14 OONGRESSION ...\.1 RECORD-SENATE ~I_j_ROH 7

l\Ir. NORRIS. I think it ought to be drastic. It is a con· 1\lr. President, I realize that nothing can be accomplished in

:Mr. WATSON. The Senator understands that committees Your letter in reference to committee assignments at hand. In an­ are selected always by resolution, and that under Rule XXIV swer will say that I do not belong to the party of Senators Johnson it is provided that- and SHIPSTE.!D, and their action is no precedent for me. In the appointment of the standing committees, the Senate, unless In my letter to him and to the others I had cited this prece­ otherwise ordered, shall proceed by ballot to appoint severally the dent. The Senator from Iowa [Mr. BROOKHART] continued: chairman of each committee, and then, by one ballot, the other mem­ It is my desire that I be assigned to committees as a Republican bers necessary to complete the same. under the same rights and rules as all other Republi.cans. I desire that this Always hitherto, except· in the last Congress, a resol~tion question be submitted to the committee and to the caucus, and · if has been offered for the purpose of naming all the coiDIDlttees approved I shall abide by the action of the committee and caucus on all at one time. committee a signments. However, if this request is denied, I then de­ Mr. BORAH. I understand, in case the unammous consent sire to become my own committee on committees and request my own is agreed to the Senator then makes a report disposing of committee assignments from the Senate itself. the committee memberships en bloc? Inasmuch as he answere'd in that -rein we felt justified in Mr. WATSON. That is correct. assigning him to committees. If these Senators are not satis- Mr. BORAH. There can be no change of any part of the fied with their committee assignments we are entirely willing program? that they shall reassign themsel-ves to the positions to which Mr. WATSON. The resolution which will then be offered we have a signed them, but not otherwise. will be on providing "That the following shall constitute Mr. BORAH. That perhaps '\"\Ould be a fruitless effort upon the tanding committees of the Senate of the Sixty-ninth their part which they would not take the time to enjoy. Congress." MI·. WATSON. That may be. Mr. BORAH. Mr. President, I suppose we may as well have Mr. BORAH. In other words, if they are not satisfied with our understanding now as later. Before the matter ig con- where they are, they may assign themselves to the same sented to I would like to ask what disposition the Committee positions? on Committees has made with reference to the senior Senator Mr. WATSON. Or some other positions to which some of from ... ~orth Dakota [Mr. LADD], the junior Senator from North the other Senators of their cla s ha\e been a signed. In other Dakota [Mr. FRAziEr.], and the junior Senator from Iowa words, we did not feel justified in as igning these Senators a [ .lllr... .- B BOOKHA.RT ] ?. Republicans,. and· theth committee· f so decided,C • and at Cothe confer· - Mr. WATSON. The Senator from Iowa (Mr. BRoOKHART] is ence th1~ mornmg e action o the omm1ttee on mnuttees left on the arne committees he was on before. The senior '\"\a ratified. . Senator from Xorth Dakota [Mr. LADD] is left on the same I ~r. BOR~. The able Senator who have outlined and committee he was on before except that he is no longer chair- de~ngnate~ ~hlR program are far better capable than my~elf · man of a committee. The junior Senator from North Dakota o! determmmg. wl;at ought to be done fr~m a party standpomt. [lli. FRAZIER] is on the !':ame committees he was on before Ne~erthel~F:s:, 1t lS a matter about which some of us have with the exception of the Committee on Indian Affairs. He decide~ Yle~s...... was transferred from the Committee on Indian Affairs to the I take tins occaaon. to say tha~ I t.hu;k It not. only ~mpo~~c Committee on Banking and Currency. from a party sta~dpomt bu~ I tlnnk It IS exceed!ngly llllJ?Olitic Mr. BORAH. As I understand, the senior Senator from from the Rtandpo~t ~f the mte~ests of the ':orkmg capacitr of North Dakota [Mr. LAnD] has been demoted from his chair- th~ Senate. I thmk It also UllJUSt and unmse fr~m any new- anshi pomt. I do not myself get any comfort out of gomg back and m p. reviewing the incidents of the laRt campaign and undertaking Mr. "Y AT~ON. He has...... if I to aRs:ign men to their particular position in the party by Mr: NORRIS. l\11:. Pre Ident, l'lght m this con~ectwn, . reason of a difference of new which pre-railed duri11g that ~Y mterrupt, that IS true of all the other Senato1 s named, lS campairn among some of those who had hitherto claimed to be It not? Ha e they not all been demoted? :" . . . . . u nrATSON Th h v b pla ed at the bottom of the Republicans and still clarm to be Republica~ . I thmk It much ~ . r. n - · ey a e een c better for the country, much better for tlie party, and much list. "T • , better for the Senate that as tllese men indicated their de~ire Mr. NORR,IS.T They .have been placed at the foot of the ll t? to he assigned a. Republican~, they :::.hould be assigned a. Re- Mr: W ATSO~. Yes, they have been placed at the foot of publican , they should !Je given their positions as Republican.,, the list. . In my opinion it is not only unfair to the Senators them- . Mr. B9RAH. M.ay I ask upon what theory the committee selves, but it is signally unjust to the constituencies '\Yhich did that 1 • • they represent. These Senators represent Republican States, 1\!r. WATSON. Upon the theory that the first Republican Republican constituencies. They were elected to this body hy confere11ce held at this se sion pro-vided that those Senators Republicans. They could not be here unless that were true. I ·hould not be invited to attend any further conference on the think it a good idea in the hour of nctory when we are en­ Republican side and that they should not be placed on any joyinu the fruits of succe to cast a look ah~ad and to practice committees to fill -vacancies on the Republican side. some "'degree of breadth a~u tolerance with reference to the e Mr. BORAH. If these Senators are not Republicans and are matters. It is a good time to build for the future. I prefer to not to be considered as Republicans or treated as Republicans, determine my course by a "ur-rey of the coming elections rather wLy did the Republican Committee on Committees presume to than by dwelling upon those which are over and now a matter dispose of them and place them? of history. These elections come swiftly, and the fruits of vic- Mr. WATSON. I can answer that question. Two years ago tory are fleeting. the Committee on Committees requested the senior Senator from I would not know where to e ta bli h the line of lovaltv or 1\Iinnesota [l\1r. SHIPSTEAD] and the junior Senator from Min- party devotion under conditions as they have prevailed in ·this nesota [Mr. Johnson] to state whether or not in the assign- country for the last 10 or 15 years. I do not know what the ment of committee member hips to them they wanted to be test is, and unless I do know what the test is I -very much a signed by the Republican Committee on Committees or by the fear that I might get outside of the line my elf. The Democratic Committee on Committees. They responded that fact is that al>out 90 per cent of the present Republican they wanted to be assigned by the Republican Committee on voters are the sons and daughters of renegades if the test '\hich Committees and were so assigned. The caucus having taken is to be applied here is the te;:;t which should h..ave been applied the action it did, the Committee on Committees in tructed me to during the last 35 or 40 or 50 years. When we go back to write to the e four Senators and make the same request of 1872 and think of the renegades -who went a '\Yay; to 1876 and them, asking whether or not they wanted to be assigned by the the vast horde that went away; to 1 96 and the vast number Republican Committee on Committees or. by the Dt-mocratic who went away; to 1912, when practically all of them went Committee on Committees. The response" were such that we away, if we should adopt a rule of reading e-verybody out of felt ju~ti:fied in assigning them to their committeeships. I will the party, testing not only the present status of them but that read for the information of the Senator from Idaho two of of their ance tors we would ha-re a \ery small group of re~lly tho. e respon~eR. loyal people left. The great leader of the past seldom in- ~1r. BORAH. Has the Senator the response of the Senator dulged in such proceedings as these, and when they did they from Iowa [l\Ir. BROOKHART]? li-red to regret it. 'llr. WATSO~. Yes. I think there will come a time in this body in the ne:xt two Mr. BORAH. Read that. years when my colleagues '\"\ill regret this action. There will ~Ir. W ATSOX. The Senator from I owa [Mr. BROOKHART] be more than one occasion when they will, in my judgment, said : look back on it as a. mi taken policy gro'\Ying out of the feel-

:· 16 OONGRESSION AL RECORD-SEN ATE l[ARCII 7

