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Cornell University Library 
 HD 9106.A4 1919J 
 
 Sugar leglsiation.Hearings before the Co 
 
 3 1924 013 771 948 
 
UGAR LEGISLATION 
 
 HEARINGS 
 
 BEFORE THE 
 
 OMMITTEE ON AGRICULTURE 
 
 HOUSE OF REPRESENTATIVES 
 
 SIXTY-SIXTH CONGRESS 
 
 SECOND SESSION 
 
 ON 
 
 S. 3284 
 
 MONDAY, DECEMBER 15, 1919 
 
 WASHINGTON 
 
 GOVERNMENT PRINTING OFFICE 
 
 1919 
 
COMMITTEE ON AGRICULTURE. 
 House of Repkesbntatives. 
 
 GILBERT N. HAUGEN, loWA, Chairman. 
 
 JAMES C. MCLAUGHLIN, Michigan. 
 SYDNEY ANDERSON, Minnesota. 
 WILLIAM W. WILSON, Illinois. 
 CHARLES B. WARD, New York. 
 WILLIAM B. McKINLEY, Illinois. 
 ELIJAH C. HUTCHINSON, New Jersey. 
 FRED S. PURNELL, Indiana. 
 EDWARD VOIGT, Wisconsin. 
 MELVIN O. McLaughlin, Nebraska. 
 EVAN J. JONES, Pennsylvania. 
 CARL W. RIDDICK, Montana. 
 J. N. TINCHER, Kansas. 
 J. KUHIO KALANIANAOLE, Hawaii. 
 
 L. G. Haugen, Clerk 
 
 n 
 
 GORDON LEE, Georgia. 
 EZEKIEL S. CANDLER, Mississippi. 
 J. THOMAS HEFLIN, Alabama. 
 THOMAS L. RUBEY, Missouri. 
 JAMES YOUNG, Texas. 
 HENDERSON M. JACOWAY, Arkansas. 
 JOHN V. LESHER, Pennsylvania. 
 JOHN W. RAINEY, Illinois. 
 
SUGAR LEGISLATION. 
 
 Committee on Agrtcultlue, 
 
 House of "Representatives, 
 
 Monday, Deceriiher l-^>, 1919. 
 
 The committee met at 10.30 o'clock a. m., Hon. Gilbert N. Haugen 
 (chairman) presiding. 
 
 The Chairman. Several bills have been referred to this committee 
 having for their object the regulation of the price and the control 
 of the distribution of sugar. I have called the committee together 
 this morning for the purpose of considering the various bills, more 
 especially Senate .3284. The others are House resolution 192, by 
 Mr. Hulings; H. R. 11059, introduced by Mr. Kelty of Pennsylvania; 
 House joint resolution No. 259, by Mr. Crisp; and H. E. 11114, intro- 
 duced by Mr. O'Connell. I lay before the committee S. 3284, and 
 also a telegi'am received from the chairman of the United States 
 Sugar Equalization Board: 
 
 [S. 3284, Sixty-sixth Congress, second session.) 
 
 AN ACT To provide for the national welfare by oantinuing the United States Sugar EquaUzatiou Board 
 until December 31, 1920, and for other purposes. 
 
 Be it enacted by the Senate and House of Representatives of the United States of America 
 in Congress assembled, That the President is authorized to continue during the year 
 ending December 31, 1920, the United States Sugar Equilization Board (Incorporated), 
 a corporation organized under the laws of the State of Delaware, and to vote or use 
 the stock of such corporation held by him for the benefit of the IJnited States, or 
 otherwise exercise his control over the corporation and its directors, in such a manner 
 as to authorize and require them to adopt and carry out until December 31, 1920, 
 plans and methods of securing, if found necessary for the public good, an adequate 
 supply at a reasonable price and an etjuitable distribution of sugar at a fair and rea- 
 sonable price to the people of the United States: Provided, That after the passage of 
 this act neither the President nor the corporation shall have or exercise, either directly 
 or indirectly, with respect to raw or refined sugar, sirups, or molasses, any of the pow- 
 ers conferred upon the President by section 5 of an act entitled "An act to provide 
 further for the national security and defense by encouraging the production, con- 
 serving the supply, and controlling the distribution of food products and, fuel," 
 approved August 10, 1917: And provided further. That the provisions of this act shall 
 expire as to the domestic product September 30, 1920: Provided, That the zone sys- 
 tem of sale and distribution of sugars heretofore established by the said United States 
 Sugar Equalization Board shall be abolished and shall not be reestablished or main- 
 tained, and that sugars shall be permitted to be sold and to circulate freely in every 
 portion of the United States. 
 
 New York, N. Y.,, December 14, 1919. 
 Hon. G. N. Haugen, 
 
 Chairman House Committee on Agriculture,. Washing'ton, D. C: 
 Replying your wire 13th, the United States Sugar Equalization Board is unani- 
 mously of the opinion that without the powers of licensing, embargo, and distribution 
 control its continuation could not serve any useful purpose, and these powers the 
 McNary bill fail to provide. Furthermore, the time has gone by when a considerable 
 portion of the 1920 Cuban crop can be purchased at a reasonable price. The Equal- 
 
 3 
 
4 SUGAR LEGISLATION. 
 
 iz-ation Board was a war measure dealing only with last year's crop, and this has all 
 been distributed. It has no control over domestic sugars, now available in fair vol- 
 ume, nor new Cuban sugars, which are now beginning to move. 
 
 Geo. a. Zabhiskie. 
 
 We have with us this morning a number of Members of Congress 
 who wish to be heard on the bill. We will be glad to hear you first, 
 Mr. Dallinger. 
 
 STATEMENT OF HON. FREDERICK WILLIAM DALLINGER, 
 A REPRESENTATIVE IN CONGRESS FROM THE STATE 
 OF MASSACHUSETTS. 
 
 Mr. Dallinger. I understand that Senate bill 3284, the McNary 
 bill, so called, which has passed the Senate, is before your committee, 
 and I assume that that bill has an excellent chance of being passed 
 before the recess. That is the reason I asked the privilege of appear- 
 ing before you this morning, to ask vou to consider the expediency 
 of making some amendment to it, ii possible, to which the Senate 
 might agree, so that the bill will accomplish the purpose we all have 
 in mind better than it will in its present form. 
 
 I understand that this Senate bill continues the Sugar Equalization 
 Board for another year but very much limits its powers. On page 2 
 there is a proviso that this board shall not exercise any of the powers 
 granted by section 5 of the act of August 10, 1917, which contains 
 the licensing feature. 
 
 As you gentlemen probably know, I have been very much interested 
 in this sugar question, it having been brought to my attention 
 when I went home in September. I had been busy with other matters 
 and was not familiar with what the people were thinking about, and 
 I found a very serious shortage of sugar all through New England, 
 the ordinary man having no sugar for his sugar bowl, and the thing 
 has been steadily growing worse. The people, I think, are very 
 much exasperated at not being able to get any sugar at all, not even 
 for the baby's milk, and at the same timfe seeing steamers leaving 
 port loaded with sugar for foreign countries. And in connection 
 with this subject I desire to state that the soldiers and sailors who 
 have been coming back, and the people who have been coming back 
 from Europe, report that sugar is very much more plentiful in France 
 and Belgium than it is here. And I believe that our people are 
 getting to the point where they feel, while it is all right to do for 
 others and to have regard for the people of Exirope, that our own 
 people should be treated at least as well as the people across the 
 water. 
 
 Now, I introduced a bill which was referred to the Committee on 
 Interstate and Foreign Commerce, which committee, as you know, 
 was so busy with the railroad bill that nothing was done. My bill 
 was introduced on October 26, aad the hearing on it does not come 
 until to-morrow. It is H. K. 9976, which puts an embargo by law 
 upon the export of sugar from the United States for a period of six 
 months. Of course, every day and every week that has gone by 
 has made any remedy that may be given to the people by Congress 
 leas and less efficacious, because the harm is being done all the time. 
 Of course my bill is a very drastic bill. It prohibits the export of 
 sugar absolutely from the United States or any place subject to its 
 
SUGAR LEGISLATION-. 
 
 jurisdiction. Now, I am here largely because of a conference I haci 
 with the Sugar Equalization Board a week a^o to-day. I saw the 
 general manager at the Wall Street ofRce, and he told me that about 
 the 1st of August the, Sugar Equalization Board recommended three 
 things to the administration. One was that they be given the licens- 
 ing power which was provided for in section 5 of the act of August 
 10, 1917, commonly known as the Food Control Act. The second 
 thing they asked for was the power to regulate the distribution of 
 sugar; and the third thing that they asked for was the power to 
 regulate exports, i. e., the power to put on an embargo. 
 
 Early in the year it looked as if there would be plenty of sugar, 
 but by June it became apparent there was a world shortage of sugar 
 this year of probably 2,000,000 tons, and they asked for this power. 
 
 Now, what I have said shows that the people who had the matter 
 in charge, to whom the President, acting under authority of Congress, 
 had given the matter in charge, themselves wanted the power to stop 
 the export of sugar from this country, because of a shortage of the 
 supply. So it is not my idea ; it is not that, as a Member of Congress, 
 I have rushed in here with an impracticable remedy. The Sugar 
 Equalization Board asked on the 1st of August that they be given 
 this power, but no attention was paid to it. I understand all those 
 recommendations were referred by the President to the Secretary of 
 Agriculture, and finally, on the advice of experts, nothing was done. 
 In the meantime sugar has been going out of the country. From 
 the 1st of January to the 1st of November, 1,246,869,413 pounds of 
 sugar have been exported from the United States.' We have not 
 the figures for November. That was an average oi' 124,686,941 
 pounds per month. 
 
 Mr. Wilson. You say an average ? 
 
 Mr. Dallinger. Anaverageof 124,000,000 pounds a month. Now, 
 some of you gentlemen probably heard the chairman of the Committee 
 on Ways and Means the other day, in the House, speak about an em- 
 bargo not being possible on account of an agreement which the Sugar 
 Equalization Board made in regard to supplying England and France. 
 As I understand, the agreement was, when the Cuban sugar crop was 
 bought, that a third of it should go to the Royal Commission for the 
 use of England and France, but might be refined in this country. It 
 is assumed by some that all the sugar that is going out of this country 
 is sugar that does not belong to us and that under this agreement we 
 have no right to stop the exportation of it. As a matter of fact, that 
 is not so. One reason why the Sugar Equalization Board said they 
 wanted the power to license, with a right to examine the books of 
 sugar dealers, particularly wholesalers, was that what was going on 
 was this — and this accounts for the shortage in the family sugar 
 bowl, the fact that the ordinary little family in the eastern part of 
 the country can not get any sugar: These wholesalers were allowed 
 so much sugar on the basis of their retail trade, as reported to the 
 board. For instance, a wholesaler would have a cotmtry storekeeper 
 as one of his retail customers, who in turn was supposed to get ten 
 barrels a month to take care of his customers. Now, the wholesaler, 
 instead of supplying his retail trade (the price of retail sugar being 
 limited by the board), has been selling his sugar for big prites to the 
 manufacturers, the chocolate nien, the condensed-milk men, the con- 
 fectioners, and others, and a lot of the manufactured product has 
 
b SUGAR LEGISLATION. 
 
 been exported, and the American consumer has been charged, with 
 that consumption. And, then, we are told we are extravagant in the 
 use of sugar regardless of the fact that this per capita consumption 
 includes an immense amount of sugar that has been used by these 
 manufacturers and a lot of whif h has been exported. 
 
 Now, the Sugar Equalization Board tells me they have no way of 
 checking up what the wholesalers do with their sugar, and there is no 
 way of checking up the resale sugar. 
 
 The Chairman. The wholesalers are licensed ? 
 
 Mr. Dallinger. They should be licensed; that is the point. 
 
 The Chairman. But they are licensed under the present law. 
 
 Mr. Dallinger. The McNary bill provides the licensing power 
 shall not be given to this board. 
 
 The Chairman. I understood you to mean that the present law 
 did not give them that power. 
 
 Mr. Dallinger. No. My point is while it is all right to continue 
 this Sugar Equalization Board for another year, you certainly ought 
 to give them some power to stop what is going on. In other words, 
 the sugar is not now going to the ordinary small householder, and 
 some governmental authority should have the power to see that 
 it does. 
 
 Mr. Candler. T would suggest the reason why this licensing propo- 
 sition was defeated in the committee of the Senate and not seriously 
 considered in the Senate, was because a number of distinguished 
 gentlemen over there said if they put it in they would talk the bill to 
 death; that it never would pass. 
 
 Mr. Dallinger. Now, in regard to this embargo, that is a matter 
 in which I am particularly interested 
 
 Mr. McLaughlin of Michigan. Just a moment. Did this Equali- 
 zation Board tell you why they had not exercised the power under 
 the act of August 10, 1917, to put the dealers under license? That 
 power has been at their disposal since that date and will' continue 
 during the life of the law unless the McNary bill is passd. 
 
 Mr. Dallinger. They tell me that they asked to have that power 
 given to them by the President. 
 
