
what the National Council has spent on this publicity end of it.

C
is
re
a)
l

Mr. LB BOUTILLIER. $5,800.

Senator RoBizsoN of Indiana. Now, they overlap. The publicity

bureau asks that the National
Retail Dry Goods Association members
d
be solicited to contribute mohoy for that purpose.
Mr. LP, B3OUTILLIER. I contradict that.
Senator Roniwsow of Indiana. But can you toll us what it is,
what they were to contiibut6e thi money for?
Mr. Lr Bountijti.
I am ting "to
tell you, that the consumers'
committee to investigate iving costs was formed by the publicity
bureau at their own suggestion, as a means of interesting the women
of the countiyin the. tariff, and that the stated
to me If we have
expenses, Will the council be responsible ' for them'," and I said,
".N0o the council Will not'be responsible ." They said "Well, how
will the funds be raised," and I suggested sending out a letter to people--merchants-I think I sent t em a list of about 50 merchants,
myself, to ask them for contributions to the women's committee.

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2178

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. Then, this does not state the whole
case.

Mr. LE BOUTJLLIEI. As far as we are concerned it states it-as far

as the council is concerned.
Senator RoBINsoN of Indiana. Possibly so, but how much money
did they got for the work they were doing for you, because this was
done for you at your suggestion-from these other sources?
Mr. LE BOUTI 4 LIER. I could not state. I never saw any such
contributions.
Senator RoBINoi4 of Indiana. Well, they did send out letters
asking for the contributions?
Mr. LB BOUTILLIER. Well, I do not think they solicited the thousand members or 3,000 members of the National Retail Dry Goods
Association, in spite of the letter.
Senator ROINSON of Indiana. That is what you say.
Senator CARAWAY. You say you yourself contributed a hundred
dollars.
M%1r. LE BOUTILIER. I did.
Senator CARAWAY. So, you were solicited.
Mr. L, BOUTILLIEII. Yes.

Senator

CARAWAY.

Do you know other merchants that were?

Mr. LE BOUTILLIBII. I think I sent them a list of 40 or 00 merchantO, prolklinent houses in Boston, New York, Philadelphia, and
Chicago.

Senator CAnAWAY. Well, do you know whether they contributed?

Mr. LE BOUTILLIER. No; I do not.

Senator RoBIzsoN of Indiana. As a matter of fact, the statement

is very plain that you reqoestedMr. LB BOUTILLEnt. The statement is incorrect. I did not
request it.

Senator RoBvxsoii of Indiana (reading):

Then, too, Mr. Lo Boutller requested that we prepare and send out a letter to
all members of tho Retail Dry Goods Association, asking for contributions to this
committee.

And she says confidently:

Ills reasons for havhig this done you, of course, know.

Mr. L BOu '1LL1nn. I can not explain that. You asked me what
I know about it and I oldyou what I know about it.
Senator RoBiNsox 6f ihdana. You do not know how much money

they received from this 6ther source?

Mr. La BO'UTILLIER. No.

Senator RomN6S0 of Indiana, And you do know that you contributed a hundred dollars?
Mr. LB ]BOUTILIER. Yes.
Senator RostNsok of Indiana. And of course, this work was all
done in the interest of the Naonal Council? They worked for you,
or they were y6ur publicity agents?
Mr. LB BOUTILLIER. Well,lt is my understandingSenator RomwsoN of Indiana. So that all the money your publicty
agents received is not represented by the statement made here with
reference to your budget.
Senator CARAWAY. Do you think that was money to be sent to this
publicity agent for publicity work, or was It money to be sent to them
1 111 11 11 11 lIlII[i!

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2174

LOBBY INVESTIGATION

for the use of this group of women who were studying the cosL of

living, Senator?
is
witness,
to the
According
Senator
work.
of theirthat
a part
time it was
butIndiana.
at the same
Spent for, of
it wasROBINSON
what
* Senator CARAWAY. But, they sent out this request.
Senator ROBINSON of Indiana. And that they received, as a result
of this solicitation, in addition to what the national council paid them
for the work.

Senator

CARAWAY.

Do you think the publicity agent was to keep

the money, or to turn it over to this group of women?