in(Y' which always come as the result of a great victory. I l\Ir. BROOKHART. l\Ir. President, that s_tatement I will thlnk too when we come to the campaign of 1926, whlch is have to challenge. I did not leave the Republican Party. I not v~ry far away, every man who. goes into the States. ":h~re am a better Republican than is the Senator from Indiann. these constituencies now are and mto a number of adJOtmng to-day. [Laughter.] I stand for the princil)les of Abraham States will spend mo t of his time in explaining to the voters Lincoln and Theodore Roosevelt, the greatest Republican:, of those States how this mistake was made. more consistently than has the Senator from Indiana in his I · votes in this Chamber. I can see no benefit to be derived from it in any way. t IS 1\fr. 1\ATSON. That illush·ates how entirely inaccurate my proposed to demote these men. The punishment is offered and friend is as to the principles that were embodied in the last they take the punishment; but they ha\e a vote upon the con:- . f d h . 't f l'ti · t' ml'ttees. They are still UIJOn the committees. They ha\e their Republican pat1 orm an t e mtegr1 yo po 1 ca 1 orgamza wns h and political harmony in a political party. Mr. President and vote in the R~nate. They have their influence here just t e Senators, we 1!-li know what we mean by party regularity and same as they had before so far as the effect. of a si~gle vo~e by party harmony. We know that these gentlemen do not is concerned. I do not see where we can gam anythmg ~Y It represent the Republican Party or its present principles as except to engender here a feeling which ought not to obtam at announced in its last political platform. We know that they tile beginning of this administration. We can afford so far as championed the cause of another candidate for the Presidency; these committee assignments are concerned to do our full part we know that they organized another political party; that they at least to establish harmony and strengthen the party. These held another political convention; that they adopted contrary men lla\e asked that they be assigned as Republi~ans. I 'e?-- principles to tho e embodied in our platform; that they ture to say that during the two years to come their votes Will nominated and tried to elect another candidate. If they had stand the test of republicanism quite as well as many other had their way, Calvin Coolidge would not to-day be the Presi­ votes which will be cast upon this side of the Chamber. dent of the United States; if they had had their way, RoBERT There is a wide difference of view among Republicans upon MARION LA FoLLETTE would to-day be the President of the questions which are now before us for consideration, and which United States. How, then, can they come in and ask to be will be before us for a number of years to come ; and I beg assigned as Republicans when they did everything in their my friend from Indiana to rememl.Je~. that that differe?ce of power to pre\ent the success of the Republican Party, the sue­ view exists not only as between political leaders but It also cess of the Republican candidate for the Presidency, and the exists as between voters and constituencies in this country. success of tho e principles and policies that were embodied in The Republicans lost a campai~ in 1916 because th.ey did not our Republican platform? know that a c~~·tain _large po~t10n of the country ensted, w~re I do not know what these Senators may conclude to do in , utterly unfamiliar With the news. ?f th~ people of tha~ sectiO~ 1928; they may realign themselves with the Republican Party of the country, and utterly Ullfamiliar wtth the econoDllc condl- as then constituted and officered · I am not concerned about tions which obtained. in that part of the co~n~try. If we :'lre that; but I am concerned about ~hat they did in 1!>24:; and wi e, we sh:'lll recogmze the fac~ t~at these di!ferences ?~f :Ie~ I they having decided and determined to Wl'eck the Republican honestly exiSt and that when. diffeiences ~f. new do e.n~t It ,t:s I Party, to defeat its candidate, and to O\erturn its principles, by reason .of the fact that d1ff;re~t .conditions pre;ail m dif: I deny that they have a right to come here at this time and ferent ~ectw?s of the cou~try. Thts IS a vast cot~ntry. and onls 1 ask to be assigned under its banner and among its votaries. by a . w1de difference of VIew a~d f~l.ll and free u~terchan~e of Therefore I think that we are entirely justified in declining opinions can we secure legislation m harmony With the mter- to assign these gentlemen to committees as Republicans. We e ·ts of the whole co~mtry. . ha Ye not, except in one instance, taken them off the committees I regret, Mr. President, that It has ~ee~ed ne~essary t? take to which they ha\e been as igned. this course. I look back upon two rnctdents rn o?r history, ' Mr. BORAH. Mr. Pre... ident, why did you not take them off one in the Democratic Party and one in the Republican Party, the committees? when men of those parti~s were .demoted because their vi~ws Mr. WATSON. They are to be on the same committees. differed from those of their associates. It would be very dl~ · l\Ir. BORAH. If they are to be ostracized, why demote cult to calculate the injury which :flowed to each of the P.ar_ties them and give them a lower place and deprive them of the from that fact. When we go back and stp.dy th_e demotiOn of ad\antage which they have gained by reason of their service? Stephen A. Douglas by Bu~hanan and t.he ?emotion of Charles Mr. WATSON. As Republicans they were entitled to no Sumner by Grant, we obtam some reali~ahon .of the fact t?at committee assignments from us, but as Senators they were what seems to be a small matter may rn reality become VItal entitled to their right to be assigned to some committees; and to the harmony, the success, and progress of the party. having answered in the fashion they did, with the knowledge If these three men stood alone, and they alone would be that we bJld the right to assign them, we offer them these dealt with, it might be aid that ~t ~ou~d be. insignificant; but assignmenfs. They are not compelled to take them if they I pledge you that there are men sitting m thiS Chamber to-day do not desire to do so; but that is the best that we can offer who~e seats will be imperiled in 1926 if thi.s program shall go under existinu conditions. through. Do not thoughtlessly, do not unwisely, invite trouble Mr. Presid:nt, I have asked unanimous consent that Rule or challenge the Republicanism of hundreds of thousands of XXIV shall be set aside in order that the other resolution voters who sent the e men here and who believe they are loyal may be offered, and I should like to haye the request put. to the great principles of government and of economics as Mr. NORRIS. Hr. President, I should like to ask the Sen- tau()'llt by Lincoln and McKinley ;md Rooseyelt. The~e are ator, before I give consent to the request, whether there are rf time . a I ha\e said, of wide difference. of view in politics and any other demotions except in the case of the four Senators? a "ide difference of view as to what constitutes Republicanism, Mr. wATSON. There are not any. and I am deeply thankful under present conditions that it is Mr. NORRIS. Has the committee determined to observe so. Let us recognize the~e conditions and deal with them as what is ordinarily known as the seniority rule? Has it been ·broad-minded lenders and not as narrow partisans. obser-.ed in these assignments, with the four exceptions noted? .I Mr. W.A'l'SON. Mr. President, a political party is a volun- :Mr. WATSON. Not altogether, for the \ery reason that _, tarr a.ssociation of individuals who tacitly agree upon a plat- circumstances and conditions arise, I will say to the Senator forin of principles which they desire to be enforced in ad- from Nebraska, that sometimes prevent such action. mini: tration. It is- organized for one election. To that end Mr. NORRIS. Exactly. Mr. President, I have been told­ members of tl1e party select delegates to a con\ention; they I have not had an opportunity as yet to examine the list­ formulate a platform of principles upon which they go before that the demotions which have been indicated are not the only the veople; and they impliedly understand throughout the ones that have taken place- campaign tlJat, if given power, they will transform those plat- Mr. WATSON. There are not any other demotions. form pledges into the statute law of the land at the earliest Mr. NORRIS. And that there are nolations in this list of opportunity. A political party, I repeat, in reality is or- the seniority rule. I am not a defender of the seniority rule, I gunized for one election. If it· policies are continuing, the will say to the Senator; I do not care whether it is abolished organization may be continuing ; but, after all, it is for one or not ; but I either want it to be fo_llowed or to be abolished-:­ contest, one election, subscribing to one platform, one set of one or the other. I do not want It observed to-day when It prin<:iple..!, and ha\ing one body of candi9-ates to represent the suits some one's convenience an~ ~ot obsened to-m01·~ow when people compl'ising that party and those principles in the en- it does not. I am perfectly ~1llmg that any .comnnttee may suin"' administration. say whether we shall observe It or not obsene It; but I should I ~m not concerned about what men did in 1912 or in 1!>1G like to ha\e that understood. I will say to the Senator it may or in 10:!0; I am concerned about what they did in 1924; and I be, if afforded a few hours' time to ~xamine this list and to lrnow that at that particular time nnd at that particular elec· consider the effect the proposed unarumous-conse;nt agreement tion these particular individuals left the Republican Party. might have, that, so far as I am personally concerned, I would 1