 Mr. McLaughlin of Michigan. I understood what they asked the 
 President for was authority to buy the Cuban sugar. 
 
 Mr. Dallinger. That was another proposition. They also asked 
 for that, but that was not the thing. I knew all about that; that was 
 an old story when I went to see them. 
 
 Mr. McLaughlin of Michigan. They did not have to ask the Presi- 
 dent for that power, because it was contained in the act of August 10, 
 1917, the power to license. 
 
 Mr. Dallinger. They told me they asked the President for that 
 power for another year and, as I understand, it was refused. 
 
 Mr. McKiNLEY. Why did not the President give them the power 
 to buy this 1919 crop? 
 
 Mr. Dallinger. I do not know. To my mind, that whole question 
 of the Cuban sugar crop is absolutely inexcusable — but that is spilled 
 milk. I am satisfied, and I think the Sugar Equalization Board all 
 believe, that if the President had given them, in August, the right to 
 buy that Cuban sugar crop, it probably could have been obtained at 
 that time for 6^ cents a pound. 
 
 Mr. PuRNELL. He did not give them that power ? 
 
SUGAR LEGISLATION. 7 
 
 Mr. Dallinger. He did not give them the power; no. 
 
 Mr. PuRNELL. Because he said he acted on the advice of Prof. 
 Taussig, who is supposed to be an expert. 
 
 Mr. Dallinger. It makes no difference upon whose advice he 
 acted. I think if he had gone ahead and done what the board asked, 
 we would not have had any trouble at all. 
 
 Mr. PuRNELL. That is really the nut of the whole proceeding. 
 
 Mr. Dallinger. That water has gone over the wheel; we can not 
 remedy that. 
 
 Mr. PuRNELL. The Ouban sugar crop could have been purchased 
 for about 6^ cents, an advance of 1^ cents over the price of^last year, 
 which was 5 cents ? 
 
 Mr. Dallinger. Yes. 
 
 Mr. Wilson. Did they not have the right to purchase the sugar 
 without authority from the President ? 
 
 Mr.( Dallinger. I understand not. 
 
 Mr. Wilson. I understand they did. 
 
 Mr. Dallinger. They tell me they did not have it, because the 
 President was the sole stockholder and his assent was necessary. 
 
 Mr. McLaughlin of Michigan. Their authority to purchase ex- 
 tended to the 1918 crop, but without the action of the President they 
 could not purchase the 1919 crop and he withheld that consent. 
 
 Mr. Dallinger. Of course, this McNary bill is all right so far as 
 it goes. As I understand, it gives this board the right to purchase 
 the 1919 crop. The price, I believe, is 12J cents now, or something 
 of that kind. It is going up all the time, and it is now a question 
 of what they can get it for. And I am not here to oppose this bill, 
 but in my opinion this McNary bill, in its present form, will be of 
 very little help. It will be of some help, however, and I am not 
 opposed to it. 
 
 Mr. TiNCHER. What is your suggestion about the provisos of the 
 McNary bill, that they be cut out ? There would not be any object 
 in cutting out the two last provisos, would there ? 
 
 Mr. Dallinger. I do not care about the last proviso — the zone 
 system. I think that that particular provision may probably work 
 a lot of injustice. It may be, as Mr. Candler says, impossible to get 
 anything through the Senate with t)iat licensing power in it. Of 
 course, if that is so, like lots of other things, we have to take what 
 the Senate is willing to give us. But I would like to see some pro- 
 vision to which the Senate will agree, which will give the board the 
 right to exanjine the books of the wholesalers. There is no way to 
 check this thing up and protect the little householder now, and with- 
 out some power in this board to find out what the wholesaler does 
 with the sugar, there will be very little benefit. 
 
 The Chairman. Mr. Dallinger, do you think the bill would be of 
 any value whatever unless it gives authority to license ? 
 
 Mr. Dallinger. Yes, I think the power to buy the Cuban sugar 
 would be of some benefit. 
 
 The Chairman. I am in receipt of a telegram from the chairman 
 of the Sugar Equalization Board which says that the Sugar Equaliza- 
 tion Board is unanimously of the opinion that without the powers of 
 licensing, embargo, and distribution control, its continuation could 
 not serve any useful purpose, and Judge Glasgow, counsel of the 
 board, said repeatedly at the hearing in the Senate that it would be 
 
8 SUGAR LEGISLATION. 
 
 (if no valuo whatever unless it provided for the power of licensing', in 
 particular, and embargo. 
 
 Mr. Dallinger. That is what I have been saying. I think it 
 would be of little value, but I would not go so far as to say it was not 
 of any value. While most of the harm has been done, I think that 
 the power to buy the rest of the Cuban sugar crop may be of some 
 value. 
 
 Mr. Candler. There are 3,262,500 tons of sugar still in Cuba. 
 Here is a statement of the situation 
 
 The Chairman. We need about 3,000,000 tons besides our own 
 production ; we would only be entitled • to two-thirds of it, which 
 would be about 2,000,000 tons. 
 
 Mr. Candler. Here is the full statement, and I would like to have 
 this go in the record, so as to show the situation. 
 
 Mr. Wilson. Where did you get the statement ? 
 
 Mr. Candler. It is taken from the speech of Senator Gay, |in the 
 Congressional Record of last Friday. This statement is given and it 
 seems to me very carefully prepared. It says the Cuban crop for 
 1920 is estimated at 4,500,000 tons, and the local consumption in 
 Cuba amounts to 150,000 tons, thus leaving for export 4,350,000 tons; 
 that Mr. Zabriskie, the president of the United States Sugar Equali- 
 zatidn Board, stated before the Senate committee that about one- 
 fourth of this crop had been sold partly to European countries and 
 in part to American refiners; and deducting this one-fourth, or 
 1,087,500 tons, we have in Cuba still remaining for export 3,262,500 
 tons. 
 
 The Government estimates the domestic sugar crop of the United 
 States and its possessions as follows: Beet crop United States, 
 953,000 short tons; Louisiana cane crop, 138,000; Hawaiian cane 
 crop, 600,000; and Porto Eican cane crop, 300,000, making a total 
 of 1,991,000 short tons. 
 
 The sugar shortage, reduced to long tons, this domestic crop would 
 be 1,777,700 tons. Adding Cuban crop now available for purchase 
 and export, 3,262,500 tons, that leaves a total for distribution in this 
 country of 5,040,200 tons. To this may be added such portion of the 
 Cuban crop as has already been purchased by refiners in this country, 
 and also such portion of the Philippine crop as may be brought to 
 this country. 
 
 The estimated consumption of sugar in this country for the current 
 year amounts to about 4,260,000 tons, thus leaving a surplus of 
 780,000 tons. 
 
 So that the situation shows enough sugar yet available if we can 
 get hold of it. 
 
 (The statement submitted for the record by Mr. Candler is as 
 follows:) 
 
 The Cuban crop for 1920 is estimated at 4 500 000 
 
 The local consumption in Cuba amounts to ' 150' 000 
 
 Thus leaving for export 4 350 qqq 
 
 Mr. Zabriskie, the president of the United States Sugar Equalization ' 
 Board, stated before our committee that about one-fourth of this crop 
 had been sold partly to European countries and in part to American 
 refiners; deducting this one-fourth, or 1^ 087 500 
 
 We have in Cuba, still remaining for export 3^ 262 500 
 
SUGAK LEGISLATION. 9 
 
 The Government estimates of the domestic sugar crop of the United States 
 and its possessions are as follows: Short tons,. 
 
 Beet crop, United States 953, 000 
 
 Louisiana cane crop 138, 000 
 
 Hawaiian cane crop , 600, 000 
 
 Porto Rican cane crop 300,000 
 
 Total 1, 991, 000 
 
 SUGAR SHORTAGE. 
 
 Tons. 
 
 Reduced to long tons this domestic crop would be 1, 777, 700 
 
 Adding Cuban crop, now available for purchase and export 3, 262, 500 
 
 Leaves a total for distribution in this country of 5, 040, 200 
 
 (To this may be added such portion of the Cuban crop as has already 
 been purchased by refiners in this country, and also sucn portion of the 
 Philippine crop as may be brought to this country.) 
 The estimated consumption of sugar in this country for the current year 
 amounts to about 4, 260, 000 
 
 Thus leaving a surplus of 780, 200 
 
 The Chairman. The present consumption of sugar is 92 pounds 
 per capita. With 110,000,000 people in the United States over 
 5,000,000 tons are required for our consumption. It is estimated 
 that there are only a little over 4,000,000 tons. 
 
 Mr. Candler. It is 5,040,200 tons available. 
 
 The Chairman. Oh, no. 
 
 Mr. Ca]si;dler. That is what this shows. And it gives it in a very 
 detailed statement. 
 
 The Chairman. That would not allow anything for Europe ? Of 
 course if we absorb the whole crop, that is a different thing. 
 
 Mr. Candler. It is stated it leaves a total for distribution in 
 this country of 5,040,200 tons. 
 
 The Chairman. But it is conceded in your statement that one- 
 third of that must be deducted. According to your statement, 
 European countries took one-third of it, and the United States 
 two-thirds, last year. 
 
 Mr. Candler. This statement deducts one-fourth for export, 
 amoimting to 1,087,500 tons. 
 
 The Chairman. Besides it state-s that 4,260,000 tons are required 
 for consumption, the consumption at 92 pounds per capita requires 
 over 5,000,000 tons. ' ' 
 
 Mr. Candler. Even taking your statement that it requires 5,000,- 
 
 000 tons for consumption in this country, this shows 5,040,200 tons 
 can be available if action is taken promptly. 
 
 Mr. Purnell. What does the Cuban sugar cost now? 
 
 Mr. Candler. Twelve and one-half cents I think now. 
 
 The Chairman. The head of a jobbing concern here in Washington 
 states that it is costing 17 cents a pound. 
 
 Mr. Candler. I have heard some people were even offering 20 
 to 25 cents a pound for sugar in this country. That is the very thing 
 
 1 want to prevent. 
 
 Mr. Lee. That would be a very good reason why it should be 
 regulated. 
 
 Mr. Eainey. That statement was from the committee of the 
 Louisiana sugar producers who appeared before the committee in the 
 Senate. Mr. Gay made, the speech, I think. 
 
10 SUGAR LEGISLATION. 
 
 Mr. Dallinger. The Sugar Equalization Board, when they 
 found this shortage coming in June and July prohibited the refiners 
 from taking any more export orders. They did not interfere with 
 their filling orders already taken, which I understand now have 
 practically all been filled. But that prohibition of the Sugar Equali- 
 zation Board has not prevented the continued export of resale sugar. 
 What I mean by that is this, that after the refiner sells to some jobber 
 in this country, that sugar can go from broker to broker and be 
 sold by some broker in this country for sale in Hamburg, or Paris, or 
 Brussels, or London, and the sugar will 'go out of this country and 
 there is absolutely no way of stopping it. And there is a lot of sugar 
 going out. I do not mean an mcreased amount, relative to the 
 total consumption, but you must remember that to the small house- 
 holder, to the supply of these small householders, a million pounds 
 of sugar, or 10,000,000 pounds of sugar, one ship load, is a great 
 deal of sugar. Now there is a great deal of talk about this English 
 sugar; we must not put on any kind of an embargo, no matter how 
 qualified, upon the export of sugar, because this sugar is going to 
 England and France; that under an agreement a certain part of the 
 sugar crop was bought for them and is refined in this country and 
 exported. It is easy enought to trace that, because it would go 
 right from the refiners. But once before, when there was a stringency, 
 the Sugar Equalization Board borrowed 50,000 tons of this English 
 sugar. In other words, they took it and said to the Englishman, 
 "We will pay you back later." If they did it then, they can do it 
 now. 
 
 Now, I am here pleading here before you for the small householder, 
 who is not getting any sugar at all at the present time — -that you do 
 something so that some board will have the power, just for these 
 few weeks, in this emergency, to have the right to prohibit exports 
 and, if necessary, to borrow some of that foreign sugar again. We 
 have done it once; they borrowed 50,000 tons. They do not need- 
 to borrow as much as that now. Fifty thousand tons would give 
 2 pounds of sugar to 50,000,000 households. And I think that 
 Congress, before it adjourns for the Christmas recess, ought to do 
 something to meet this emergency. There are people here in Wash- 
 ington who can not get any sugar 'for their families, and I think some- 
 thing ought to be done immediately. You ought to put something 
 in this bill to give it teeth; there ought to be some amendment put 
 in this biU that will relieve the present situation. 
 
 The Chairman. But the bill in its present form would not give 
 immediate relief. Can you point out wherein it would oive any 
 rehef ? The authority to buy this Cuban sugar does not give control 
 over the dealers or wholesalers. 
 
 Mr. Dallinger. No; but it would give them a chance to increase 
 the supply of sugar. 
 
 Mr. Anderson. May I ask a question? 
 
 Mr. Dallinger. Certainly. 
 