Senator ROBINSON of Indiana. I assume from what the witness said
that they were to turn it over to this group of women for the expenses
that they might incur.
Mr. LE BOUTILLIER. Yes; and postage and printing.
Senator ROBINSON of Indiana. Well, to hasten along:

The news service is apparent in the clippings which we have mailed to you
to.day.
A great deal of correspondence is being carried on with the women.
Also, we have revised the booklet for women and have written the booklet oil
the New York University survey which is to be sent to all Members of the
Congress.
A folder is being made tip for you with copies of all printed material, form
letters, etc., which we have issued during the campaign and this will be sent to
you at the time our work is completed.

Mr. Le Boutillier, how do you work with the faculty of Smith

College?

car

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Mr. LE BOUTILLIER. I have not worked with them at all.

Senator ROBINSON of Indiana. Do you know how your publicity

bureau worked with that faculty?

Mr. LE BoUTiLLI1R. No.
Senator ROBINSON of Indiana. They say, "We have been working

with the faculty of Smith College."

Mr. LE BOUTILLIER. Except to ask them for their opinions on the
tariff.

Senator

ROBINSON

of Indiana (reading):

It took a great deal of our time with New York University.

Do you know what she means by that?.
Mr. Li BOutxLLEn. I think her questionnaire was sent out to the
economists through the'New York University.
Senator hoBiNsoN of Indiana (reading):
Speakers for consumers' committee luncheon, Monday, October 28, at I o'clock,
Hotel Roosevelt.
Presiding officer, Mrs. George Orvis, Manchester, Vt., formerly Republican
National Cbomitteewoman.
Dr. Ethel Puffer Howes, director of the Institute for the Coordination of
Women's' Interests of Smith College.
Dr. Lewis H. Haftey, director of-the Bureau of Business Research of New York
University.
Mrs. Rosalie Loew Whitney, of Brooklyn, chairman Educational Council of
the Republican State Committee.
This luncheon was given at your expens--you paid the expenses
of this luncheon the same as all other luncheons? They were billed

to you?

Mr. Lm

BOUTILLIER.

Why "all other luncheons"?

This is the.

one luncheon. It is the only one I ever heard of.

SARAWAY. Just answer the questions. Did you pay for
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I III I

LOBBY INVESTIGATION

2175

Mr. LP BOUTILLIER. I believe so, and that is where the question

came tip as to what about the expenses of the consumers' committee, where I told them I would not be responsible for it.
Senator CARAWAY. Well, just answer the questions as they arise
and let us get through.
Senator ROBINSON of Indiana. These letters sent out by New
York University to a selected list of American economists, signed by
the New York University Better Business Research were found in
your files. Did you pay for that?
Mr. LE BOUTILLIER. Yes.
Senator RoBiNsoN of Indiana. You paid the expenses that were
incurred?
Mr. LB BOUTILLIEB Yes . I believe so.
Senator ROBINSON of Indiana. Now, here is a letter, towards the
end of this contract with this bureau:
This conflrns conversation of to-day 'whereby' we will pay you for the week
commencIng October 25, and ending Friday, Novcmber 1, $350, plus certain
small printing bills yet to come through, thereby terminating the arrangement
by mutual agreement.
We quite agree with the statement you frankly made to me that the present
status of the Hawley-Smoot bill scenes to eliminate the necessity of any further
educational work.
We wish to express to you our appreciation of the excellent. manner in which
you have carried out the work entrusted to you; and would be pleased at any
time to have you use the National Council of American Importers and Traders
(Inc.) as a reference in connection with any other publicity work you may be
taking up.

Very truly yours.

Signed by yourself.

Mr. Lp BOUTILLIER. Yes, sir. Could I say I think the bureau did

their work very well?

Senator

CAR AWAY.

get through with this.

Senator

ROBINSON

We are not interested in that. Please let us

of Indiana. On November 13 there seems to

have been some question about this luncheon, and there is a letter
here from the executive secretary to you, from which I quote one
paragraph:
The Phoenix News Publicity Bureau gave me the impression over the phone
that the consumers' committee luncheon was at their expense entirely, and that
there was no intimation as Implied in the attached letter that any extras were
to be charged to the National Council.
Senator CARAWAY. I want to ask a question right there. You
said awhile ago that you declined to be responsible for any expenses
of this consumers' committee, and then you say you paid for this
luncheon.
Mr. LB BOUTILLIEB. I think that is correct. I think that is where
the question came up.
Senator CARAWAY. But there is some conflict in those two statements, is there' not? You say you declined, and they called yoU ui

and asked you "suppose we incur some expense will you pay it,

and you said, no, that you would not pay it; and then you gave them

the name of merchants to whom they might write, and now it is

disclosed that you paid for the first luncheon they gave.