1925 CONGRESSIONAL RECORD-SENATE 17

not make any objection to it; but I am not going to permit it Mr. REED of Pennsylvania. That if objection is made to to be agreed to now, howeYer, without objection, and an ob­ the unanimous-consent order asked for by the Senator fi•om jection, of course, will put it over. It is very possible that we Indiana, I shall on Monday move to suspend the rule as re­ could· agree on a system of procedure and let the Senator's quested in the proposed unanimous-consent order. resolution go through; but I should like to confer with some Mr. BORAH. Mr. President, I do not care to be captious, Senators first, as well as to examine the list before I give but as we have taken up other matters for the purpose of consent. enabling us to get together, I think that had better go oyer Mr. WADSWORTH. Would the Senator come to a Repub­ also, because when we are settling part of these matters I lican conference? think perhaps we had better settle them all together. Mr. NORRIS. My own hands are free now, and I have not Mr. WADSWORTH. Can not the Senator file a notice? taken any steps to tie them, and I do not intend to do so, I Mr. BORAH. The Senator has asked unanimous consent. will say to the Senator from New York. l\Ir. KORRIS. The Senator ·has not attempted to file a Mr. WATSO~. The Senator from Nebraska has not been notice. lie has not attempted to comply with the rule. demoted. 1\Ir. REED of Pennsylvania. I understand that the notice l\Ir. NORRIS. I am not thinking about my own case, I will can be filed in executive session just as well, so I will prepare say to the Senator. I should like to be in good society, and the notice in writing and I will not ask unanimous consent. hence I would not feel badly if I were demoted with the four Mr. ROBIKSON. I ask the Senator from Pennsylvania, as other Senators. I do not care· "·hat happens to me; I am not a matter of information, whether he thinks under Hule XXIV thinking about my own committee assignments when I say that it is neces...,ary to suspend the rule, or whether the procedure I want to examine the list. I have had the rule applied to me a may be otherwise. good many times since I have been in the Senate, wheneYer ~Ir. CURTIS. l\Ir. President, before the Senator answers my wishes conflicted with those of somebody else closer to the that question I should like to suggest that the rule provides po\Yers that be. I conceiye that that is likely to happen during how committees shall be selected in case unanimous consent. is the remainder of my life, and I a.m not makin2: an:v comnlaint not given. I think ample provision is made, and I hope the about that but I do not want anybody to think that I do not Senator will not give his notice. We do not need unanimous ha-fe ense enough to obsene "it and see it. consent. The rule provides how committees shall be selected I should like to have this questiorJ go OYer. I will say to the in case this order is not made. Senator it may be that if it shall go over there will be no ob­ Ur. REED of Pennsylvania. I see, upon referring to the rule, jection tD his request fo. unanimous consent. Personally, I am that it provides that the Senate may otherwise order. That inclined to think there will not be. I want an opportunity to would not requh·e suspellilion, if it is done otherwise, so I with­ debate the question. I am not very particular as to how it draw the notice. comes up. The rule, howeYer, is specific in its command, as I understand it, and objection will not only put it over, but the HEARINGS BEFORE MILITARY AFFAillS COMMITTEE Senator, without unanimous consent, could not ado_pt a pro­ l\Ir. WADSWORTH. I ask unanimous collilent to offer a cedure that would conflict with the standing rule of the Senate. resolution for reference to the Committee to Audit and Control :J!r. WATSON. Mr. President, I do not agree with the Sen­ the Contingent Expenses of the Senate. ator. The rule recites, if the Senator will pardon me- The resolution ( S. Hes. 17) was read and referred to the In the appointment of the standing com.mittees, the Senate, unless Committee to Audit and Control the Contingent Expenses of otherwise ordered- the Senate, as follows: That is by majority rule­ Resolt·ea, That the Committee on Military Affairs, or any subcom­ mittee thereof, be, and hereby is, authorized during the Sixty-ninth shall proceed- Congress to send tor persons, books, and papers, to administer oaths, And so forth. and to employ a stenographer, at a cost not exceeding 25 cents per M1·. NORRIS. The Senator will have some difficulty in dis­ hundred words, to report such hearings !LS may be had in connection posing of it to-day, I think, even if his theory be correct, be­ with any subject which may be before said committee, the expenses cause, as a matter of fairness, I think before we make this ther~of to be paid out of the contingent fund of the Senate, and that modification as suggested by the resolution there ought to be at the committee, or any subcommittee thPreof, may sit during the ses­ least a reasonable opportunity to look into the assignments that sions or reces es of the Senate. have been proposed and just reported to the Senate. The copy EXECUTIVE SESSION which I have on my desk has been placed there since the con­ vening of the Senate this morning. For the present, Mr. Presi­ 1\ir. CURTIS. I renew my motion that the Senate proceed to dent, I object to the request. _ the consideration of executive bu ·ine s. .Mr. BORAH. Mr. President-- The motion was agreed to, and the Senate proceeded to the Mr. WATSON. Does the Senator from Idaho desire the consideration of executive business. After 45 minutes spent in floor? executi're session the doors were reopened. Mr. CURTIS. Mr. President, will the Senator from Idaho KO:YIN ATION OF CHARLES BEECHER WARREN yield to me? D)lring the executive session this day, l\Ir. REED of 1\Iissouri .Mr. BORAH. I will yield in case this matter is going oyer; moved to proceed to the consideration in open executive se sion otherwise I will occupy the time. of the nomination of Charles Beecher Warren to be Attorney 1\Ir. CURTIS. I wish to suggest to the Senator from Indiana General, and the President pro tempore [1\lr. l\IosEs] held that that we consent to let the matter go over until next Monday, the consideration of the motion involved a suspension of the and that we proceed with the Warren nomination. I think rules and required a two-thirds vote to sustain it. Mr. REED we can save time in that way: of 1\lLsouri having taken an appeal from this ruling, and the 1\Ir. WATSON. At the request of the majority leader, I am question being, Shall the decision of the Chair stand as the quite content to have that arrangement made. judgment of the Senate? the yeas and nays were ordered, and Mr. REED of Missouri. Mr. President, I a k unanimous con­ the roll call resulted-yeas 38, nays 39, as follows: sent that the Warren nomination shall be considered in open executive session. YEAS-38 Mr. CURTIS. That can oilly be decided in executive ses ion. Bingham Glass McMaster Schall ButlN· Goff Means Shortridge Mr. REED of Missouri. It can be decided now by unanimous Cameron Gooding Metcalf Smoot con~ent. Curtis Hale Norbeck Spencer 1\Ir. CURTIS. Ail questions of that chamcter heretofore Dale Harreld Oddie Stanfield Deneen Jones, N.Mex. Overman Wadsworth have been determined in executive se ion. duPont Jones, Wash. Pepper Watson Mr. WADSWORTH. The nomination is not before us. Ernst Keyes Pine Weller Mr. CURTIS. I move that the Senate proceed to the con­ Fernald Reed, Pa. Gillett - ~~~y Sackett sideration of executiYe business. ·~ . .. l\Ir. REED of Pennsylvania. Mr. President, will the Senator ·":·' ,...(.'rll NAYS-39 Ashurst · nm~ ~~·· Johnson Ransdell from Kan~as withhold that motion for a moment? Bayard ' ·Ferr.ba ~- ~, King Reetl, lUo. Mr. CURTIS. I withhold it. Blease Fletcher Ladd Sheppard Mr. REED of Pennsylvania. Mr. President, I have not had Borah l!'raz1er McKellar Shipstead Bratton George l\IcXary Simmons time to put it in wl'iting, as required by the Senate rule, but I Brookhart Gerry l\layfield Swanson ask consent that I may put this notice in writing and file it as Brous ·ard Harris l'\eely Trammell of to-day's legi lative se ·sion. Bruce Harrison ~orris Tyson Capper Heflin Pittman Walsh ~Ir. ROBINSOK "What is the notice? Couzens Howell Ralston LXVII--2

' 18 CONGRESSIO~AL RECORD-SENATE MARCH 7