 Mr. Anderson. I have not examined this situation recently My 
 understanding is whatever the authority is, that the Equalization 
 Board is the agency created by the President under the authority 
 given him in the food control act. And so long as the Food Control 
 Act is in effect the President can confer upon the Sugar Equalization 
 Board any of the powers contained in the food control act, provide 
 
SUGAR LEGISLATION. 11 
 
 we do not specifically provide they shall not have that power in this 
 legislation. If that is true, it is sufficient to continue the legal 
 existence of the Sugar Equalization Board, assuming that the legal 
 effect of the food control act also continues. Am I correct about 
 that? 
 
 Mr. Dallingeb. Yes, sir; that is right. 
 
 Mr. McLaughlin of Michigan. That is what I said a few moments 
 ago, Mr. Dallinger, that the food control act of August 10, 1917, 
 contained all this power — -the power to license. When Mr. Palmer 
 was before us a few weeks ago asking that a penalty be attached to 
 section 4 of that food control act, I asked him why he did not 
 undertake to control under another section which provided for 
 licensing and for the operations of the Food Control Board. But he 
 said he did not want to do that; he wanted this penalty put on so 
 that he could go on in sort of a spectaular way in making arrests and 
 carrying on prosecutions. He did not want any kind of a corrective, 
 preventive, or regulatory proposition at all. Now, that food control 
 act is still in force; just as Mr. Anderson says, it contains the power 
 to license and the President can invoke that power if he wishes to 
 do so. 
 
 Mr. Dallinger. Do you understand, Mr. McLaughlin, that the 
 Food Control Act gives the right to the President or to anyone 
 delegated by him to stop the exportation of sugar for a limited time ? 
 
 Mr. McLaughlin of Michigan. I do not remember as to the export 
 particularly. But it can be done by license. A license can be 
 issued to any dealer whose annual sales are $100,000 or more, and 
 one of the terms of that license that may be issued to any dealer, or 
 anybody handling sugar, could be that he shall not export it. 
 
 Mr. TiNCHEE. This sugar board is incorporated, is it not ? 
 
 Mr. Dallinger. Under the laws of the State of Delaware, I 
 understand. 
 
 Mr. TiNCHER. Who are the stockholders of the corporation ? 
 
 Mr. Dallinger. The President is the sole stockholder. 
 
 Mr. TiNCHER. The President is the sole stockholder. For that 
 reason the whole matter is checked to him for control. Now, there 
 is not anything in the food control act to preVent them making any 
 condition to the issuing of any license, that the license holders should 
 not export sugar, is there ? 
 
 Mr. Dallinger. No. Of course, Mr. Chairman, the President did 
 not act; he did not follow the recommendations of the Sugar Equali- 
 zation Board on this important matter, and it is a question now 
 whether Congress ought not to take some action. 
 
 Mr. McKiNLEY. How are you going to take action? The Presi- 
 dent has finally to pass on this resolution, and if he won't do it now, 
 how are we going to compel him to act ? 
 
 Mr. Candler. There is some justification for the President's 
 action. It is true on August 20 that the Sugar Equalization Board 
 did recommend to the President that action be taken on this matter, 
 and the President was considering it. This board, however, is 
 divided. It is true, I understand, that he accepted Prof. Taussig's 
 advice, who recommended that no action be taken at that time. 
 
 The Chairman. One out of eight opposed it? 
 
 ]\^. Candler. Yes; one out of eight opposed it. The President 
 was considering it at the time, but at that very time, or about that 
 
12 
 
 SUGAK LEGISLATION. 
 
 very time, as we all know, he was taken seriously ill and never con- 
 sidered anything. 
 
 Mr. McKiNLEY. He was taken seriously ill on the 26th of Sep- 
 tember — eight weeks afterwards. 
 
 Mr. Candler. He was taken ill, and he did not take action. That 
 statement is just to him and ought to be considered in this matter. 
 
 Mr. TiNCHEE. They had time before that, I will state, on a 
 similar board that has control of the wheat of the United States, 
 when we had an over supply of wheat in the United States, more 
 than there was any chance in the. world to use for our local con- 
 sumption, under the same kind of a law and the same kind of a 
 system, to put an embargo upon the exporting of wheat, in order to 
 keep the price of it down. 
 
 Mr. Candler. Action possibly ought to have been taken on this 
 matter, as was suggested a moment ago, but it was not, and that is 
 some explanation of it at least. But that water has passed over the 
 wheel and the question is what is to be done now. 
 
 Mr. McKiNLEY. You say 5,000,000 tons are available. Why not 
 buy some of it now ? 
 
 Mr. Candler. That is what I suggest. 
 
 Mr. McKiNLEY. He has the power; why not exercise it? 
 
 Mr. Candler. I want to state the statement I made a little while 
 ago was taken from the speech of Senator Gay, of Louisiana. 
 
 Mr. Tincher. It is the quotation of a sugar grower ? 
 
 Mr. Candler. Yes ; from a Louisiana sugar producer. 5 
 
 Mr. Jones. Has the President power now, under the existinglaw, 
 to buy this surplus sugar ? 
 
 Mr. Dallinger. I do not understand he has. 
 
 The Chairman. There can be no question about the President's 
 having authority, nor can there be a question about the President 
 being responsible for the delay. 
 
 Mr. Dallinger. They can not buy now. 
 
 The Chairman. And as a result of the delay two prices are being 
 
 Said for sugar, much more than they would otherwise have to pay. 
 "obody has undertaken to defend the action. 
 
 Mr. Candler. The Senate commenced hearings on this proposition 
 on October 3, and thay have had time to take some action up to this 
 time, and at least the Senate has some share of the blame. 
 
 The Chairman. But if he ignored the law and the opportunity at 
 that time, what can we expect in the future ? Certainly, by passing 
 this act, we can not compel him to take action. 
 
 Mr. Dallinger. I want to correct my answer to the question of 
 Mr. Jones. I did not understand your question. I suppose he has 
 until December 31 the right to buy up last year's crop, the old crop; 
 but he has not the right to buy anything more. 
 
 The Chairman. The corporation is given certain powers. 
 
 Mr. Jones. The corporation, then, would have the right to buy 
 the surplus existing crop without this amendment ? 
 
 Mr. Lee. The old crop. 
 
 Mr. Dallinger. The old crop ; yes. 
 
 Mr. Jones. Why has that surplus not been bought in your opinion ? 
 
 Mr. Tincher. He could have purchased the new crop. They rec- 
 ommended to him that they be given the authority to Duy the crop, 
 and the authority was not given. 
 
SUGAE LEGISLATION. 13 
 
 Mr. McLaughlin of Michigan. The corporation had the right to 
 buy in the old crop, because the President had the right to authorize 
 them to buy that crop. The corporation would have had the right 
 to buy the 1919 crop if the President had authorized them to buy it? 
 
 Mr. Dallinger. Yes. 
 
 Mr. PuKNELL. They asked for the authority and he refused to give 
 them the authority. 
 
 The Chairman. He has the authority under the existing law to 
 make the purchase, has he not ? 
 
 Mr. PuBNELL. Of course he has. It is because he did not want to ; 
 that is all. 
 
 Mr. Dallinger. Mr. Chairman, so far as the political question is 
 concerned, you can rest back and say the President is responsible for 
 this whole thing. And I am perfectly willing to acquiesce in that. 
 But the question is whether Congress is going to take the attitude of 
 not trying to do anything themsSves to help the people in this situa- 
 tion. I have heard a great deal of criticism of Congress since my 
 bill was put in for not doing something. It may be the President 
 would veto anything you pass, but that does not relieve us as Members 
 of Congress, in the eyes of the people, from trying to do something. 
 
 The Chairman. The President has had the authority all along. 
 By renewing it or extending it can we hope for action ? Is it not fair 
 to assume he wiU do as he has done in the past — ignore the authority 
 that was given to him by Congress ? 
 
 Mr. Dallinger. I had hoped in some way that your committee 
 could so amend the McNary bill as to give this power to the board 
 which it asked for last August, to stop me exportation of sugar, and 
 to give them the power direct. 
 
 The Chairman. If any legislation is enacted, it should at least give 
 the power asked by the board ? 
 
 Mr. Dallinger. It ought to be given to this board to do it rather 
 than to give it through the President or anybody else. 
 
 Mr. Jones. Have you prepared an amendment to this McNary bill ? 
 
 Mr. Dallinger. No ; I have not. My bill prohibits the export of 
 sugar for a period of six months, and gives the President the right to 
 extend that. 
 
 Mr. TiNCHER. You have not had any hearings on it at all ? 
 
 Mr. Dallinger. No. The hearing on my bill is set for to-morrow 
 before the Committee on Interstate and Foreign Commerce. The 
 reason I came here is that I realized the chance of my bill being re- 
 ported and going through is remote if Congress takes its Christmas 
 recess on Saturday. ' 
 
 Mr. TiNCHER. Your theory is you would like to have this committee 
 put an amendment onto the senate bill, putting an embargo on the 
 export of sugar for a fixed length of time ? 
 
 Mr. Dallinger. Yes; I would like to have some authority given 
 to this board. 
 
 Mr. TiNOHER. They are simply the officers of the corporation in 
 which the President is the sole stockholder ? 
 
 Mr. Dallinger. So I understand. 
 
 Mr. TiNCHER. Th!at is the complication that comes up. What you 
 want Ls to have something passed so they will have to put an em- 
 bargo on ? 
 
14 SUGAR LEGISLATION. 
 
 Mr. Dallinoee. Yes, air; that is what I want. I am simply 
 making: this suggestion to the committee. 
 
 Mr. TiNOHEB. How would you go about enforcmg that embargo i 
 T suppose a legislative body would be slow, without giving some one 
 rights, just to pass a law making an embargo ? 
 
 Mr. i)ALLiNGER. Of coursc, vou can protect the English and the 
 French if you want to, and say whatever they were given in a solenin 
 agreement thev should be allowed, and let them have it. But it 
 seems to me you ought to stop the other kind of sugar going out— the 
 resale sugar. " We ought to try it. I do not know that you can do it. 
 I do not know that under the rules of the House you can report an 
 amendment of that kind on this Senate bill. But if you can see vour 
 way clear to do it, T hope you will consider the matter while you have 
 the thing before you, because in my opinion the only hope of getting 
 any legislation at this session lies in this committee, and I hope 
 something can be done to stop this sugar going out of the country. 
 
 The Chairman. There really is no remedy in purchasing the sugar 
 outside of the United States. The domestic sugar supply for this 
 year is only 1,991,000 tons. We need, all told, about 5,000,000 tons. 
 We must buy 3,000,000 tons outside of the amount produced in the 
 United States. 
 
 Mr. Dalltnger. The point is, I am pleading for the ordinary 
 householder for these few weeks. We are told that we will have 
 
 ?lenty of sugar by the 1st of February ; that the supply will be ample. 
 Ve do not know what the price is going to be, but they will be able 
 to get it. The point I am making is the ordinary householder in the 
 eastern part of the country can not get it how at all: the ordinary 
 householder in the eastern part of the country can not get it at any 
 price. The absolute b'are necessities of the people ought to be con- 
 sidered. That is what I am pleading for. And if there is any way, 
 by putting an embargo provision in this bill, or giving some power 
 to somebody to check up the wholesalers, so that the small retailer 
 would be assured of getting his supply to take care of his individual 
 customers, that will accomplish what I am seeking to accomplish. 
 It is an emergency matter, for a few weeks now, during this shortage, 
 and I would like to see Congress show a disposition to try to do some- 
 thing. I have no pride of opinion in my bill or any other bill: I do 
 not care whether my name goes on it or not, but 1 do want to have 
 something done, because I know the situation is very serious. The 
 situation is serious in the line of dissatisfaction with the Government. 
 We are going through a crisis here. We have men who are trying to 
 overthrow this Government, and when you have the laboring man 
 working on the docks at Boston, New York, or Philadelphia loading 
 sugar by the thousands and millions of pounds into these steamers to 
 go across the water and they can not get one single teaspoonful of 
 sugar for their own families, those men are pretty apt to oe resent- 
 ful against the Government that allows that sort of thing to go on. 
 I want to have Congress try to do something — to show a disposition 
 to do something to deal with the present emergency along the 
 eastern coast of the United States. 
 
 Mr. Timbeklake of Colorado. Why do not the American refineries 
 buy upthis Cuban crop as they did before the war 1 
 Mr. Dallingee. I do not know, air. 
 
SUGAR LEGISLATION'. 1§ 
 
 Mr. TiMBEiiLAKE of Coloiado. They are at liberty to buy it if they 
 want to, are they not? 
 
 Mr. DalLiIngee. I suppose they are. I suppose anybody could go 
 down to Cuba and buy sugar. 
 
 Mr. McKiNLEY. The facts probably are they have bought it, but 
 they do not have to sell it in the United States. 
 
 Mr. TiNCHER. You know on6 reason they haVe not produced any 
 more sugar in the United States is/ since this board has been in 
 existence, the unfait discrimination of the President agaiast the beet 
 sugar has practically destroyed that industry. 
 
 Mr. Lee. You say it has destroyed it? How much beet sugar 
 was made this year ? 
 
 Mr. Ttncher. It has destroyed it in my section of the country. 
 
 Mr. Lee. That is a pretty broad statement — that it has destroyed 
 the industry. 
 