II HIIIII i

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2176

LOBBY INVESTIGATION

Senator ROBINSON of Indiana. Here is a letter to Mr. Van Leer

attesting to explain it:
Inclo ;cd is our final bill for our work with the National Association of American
Im orttrs and Traders (Inc.).
You %illnotice an iten on the first page of the bill for extra expenses in connection with the luncheon. This was for flowers and tips at the luncheon which we
gave at the Hotel Roosevelt. As you know, the consumers' committee undertook
the complete cover charge for the luncheon and these extras the Phoenix advanced
cash for.
The item of "lists" you may also with (sic) to know about. We bought the
lists of presidents of all women's clubs to which the questionnaires for the
women's clubs are being sent.
I thought you might wonde' about these two items.
Senator CARAWAY. Pardon me, what I am interested in, is how do

you reconcile the two statements that you declined to pay any
expenses, and then you evidently paid this expense.
Mr. LE BOUTILLIER. If I gave yOU the Impression that the council
or the publicity campaign did not include the luncheon of the consumers' committee, I did-so inadvertently, because I have knownSenator CARAWAY. Your first statement that you declined to be

responsible for any of the expense-now, does that cover all the
expense you went to for this consumers' committee?
Mr. LE BOUTILLIER. I believe so.
Senator RomNsoN of Indiana. And that, all told, cost the Importers and Traders Council how much?
Mr. Lia BOUTILLIEr. $5,800, of which $4,800 was services.
Senator RonNsoN of Indiana. I think that is all the questions I
have.
Senator BLAINE. In the early part of your testimony you referred
to the President's prosperity boom conference. Did your association

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participate in that?
Mr. 1 BOUTILLIER. Yes.

Senator BLAINE. Through your Washington office?

Mr. LE BOUTILLIEn. Through Mr. Cook, the president, Alfred D.

Cook.

the

Senator BLAI$. You mentioned your Washington office in connection withhat con&frenco.
Mr. LE' BOUTnLIER. Yes.
Senator BLAM.

Is your Washington office carrying on, assisting

in the President's prosperity boom?

Mr. L+ BO'UT1LL'J1. That I do not know. The relationship I was
trying to establish was that the activities of the trado association
are thoroughly legitimate, and.that this National Retail Dry Goods
Association maintains its Washington office, whether they have a tariff
change in 10 years or 20 years or 5 years. That is not what it is
maintained for.
Senator BLANmn. You were mentioning the Washington office in
connection with the President's prosperity boom. I was just interested to know to what extent your Washigton office was participatingin that activity.
.
Mr. Lia BOUTILLIER. I don't know.
senatOr BLAINE. You don't know anything about that?
Mr. LE l3OUTI,1,1911. No.
Senator BLAINE. Then I will not ask any further questions. That.
is all.
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LOBBY INVESTIGATION

2177

Senator CARAWAY. That is all sir, thank you.

Mr. LE BOUTILLipR. Could I add one thing?

Senator CARAWAY. Yes.

Mr. LE BOUTILLIER. The National Council of American Importers

and Traders, one of their requirements is that every member be an

American citizen and I am not here in their defense or anything like
that, but I think there is at times an impression that they are a
bunch of foreigners. Now it is a fact that they are all American
citizens. I am not ashamed of my association there, any more than I
am with the National Retail Dry Goods Association. As far as
there being any tie-up between the two, there is none.
Senator CARAWAY. That is all right. Is there anything else now?
Mr. LE BOUTILLIER. No, thank you.
Senator CARAWAY. That is all.
Is Mr. Young in the rooms? Please come around and be sworn,
Mr. Young.
TESTIMONY OF H.ROLD B. YOUNG, WASHINGTON, D. 0,, tEPESENTING Tilt NATIONAL DRY GOODS ASSOCIATION
(The witness was duly sworn by Senator Caraway.)

Senator CARAWAY. Will you give the reporter your name, residence,

and occupation.
Mr. YouNG. I am Harold R. Young. I represent the National
Retail Dry Goods Association in Washington. My office is 1009
Munsey Building.
Senator CARAWAY. Why is it that all you folks gather in the
Munsey Building? What is there about that building?
Mr. YouNo. Senator, I don't know,

Senator BLAINE. That is a crow's nest, isn't it?