So the Senate refu. ed to sustain the decision of the Ohair. The _roll was called, and the following Senators answered to The question wa. then taken on the motion of Mr. REED of their names : :Missouri to consider the nomination in open executive session. Ashurst Fernald King Robinson Bayard Ferris Ladd Sackett The yeas and nays having been ordered, the roll call re­ Bingham Fe s McKellar Schall sulted--yeas 46, nays 39, as follows: Blease Fletcher McKinley Sheppard YEAS-46 Borah Frazier McLean Shipstead Ransdell .Bratton George Mc:\faster Shortridge Ashurst Ferris Kendrick Brookhart Gerry McNary Simmons Fletcher King Reed, :Mo. Bu.yard Robinson Broussard Gillett Mayfield Smoot Blea e Frazier Ladd Bruce Glass Metcalf Spencer George McKellar Sheppard Borah Shipstead Butler Goft' Moses Stanfield Bratton Gerry McLean Cameron Gooding Neely Stephens Glass McMaster Simmons Brookhart Stephens Capper Hale Norbeck Trammell Broussard Harris McNary Caraway Han·eld Norris Tyson Harrison Mayfield Trammell Bruce Ty..,on Couzens Harris Oddie Wadsworth Capper Heflin Neely Cummins Harrison Overman Walsh l'aruway Howell Norris Walsh Curtis He.tlin Pepper Warren 'ouzens Johnson Pittman Dale Howell Pine watson Dill Jones, N.Mex. Ralston Deneen Johnson F1ttman Weller NAYS-39 Dill Jones, Wash. Ralston Willis Binfl.'ham Fess Metcalf Shortridge du ront Kendrick Reed, Mo. Butler Uillett :lloses Smoot Ernst Keyes Reed, Pa. Cameron Goft' Norbeck Spencer The PRESIDENT pro tempore. Eighty-two Senators having t:ummins Gooding Oddie Stanfield Cu rtis Hale Overman Wadsworth answered to their names, a quorum is present. The Senator Dale Harreld Pepper Warren from Montana [Mr. WALSH] is entitled to the floor. Deneen Jone , Wash. Pine Watson l\Ir. WALSH. llr. President, I subscribe to the doctrine that du Pont Keyes Reed, Pa. Weller under all ordinary circumstances the nominations of the Presi­ Ernst ~IcKinley Sackett Willis Fernald lfean Schall dent of the United States for members of the Cabinet should be So the motion was agreed to, and the Senate proceeded to confirmed by the Senate without delay and that oppo ition of consider the nomination in open executive session. a political or factional character ought to be discountenanced. On motion of Mr. REED of Missouri, the injunction of secrecy The President is charged by the Constitution to take care that wa ~ rt>movecl from the foregoing proceedings and votes relative the laws be faithfully executed, and he ought to be given the to the nomination of Charles Beecher Warren to be Attorney greate t liberty po ible in the selection of those who imme­ diately under him are to carry out his policies in accordflllce General. The PRESIDENT pro tempore. The que ~ tion is, Will the with the laws of Congres . .Kevertheless the founders of our Senate advise and consent to the nomination of Charles Beecher Go\ernment, the framers of our Constitution, deemed it unwise 'Varren to be Attorney General of . the United States? The to trust unrestrictedly to any one man the appointment of any of the principal officers of the Government, n.nd accordingly Renator from liontana [:Mr. W .A.LSH] is recognized. :llr. WALSH. ~1r. President, I suggest the ab ence of a provided that in the case of all nominations made by the Pre .~ ident of the United States confirmation by the Senate quorum. should be necessary except in the case of such inferior officers 'l'he PRESIDEXT pro tempore. The Secretary will call the as Congre s might protide should be appointed by the Pre:-i­ roll. clent alone, by the courts, or by the heads of the departments. The legislative clerk (Han·ey A. Welsh) called the roll, and The responsibility, accordingly, for the appointment of all the the following Senators answered to their name : Federal officers where confirmation is necessary rests upon this _\..shllr~t Ernst King Ran. dell body jointly with the President of the United States. Whether Ru.yard Fernald Ladd Reed, Mo. liingham Ferris McKellar Reed. Pa. equally or in lesser degree it is unnecessary to canvass. 1t is BleaRe Fe ·s McKinley Sackett indisputable that -we share that responsibility and that we Borah Fletcher :\!cLean Schall must assume it, at least in part. Bratton Frazier Mc::Uaster ~ h eppard Brookhart Gerry l!cNary hipstead All will agree that if a nominee, even for a Cabinet position, Broussard Gillett Mayfield Shot·tridge i lacking in moral character, he should be rejected by the Bruce GlaRs ~le an s Smoot Senate; but it is contended by some that otherwi"e his con­ Cameron .off Metcalf Spencer firmation should follow as a matter of cour e. I can not think Capper Gooding ~ ose s tanfield l'araway Hale ~orbeck ~tephens so. A man may have some serious blemishes in the matter of Cummins Harris :Norris T~vson his private character and still be an able administrator and a Curtis Heflin Oddie Walsh courageous and patriotic official. Instances of that character Dale Howell Overman Warren Deneen Johnson Pepper Watson will readily occur to any student of history. On the otht=!r Dill Jones, Wash. Pine Weller hand, a man may have led the most exemplary life and yet be duPont Keyes llalston Willis totally unfit for the duties and responsibilities of high official The PRESIDEI'.'T pro tempore. Seventy-two Senators hav­ position. It is unwise, even if it were possible, accordingly to ing answered to their names, a quorum is present. attempt to lay down any general rule which ought to govern RECESS the Senate in its action upon nominations for public office. The nomination before us waiTantl , and as I think imperatively Mr. REED of Missouri. Mr, President, I desire to make a demands, a departure from the general rule. In the active .- uggestion. propaganda which ha been carried on through the press to We have been held here past our lunch hour. This, I think, break down or wear down the opposition to the nomination of is the most important matter.. to come before this session. Mr. 'Varren it has been repeatedly asserted that there is no Senators all -would like to get a bite to eat, and I suggest instance on record of the rejection by the Senate of the nomina­ tmanimous consent that we recess until 2 o'clock. That will tion for the bead of any of the departments. That is not cor­ allow 35 minutes for luncheon. l'ect. So good a man as Roger B. Taney, afterwards Chief 1\Ir. CUMMINS. Mr. President, I very much hope that the Justice of the Supreme Court of the United States, was re­ request made by the Senator from Missouri will be granted. jected by the Senate as a nominee for Secretary of the Treas­ The debate on the question now before the Senate will be one ury by Andrew Jackson. The illustrious Caleb Cu. bing, after­ which all Senators ought to hear, and at this time I am afraid ward-. Attorney General of the United State. , and who.:e career it will be impossible to secure the presence of a large number i a pnrt of the glory of that office, was rejected for Secretary of Senators. of the Treasury during the administration of President Tyler. The PRESIDENT pro tempore. The Senator from Missouri Two other nominations for Cabinet no itions . ent to the Senate asks unanimous consent that the Senate stand in recess until by that President were likewi e rejected-that of .James M. 2 o'clock. I there objection? The Ohair bear none. Porter, of Pennsyl\ania, nominated for Secretary of War, and Thereupon (at 1 o'clock and 25 minute. .. ~""m.) the Senate David Henshaw, of Massachu etts, for Secretary of the Na\y. took a recess until 2 o'clock, at whick~ hc:itm · 'rea..,sembled in During the administration of President Johnson the nomination open executi\e session. · \ .. '.~~<;·,;"' : of Henry Stanbery, of Ohio, for Attorney General, was rejected ~O:MINATION OF CHARLES BEEC~!RREN by the Senate. The Senate, in open executive se. sion, re umed the con id­ As I underNtand the matter, the nomination of ~ r. Warren eration of the nomination of Charles Beecher Wanen, of Mic·hi­ was made without the appro\al of the • onator · from the State gan, to be Attorney General of the United States. of his residence. The nomination ha\ing been referred to those Mr. C"CRTIS. ~!r. President, I suggest the absence of a Senators by the ColllDlittee on the Judi<:iary, charged mth the quorum. duty of inquiring into the nomination in the first in tance, they The PllESIDEKT pro tempore. The Cle1·k will call the roll. reL· ponded as follows : 1925 CONGRESSION .A.L RECORD-SENATE 19

Srnntor ouz-t:xs. Believe him to be a bright, intelligent lawyer. I might say in this connection-and I should properly say-­ foienator FEnnrs. I ·ball not oppose the confirmation of Charles that, coincidentally with their efforts thus to secure control of r.eeclH'r "·arren to be Attorney General of the United States. I had the Michigan companies, control was secured of the Spreckels' hoped the new Attorney General would be selected from a group of companies in California, the Mormon Co. at Salt Lake, the hi;;h-,;raSugar Co. at Denver, Colo., representing t11e Colorado is a high-grade politician. field, a.ru! g1e beet-sugar companies in the States of Iowa and 'l'lil·ee times, 1\.Ir. Prel:lident, within the past six years the Minnesota until they had practically dominated the beet-sugar otli<:o of A.trorner General has been filled, as in the instance of industry as well as cane-sugar refining. tlle pre.-ent nominee, by men who were named for the place not The story will not be fully appreciated without the back· as a re'IT'arcl for eminent success at the bar or brilliant attain­ ground and without some appreciation of the earlier history of ment in the law lJut a a reward for active political service. the Suga1· Trust. It has, 1\Ir. President, for over 40 years been In two of these instances the career has not shed any particu­ almost continuously the object of prosecution, either before lar luster upon the office nor any particular credit upon the State or Federal courts. It bas been made the subject of appointing power, whatever may be said with referenc~ to the inquiry by innumerable congressional investigations, so that Senate in confirming them. It is neither exaggeration nor the story is reasonably familiar to most of tllose who follow hyperlJole to a. 