 Mr. TiNGHER. They say it is being destroyed because they won't 
 allow them the cost- of production. That is what the beet-sugar men 
 say. 
 
 Mr. TiMBERLAKE of Colorado. Is it possible the American sugar 
 refiners have already bought this Cuban crop and are waiting for the 
 Government to buy it at an advanced price ? 
 
 Mr. Dallinger. I do not know, Mr. Timberlake, what the situa- 
 tion is.- Of course, Mr. Chairman, if the refineries have to pay 17^ 
 cents for that sugar, I can not see how they would be very anxious to 
 have to pay l?^- cents for the sugar and to sell it for 11 or 12 cents 
 under the present regulations regulating the retail trade. There 
 would not be very much profit in that; there would be a big loss. 
 
 Mr. Timberlake of Colorado. I can not understand why these men 
 in the sugar business, in normal times, would refuse to go down there 
 and buy that sugar, anyway. That is worthy of investigation. 
 
 Mr. Candler. One reason why they say they did not buy it, so I 
 have been informed, is this bill has been pending in the Senate for 
 10 weeks and they were afraid the Government would step in and 
 they would get the small end of the transaction, if they went down 
 to Cuba and purchased the sugar and then the Government took 
 it over at the price they paid for it. That is the excuse they gave. 
 And therefore they held off and did not buy, and my information 
 is they have not bought and that the sugar is held in Cuba now. 
 
 The Chairman. Have you any information as to whether the 
 refineries of the so-called Sugar Trust are for the passage of the 
 bill? 
 
 Mr. Dallinger. I have not. 
 
 The Chairman. You spoke of the sugar for maniifacture. The 
 board has no authority to license the manufacture or to regulate 
 the price of what is sold to the manufacturer? 
 
 Mr. Dallinger. They told me there was no way of checking up 
 what the wholesalers did with the sugar under their present power. 
 
 The Chairman. They have no authority to license them or to 
 regulate the price ? 
 
 Mr. Dallinger. No. I know when this question was first brought 
 up about the sugar being English sugar, which we had no moral 
 right to stop going out of the country, I received letters from men 
 in the sugar business in New York, Philadelphia, and other places 
 (some of whoih did not want their names used) calling my attention 
 
16 SUGAR LEGISLATION. 
 
 to the fact that a great deal of sugar was being bought by the manu- 
 facturers of condensed milk — and an immense amount of sugar goes' 
 into the manufacture of condensed milk— and was being exported}, 
 and that other sugar was being used in the manufacture of chocolate, ' 
 and other things /of that kind which are being exported. So that 
 not only the sugar is going out of the country, but that manufac- 
 tured products containing sugar are going out of the country. And 
 the most diabolical part of the whole thing is that this sugar which is 
 going into the manufactured products, jams, ahd things of that kind, 
 and which is going out of the country in the form of manufactured 
 products is charged against the American consumer and the American 
 consumer is told "Why, you are too extravagant in the use of sugar. " 
 In other words, the per capita consumption is increased by the sugar 
 that is being bought from the wholesalers by the manufacturers and 
 put into commodities that are being exported and the foreigners 
 are getting it. So that they are getting a great deal more than their 
 share; they are getting the sugar that is simply brought in here and 
 refined, which is supposed to be their portion, and which is sent over 
 there, and then the people over there are getting a whole lot of other 
 sugar in the form these other commodities and our people are going 
 without the small amount necessary for their daily household use. 
 
 Mr. McLaughlin of Michigan. There is a feeling here that the 
 President has had for a long time all the power that is necessary, but 
 he has not seen fit to exercise it. He may have good reasons for 
 not doing it. At this time, we are not criticising him for the failure 
 to act, but under section 5 of the food control act, the license section, 
 we find that from time to time whenever the President shall find it 
 essential to license the importation, manufacture, storage, mining, 
 or distribution of any necessaries, he may provide for licensing those 
 engaged in those lines of work. And under the license he can direct 
 every operation of an individual or a company, and he certainly 
 could forbid the exportation and he could regulate and direct the 
 distribution of all these necessaries. Now that is under the licensing 
 section. f^ 
 
 Mr. Dallingbr. Yes, sir. 
 
 Mr. McLaughlin of Michigan. That is still in force. And I may 
 say that it is under this food control act of August 10, 1917, that the 
 President acts when he delegates power to the Sugar Equalization 
 Board and he can delegate to that board any power that is given him 
 under this act. Now besides the license section, No. 5, we find 
 section 12, that whenever the President shall find it necessary to 
 secure an adequate supply of necessaries for the support of the Army 
 or the maintenance of the Navy, or for any other public use connected 
 with the common defense — and it is that; this is a condition growing 
 out of the war, and if the war power can be exercised to regulate 
 and to take care of these conditions, and if this act by which the 
 Congress has invoked the war power is proper, under this section the 
 President is authorized to requisition and take over, for use or 
 operation by the Government, any factory, packing house, oil pipe 
 luae, mine, or other plant, or any part thereof, in or through which 
 any necessaries are or may be manufactured, produced, prepared 
 or mined and to operate the same. And further along in the section, 
 we find the President is authorized to prescribe such regulations as 
 he may deem essential for carrying out the purposes of this section. 
 
SUGAR LEGISLATION. 17 
 
 including the operation of any such factory, mine, or plant, or part 
 thereof, the purchase, the sale or other disposition of articles used, 
 manufactured, produced, prepared or mined therein, and so forth. 
 
 Now he has not only the power to license, but he has the power 
 if the license provision is not adequate, to take possession of the 
 factories and to run them himself or to provide for- their operation. 
 
 Mr. Dallinger. Yes; I understand that. 
 
 Mr. McLaughlin of Michigan. And to provide for the distribution 
 of all the products of those 'manufacturers. Now, how could broader 
 power be given to the President ? In his wisdom he has not seen fit 
 to exercise those powers. The question is wUl he avail himself of the 
 power that we might give him now by the additional legislation, 
 such as you and others are suggesting. 
 
 Mr. RuBEY. It seems to me, irom reading this biU, that the Sena,te 
 has agreed with the President in not having exercised this authority. 
 The Senate by this act, which was passed on December 12, puts in a 
 specific provision which says after the passage of this act that neither 
 the President nor the corporation shall have or exercise, either 
 directly or indirectly, with respect to raw or refined sugar, sirups, or 
 molasses, any of the powers conferred upon the President by section 
 5 of the act just read by Mr. McLaughlin. 
 
 Mr. Dallinger. That is the license section ? 
 
 Mr. RuBEY. That is the license section. Evidently the Senate is 
 opposed to the President exercising this right. Yet if we pass this 
 bill and give the President or this corporation the right to go down to 
 Cuba and buy that sugar, we will, as the gentleman from Massachu- 
 setts has very well said, increase the supply of sugar. But unless this 
 board has the right, after it gets hold of that sugar, to follow it out, 
 through the trade, and regulate the price that the wholesaler shall 
 sell to the retailer for and possibly the retailer to the consumer, we are 
 going to get a big supply of sugar here and simply give these people 
 the right to profiteer on it. Now, then, it may be, under this bill 
 passed by the Senate, it says to exercise his control over the corpo- 
 ration and its directors, in such a manner as to authorize and require 
 them to adopt and carry out, until December 31, 1920, plans and 
 methods of securing, if found necessary for the public good, an ade- 
 quate supply at a reasonable price and an equitable distribution of 
 sugar at a fair and reasonable price to the people of the United States, 
 Now whether that language wiU give the corporation the right to 
 follow the sugar into the trade and to regulate its price, I do not 
 know; it would seem to me that without some method of regulating 
 the price of sugar we are going to buy down there in Cuba, the people 
 of our country, whUe they will have sugar, they wUl get a sky-high 
 price. 
 
 Mr. Wilson. The President has the right under the present law to 
 regulate the price. 
 
 Mr. RuBEY. I say the Senate seems to want to get rid of that 
 right. They have repealed it. '"'hey have said here the right shall 
 not be exercised. 
 
 Mr. Wilson. They can not repeal it; they can not say he shall not 
 exercise that right. They have not any right to say that. 
 
 Mr. RuBEY. They have it here in this biU. 
 
 Mr. Wilson. That is not in the law. 
 
 155255—19 2 
 
18 SXfGAB LEGISLATION, 
 
 Mr. RuBEY. But this bill, having passed the Senate, stands as the 
 will and the opinion of the Senate as to what ought to be done. 
 
 Mr. Wilson. That does not mean anything. 
 
 Mr. RxJBEY. Evidently the Senate of the United States does not 
 want the hcensing feature put into force. 
 
 Mr. Wilson. That is true. 
 
 Mr. Candler. It was stated on the floor of the Senate, in debate, 
 that with the licensing feature in there, the bill could not pass; that 
 certain Senators would talk it to death. And that was not denied 
 in the Senate. 
 
 The Chairman. A Senator said in the debate, "I voted against 
 that in the committee, because the committee were informed that 
 there were certain Senators who had stated that they would speak 
 at such length as to km the proposed legislation if the licensing 
 feature should be adopted." The Senator also stated, ' ' Mr. President, 
 I desire to say before this bill is passed and the pending amendment 
 is adopted, that, in my opinion, the legislation does not go far enough, 
 and I sincerely hope that at the other end of the Capitol, the House 
 of Representatives will amend the bUl so as to make it more effective. 
 
 Mr: RuBEY. Now, let me ask the gentleman a question. He has 
 given the subject a great deal of consideration and I know he knows a 
 great deal more about it than I do. It occurs to me if you will exam- 
 ine this bUl here, on page 2, line 5, where it puts in the bill a provision 
 prohibiting, after the passage of this act, the licensing feature — if we 
 would strike out that provision and all the rest of the bill and pass 
 down to line 5, on page 2, giving the Sugar Equalization Board this 
 right, and not placing any limitations upon them, would that meet 
 the situation ? 
 
 Mr. Dallinger. I am not at all sure, Mr. Rubey, that it would. 
 If the President still refuses to act, as Mr. McLaughlin says, why the 
 Sugar Equalization Board, unless you give the board the power — if 
 you just simply strike out the proviso, you may be meeting the same 
 situation you are now. The President has absolutely refused to 
 follow a single suggestion of this board since August 1. They havb 
 asked him to give them thes^ powers and he has declined to do it — 
 whether on Prof. Taussig's recommendation or not, it makes no 
 difference. 
 
 The Chairman. The President has control of the board and con- 
 trols its actions. 
 
 Mr. Rubey. We are giving them here the power to do it. 
 
 Mr. Dallinger. Inasmuch as the President has the power and.has 
 had it right along, and has paid no attention to the suggestion of the 
 board, I would like to see something, as the chairman suggested, 
 that has some teeth in it, that would provide that the board itself 
 may have the right to exercise this power. 
 
 Mr. Rubey. The proposition I make is this, if you pass the bill 
 as written down to that point, the Congress of the United States 
 authorizes the Board of Equalization to go ahead and buy this sugar, 
 and then it leaves out the Senate amendment which says "shall not 
 exercise," and leaves to the Board of Equalization any power he may 
 now have under the law. 
 
 Mr. TiNCHER. As I understand this Senate amendment, it is a 
 compliance with the Department of Justice's idea of the enforce- 
 ment of this law. They have done away with the licens'ing system 
 
SUGAE LEGISLATION. 19 
 
 applying practically to everything. Of course, that does not apply 
 to the Department of Justice. If we adopt a law with this proviso 
 in it, it does not prevent the Department of Justice from following 
 and prosecuting anyone as long as the law is in existance for profi- 
 teering. And I am inclined to agree with Congressman Rubey, that 
 in this instance it would be all right to continue the licensing system, 
 and I especially agree, with you on that because of the telegram from 
 the board, in which they say they can not enforce this law; it won't 
 be effective, without that feature. And I believe if that bill is sent 
 to the Senate with that proviso stricken out I do not believe they 
 will talk it to death; I believe they wiU pass it. But it is foUy to 
 pass a bin to be enforced by the Sugar Equalization Board, and 
 expect that board to enforce it, when the chairman of that board 
 has sent a telegram to this committee stating that in its present form 
 it would have no effect. Of course, this is a square issue between 
 this board and the Department of Justice, because we all know 
 the Department of Justice does not believe in using the licensing 
 system to control profiteering. 
 
 Mr. Dallinger. I am very much obliged to you, Mr. Chairman 
 and the committee, for this hearing. 
 
 The Chaiuman. We are very much obliged to you, Mr. Dallinger. 
 
 Mr. Anderson. Just one question. Would it not meet the situ- 
 ation sufficiently for all purposes if we simply strike out the words 
 in the proviso beginning in line 5, page 2, and put in language 
 there "and for such purpose the board shall have the power con- 
 ferred upon the President in section 5 of the food control act"? 
 That would affirmatively give them that power. 
 
 Mr. Dallinger. That is right. 
 
 Mr. Anderson. It would not have to go through the President 
 at all. 
 
 Mr. Dallinger. No. 
 
 Mr. EuBET. Instead of repeahng, that, just affirmatively give them 
 here the authority to act under that section. 
 