Mr. YoUNG. I really don't know, Senator, but I went there-

Senator CARAWAY. Well, we don't want to know why you went

there.

Mr. YOUNG. Well, you asked why.

Senator CARAWAY. But, you saidyou said you didn't know.

Mr. Youxa. You said it was a crow's nest.

Senator CARAWAY. Now, how long have you been with this

association?

Mr. YOUNG. As I recall Senator, I was employed by the National

War Service ' of the National Retail Dry Goods and Department
Stores, in 1919, I think.
Senator OARAWAY. And you have been with them ever since?
Mr. YouNG. I have been with them ever since; yes, sir.
Senator CARAWAY. Were you interested inilhis tariff bill?
Mr. YouNo. I was interested in the tariff bill, just as I am in any
other legislation affecting the interests of the retailers.
Senator CARAWAY. Then your answer is that you were interested
in it?
Mr. YOUNgo. In giving them the information they requested.
Senator CARAWAY. What activities other than giving information

to your association did you indulge in with reference to the tariff

bill?
Mr. YouNo. In the assistance--in the preparation of briefs.
28214-30--w 5----28

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2178

LOBBY INVESTIGATION

Senator CABAWAY. What assistance did you give in the preparation

of the briefs?
Mr. Youva. In getting data together.
Senator CARAWAY. You gathered information?
Mr. YouNo. I gather a great deal of it; yes, sir.
Senator CARAWAY. And gave it to them?
Mr.

YOUNG.

Yes, sir. That is, the New York office, for the

preparation of the briefs, a great deal of which was done by Doctor

Do ghton, and which went out to the three statements of the
National Retail Dry Goods Association.
Senator CARAWAY. Now, you are not going to be allowed to make
.
a speech here.
Mr. YOUNG. I was just trying to answer your question.
Senator CAHAWAY. We want to get through quickly. The more I
look at you the more I am in a hury to get through. Did you yourself do anything with reference to the tariff?
Mr. Youxo. What does that question contemplate?
Senator CAUAWAY. Did you do anything other than collect information? Did you go to see Members of the House?
Mr. YoUNG. No; and I did not appear before any committees.
Senator CARAWAY. You did not go to see any individual Members
of the House or the Senate?
Mr. YoUNG. I want to see Mr. Chindblom, of Illinois, to present
to him a brief with reference to the inclusion of the definition of
rayon in the schedule.
Senator CARAWAY. IVell, that was the only purpose for which
you went to see him?
Mr. YOUNG. Yes, sir.
Senator CAHtAWAY. You did not go to see any other Member of
the House?
Mr. Yo 'UN.

No.

I discussed the brief with him at the time I

was with him.

Senator CARAWAY. And you left him much wiser than he was
before?
Mr. YouNG. I don't know. The brief was not prepared by me.
Senator CARAWAY. AlfiAght.
Senator BLAINIz. Mr. Young, I am interested in ascertaining the
interlocking devices of those who are interested in the tariff bill.
I understand your office is in the Munsey Building in Washington.
Mr. Youtro. Yes, sir.
Senator BI,AwI. In the same room in which the representative
of the National Council of Traders and Importersis located?
Mr. YOUNG. As far as I know they have no office here. I did not
know they had an office -here.
Senator Bt,A!:. I think the witness who just left the stand said
they had an office in Washington and spent about $16,000 a year.
Mr. YOUNG. Well I did not know theoy had an office here.
Senator BLA N. Is there anyone officing with you?
Mr. Youxo. No, sir.
Senator BLAINE. Are you officing with anyone here?
Mr.- YouNo. No, sir. My secretary and myself comprise the
entire force.
Senator BLAxIN.

How much have been your expenditures since the

tariff bill became a part of the Congressional program?