'l:lert that the result has approached disaster, so questions of that character. The proceedings are reviewed in far as the pulllic interests are concerned. What may happen a small book before me entitled " The Trust Problem in the in the ca. e of the corrfirmation of the nomination of :Mr. Warren United States," by Eliot Jones, professor of political economy wo can only ~peculate, but, in the language of the orator of the in Stanford University, from which I shall take the liberty, Revolution, ·'I know no way of judging of the future but by the even though it may seem tedious to some, to read at consider­ past." able length. After telling of the organization of the Standard )Ir. 'Varr·en, it is no injustice, I think, to say, has no reputa­ Oil Trust, the Cotton-oil Trust, the Linseed-oil Trust, and of tion whate\er as a lawyer. 'l,he attache· of the Supreme Court se,·erul other trusts, the author tells about the ol"iginal organ­ of tlle United States alllHlrently ha\e no I'ecollection of e\er ization of the Sugar Trust, as follows : having seen him before that tribunal in the presentation of a Another group resorting to the h·ustee device was the sugar refiners. case. It i~ nid in his lJehalf, Mr. President, that he repre­ During the se>enties and eighties competition in the ugar-refining sented the United States in two important international arbi­ industry had been quite keen; between 18G7 and 1887 some 36 refineries tration ·-the Bering :::lea fur-::;eal arbitration and the North had been closed. By 1887 there ~ere left only 26 refineries, operated Atlantic fil:'heries case. He did, indeed, appear on the record in by 2~ companies. The concerns that survived this period of sev<'re the fur-seal arbitration, but we were repre:ented in that pro­ competition were those that resorted to large-scale production, with cerding by :i\Ir. Don U. Dickinson, of the city of Detroit, ~lieh., its resulting economies. In August, 1887, 17 of these companies, own­ nnd a. my information is, Mr. 'Varren, at that tl.me being 26 ing 20 refineries and posses ing among ihem approximately 78 per cent years of age, was a clerk in his office and went on the record of the refining capacity, entered into a trust agreement to become with him. lie did, however, make an argnment in the North effective October 1, 1 87. Atlantic fisheries case at The Hague, and I must say, to his ln its main provi. ions this agreement was sub tantially like the entire credit, that the argument was lawyerlike in character, trust agreements already described. EleTcn trustees con tituted a and inllicated that :Mr. Warren is a ·man of ability; but, as I board known as the Sugar Refineries Co. and distributed trust cer­ haYe stated, I think I do him no injustice whateYer to ay tificates ($30,000,000) to the shareholders of the corporation in retmn that he has no reputation whatever as a lawyer. for the secu riti~s held by them. The trustees thereupon caused them­ I think that he ought not to be made .Attorney General not selves or their representatives to be elected directors of the separate only becau ·e he is not eminent in the profe ·sion but chiefly corporations and were thus able to manage the affairs of all in unison. becauEe for years he was a representatiye in llis State of the It was provided that 15 pet· cent of the certificates allotted to the Sugar Trust, one of the most offensive and oppressi\e trusts several companies should be left with the bo:u·d and that these and with which the American people have unfortunately been any part of the $50,000,000 of certificates not allotted might be em­ familiar in the pre ·ent and past generations. ployed by the board for the acquisition o'f other refineries or for In the course of the efforts of that organization to mo­ certain other purposes. A unique featme of the Sugar Trust deed was the nopolize the supply of sugar of the American people it first provision that no trustee should be interested ilirectly or indirectly in secured control of the Atlantic coast refineries, refining raw the purchase or sale of sugar, whether for the purpose of speculation sugar imported from Cuba and other places. Haying prac­ or· otherwise, without the consent of a majority o! the board. Of the tically accomplished the consolidation of all of the competing !!0 refineries acquired by the Sugar Refineries Co. 12 were soon dis­ companies engaged in the refining business, it encountered tlle mantled, and the other 8 were consolitlated into 4. opposition of the beet-sugar producers. Then, in the early In this same year (1 87) there was organized the National Lead part of tlle pre. ·ent century, it set out to 'ecure control of all Trust and Cordage Trust. The latter, known as the National tlle beet-sugar companies. Cordage Association, controlled at this time only 30 per cent of tlie At that time there were in the State of Michigan a half connh·y's output of rope and cordage; it was not until 18Vl that it dozen small beet-sugar companies, each competing with the attained a monopolist!~ position in the- industry. other and entirely independent. Prosecuting its purpose, the The organization of these " tl'Usts " was followed by a ~eneml Sugar Tru t sought to secure control of these various com­ outcry against monopolies. How fully the attention of the public panies. One of them, the Peninsula Sugar Co., was, I believe, had been called to the c tablishment of •· trmlts," and what its re· organized by Mr. Warren; at least, he owned a consider·able action was, is shown by the numerous laws forbidding combinations amount of stock in the company as well as some stock in the and tru ts enacted by the State legislntnres from 1 0 to 1 03, and other companies to which I ha\e adverted. Mr. Havemeyer, by the passage by the National Congress in 1890 of the Sherman who 'IT'as then the dominant intellect of the Sugar Trust, was Antitrust Act, which prohibited every co_ntract, comuination in the form deflirous of getting control of those companies, and Mr. Warren of trust or otherwise, or conspiracy in restraint of h·ade or· commerce acted as his agent in securing that control. lie went out and among the several States or with foreign nations nnd evet·y monopoly bought up enough of the stock of the independent beet-sugar or attempt to monopolize. And it soon pron>d the "trusts" were par­ companies of the St.:'lte of Michigan to control them, taking ticulnrly vulnerable, much more so than the pools. the conYe:rance in his own name but using the money of Mr. "'Ilan:>me:rer and his as:ociate~ and holding the stock in trust It will then be noted that tbi::; .·ame Sugar Tru~t anll its for them. exactions from the people of the ""Cnited •'tate::; gn.Ye ri.'e to the Subsequently they organized the Michigan Sugar Co., of Sherman Antitrurt Act. which Mr. Warren became the president and remained presi­ 'l'lle author continue·: dent down to the 25th of January last, as my information is. Hardly had the "trusts" bePn created when l<'g<1l pr·ocPedings were In the same way the .-tock of the local companies was turned instituted against them. The State of Loui~inna atta('ked the Cotton­ in in exchange for stock in the .i\Iic-higan Sugar Co., the stock oil '!'rust, the State of Kebrn ka the \Yhi ky Trust, the State t~f being i ·sued again iu the name of Mr. "ran·en and being held l\ew York the Sugar TruRt, and the State of Ohio the Oil Tru:t. by him for some time, the b·ust haying acquired 46 per cent Tbe action against tbe Sugar Trust came in 18 .~. In tbnt yP!lr tiH• of the stock of the "llicbigan Sugar Co. Thereafter, in the year attorney general of New York State brought suit und<'r tlte common 1910, the Government of the United States began suit under law against the North River Sugar Refiujng Co., a New York corpora­ the Sherman Antitrust Act to dissolye the Sugar Tru~t, making tion, praying that the charter of the company be vncated and tbe com­ !:he Michigan Sugar Co., as well as Mr. Warren indindually, pany dis ol>ed. In a d~cision in June, 1 90. the circuit court of ap­ defendants in that action, and charging they bad both par­ peals decided against the company. The coul't held tllat the ~orth ticipated in the con~pirary to monopolize the beet-sugar in­ Rinr Sugar n efinint; Co. in ~ntering the ·' trn t " had ginn over tlle dustry of the country. control of the aJiuirs to an irresponsible board, and that . uch uelega- 20 CONGRESSIONAL RECORD-SENATE ~URCII 7 non of its essential corporate powers wns a perversion of the privileges pany itself dissolved. The purpose was clearly to stlfie a prospective conferred by the company's charter. Furthennore, the court he-ld that competitor. Obviously no economies were effected through the clos­ the company hnd helped to create a trust which in substance and etl'e-ct ing of a plant that was never allowed to operate. was a partnership of separate corporations, and for corporations to In March and Aprll, 1892, the American Sugar Refining Co. acquired enter a partnership was illegal. The company's charter, therefore, was all but one of the remaining competitors. Up to March of this year taken away and its corporate existence terminated. competition between the trust and the independents (the Franklin Sugar Refining Co., the Spreckels Sugar Refining Co., the E. C. Knight In order to avoid the effect of that decision the American Co., and the Delaware Sugar House) had been severe, and the price of Sugar Refining Co. was incorporated. The story of that com­ sugar had fallen so low that failure confronted some of these com­ pany, being the company which absorbed the Michigan com­ panies. Relief from this contingency was secured by selling out to the panies, will be of inte1:est in this connection. trust, the capitalization of the trust being increased for this purpose The author continues: from $50,000,000 to $75,000,000. Shortly after 1892 the American The early history of the Sugar Trust, touched on in Chapter III, Sugar Refining Co. consolidated the Spreckels refinery and the Delaware may be briefly reviewed. The Sugar Refineries Co.