 Mr. Anderson. And that would put teeth in it. 
 
 Mr. Dallinger. Of course, it may be that Mr. McLaughlin is 
 right, that the power to license gives the right to prohibit exportation 
 imder certain restrictions. If that is so, I have nothing to say. 
 But I would like to have it perfectly clear that they have that right, 
 whenever they see a lot of resale sugar going out of the country, to 
 stop it. If the licensing power can be so exercised, that is sufficient. 
 I think your suggestion is excellent. 
 
 Are there any other questions. If not, I thank you again? 
 
 The Chairman. We have with us Mr. Timberlake, of Colorado, 
 who desires to make a brief statement. 
 
 STATEMENT OF HOIT. CHARLES BATEMAN TIMBERLAKE, A 
 REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
 COLORADO. 
 
 Mr. Timberlake. Mr. Chairman and gentlemen, I will not take 
 very much of the committee's time this morning. Colorado is a 
 great beet-sugar producing State, with 10 beet factories in my con- 
 gtessional district. And tnat being true, there was sent to me a few 
 days ago a' resolution passed by a meeting which was held by ail 
 
20 SUGAE I.EGISLATION, 
 
 of the sugar producers of this country on the question of whether 
 or not there should be continued this Sugar Equalization Board. 
 And, by a resolution, they favor its continuation and urge the pur- 
 chase of the 1919 Cuban crop of sugar. This was passed before the 
 passage of this bill that has been referred to, which was passed by 
 the Senate on December 12, and whether or not this meeting was 
 in favor of section 5 or whether or not they have indorsed or would 
 indorse the action of the Senate relieving this board from the oper- 
 ations of section 5, I have not any means of knowing. I would 
 like to leave with you, Mr. Chairman, the resolution that was adopted. 
 It seems to me, however, from the discussion of the subject I have 
 heard this morning from Mr. Dallinger and others, that without this 
 provision the law would be where it is, would it not ? Is not that the 
 understanding ? Without this provision, section 5 of the food control 
 act would operate? 
 
 The Chairman. It would until the authority under the food 
 control act ceases. 
 
 Mr. TiMBEELAKE. And when would that be, until peace is declared ? 
 
 Mr. Anderson. He can extend it for six months after the procla- 
 mation of peace. 
 
 Mr. Candler. Sixty days after peace is declared. 
 
 Mr. TiMBERLAKE. The resolution is as foUows. At the suggestion 
 of the chairman, I will read it : 
 
 POLICY AS TO CONTROI. BY THE SUGAR EQUALIZATION BOARD. 
 
 Mr. Havemeyer advocated the continuation of the Sugar Equalization Board and 
 the purchase by it of the 1920 crop. He explained that in his opinion such purchase 
 would be in the interest of the domestic producers, as it would tend to prevent wide 
 fluctuations in price, especially the possibility of very high prices for sugar during 
 certain periods of the coming year. 
 
 From that, it would seem to be the sentiment of this meeting that 
 section 5 should still operate; that the licensing feature and probably 
 an embargo would be advisable, and the resmt he mentioned would 
 be desirable of accomplishing. 
 
 After further discussion participated in by Mr. Welch, Mr. Farr, Mr. Dillingham, 
 Mr. Kemper, and the chairman. Judge Rolapp moved the following resolution, which 
 was seconded by Col. Edgar: 
 
 . ' 'Resolved, That in view of the prospective continuation of Scarcity of sugar supplies, 
 this conference recommends that the United States Sugar Equalization Board be 
 continued in power with authority to purchase the 1920 Cuban crop, making proper 
 provision for the protection of domestic sugar, and for fixing a fair price to the ulti- 
 mate consumer, and that a committee be appointed to consider and report." 
 
 The resolution was then put to vote and adopted. The chairman voted against its 
 adoption, malriiig the explanation that he did so because he believed the plan for 
 continued control impracticable. 
 
 Gentlemen, I believe that is aU, and I thank you. 
 The Chairman. We are very much obliged to you, Mr. Timberlake. 
 Mr. Martin, I believe you desire to be heard this morning ? 
 Mr. Martin. Yes, sir. 
 
 STATEMENT OF HON. WHITMELl PUGH MARTIN, A REPRE- 
 RESENTATIVE IN CONGRESS FROM THE STATE OF LOUIS- 
 IANA. 
 
 Mr. Martin. Mr. Chairman, following out what Mr. Timberlake 
 said just now, I wish to add that I know the sugar beet producers, 
 like the Louisiana cane producers, do not object to control and con- 
 
SUGAR LEGISLATION. 21 
 
 tinuation of the Sugar Equalization Board, but the sugar beet people 
 as well as the Louiana cane people do object, most seriously, to the 
 continuation of the licensing feature. I will come to that directly. 
 I want to call the attention of the committee first to the fact this leg- 
 islation is absolutely unnecessary to start with. Under the laws as 
 they presently exist, the Sugar Equalization Board has all of the 
 powers and more too than they are asking for in this legislation. 
 
 Mr. VoiGT. May I ask you a question right there ? 
 
 Mr. Matrin. Yes, sir. 
 
 Mr. VoiGT. There is some doubt in my mind as to whether this 
 hoard has the power to buy the crop of sugar that is now in Cuba 
 without additional legislation. Here is the telegram from the chair- 
 man of that board 
 
 Mr. Martin. What legislation did they have to buy, then ? 
 
 Mr. ViOGT. This bill that has been passed by the Senate provides 
 that the President is authorized to continue during the year 
 
 Mr. Martin. I mean without this bill; what authorization did 
 they have last year to buy the Cuban sugar crop that they bought 
 last year ? 
 
 Mr. VoiGT. 1 do not know, I am frank to admit, but just by read- 
 ing the bill passed by the Senate, 1 should judge authority is neces- 
 sary to contmue the power of the board until next year. You will 
 notice this bill passed by the Senate provides 
 
 Mr. Martin. The Sugar Equalization Board, gentlemen, is an off- 
 shoot of the Food Admmistration. It is a corporation, incorporated 
 imder the laws of Delaware, the only stockholder of which is the 
 President of the United States. 
 
 Mr. Candler. You have, then, the power to buy as one of the 
 powers in the charter of that corporation ? 
 
 Mr. Martin. 1 know there is a provision in the charter which says 
 that this corporation is not to have a permanent existence, but its 
 existence is to commence on the 15th day of July, 1918, and is to 
 cease on the 14th day of July, 1923, unless it is sooner dissolved in a 
 manner provided by law. 
 
 Mr. VoiGT. In the telegram sent by the chairman of than commit- 
 tee, he says this : 
 
 ■ The Equalization Board was a war emergency, dealing only with last year's crop 
 and this has already been distributed. It has no control of our domestic sugars now 
 available in fair volume, nor new Cuban sugars which are now beginning to move. 
 
 The board is evidently of the opinion it has no power to buy this 
 new crop without additional legislation or possibly without authority 
 from the President. That is what they say in this telegram. 
 
 Mr. Martin. The board took the position at the Senate hearings, 
 whUe they had the power at this time, that it might be that peace 
 would be declared, and that when peace should be declared by a 
 proclamation of the President, that they would lose their power 
 oecause the Lever Act went out of existence. That is the position 
 of the board before the Senate committee. 
 
 Mr. PuRNELL. Would they go out of existence by reason of tho 
 proclamation of peace by the President ? 
 
 Mr. Martin. They would not for this reason 
 
 Mr. PuRNELL. For- the reason that the charter itself provides that 
 the corporation shall continue until 1923 unless dissolved by law. 
 
22 SUGAB LEGISLATION. 
 
 In other words, it would take some affirmative act to bring about a 
 dissoulation, other than the declaration of peace. 
 
 Mr. Matein. And not only that, but I want to call attention to 
 section 24 of the Lever Act : 
 
 That the provisions of this act shall cease to be in effect when the existing state of 
 war between the United States and Germany shall have terminated, and the fact 
 and date of such termination shall be ascertained and proclaimed by the President; but 
 the ter ination of this act shall not affect any act done, or any right or obligation ac- 
 cruing or accrued, or any suit or proceeding had or commenced in any civil case 
 before the said termination pursuant to this act; but all rights and liabilities under 
 this act arising before its termination shall continue and may be enforced in the same 
 manner as if the act not terminated. Any offense committed and all penalties, for- 
 feitures, or liabilities incurred prior to such termination may be prosecuted or pun- 
 ished in the same manner and with the same effect as if this act had not been termi- 
 nated. 
 
 So that the Board of Equalization could make contracts and pur- 
 chase the Cuban sugar, and could place it on the market at a given 
 price. It has authority to go on and continue to do that until this 
 act expired. 
 
 Mr. VoiGT. It is your opinion, then, that this board has the power 
 to buy the sugar now available in Cuba without the passage of this 
 bill? 
 
 Mr. Martin. They have had it all the time. In the correspondence 
 with the President, which I will be very glad to read to you gentle- 
 men — — 
 
 Mr. VoiGT. Why do they not exercise that power ? 
 
 Mr. Martin. For this reason I just stated, that they fear when 
 peace is declared they will lose all their powers. But I say they do 
 not under the very terms of the Lever Act. 
 
 Mr. McLaughlin of Michigan. Anything they have undertaken, 
 they can carry out to completion ? 
 
 Mr. Martin. They can carry out. 
 
 Mr. McKiNLEY. ts it not a fact, Mr. Martin, the reason they do 
 not exercise it is because the President does not let them ? 
 
 Ml-. Martin. That is it, exactly. 
 
 Mr. Anderson. I would like to ask you a question on that: Of 
 course it is true that a contractual relation established would con- 
 tinue: but I do not think it is true that the powers of control under 
 the license section, would continue after the termination of the 
 food control act. 
 
 Mr. Martin. I doubt that myself, and I certainly hope this com- 
 mittee and no other committee will continue us "under license in 
 peace time. I do not see why our sugar producers should be put 
 under license any more than they should put the cotton producers 
 under license to hold down the price of cotton, or to put wheat 
 under license, or to put shoes under license, and to continue them 
 under license. 
 
 Mr. Tincher. This year's wheat crop is under license. 
 
 Mr. Martin. I know it is. But you gentlemen do not want to 
 continue it under license when that time expires. 
 
 Mr. Tincher. Sugar ought to continue as iohg as wheat does. 
 
 Mr. Martin. I believe the sooner they take -it all out, the better 
 it will be. 
 
 Mr. Tincher. As a producer, I think you are right. 
 
SUGAB LEGISLATIOK. 23 
 
 Ml-. Mautiist. The situation is just this: In July of this year the 
 Cuban producers offered to sell their entire crop of sugar to the 
 Equalization Board. 
 
 Air. Wilson. For how much ; did they say how much ? 
 
 Mr. Martin. No, sir; they did not. 
 
 Mr. PuRNELL. Eeferring to the price, was it not about 6^ cents ? 
 
 Mr. Martin. About 6 % cents or 7, I was going to say. 
 
 Mr. Pdrnell. A cent and a half advance over the price of the 
 preceding year ? 
 
 Mr. Martin. Tha,t is what I thought. The Equalization Board 
 said they thought it could be bought at that time lor 6i to 7 cents, 
 and on August 14, the Sugar Equalization Board placed the matter 
 before the President, calling his attention to the critical situation 
 confronting the> consumers of sugar and advised that the board's 
 control bo extended another year with authority to purchase the 
 1920 Cuban crop. They evidently took the position at that time 
 the President had the right to extend their authority; he being 
 the sole and only stockholder in that corporation, that he had the 
 right to tell them whether or not they should proceed to b'uy the 
 Cuban erop. 
 
 Mr. VoiGT. When you speak of the 1920 crop, that means the crop 
 grown in 1919? 
 
 Mr. Martin. They do not begin to harvest until about January 1, 
 in Cuba. The President having taken no action in the meantime, 
 the board wrote to him on September 20, calling his attention to 
 the fact that the time was fast approaching if it had not already 
 arrived, when they would be unable to control the 1920 Cuban crop 
 unless action was taken at once, and that between one-fourth and 
 one- third of the 1920 Cuban crop already had been sold to foreign, 
 nations. To this communication, the Executive Secretary to the- 
 President replied that the letter would be brought to his attention 
 at the first favorable opportunity. On September 22, the S\igar 
 Equalization Board received word from the representatives of the 
 Cuban producers that their offer to sell their crop to the United 
 States Government was withdrawn, and the following day the 
 Equalization Board wrote the President to this effect, stating that — 
 
 in view of the fact that about one-third of the Cuban crop of next jrear has been dis- 
 posed of for export to countries other than the United States, we believe the situation 
 is out of hand. 
 
 Mr. McIjAughlin of Michigan. To whom had that portion of the 
 Cuban crop been sold ? 
 
 Mx. Martin. Mostly to foreign countries. 
 
 Mr. PuRNELL. To England? 
 
 Mr. Martin. To England 
 
 Mr. PuRNELL. And France? 
 
 Mr. Martin. To England, France, Norway and Sweden, and at. 
 that time about 300,000 tons had been sold to the American refiners. 
 
 The Chairman. Did vou say one-third or one-fourth ? 
 