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LOBBY INVESTIGATION

2
2179

Mr. YOUNG. My expenditures are handled by the New York

office, and whatever those expenditures are is contained in a statement
which was made by the New York office and furnished to Mr. Holland
at the time he was there.
Senator BLAINE. How much does your Washington office cost?
Mr. YOUNG. What do you contemplate by that statement? Do
..
you mean for all purposes
Senator BLAINE. Well, tho activities that come out of the Washington office. How much is the expenditure?
Mr. YOUNG. The budget for the last year, as I recall, is shown in
a statement which was also furnished to Mr. Holland.
Senator BLAINE. Oh, I understand that your office in Washington
is the organization about which the witness testified.
Mr. YOUNG. The National Retail Dry Goods Association; yes,
sir.
Senator BLAINE. Which spent 816,000.
Mr. YouNG. Well, that is the cost of rentSenator BLAINE. Well, it is the cost of running your Washington
office.
Mr. Youwo. For all purposes.
Senator BLAINE. I will not go into the details. You were interested in the President's prosperity conference?
Mr. YOUNG. Only at the direction of my association, in furnishing
a report of conditions in the retail dry goods industry.
Senator BLAINE. You attended the conference?
Mr. YouNG. I did, with Mr. Cook and Mrs. Sweitzer Mr. Cook
being vice president and Mrs. Sweitzer being managing director.
Senator BLAIN.. And after the conference had concluded, did your
organization take up the program to carry on the President's pros.
peity boom?
Mr. YOUNG. Why, as far as my knowledge goes, no further than
making a report which was made to the conference by Mr. Cook, the
president of the National Retail Dry Go.ds Association.
Senator BLAINB. A report on the conditions prevailing among the
retail dry goods men or a report on the President a conference? What
was
thatmake?
report? I don't-know what your report was. What report
didMr.Ydi6Uo.
yu
Mr. Cook made Areport on conditions in the retail dry
goods industry, to the conference?
Senator BLAINE. To, the conference?
Mr. YOUNG. At the conference; yes.
Senator
BLAINE. That is the only activity in which your office has
onrr.
aged?
YOUNG. My office was not engaged in that. That report was
made by Mr. Cook, and was prepared in the N.w York office.
Senator BLAINE. Well, this organization which has an office here
in the Munsey Building?
Mr. YOUNG. Yes, sir.
Senator BLAnm. How much of the $16,000 was expended in pro.
mtiig the President's prosperity boom?
Mr. YOUNG. Frankly, you Would have to get thatSenator'BLAuN. I Just wanted to find out how much we are to
reduce the sum that you expended from your Washington office, by
the sum that you expended 'or other purposes.

2180

LOBBY INVESTIGATION

Mr. YOUNG. It was a relatively unimportant amount. What the

exact amount was for the expenses of Mr. Cook and Mr. Sweitzor
and Mr. Fitzgerald down here to the conference, I am frank to tell
you I do not know.
Senator CARAWAY. What was the suggestion of the retail people?
That you could get eople to buy more goods? Was that going to

it
alo

bring prosperity? Was that what Mr. Sweitzer and Mr. Cook gave
as a solution of the lack of prosperity?
Mr. YOUNG. Well, we have not found any lack of prosperity as far
as my information from the records shows, from the sales of last year.
The sales of last year were approximately the sales of 1028.

Senator

CAnAWAY.

Then your association reported to Mr. Hoover

at his prosperity conference that as far as you were concerned, you

were al right?

Mr. YouNa. Well, Mr. Lo Boutillier could answer that better

than I can. I am not a merchandiser.

Senator CARAWAY. I know you are not, but you were down at the

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anc

whi

President's conference, were you not?

Mr. YOUNo. Yes, sir.

Senator

CARAWAY.

Mr. YouNo. Yes.

Senator

CARAWAY.

And you heard Mr. Cook?

Did lie say they were hard up or had plenty of

no

tha

money, or which?
Mr. YoUNG. Well, that the volume of sales was maintained at
approximately the same level in 1929 that it was in 1928.
Senator CARAWAY. Did he say that people were paying their bills
as promptly as usual?
paying
Mr. YoUNG. Well, I don't know. I haven't any connection with
the credit department.

for

that' collections were good or bad?

Mr. Youxo. I don't think he touched on that.

telc
rep

the

the
in

Senator CARAWAY. Did you hear his speech?

Mr. YoUNo. I don't know that he referred to that.
Senator CARAWAY. Y60 don't know whether he told the President
Senator

CARAWAY.

That is a yery important part of the business,

isn't it?
Mr . YoUx0. Well, unless they do inake their collections promptly,
.
they can not pay their bilEs.
Senator CAIAWAY.- Well, I am trying to find out what he told the
President, you know, that was of so great importance.
Mr. Youth . That isa matter of record. I have it here.