-a trustee device­ house into one; and the Franklin and Knight refineries into one. In bad been organized in 1887. In 1890 this arrangement was declared 18!>7 the Franklin Sugar Refining Co. closed its plant and became illegal by the ~ ·ew York courts, and as a result a reorganization was simply a selling agency for the Spreckels concern. determined upon. In January, 1891, the American Sugar Refining By April, 1892, then, the first period of competition with the trust Co. was chartere-d in the State of New Jersey, then a place of refuge had come to an end. The struggle had been severe, but bt'ief. It tor combinations and trusts. The new company had an authorized ended in the purchase by the American Sugar Refining Co. of its lead­ capitalization of 50,000,000, half preferred stock a.nd ball common. ing competitors. In the whole country there were left only two re­ The American Sugar Refining Co. exchanged its capital stock for the fineries that did not belong to the trust. One of these was the Cali­ trust certificates of the Sugar Refineries Co., and thus obtained con­ fornia Sugar Refinery, leased to the Western Sugar Refining Co., half trol over the various corporations previously controlled by the of the stock of which was held by the trust; and the other was the trustees. The American Sugar Refining Co. next caused the several small refinery in Boston owned by Nash, Spaulding & Co.-a plant corporations-17 in number-to convey to it their entire property, which the trust had attempted to buy in 1892, but without success. real and personal; and thereupon di solved them. Upon the comple­ The American Sugar Refining Co. produced in 1892, including the tion of this series of tra.nactions, the American Sugar Refining Co. be­ output of the California Sugar Refinery, substantially controlled by it, came a property-owning b·ust, as distinct from a holding-company about 98 per cent of the country's output of refined sugar. trust. But not for long did the American Sugar Refining Co. malntain its The American Sugar Refining Co. operated only four refineries-the well-nigh complete monopolistic control of the industry. It immedi­ Standard Sugar refinery at Boston, the Matthiessen and Weicbers re­ ately took advantage of the situation and advanced the price of refined finery at Jersey City, the Havemeyers & Elder refinery at Brooklyn, sugar until the margin between the raw and refined bad much increased. and the Loui iana Sugar refinery at New Orleans. These four re· Naturally new refineries were built in order to profit by the higher fineries among them bad a daily melting capacity of about 70 per prices; in fact the history of the trust for a number of years after cent of that of the whole country. There were only six other cane 1892 was one of constant endeavor to crush or to bring into working sugar refineries in the country, and one of these-the Havemeyers relations with it intere ts that would not sell out. & Elder plant in an Francisco-was for all practical purposes a part Already in 1891 the Mollenhauer Sugar Refining Co. had been in­ of the trust. The owners of the San Francisco plant had gone into corporated, and soon after the purchase of the independent refineries the " tru t " in 188 , the year after its organization, but because ot at Philadelphia, this company began to operate its plant at Brooklyn. the opposition of the State of California the plant had been trans­ In September, 1892-only a few months after the acquisition by the ferred to Messers. II. 0. Ilavemeyer, T. A. Havemeyer, and C. H. Sugar 'frust of ail the Philadelphia refineries-the National Sugar Senff, members of the board of trustees of the Sugar Refineries Co. Refining Co. was organized. The e three men bad thenceforth carried on the business under the name I will ask the attention of Senators to this, because we will of Havemeyers & Elder, but always in cooperation with the Sugar recur, later on, to the National Sugar Refining Co. Refineries Co., and its successor, the American Sugar Refining Co. Including the output of this San Francisco refinery, as is only proper. In October of the same year the W. J. McCahan Sugar Refining Co. the American Sugar Refining Co. controlled at its organization about was chartered, and in the following year started to refine sugar. To 7u per cent of the country's melting capacity. bold this competition within the bounds the American Sugar Refining Co. in 1893 acquired 30 per cent of the stock of the Mollenhauer con­ 'fhe only cane- ugar refining companie outside of the trust in cern, and in 1894: it succt>eded in effecting agreements with its com­ January, 1891, were the California. Sugar Refinery at San Francisco, petitors looking toward a. limitation of the output and the fixing of the Franklin Sugar Refining Co., the E. C. Knight Co., and the Dela.­ prices. In 1895 the United States Sugar Refining Co. was formed for ware Sugar House, all located at Philadelphia; and the ~ash. Spauld­ the purpose of constructing a sugar refinery in Camden, N. J. (just ing & Co. at Boston (later known as the Revere Sugar Refining Co.). across the river from Philadelphia). But before the plant was ready During the course of the year 1891 the Spreckels Sugar Refining Co. for operation the American Co. purchased all its stock and the began the operation of a large new refinery at Philadelphia and the plant was never completed. In 1897 the California & Hawaiian Baltimore Sugar Refining Co. had under construction a refinery in Sugar Refining Co. was incorporated, and in the same year it entered Baltimore. The Sugar Trust set out to overcome all these competitors, upon the refining of sugar at Crockett, Calif. This concern refined both and by 1892 had acquh'ed all of them but one. cane and beet sugar. Another independent enterprise established in The first to succumb was the California Sugar Refinery at San Fran­ 1897 was the New York Sugar Refining Co., fathered by Claus Doscher, cisco, owned by John D., Adolph B., and Claus Spreckels. In March, a capable refiner who had disposed of his property to the trust in 1887 1891, in order to bring to an end the competitive campaign which had and bad given up the business. The New York Sugar Refining Co. been instituted against this company by the firm of Havemeyers & Elder, was formed in March, 1897, and its refinery was completed toward the the Spreckels concern entered into an agreement with the firm of Have­ close of 1898. · meyers & Elder whereby there was incorporated the Western Sugar Befining Co., a California corporation, half of the stock in which was Now comes the tory of the famous controversy between the taken by each _party. The newly organized corporation, in accord­ trust and the Arbuckles, which perhaps many of the Senators ance with the provisions of the agreement, leased for a term of 10 will 1·ecall. years both the Havemeyers & Elder refinery and the Spreckels refinery. Mr. CUl\lMINS. Mr. President, will the Senator yield for a Shortly thereafter the Western Sugar Refining Co. permanently closed question only? the Havemeyers & Elder refinery, and its former owners old their Mr. WALSH. I yield. plant and their half interest in the Western Sugar Refining Co. to the 1\lr. CUMliiNS. I am right, I a sume, in supposing that the American Sugar Refining Co. The factory continued to be so owned history of the .American Sugar Refining Co., already given, (subject to lea e) until 1906, when it was destroyed by fire, and relates entirely to cane sugar'? the stock continued to be owned by the American Sugar Refining Co. l\lr. WALSH. Yes. I shall pre~ently take up their efforts until 1911, when, in accordance with the policy of the new management, to acquire the beet-sugar companies. My purpose in thus the American Co. uisposed of its stock to the Spreckels interests. detaining the Senate i~ to impress upon them the l.lackground By agreement between the American Sugar Refining Co. and the of the operations with "Which Mr. Warren was directly con­ Western Co. the territory in which each was to sell its products was necte