 Ml-. Martin. About one-fourth at that time. Now, Mr. Chairman, 
 I also want to direct your attention to the fact that the Sugar Equali- 
 zation Board was not a unit on that matter. Prof. Taussig filed a 
 minority report, which was also sent to the President, saying he 
 believed the time for this country to enter into a great commercial 
 
24 SUGAE LEGISLATION. 
 
 venture of that kind had passed and sugar like other commodities 
 in this country should be permitted to be governed by the law of 
 supply and demand and, if the refiners were given the opportunity, 
 they would go in there and buy the Cuban crop. 
 
 Now I want to say, Mr. Chairman, that in my opinion the high 
 price of sugar for next year is due more than anything else- to the 
 agitation in this legislation. The President, evidently took Prof. 
 Taussig's advice and did not intend to continue this Equalization 
 Board. 
 
 Mr. Wilson. Who is this Pro'". Taussig? 
 
 Mr. Maetin. He used to be chairman of the Tariff Commission. 
 
 Mr. PuRNELL. He is a Government expert. 
 
 Mr. Candler. He is the author of the "History of the Tariff." 
 
 Mr. PxjRNELL. Have you estimated how many million of dollars 
 that expert's advice has cost the consumers of the United States ? 
 
 Mr. Martin. I do not think, if it had been followed, it would have 
 cost them 1 cent. 
 
 Mr. PxiRNELL. You do not. You believe, Mr. Martin, that Mr. 
 Taussig's position in the matter was correct ? 
 
 Mr. Martin. I do. But here was the unfortunate situation, that 
 when the President failed to act, the Senate then held these hearings 
 and they introduced the McNary bill some two or three months ago. 
 If Prof. Taussig's advice had been followed, the Sugar Equalization 
 Board having given the refiners notice that they were not going to 
 buy the Cuban crop and told them to go ahead and buy it, three 
 months ago, the American sugar refiners could have gone into Cuba 
 and made contracts for next year's crop at a price less than this 
 Goverimient would have had to pay for it; because you know and 
 I know any Government always has to pay a higher price for any- 
 thing than an individual does. 
 
 Mr. PuRNELL. But the Government could have purchased it for 
 6i cents. 
 
 Mr. Martin. I say the American sugar refiners could have pur- 
 chased this sugar for 6^ cents, but the American sugar refiners kept 
 out of the market because of this bill pending, authorizing the Sugar 
 Equalization Board to buy this crop, and they did not propose to 
 go in there and interfere with the Government and possibly be left 
 with the bag to hold. And they kept out of the market and are out - 
 of the market to-day. 
 
 Mr. Candler. They had this bill pending in the Senate ? 
 
 Mr. Martin. They had this bill pending in the Senate and now it 
 is before the House so that the American sugar refiners are still out 
 of the market. 
 
 Mr. PuRNELL. Then where does the fault lie ? 
 
 Mr. Martin. The fault lies, to start with, in ever bringing up any 
 legislation at all. The American refiners would have gone in there 
 and this crop would have been bought and refined in this coimtry ■ 
 
 Mr. Piirnell. I do not think the consumers would have gotten 
 sugar any cheaper. 
 
 Mr. Martin. They should have done one of two things : Either the 
 Sugar Equalization Board, in July or August, should have bought 
 tiie sugar with the authority they have now and had then, and have 
 always had; or, if they were not going to buy, then the American 
 sugar refiners of this country ought to have been permitted to go in 
 
SUGAE LKGISLATION. 25 
 
 there and to buy the sugar for 6^ or 7 cents. What has been the 
 result of this agitation in Congress? For two or three months the 
 foreign representatives have been going down to Cuba and buying 
 up the crop until they have bought about a fourth or a third, and 
 the price is going up, up, and up all the time. So at this time I 
 doubt very much if the Cuban crop could be bought for less than 
 9 to 10 cents a pound, whereas it could have been bought for from 
 6i to 7 cents a pound. 
 
 Mr. PuENELL. As a matter of fact, do you think it could be bought 
 for less than 12^ to 13 cents ? 
 
 Mr. Martin. I think it could be bought for about 9 or 10 cents; 
 and I think if the committee would drop this legislation the refiners 
 could go in there and buy it cheaper than 9 or 10 cents now. 
 
 Mr. TiNCHEE. The Executive did not take any decided stand as 
 to giving the board the power to buy? 
 
 Mr. Maetin. No, sir; he did not give any decision one way or 
 the other. 
 
 Mr. TiNCHEE. It has been an evasive policy. Don't you thiak 
 the unrest and the unsettled condition is partly due to the indecision, 
 the lack of decision on the part of the Executive as to what to do 
 with the sugar crop ? 
 
 Mr. Martin. I tnink it is due to that and a lack of policy on the 
 
 §art of this Government, whether they were going to do it or not- 
 o it. 
 
 Mr. Lee. And the failure of Congress to pass some legislation? 
 
 Mr. Maetin. No, sir; because legislation is not necessary, as I 
 have just shown they have legislation now to do it. 
 
 Mr. Candlee. But when Congress did intimate it would consider 
 legislation and probably pass legislation, they had entire control and 
 could have passed it promptly ? 
 
 Mr. Maetin. Yes, sir; and if they had passed it promptly they 
 could have bought the crop very much cheaper. 
 
 The Chaieman. But the President suggested another plan through 
 the Attorney General. 
 
 Mr. Lee. But you do not take the President's suggestions as to 
 the way you should act, but act on yotu- own initiative. 
 
 Mr. Wilson. Do not allow any of this to rest on the shoulders of 
 the President; he was not responsible for anything. 
 
 Mr. Maetin. I would like to say a word or two about this licensing 
 provision and to express the hope this committee will not, in peace 
 times make the sugar producers of this country operate under 
 license Anybody who has operated under a license heretofore, 
 knows the hardships. It means that the cane sugar manufacturer 
 or nroducer or beet manufacturer or producer, can not make a pound 
 of sugar without coming to the Equalization Board and getting a 
 license and it means the Equalization Board has the right to exact 
 a license from every man who makes as much as a barrel of sugar 
 from sorghum or from cane, and that he can not dispose of a barrel 
 of this sugar to anyone unless he gets permission from the Equaliza- 
 
 Mr Puenell. Let me ask you: Suppose the President had exer- 
 ■ d the power and permitted the Equalization Board to buy this 
 Cuban sugar at 6^ cents, what in your. opinion would the consumer 
 be paying for sugar to-day? 
 
26 SUGAB LEGISLATION. 
 
 Mr. Martin. That would be just about 1 cent a pound more than 
 they paid last year. The price last year was 8.82 and it would 
 have been 9.82 to 10 cents. That would hare been the wholesale 
 price. Of course they would have had to add a cent and a half 
 to 2 cents a pound on to that, which would make sugar sell for from 11 
 , to 12 cents a pound. 
 
 Mr. PxiRNELL. If it had been piu-chased at 6^ cents ? 
 
 Mr. Martin. Yes. You see, they have to add for the freight, 
 and they have to add the duty, and they have to add the overhead 
 charges for refining, which amount to 1.52 to 2 cents a himdred. 
 
 Mr. PuENELL. Is that the normal cost of delivering to the con- 
 sumer, the difference between 6^ and 1 1 cents ? 
 
 Mr. Martin. No; the price delivered last year to the Cuban refiners 
 was 7.28. Then adding the duty, the freight, and everything to it, 
 this would make 8.28, and adding 1.52 to that for refining and over- 
 head charges, it would have made 9.82 instead of 8.82 as against last 
 year. 
 
 The Chairman. Mr. Martin, the Senate has inserted "that the 
 President is authorized to continue during the year ending December 
 31, 1920, the United States Sugar Equalization Board." What 
 relief may we look for by simply providing for the continuing of 
 the board without giving it the authority to license? 
 
 Mr. Martin. So far as the power to embargo is concerned, I want 
 to say you have that now; you have had that all the time; the War 
 Trade Board has that power. And, as a matter of fact, the Sugar 
 Equalization Board, during this shortage of sugar, some three months 
 ago when they started to send sugar abroad, went to the War Trade 
 Board and asked them to put an embargo on the sugar. The Sugar 
 Equalization Board had the right to stop the shipment to foreign, 
 countries when the sugar left the hands of the refiners, because the 
 refiners were under contract not to ship any of this sugar abroad; 
 but individuals would go there and buy this crop from the refiners 
 and then ship abroad, so that the Sugar Equalization Board asked 
 the War Trade Board to put on the embargo, which they did not do. 
 And the War Trade Board stiU has that authority. 
 
 Mr. Candler. Was there any agreement between our Government 
 to furnish any sugar to any of those foreign Governments 1 
 
 Mr. MARTipr. One-third of the Cuban crop last year was bought 
 up by the British Koyal Commission and refined in this country 
 and, when refined, shipped abroad. It was not our sugar. 
 
 Mr. Wilson. It was bought by us and sold to them ? 
 
 Mr. Martin. No, sir; they purchased one-third of it at the same 
 time we purchased two-thirds of the Cuban crop. One-third of it 
 was alloted to them. 
 
 The Chairman. I want to call your attention to Mr. Glasgow's 
 statement for the board. In response to a question from Senator 
 Smoot, he states: 
 
 Let me say one other word. I do not want the license system; I am just as opposed 
 to it as you are on every basis, but from practical experience in this matter I do not 
 see anything but failure ahead of this Equalization Board without the powers; and 
 we ask simply that unless we are given the powers that Congress do not put the burden 
 on this board to try to do it. 
 
 He says without the power to license, the board is opposed to the 
 legislation and ask that the burden be not placed upon them to try it. 
 
SUGAB LEGISLATIOIT. 27 
 
 Mr. Martin. In the first place, I want to direct your attention to 
 the fact this bill contemplates not only the purchase of the Cuban 
 crop but the purchase of all sugars. It does not say "foreign sugars," 
 but gives the Sugar Equalization Board the right to purchase all 
 sugars. , 
 
 The Chairman. What relief will that give — simply to purchase it ? 
 
 ^^ ™eans that sugar will be sold higher. 
 
 Mr. Martin. No; it does not. 
 
 The Chairman. It can be sold at any price the seller asks. It is 
 left up to the conscience of the profiteer. 
 
 Mr._ Martin. Is not that the case with every other commodity, if 
 that is the case with sugar 1 But my position is this, that if the 
 Sugar Equalization Board purchases the Cuban crop and then makes 
 a contract with the refiners to refine this sugar for a given amount, 
 with the understanding the refiners are to distribute that sugar 
 among the wholesalers of this country 
 
 The Chairman. With the unders^tanding that that is ail the 
 authority they have. 
 
 Mr. Martin. They can make it by contract; they have the power. 
 There is no imderstanding about it; thev can make it as a binding 
 contract. 
 
 The Chairman. Suppose the refiners got in ahead of them, or own 
 it at the present time ? 
 
 Mr. Martin. But the refiners do not. The very foundation of this 
 biU is that the Sugar Equalization Board wiU go to Cuba and buy 
 the crop. If it is going there to buy the sugar, the matter is out 
 of hand; nothing can be done. 
 
 The Chairman. They will be able to control it after they buy it ? 
 
 Mr. Martin. They can control it by contract with the refiners. 
 If they make a contract with the refiners and say "We will seil you 
 this sugar and you wiU refine it for a given amount and place it upon 
 the market, say, at 10 cents a pound, to the wholesalers of this 
 country," then sugar is not going to sell in this country for more 
 than 10 cents a pound. 
 
 Mr. Candler. It requires them to secure an adequate supply at a 
 reasonable price and an equitable distribution of sugar at a fair and 
 reasonable price to the people of the United States; and if they 
 become the sellers of the majority of the sugar they can practically 
 fix the price at which it is sold outside. 
 
 Mr. Martin. Your licensing feature not only means you start 
 with the producer and put him under license, and he can not purchase 
 a pound without puttmg him under a license and he can not sell a 
 
 gound without putting him under a license from the Equalization 
 ioard; but it means to the wholesaler he has got to haVe a license 
 before he can sell a pound of sugar, and it means to the retailer that 
 he can not sell a pound of sugar without a license from this board. 
 So they are going to be licensed from top to bottom. That is what 
 they want. 
 
 Mr. McLaughlin of Michigan. No; you are not quite right. They 
 get their power under this food-control act, which excludes the 
 retailer. 
 
 Mr. Martin. They put him under license before. 
 
28 SUGAR LEGISLATION. 
 
 Mr. McLaughlin of Michigan. The retailer is described in the act 
 to be one whose business is less than. $100,000 a year. You are 
 opposed to the license system ? 
 
 Mr. Martin. Oh, yes. 
 
 Mr. McLaughlin of Michigan. As to sugar, unless it is applied to 
 everything else ? 
 
 Mr. Martin. Yes, sir. 
 
 Mr. McLaughlin of Michigan. Whether it is necessary as to 
 everything else or not ? 
 
 Mr. Martin. Yes, sir. If you were going to put it on everything 
 in this country, it would be a different thing; but I can not see, for 
 the life of me, why sugar should be the one thing singled out. 
 