Senator

CARAWAY.

NO no. Don't read it to me.

Mr. YOUNG. I have it here.

Senator BLAIhm. Did he tell the President that the merchants'
shelves were loaded down with carry-over goods?
Mr. YOUNG. No, sir. As I recall it, he said that inventories were
yer clean.
Senator BLAME. Did he state that traveling salesmen reported to
their employers, j6bbers, and wholesalers, that the retail t&orchants
had their shelves filled with carry-over goods, -nd for that reason
they could n6t make a very good showing on their respective trips
out through the country?

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LOBBY INVESTIGATION

2181

Mr. Young. Here is what he said on that point. I have a copy of

it hereSenator BLAINE. No. Don't read it. Did he state anything
along that line?
Mr. YOUNG. No.

Touching on that point-

Senator BLAINE. I don't want to listen to his speech.

Mr. YOUNG. No. It is touching solely on that point.
Senator CARAWAY. No. Don't read that.
Senator BLAINE. Just make it brief. Did he tell about these things?
Mr. YOuNG. He said the usual fill-in orders would be anticipated
during the month of February; that the stocks were relatively clean.
Senator BLAINE. That does not answer my question.
Mr. YouNG. I am sorry if I did not get it.
Senator BLAINE. Did he tell the President that the merchants
throughout the country, had their shelves filled with carry-over goods
and did not want to buy any more goods from the jobbers and
wholesalers?
Mr. You o. No, sir. He said that they were not carrying in their
warehouses large inventories of merchandise.
Senator BLA I.E. But these merchants that I am talking about do
not have warehouses. They have stores and they have shelves, and
that those shelves were filled with carry-over goods-goods from a
former season, and they could not buy any more goods.
Mr. YoUNG. I don't understand that lie made that statement to
them. He made the statement that the inventories were clean, and
they were open for fill-in orders.
Senator BLAINE. That the merchants generally were open for fillin orders?
Mr. YoUNO. Yes, sir. .They were not overstocked.
Senator BLAINE. Evidently Mr. Cook did not get his report from

the traveling salesmen.

Mr. Y oNo. Frankly I do not know. There were a great many
telegrams sent out for information all over the country, and the
report was based on those telegrams.
Senator BLAINE. After the conference was held, what did you do
to promote the 1!rosprity boom?
Mr. YOUNG. I have had nothing further to do with it.
Senator BLAINE. Your Washington office did not do anything?
Mr. YOUNG. Nothing.

Senator BLAIzN. You did not think there was any necessity for it?
Mr. YoUNG. Most of that would emanate from New York, if
anything of that character was done.
Senator CARAWAY. You just let the movement drop as far as your

office was concerned?

Mr. YoU G. There was no necessity for any further activity on it.
Senator BLAINE. So, all your office did was to keep your eyes .and
ears open? Now, who kept the eyes and ears open around Washington, from your office?

Mr. YOUNG. To what do you refer?

Senator BLAIN. Well, you were here when the former witness
testified?
Mr. YoUNG, Yes, sir.

b ,

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2182

LOBBY INVESTIGATION

Senator BLAINE. I assume you heard it.

Mr. YOUNG. Yes, sir.

Senator BLAINE. I am not going over that testimony.

Did you

keep your eyes and your ears open to see what was going on in
Washington?
Mr. YouNo. Mr. Le Boutillier testifiedSenator BLAINE. No; but did you keep your eyes and ears open?
Mr. YOUNG. When any legislation, when any bills are introduced,
of interest to the retailer, I advise them. I send them to New York
any information as to the provisions in these bills and the effect of
those bills.
Senator BLAINE. Is that your main duty?
Mr. YOUNG. Oh, no. That is only a very small part of my duty.
Senator BLAINE. Is that your only duty?
Mr. YOUNG. Oh, no.
Senator BLAINE. What other duties have you?
Mr. YouNo. I have contacts with various departments, giving
them information which they may request.
Senator BLAINE. Departments of Government?
Mr. YOUNG. Yes, sir.
Senator BLAINE. They come to you to get information on the
trade?
Mr. YOUNG. Yes, sir; the Department of Commerce.
Senator BLAINE. Wirt information do they request of you?
Mr. YOUNG. They request information, in the new census of distribution-I am giving you the recent activities-in the census of
distribution, in the formation of schedules which go out to retailers,
to secure information for the census of distribution. I have connection with and handle matters for members on taxes.
Senator BLAINE. You are a tax expert?
Mr. YouNG. Well, I don't know that I qualify as an expert. I am
an attorney.
Senator BLAINE. Well, you assist members in getting their incometax returns corrected?
Mr. YouNa. Yes sir; and with the Treasury Department on
matters of general administration with reference to accounting
systems; for instance, the retail inventory.
Senator BLAINE. So you are a sort of an assistant to these depart.
monts of Government here in Washington?
Mr. YOUN,. Well, I would not say that. I give them information
which may be helpful.
.
Senator BAIN. How much is your salary?
Mr. YoUNG. At present?