Mr. ·w .ALSH. I yield to the Senator. throughout the spring of 189!>. At the date of his testimony-June, Mr. SMOOT. ·was l\Ir. ·warren eYer a director of any 1809-the margin was 51 cents per 100 pounds, which was ~\I)­ sugar-refining company in the United States? proximately the cost of refining, and the margin had been as low as ~t! l\lr. WALSH. I think not. cents, which was 20 to 30 cents below cost. 1\11·. SMOOT. I am quite sure he was not. In other words, the Sugar Trust was selling sugar to the Mr. WALSH. I do not think he ever had anything to do American people at from 20 to 30 cents below cost for the pnr­ ""ith the cane-sugar business. pose of breaking the Arbuckle Bros. or compelling them to sell ::Ur. SMOOT. I was wondering what the Senator wanted to to the trust. bring in the cane-sugar question for, because 1\Ir. Warren neYer has been connected with the cane-sugar business in any As a result of this price war Arbuckle Bros. lost a great dE'al of way. money, approximately a million and a quarter dollars. Another officer of the .Arlmckle firm testified that his company was hard put to it to l\lr. WALSH. I have tried to explain that having thus develop its business because the wholesale grocers in some localities stifled every bit of competition in the cane-sugar refining busi­ refused to distribute the goods of competitors of the .American Sugar nes , they then turned their attention to the other branch of Refining Co. This difficulty was obviated in Boston by Arbuckle Bros. the industry. dE'aling directly with the retailers. The latter were given sugar at the lllr. SMOOT. That is, the sugar refiners did. same price as the wholesalers, irrespective of quantity; and e\en as late Mr. WALSH. The same companies. The sugar refiners are as 1911 the firm still dealt directly with the retailers In tba.t city. A nothing more nor less than the Sugar Trust. special retaliatory measure directed against the Arbuckle firm was the 1\lr. SMOOT. I agree with the Senator as to that. invasion by the American Sugar Refining Co. of the coffee business. In Mr. W.ALSH. Certainly. The Senator and I have no con­ 1896, having failed in an attempt t() buy the patented packing machine n·over y about that. This was not an independent, entirely of the Arbuckle firm, the American Sugar Refining Co., through nave­ disassociated effort upon the part of the Sugar Trust to meyers & Elder, purchased a large interest in the Woolson Spice Co., get these Michigan companies. It had altogether an immediate of Toledo, at a cost of $1,150 per share, plus commissions. The Wool· and direct relation to its efforts, to which I am endeavoring son Spice Co. promptly reduced the price of coffee and forced the to call the attention of the Senate, to monopolize the sugar Arbuckle C()ncern to do likewise. But this campaign did not bring supply of the United States. about the de !.red re ult. The Arbuckle Bros. did not give in, and they l\lr. Sl\IOOT. Of cour e the Senator knows that the Sugar are still in the sugar business. l\IoreoYer, the American Sugar I:.efining Trust undertook to control all of the beet sugar produced in Co. deemed it ad\·isable sub ·equently to gi.Ye up its coffee bUsiness, the the "Gnited States. sale of this business being reported by the directors in their annual re­ l\Ir. WALSH. I am going to try to show that. port to the stockholders in 1909. l\Ir. SMOOT. I do not think there is any question at all The remaining competitors, or "interlopers,'' as Ur. Havemeyer about that; and not only that, but it was a question of either called them, provE'd more tractable. Through the formation in May, 1900, destruction or giving conh·ol to them for a number of years. of a holding C{)mpany, organized largely by individuals dominant in the Mr. WALSH. Yes. management of the American Sugar Refining Co., the other refiners ot l\Ir. Sl\IOOT. But I want to say, and I am delighted to say, cane sugar were brought into harmony with the trust. The name of the that they do not hold that control to-day. They did for a 11hile, holding company was the National Sugar Refining Co. of Kew Jersey, howeYer. capitalized at $20,000,000, half preferred and half common. The Na­ Mr. WALSH. They do not hold that control to-da.y because tional Sugar Refining Co. of New Jersey acquired the entire capital the decree of the courts had forbidden them to, and not only stock of the :Mollenhauer Sugat· Refining Co., the National Sugar Refining that, but the decree had compelled them to dispose of the Co., and the Xew York Sugar Refining Co. (also its entire bond issue), property which they thus acquired in violation of the law. giving in exchange therefor $8,250,000 of its own preferred stock. Most Mr. Sl\IOOT. I want to say to the Senator that a great deal of the balance of the preferred stock was used to buy 25 per cent of the of that property was bought before eYer that decree was issued. stock of the McCahan Sugar Refining Co. The National Sugar Refiuing Mr. WALSH. Why, of course it was. Co. of New Jersey continued to hold the stocks and bonds of these com­ Mr. SMOOT. Yes; I say it was, and it was not because the panies and managed thei.J.· affairs in harmony. The common stock of beet-sugar companies did not want to retain control of the the National Sugar Refining Co. of New Jersey ( 10,000,000) was given beet-sugar industry, but it was becau ·e they were forced to to Mr. H. 0. Havemeyer, the president of the American Sugar Refining sell control or be destroyed. Co., as promoter's profit. Mr. CUMMINS. Mr. President-- 1\Ir. Havemerer thereupon delivered this stock to himself and to The PRESIDING OFFICER. . Does the Senator from l\lon­ Mr. L. M. Palmer, l•oth of them directors in the American Sugar Re­ tana yield to the Senator from Iowa? fining Co., as trustees under a voting tru t for five years, the bene­ Mr. WALSH. I should like to haYe that point made entirely ficiaries being Mr. Havemeyer, Mr. Palmer, Mr. W. B. Thomas, Mr. clear. It was not, for instance, because the 'Ctah Sugar Co. J. E. Parsons, and Mr. J. H. Post, all of them, with one exception wanted to sell to the Sugar Trust, but the Sugar. Trust prac­ pos ibly, officers in the American Sugar Refining Co. As part of thi~ tically said to them: "You sell to us or go out of business." same set of transactions, the American Sugar Refining Co. on it I want to impress that idea ttpon the Senator. own account acquired $5,128,000 of the preferred stock of the ~atioaal 1.\lr. SMOOT. I want it impressed upon the Senate, too. Sugar Refining Co. of New Jersey. (This included the $000,000 ot l\1r. CUMMINS. :Mr. President, does the Senator refer to preferred stock in this company recei\ed by the American Sugar Re­ the decree of 1922? fining Co. in exchange for the Mollenhauer stock acquired by it ill Mr. WALSH. I do. The Senator from Utah was calling my 1893.) attention to the fact that they do not now control the beet-sugar industry. They do not now control the beet-sugar industry Further efforts to eliminate competition which sprang up because we have the Sherman law, against which they were from time to time I omit and pa~s to the effort of this or­ obliged to contend. ganization to control the beet-sugar indu~try of the United State . I read now on that subject from page 103 of the work: Another very important competitor was Arbuckle Bros., best known as a coffeehouse. This firm owned a machine used for filling, i)ack­ The beet-sugar industry, however, wa teadily gt·owing in im- ing, and weighing coffee-a machine which it believed could also be portance, and in some localities was becoming n seriollS competitor ot profitably used in the sugar busine s. In 1893, therefore, it began cane ugar. By 1901 there were 31 separate concerns manufacturing to buy sugar from the refineries and put it up in packages suitaule beet sugar, and 8 others were planning to enter the business. The for distribution by whole ·ale grocers. After some three or four :.r('ars American Sugar Refining Co. apparently came to the conclusion that the firm decided that it would build a refinery of its own, and by the it must eliminate this growing competition. Ila ving obtained the middle of 1898 the plant was in operation. nece~sary funds by an increase in Its capital stock from $75,000,000 Competition was thus springing up on all sides, and it was im­ to $90,000.000, the company, in the summer of 1901, manufactured an . pe~atiT"e that somethilig be done unlE'ss the Sugar Trust was to abandon unusually lar·ge quantity of refined sugar for the purpose, so the its monopolistic purposes. Accordingly, in September, 1898, the Government pE'tition alleged, of selling it in tb markets of its rlval>J. American Sugar Refining Co. appointed a committRe to acquire the .About the arne time Mr. H. 0. Havemeyet· anll Mr. L. M. Palmer factorieB of any and all ind~pendents, this committee being authot·ized entered into unlawful agreements with Yariou railroads leading out to pay such purchase prices as it might deem fit. In order to facili­ of Boston, New York, Jersey City, Philadelphia, and New Orleans for tate the work of the committee, the price of refined sugar was much the transportation, at rates much below the publiahed tariffs, of larg') reduced. Mr. Jarvie, one ()f the partners in the firm of Arbuckle quantities of refined sugar, and for the free storage of this sugar in Bros., testified before the industrial commi sion that when his warehouses belonging to the railroads. · company's refinery was completed in August of 1898 the margin ~'he amount of rebates paid to the American Sug:l.L' Refining Co. dur­ t·angetl from 80 to 90 cents per 100 pounds, that pt;ices were first ing the years 1901-1904 totaled $500,000. The next step was the sale cut in S~ptember, and that this price cutting continued unremittedly of this sugar in the markets of the beet-sugar comtlanies at prices