 Mr. McLaughlin of Michigan. The conditions seem to justify it as 
 to sugar and not as to the other things. I am as much opposed as 
 you are to Government control 
 
 Mr. Martin. Why do the conditions make it necessary? 
 
 Mr. McLaughlin of Michigan (continuing). But when you strike 
 a situation where it seems to be necessary, I am even willing to give 
 the extraordinary power, as much as I dislike it. 
 
 Mr. Martin. What is the condition that makes it necessary ? Why 
 do you think it is necessary ? 
 
 Mr. McLaughlin of Michigan. The sugar situation is a very acute 
 and dangerous situation. 
 
 Mr. ly^RTiN. I want to say, gentlemen, there is more sugar in 
 sidit than you ever had before in this country. 
 
 Mr. Wilson. What is the cause of the present condition, then? 
 
 Mr. McLaughlin of Michigan. It does not do much good to look 
 at it if you can not get it. 
 
 Mr. Martin. No; they have not got it, but you must remember 
 this acute situation was brought about in this way: This country 
 bought, and had two or three months ago, from 200,000 to .300,000 
 tons of sugar in Cuba that belonged to the United States Sugar 
 Equalization Board. At that time you had the longshoremen's ' 
 strike and ships from Cuba came to our seaports, but they were not 
 unloaded there for five or six weeks. They stayed there loaded and 
 a number of refineries shut down and that brought about an acute 
 shortage of sugar in this country. Now we are bringing sugar in 
 from Cuba and they are unloading those ships, but they have not 
 had the time to distribute the sugar so as to relieve the situation. 
 
 Mr. Jacoway. Is there any truth in the statement if they do not 
 take control of the sugar at the present time, Europe will buy up the 
 entire Cuban crop ? 
 
 Mr. Martin. No, sir; I do not think Europe will buy up the entire 
 Cuban crop, for the reason the rate of exchange is so great against it 
 they will only buy what they have to buy; and they are rationing 
 their people now. 
 
 The Chairman. I would like to call your attention to the state- 
 ment of Mr. Glasgow, general counsel of the Sugar Equalizatiola 
 Board, on page 96, where he states, on behalf of the board, "that 
 the powers m that bill are absolutely necessary to have, in our judg- 
 ment, if you should decide to purchase the Cuban crop." 
 
 Then, on page 97: 
 
 Mr. Glasgow. I can see nothing, Mr. Chairman, nor can the board see anything 
 that can be accomplished by it in the pxirchase of the Cuban crop if the sole function 
 
SUGAB LEGISLATION. 29 
 
 of the sugar board is to go there and buy it and feed it out to the refiners and they 
 feed It out in turn to the middlemen, and. they feed it out in turn to the dealers for 
 speculation in the United States. 
 
 Mr. Martin. That is the case with everjrthing. 
 
 The Chairman. That was the contention Mr. Glasgow made in 
 beha,lf of the Equahzation Board, that they had had the matter under 
 consideration and beheved the law of no value whatever unless that 
 power is granted. Your contention is that it is not necessary. 
 
 Mr. Martin. Our contention is, first, it is not necessary; and, in 
 the second place, it would be unjust and unfair to select sugar as 
 the only commodity in this country to be put under a license. If 
 you go down to the Agricultural Department and ask them whether 
 they want a license for their cottonseed meal, they will say "Yes;" 
 that they can not handle it in any other way, and every one of your 
 boards will tell you the same thing. 
 
 Mr. McLaughlin of Michigan. Here is the situation that is exist- 
 ing: In one zone, the zone along the North Atlantic coast, it is selling 
 the remnants of last year's Cuban sugar crop, which is now 9 cents, 
 to the wholesaler. That is the Equalization Board's sugar. Then 
 it has created another zone where the beet-sugar people are not 
 permitted to sell at over 10^ cents a pound. Then it has created 
 another zone, in which these Louisiana people are permitted to sell, 
 not at a price fixed by the Equahzation Board, but at a price which 
 the Attorney General says will not be profiteering, to wit, 17 to 18 
 cents a pound. Now is that the situation you wish to have continue ? 
 
 Mr. Martin. No, sir. But I want to say that situation is brought- 
 about by the fact that the Sugar Equahzation Board has established 
 these zones. 
 
 Mr. McLaughlin of Michigan. It is brought around by the fact 
 that the Sugar Equalization Board has been interfered with by the 
 Attorney General, who arbitrarily fixes a price at 17 or 18 cents in. 
 Louisiana; whereas the rest of the country is being charged only 9 
 cents and 10^ cents a pound. 
 
 Mr. Martin. I was first answering your question as to zones. 
 The zones in this country were estabhshed by the Sugar Equalization 
 Board. 
 
 Mr. McLaughlin of Michigan. But the board has not been oper- 
 ating or fixing the price in the Louisiana zone. 
 
 Mr. Martin. The board is operating and expects to operate up 
 until the 31st of this month, so far as the zones are concerned and 
 in fixing prices. 
 
 Mr. McLaughlin of Michigan. The Attorney General fixed the 
 price down there at nearly double what is paid and ];pceived in other 
 zones. 
 
 Mr. Martin. I would hke to say just a word on that : The Attorney 
 General has fixed no price. The situation in Louisiana is just this : 
 Our crop in Louisiana this year amounts to about 25 per cent of a 
 normal crop. We normally produce about 300,000 tons of sugar. 
 This year we will make less than 100,000 tons. That is due to no 
 fault of the Louisianians; they have done their best to produce a 
 good crop. But the normal rainfall there is about 50 inches, and 
 this year it has been more than 100 inches. So they have simply 
 been drowned out and have not got the crop, and a great many 
 factories down there will not turn a wheel or make a pound of sugar. 
 
30 SUGAR LEGISLATION. 
 
 On the 1st of December, which was about the time this longshoreman's 
 strike was being settled, there was an extreme shortage of sugar in 
 this country and when we began to harvest our crop, there was a 
 rush from all sections of the United States to buy the Louisiana 
 crop and we were offered tremendous prices for it. We were offered 
 from 20 to 27^ cents a pound for every pound of sugar produced in 
 Louisiana. Many people entered into written contracts for the 
 sale of their entire crop, some to candy men, some to confectioners, 
 at prices above 20 cents a pound. This matter was brought to the 
 attention of the Attorney General, and the Attorney General wrote 
 a letter to the United States district attorney of Louisiana and told 
 him if anyone sold their sugar at any such fancy price, he should 
 call them before him for an explanation, and if that explanation was 
 not satisfactory, he should prosecute them for profiteering. I heard 
 of this letter arid went over to see our two United States Senators, 
 and we went down to see the Attorney General. We protested: 
 First, on the ground that sugar was a farm product, and it was 
 especially exempted under the act you gentlemen passed known as 
 the Lever Act. The Attorney General took the position it was not 
 a farm product. 
 
 Mr. McLaughlin of Michigan. Not a what? 
 
 Mr. Martin. Not a farm product; that while' it was made on the 
 farm, yet it had to go through a certain manufacturing course and 
 therefore it was a manufactured product. I do not believe any 
 jury in the world would ever be convinced of that. We further 
 told him that even if what he said was true, he could not convict 
 a single man in Louisiana for profiteering, because if he sold his 
 sugar for 25 cents a pound, he would not make any money; that he» 
 first had to show a profit before he could be called a profiteer. He 
 admitted that was true, but he said "I have got to take some action 
 to stop this high price of sugar. It is going to affect the market in 
 other sections of the country." After talking over the matter, the 
 su^estion was made that we have a United States district attorney 
 in Louisiana, and it might be possible for the United States district 
 attorney to meet a committee of sugar producers and see whether 
 they could not come to some agreement as to the marketing of the 
 Louisiana crop. This was done, and the United States district 
 attorney and his advisers down there, after looking into the situa- 
 tion, getting the facts and figures as to the cost of making this crop, 
 and as to the shortage of the crop, concluded that nobody could 
 possibly be convicted if he sold sugar under 17 cents a pound for 
 clarified sugars. The sugar producers in Louisians then agreed, 
 notwithstanding the fact a great majority of them would lose money 
 at that figure, that they would not sell above 17 cents a pound 
 The district attorney served notice upon them that anyone that 
 sold sugar above 17 cents a pound would be called upon for an 
 explanation as to why he should not be prosecuted for profiteering. 
 That is the situation so far as the Louisiana crop is concerned. 
 They have not been profiteering down there, and the fact is they are 
 losing money. We have no crop to profiteer with. 
 
 The Chairman. In that co'nnection, let me call your attention to an 
 apparent discrimination. With short crops in the Northwest, 
 especially wheat, where thefie is less than half a crop and where many 
 did not even get back their seed, the President said, concerning 
 
SUGAE LEGISLATION-. 31 
 
 diZ^tJi^TT^l\^°T.^^^' *^^* they had the power to bring 
 Dowr ?n K^" \if T\^^ ^""^^"^ ^^d shoiJd do eYerything in it! 
 be don. to r^^nli'ilf^^''- • ^^^ ^ ^«°t^^«t tl^^t everything^should 
 ^\ip;tt:if%^Z^^^^^ «^ '^^ NortLesf and to 
 
 The fc^'^-.J^T^"' ''°-'^' -"^^ ^^™te- If tlie South 
 
 yea? 1w Z^h ?! -fr/' ^^^^ ^* 17 ^^^t^ in tli^ South this 
 ^ ir' ^^^ much was it last year 2 
 
 eotten frZT. tn?7 ".*^' ^°^*^ ^""^ ^^^n ^«t ^1°"^ ^« ««"W li-^e 
 
 ^ Mr M-?r ..i 7 ^T.*\^?'' ^^^^? P<^^^ tliat tW made. 
 
 «rt w;S r T °i ^r^\g^n- Mr. Hoover said i/the food control 
 
 L fr * P^^^^^ ^^®^* ™gli'^ go to $7 a bushel. 
 .Jif'r. A™- ^ ^^ not think it is fair to the wheat producer, the 
 corn producer, or that it is fair to any other producer in this couAtry, 
 that they be compeUed to sell their product at a figure at which thev 
 are gomg to lose money. ^ 
 
 The Chairman. I was calling attention to the way the people were 
 treated m one section of the country and the wav thev were treated 
 m another. 
 
 Mr. Martin. I think they ought to be treated all alike in all 
 sections of the country. 
 
 The Chairman. I agree with you, but evidently they have not all 
 been treated alike. Is that all ? 
 
 Mr. Martin. That is all, unless you gentlemen have some questions. 
 
 The Chairman. Thank you very much, Mr. Martin. We will how ' 
 hear from Mr. Kelly. 
 
 STATEMENT OF HON. MEIVIIIE CIYDE KELLY, A REPRE- 
 SENTATIVE IN CONGRESS FROM THE STATE OF PENNSYL- 
 VANIA. 
 
 Mr. Kelly. Mr. Chairman, I wanted just to take a little time to 
 give my own experience with the Equalization Board in the sugar 
 situation, and I want to approach it from exactly the opposite point 
 of view that Judge Martin has taken — in other words, from the con- 
 sumers' standpoint, and to show what the actual situation is now and 
 the possible situation next year. 
 
 The average normal consumption in this country is something like 
 8,000,000,000 poilnds of sugar. If the profiteers and gamblers can 
 put 1 cent a pound on that, because there is no restraint, it means 
 $80,000,000 to the people of this country. If they can put 10 cents a 
 pound on that it means $800,000,000, the profiteers and gamblers in 
 this sugar have taken out of the pockets of the consumer. 
 
 The Sugar Equalization Board has made two mistakes, in view of 
 my own experience with them in western Pennsylvania: First, 
 because they failed to take advantage of the opportunity to buy 'the 
 Cuban crop and, as has been explained, because the President refused 
 to give them the authority to buy the Cuban crop. Second, they 
 zoned the United States. They put zones on the United States 
 absolutely preventing the natural free play of sugar in this coimtry, 
 and here is what they did to Pittsburgh under that situation. Pitts- 
 burgh was situated on the exact boundary between the eastern zone 
 and the western sugar zone. We got sugar out in western Pennsyl- 
 vania until the first of July. Along about September there came a 
 
32 SUGAE LEGISLATION. 
 
 serious situation where no sugar was coming in, and both the whole- 
 salers and jobbers became very much concerned. They com- 
 menced to write me in a most plamtive way, asking me to get some 
 word. I took it up with the Sugar Equalization Board personally, 
 with Mr. Zabriskie, and he promised me, on the 1st of September, 
 Pittsburgh would be allotted exactly the same supply in September, 
 October, November, and December of 1919 that they had in the same 
 months of 1918. I sent that word back and everybody was happy. 
 They said they could get along this year with exactly the same as they 
 had last year. 
 