Senator

BLAINt.

Yes.

Mr. YoUNG. $11,000.

Senator BLAiNg, And you expend $5,000 for ordinary expenses?
Mr. YOUNG. Well, that includes the salary of the secretary and
rent and other incidentals.
Senator BLAINE. And you get $11,000 as a sort of an assistant to
the Treasury Department and the Department of Commerce, in

fur
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LOBBY INVESTIGATION

2183

furnishing them information, and to keep your eyes and ears open to
examine these bills that are introduced in Congress. Now what
else do you do to earn your $11,000?
Mr. i'OUNG. I handle trade-mark matters for the various members.
They have 3,000 dealers in the National Retail Dry Goods Association.
Senator BLAINE. And do you do a little lobbying around Congress?
Mr. Youi.o. No lobbying, except in so far as I gather material for
the preparation of briefs, to which Mr. Le Boutillier referred.
Senator BLAINE. Do you visit members of Congress at their
offices or call them out of the chambers?
Mr. YoUNo. No. I have done it. I was in to see Senator Norris
the other day for the purpose of making an appointment with him
for Mr. Le Boutilier who came down to discuss with Senator Norris
an amendment which Senator Norris introduced, paragraph 1560 in
the tariff bill, and Senator Norris, having been motivated, as I
understand it, in the introduction of that by misinformation contained
in this pamphletSenator BLAI?. What amnendment is that?
Mr. YouNo. That is an amendment which would place a tax of
9 per cent on the profit of importations over and above 25 per cent
profit in excess of the landed cost. The Senator was apparently
motivated in that by misinformation-Senator BLAINH. You need not discuss the Senator's motives. I
want to got at your activities.
Mr. YOUNG. I was explaining that.
Senator BLAINE. I don't think you need to explain for Senator
Norris.
Mr. YOUNO. I am not. He was motivated by misinformation
contained in this pamphlet Imported Merchandise and Retail Price*
which alleges that the retailer makes a profit between the landed
cost and the retail selling price.
Senator BAINE. Welf, let us not go into his motives. That is
immaterial.
Mr. YooNG. I am sorry. I was trying to answer your question.
Senator BLAINE. What other activities-have you had?
Mr. Youx0o. Why, I secure passports for members and various and
sundry other things.
Senator BLAINE. I mean connected with the tariff )ill.
Mr. YoJNG. I do not recall any others.
Senator BLAINE. Do you prepare statements for the press?
Mr. YOU'NG. I have nover prepared any statements for the press.
Senator BLAINEi. You are not in the publicity business?
Mr. YovuG. No; except in so far as presentation to the press is
concerned, of briefs which we have prepared, all of which are contained in the Congressional Record, and which were introduced by
Senator Harrison.
Senator BLAIdE. I have no further questions.
Senator CARAWAY. That is all, thank you.

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LOBBY INVESTIGATION

Senator RoBmsON of Indiana. You did know that the National

Importers and Traders Council had an office here for a little while,
for quite some time during the tariff hearings?
Mr. Youzo. I did not. I had no knowledge of that.

Senator RoBiNN of Indiana. They had an office, I think the

evidence shows, i the Washington Hotel, that was later moved to

the National Press Building.
Mr. YoUNG. No, sir. I did not know that.
Senator ROBINSON of Indiana. That is all.
Senator CARAwAY. That is all.
Are there any other witnesses? If not, that is all. We will meet
again Tuesday morning at 10 o'clock.
(Whereupon, at 12.10 o'clock p. m the committee adjourned until
Tuesday, January 21, 1930, at 10 o'clock a. m.)

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