 Everything went along, but no sugar came in, and I began to be 
 deluged with letters and telegrams asking me why the Sugar Equaliza- 
 tion Board should not carry out its promise to me. I took it up and 
 found this zone system having been put into effect and Pittsburgh 
 being put on the line it womd have to get its supplies . from the 
 eastern market, and beet sugar was not to be brought in. In other 
 words, they had given Pittsburgh an allotment of cane sugar and 
 domestic Cuban raw sugar, and beet sugar was not to be brought into 
 Pittsburgh. I found out that Pittsburgh got three-fourths of its 
 supply in the last three months of 1918 from cane refiners, and there 
 was the situation. It became necessary to. take it up with the 
 refineries of New York, which I did, and after a great deal of trouble 
 they finally changed the system and we got enough to fill our sugar 
 needs in Chicago, and last week they sent us 40,000 bags of 100 
 pounds each from Chicago, and we are still getting it in, but we are 
 not getting any beet sugar. And as a result of the situation there is a 
 most serious shortage, where the people are unable to get any sugar, 
 but where apparently the candy manufacturers are selliag all kinds 
 of sugar, but they are selling it at 400 per cent higher than any such 
 merchandise was ever sold before. And it has come to the point in 
 that great western section of Pennsylvania where it is more of a 
 question than the great league of nations and a lot of other big 
 questions. 
 
 And here is a question which concerns every single individual, and 
 I am willing to go to the extent of allowing this Equalization Board 
 to be continued, because they had done that work up until the 1st 
 of July, but to take away from it the power to zone the United States. 
 I thiiik by all means they never should have put those zones into 
 effect, and it can carry on its work effectively if it is allowed to go 
 ahead with its power to purchase sugar, if it can, and to put it out 
 as it did before, in 1918, in the very midst of the war. 
 
 Mr. Candler. This bill under consideration takes away from them 
 that power. 
 
 Mr. KJELLY. If that is amended in the Senate 
 
 Mr. Candlek. It provides: 
 
 That the zone system of sale and distribution of sugars heretofore established by the 
 said United States Equalization Board shall be abolished and shall not be reestab- 
 lished or maintained, and that sugars shall be permitted to be sold and to circulate 
 freely in every portion of the United States. 
 
 Mr. Kelly. I did not see that in the original bill. 
 Mr. Candler. It was amended in the bill as it passed the Senate. 
 Mr. Kelly. That is fine. That will obviate one difficulty. 
 Mr. Rubey. Do you know just when they put in this zoning 
 system ? 
 
SUGAE LEGISLATION. SST- 
 
 Mr. RuBEY. They piit it in in February of this year, I think, 
 
 y +V, ^^^^" ■'^-'"^'^J'ythmg was going along nicely up until that time, 
 ana tJiere was no complaint whatewr. They werp doing their work, 
 liut suddenly they put Pittsburgh exactly on the line and refused to 
 let Deet sugar come m, and when we had been getting three-fourths 
 ot the sugar from the beet interests we, of course, were hit by panic. 
 • i+-I°v! ■ • *° ^^^' fiii'ther, that I believe the licensing system is 
 ,Xi«gtiliablr- m view of the situation which we have at the present time, 
 and which means we are just facing a profiteering scheme next year 
 which will put sugar, I am confident, up to 30 cents a pound to t"he 
 people ot America unless some restrictions are put on them. That 
 IS what we are going to face. And when you figure thai every cent 
 per pound added to the price of sugar takes $80,000,000 out of the 
 pockets of the people, you can figure what a tremendous thing that 
 is to the gamblers m sugar. Sugar is not so essential for the manu- 
 facturers of soft drmks and candy, but to the workingman of this 
 country, I think, it is absolutely essential for him to have sugar on 
 his table, and that is the reason we f9,ce such a situation' as this, 
 because the candy men apparently are able to get all kinds of sugar. 
 Perhaps the refiners sell to the manufacturers of candy at a 300 or 
 400 per cent advance, and they get it at a price tliat cuts out the 
 worker of this coxmtry. I would extend the license to every single 
 dealer in 1920 and see that that dealer holdsithe price constant. The 
 price is going up because of the failure to get the crop of Cuban sugfer, 
 at 6i cents. The price of Cuban sugar will be higher next year, but 
 there should not be one single cent put on there by the gamblers of 
 this country and every single cent advance should be put on there 
 simply .because it is alasolutely necessary. And if you do not take 
 some action here in this case, I want to say to you it will be an abso- 
 lute disregard of our obligations to protect the people of this country, 
 and I am convinced this committee will take some action. 
 
 I have 200 letters here from men in Pittsburgh that give exactly 
 the same things I have told you. 
 
 Mr. Candler. Suppose you could not get a bill through? Have 
 you read this bill ? 
 
 Mr. Kelly. Yes. 
 
 Mr. Candler. Do you think this bill would meet the situation if 
 it is passed as it is ? 
 
 Mr. Kelly. I am afraid it won't accomplish whal^we desire, with- 
 out the license fea|;ure, but it will have some effect on steadying the 
 price; and if yoii continue the board and tiey do as they did in 1918,, 
 they will do it again. 
 
 Mr. Candler. The theory of this evidently is they will buy a. 
 majority of the sugar, they will control the larger amount of the. 
 product, a,nd,by having, control of a large amount of the product,, 
 that they may be afele to regulate the; price through the dealer to the- 
 consupier and reduce the price so thai we may get a reasonable price.. 
 
 Mr^ Kelly. Thai; is the theory, and I think they will be abte to.do) 
 that if [the zone system is put out. 
 
 .-.Mr. Martin. Is' it not true that. ; the price of Cuban\ sugar has; 
 always fixed the price of sugar in this country? 
 
 155255—19- 
 
34 SUGAE LEGISLATION'. 
 
 Mr. Kelly. The price of Cuban sugar has fixed the price of sugar 
 in this country in the past. 
 
 Mr. Martin. And in our coming crop it will have the same effect ? 
 
 Mr. Kelly. I think so. 
 
 Mr. Candlee. I want to go to any extent necessary in order to 
 reduce the price of sugar to the consumer ; I want to get it at a reason- 
 ahl^ price to the man who uses it. 
 
 The Chairman. Thank you, Mr. Kelly. We are grateful to all of 
 you for your testimony. 
 
 (Thereupon the committee took a recess until 10 o'clock a. m. .the 
 following morning.) 
 
 (At the request of Eepresentative Charles A. Mooney, made by 
 Representative John W. Rainey, the following statement was ordered 
 printed in the record :) 
 
 Statement of Me. A. B. Linn, Cleveland, Ohio. 
 
 1 first became a dealer in 1863 and have been for more than 50 years engaged in the 
 sale of sugar, tea, aiid coffee, and for more than 25 years exclusively in sugar. 
 
 I supply a retail trade of from 300 to 500 grocers, soft-drink manufacturers, bottlers, 
 confectioners, bakers, and ice-cream manufacturers in northern Ohio. I have no 
 other business connection save sugar. The nation-wide scarcity of sugar which has 
 existed for a considerahle period of time has been especially marked in northern 
 Ohio, and there has been a general feeling that this local scarcity was intensified 
 through inequalities of distribution. 
 
 In recent times, through the zone system, northern Ohio has been dejjendent upon 
 the supply of beet sv^ar, shipments of cane sugar into this locality having been pro- 
 hibited. This fact would not have resulted in a hardship had the spirit of the zone 
 system been fairly carried out; . Prior to recent times, I have been a dealer principally 
 in cane sugar, arid my customary sources of supply have been cut off from this territory. 
 During hostilities, through governmental action, the beet sugar dealers were required 
 to make certain sales to me of beet sugar, but recently this control has been removed. 
 The result has been that f;Or months I have been unable to obtain any beet sugar what- 
 ever.. I have appealed to the refiners of beet sugar, have offered cash at the established 
 price, with negative results. At my request, my attorney. Col. Turney, called upon 
 the sales manager of the beet refinery now principally supplying northern Ohio and 
 tendered cash for the purchase of sugar and was met with a refusal. The grounds upon 
 which I have been denied sugar by the beet refiners is that I was not their customer 
 heretofore and that unless compelled so to do by the United States, they Would not 
 sell me sugar now, as they had ordei's from their regular dealers for their entire product 
 and more than their prdduct. 
 
 A great inequality of distribution has resulted in the application of the zone system. 
 In my opinion, it would aid in the equal distribution of sugar were the zone system to 
 be entirely abdlished. I have found Federal control of sugar to be beneficial, but it is 
 necessary that this control be so exercised thatif any particular refinery is to supply 
 any particular locality, that refinery shall be required to make an equal distribution 
 lof itfi product, both among those who have been its dealers prior thereto, and those who 
 thave been customers of its competitors. Otherwise, assuming that there is about a 50 
 per cent supply of the amount of sugar, that could reasonably be consumed and would 
 reasonably be consumed if the supply were unlimited, the present system permits one 
 ■who was a dealer and customer of the house supplying the territory to receive substan- 
 rtially 100 per cent and one who was a customer of a refinery excluded from the territory 
 Would receive nothing. In my own case, for the past two months, I have not had a 
 single pound of sugar to deliver to any of my customers a,nd have had no sugar since the 
 last carload of cane came into my territory. If a long lifetime spent in this particular 
 : industry has impressed one thing more than another upon my mind, it is that govern- 
 mental control is beneficial in case of shortage from whatsoever reason, but this govern-' 
 ment control must be sufficiently complete and comprehensive that the distribution 
 ;shall be equal . If the contrul simply designates a particular house or houses to supply 
 :a.p?.r,tiGular zone and excludes other houses therefrom, and is not associated with a 
 mandatory requirement that all dealers be equally supplied, the results are bound to be 
 ideplorable. 
 
SUGAR LEGISLATION. 35 
 
 Small dealers, many of them imperfectly understanding the English language, only 
 know that their customary source of supply is cut off . They are unable to understand 
 why their competitor receives sugar and they do not. They pass this feeling on to 
 their customers, the families that come into their stores with market baskets lor this 
 necessary food supply. This results in feelings of great bitterness and governmental 
 agencies are blamed for the situation. I am not certain but that no control at all is 
 better than a partial control, as a partial control is bound to develop such discrimina- 
 tions as I have outlined in my own case and with which I have had a most cruel and 
 harassing personal experience. 
 
 I have intentionally omitted speaking upon the subject of price control. Your 
 present position in this matter has been so well taken and appears to be so thoroughly 
 understood that no word of mine could add anything to that which you already know, 
 nor would I desire to see your present admirable system changed in this regard. 
 
 May I also offer the suggestion that in the position in which I have been, in close 
 touch with the retail dealer, the small retailer, the user and the consumer, that I have 
 had an admirable opportunity to know their state of mind and their feeling in the situa- 
 tion. The present or any other shortage willbe cheerfully borne provided the shortage 
 is equally borne. When, however, any person finds himself deprived of his source of 
 ■aupply, whereas his competitor is receiving, through governmental agencies, a partial 
 isupply or a nearly full supply, a school of Bolshevism is automatically created and 
 the resultant ill feeling is automatically directed against the governmental functions 
 which are striving to cure the very situation. I have no complaint with respect to 
 the powers granted to the SuKir Equalization Board, nor the manner in which its 
 powers have been exercised. I do submit that any new powers should be wide and 
 adequate, and granted with the full understanding that they shall be so exercised as 
 "to insure in times of shortage an exactly equal distribution without reference to any 
 prior business connection with any dealer who may for the moment be serving a 
 particular locality, or who in normal times may represent a dealer who has been 
 excluded therefrom. 
 
 (The bill referred to in the hearings was unanimously reported with 
 the following amendment: Strike out everything after the enacting 
 •clause and insert in heu thereof the following:) 
 
 That the President is authorized to continue during the year ending December 31, 
 1920, the United States Sugar Equalization Board (Incorporated), a corporation 
 organized under the laws of the State of Delaware, and to vote or use the stock in 
 .■such corporation held by him for the benefit of the United States, or otherwise exercise 
 his control over the corporation and its directors, in such a manner as to authorize 
 and require them to adopt and carry out until December 31, 1920, plans and methods 
 of securing, if found necessary for the public good, an adequate supply and an equitable 
 -distribution of sugar at a fair and reasonable price to the people of the United States. 
 Sections 5 and 10 of the act entitled -'An act to further provide for the national security 
 and defense by encouraging the production, conserving the supply, and controlling 
 the distribution of food products and fuel," approved August 10, 1917, as far as the 
 «ame relates to raw or refined sugar, sirups, or molasses, are hereby continued m full 
 force and effect until December 31, 1920, notwithstanding the provisions of section 
 124 of said act: Provided, That the provisions of this act shall expire as to the domestic 
 product September 30, 1920: And provided further, That the zone system of sale and 
 distribution of sugars heretofore established by the said United States Sugar Equaliza- 
 tion Board shall be abolished and shall not be reestablished or maintained, and that 
 ■sugars shall be permitted to be sold and to circulate freely m every portion otthe 
 United States. The termination of this act shall not affect any act done or any right 
 or obligation accruing or accrued, or any suit or proceeding had or commenced in any 
 civil case before the said termination pursuant to this act; but all rights and liabilities 
 under this act arising before its termination shall continue and may be entorced in 
 the same manner as if the act had not terminated. Any offense committed and all 
 penalties, forfeitures, or liabilities incurred prior to such termination may be prose- 
 •cuted or punished in the same manner and -with the same effect as if this act naa not 
 Taeen terminated. 
 
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