J 22 CONGRESSION ...\.1 RECORD-SEN.ATE 1\iARoH 7

bt>low thP cost of production. This moTe forced the beet-sugar re­ local industry. That is exactly what he said in his te ·timony fineries to . eU out to the American Sugar Refining Co. or face the should be done. pro pect of ruin, and many of them decided to sell. Mr. WALSH. Quite right; the Senator has accurately That i the ~ituation which is presented in brief by the Sen­ stated the situation. ator from utah. Another interesting feature of this rather dramatic story is found on page 113: The most important concem over which control was secured was the American Beet Sugar Co. This concern, with a capital of $20,000,000, One of the worst charges that may be matle against the American was the leading beet-sugar enterprise in the country; it bad five plants Sugar Refining Co. 1s the fact that, though at times it practically and was steadily increasing its business. The American Sugar Refining framed the sugar schedule, it sought to avoid payment of the custom Co. and the American Beet Sugar Co. entered in 1902 into a 10-year duties on raw sugar by tampering with the weighing scales at the ports contract whereby the former was to become the supervising agent for in such manner as to register false weights. An Investigation under­ the disposal of the product of the latter at a commission of one-quarter taken by the Government in 1907 resulted in a suit against the com­ of a cent per pound. '.rhe American Sugar Refining Co. agreed during­ pany to recover the amount of money stolen from the Government the beet-sugar ~eason-b~t sugar comes on the market only during a through false weighing at the Brooklyn plant. The evidence in the limited period following the maturing of the beet-sugar plant-not to suit, according to the .Attorney General, revealed a long-continued sr - -·ell sugar in the markPts of the .AmerJca.n Beet Sugar Co. except at its tern of defr.aue a judgment ordering the company to pay the United wa inserted, according to the vJce president of tbe Beet Sugar Co., to States $134,411, repre entlng unpaid custom duties. Thereupon the prevent local price cutting by the trust. .A drop in the price of refined company opened negotiations with the Government, and in 1909 a com­ ugar at the Mis om·i River from 5 cents to 3th cents in one day wn~ promise was made whereby the latter accepted the judgment of $134.411 not competition, in bls opinion, but wnrfare. At about the arne time plus an additional sum of $~,000,000, in full settlement of all civil the American Sugar Refining Co. acquired $7,500,000 of the Beet Sugar liabilitie~ of the company for any underweighlng at eitbeJ· the Brooklyn Co.'s stock. The agreemPnt remained in force until 1907 and the stock refinery or the Jersey City refiuery. continued to be held until 1907 or later, but after 1909 the two com­ The GoTernmPnt especially reserved the right to institute CJ.·iminal pa.nie do not seem to have acted in cooperation. The president of the prosecution against the officials respon ible for the underweighing. American B~t Sugar Co. testified that the agrc:>emc:>nt "·as abrogated on Snbo~equentlr suit wa brought against the ecretary of the company the recommendation of counsel, who advised that the contract, if not and the general . uperintendP.nt of the Brooklyn refinery. Both of them canceled, would land the partie thereto in the penitentiary. were convJcted of ft'rwelgbing practices, however, mu t not was subsequently disposed of, some during Mr. Havemercr's life, but be exaggE'rated. They evidence the cupidity of the sugar companies, most of it after his death. Yet even as late as 1911 the company had or pPrhaps the de:irc of tbPir managers to get re ults, and tbu enrn u majority interest in two beet-sugar factories and o. minority interest their salarir , but evPn if nP>f'r discoverc:>d tbc:>y would nnt have helped in 31. The total number of beet-sugar factories in the:> country was 6 . . the trust apprpdably to maintain itFI poF~ition, excPpt by providing it The trust, therefore, had some interest in approximately one-half of '\\itb tbc sinews of war. At b t they would merely have enal>lecl it the factories, and presumal>ly on the whole the more importunt one . aud the other companies that carried on these practices to make ome­ what larger profits. I ·again hurry over the discussion of this to one or two other interesting features of the discu ion found on page 111 : Now, as to the effect of this monopolization on t11e Amerkan people, I read from page llD, as fol1ow. : The record of the trust's relations with the Federal Government is not one of which it can be proud. The trust ha been a notetl recipient of The dividends of the American Sugar llE>fining Co. point to monopoly ta.rilf favors. Without venturing to discuss tbe merits of tbe protective prices during the period whPn the company was at ti.Je heigbt of its system, it may be said that the sugar duties for many year have been power and to the leveling t•O:ect of competition on prices. arranged without reference to any lPgltimate protective principle. The Since it~ organization in 1891 the Am rican Sugar Rt>.flning Co. bas differential on refined sugar under tbe act of 1 83, tor example. was regylal'ly paid 7 per cent on its preferred stock and the following rates considerably greater than tbe total cost of refining, a11d tbis virtually on its common stock : prevented the importation of refined sugar. The prohibitory duty un­ Common stock div1dends of tlie Amct·ican Sugar Refining Co., 1891-1915 doubtedly promoted the establishment of the trust in 1887 and enabled Per cent it to make enormous profits. In the act of 1890 raw sugar was ad­ 1. 91 ______8 mitted free (a bounty being given to domestic producers). but the dif­ 1H9~------9 ferential on refined was still high enough to shut out foreign competi­ 11893------~--- !)4 ______------_ 2~ tion and therefore to facilitate the charging of monopoly pr·ices, espe­ 12 11803------96 ______1:.! cially upon tbe practical elimination of domestic competition in 18!)2. 1897 ______12 Hostility toward tbe Sugar Trust became lnten ·e dmlng the early 12 nineties, and for a time bade fair to lead to the entire removal of the 180918D8------~------______12 1900 ______12 duty on sugar, both raw and refined, in the 'Wilson tariff act of 18ll4. li!h Yet it is a matter of history that from this struggle the trust emerged 1901------7 the victor. 1902-----~------7 7 It will be remembered that becatL"e of the incorporation of 1903 ______7 that provision in the tariff act of that year, President Cleveland, 19061~&1======______7 1ll07 ______7 although he was a noted tariff reformer, refused to sign the bill. 7 19091908 ______~------_ 7 Duties were somewhat reduced, but they were still more than ample. 7 From 1 94 down to the enactment of the Simmons-Underwood bill of 19111910------______7 1913, tbe duties on sugar restrained foreign competition and thus made 1912 ______7 it easier for the trust to maintain monopoly price . 11r. llavemerer, 7 19141913------______7 the head of the Sugar Trust until his death in 1901, stated before the 1915 ______7 Industrial Commis ion that " the mother of all trusts is the customs 7 tariii bilL" Just how much water there was in the stock can not be tnted with Mr. Sl\100T. Mr. Pre ident-- certainty. The capitalization of the companies that went into the The PRESIDil\TG 'OFFICER. Does the Senator from l\Ion­ trust in 1887 WilS G,G90,000; the amount of trMt certificates issued tana yield to the Senator from Utah? in ' 1~87 and of stock in 1891 was $50,000.000, minu 1u per cent Mr. WALSH. I yield. treasury stock. The capitalization of the trust thus exceeded the Mr. SMOOT. I call the Senator's attention to the fact that capitalization of the coustituent companies I.Jy more than sL~ times. in the sugar hearings 1\lr. Atkins testified that he wanted a But, according to Mr. Havemeyer, the con ·tituent eompanie were rate of 50 cents a hundred on sugar, for the reason that with undel'capitalized. a rate of 50 cents a hundred he felt that the refiners who I thought I had here the storr giT"en by the author of the refined only the raw sugar would be perfectly protected against acquisition of the American Sugar Co., uut the fact are as I importations from foreign countries, but thnt it would kill the have heretofore stated. In their effort to gather np the beet- '

1925 CONGRESSION .A.L ~ECORD-SEN ATE 23

sugar companies throughout the country they secured control gan Sugar Refining Co. and that the Sugar Trust had no interest · · ,. : · ·· . of the Michigan companies in the manner in which I have in it whateYer. stated. The important thing is that l\lr. llayemeyer and his l\lr. SMOOT. Has the Senator the record showing when as··ociates and the American Sugar Refining Co. did not go to they bought the controlling interest in the Michigan factories? the State of l\Iichigan and buy the stock of those local com­ Mr. WALSH. Yes. panies and ha'e the stock in their own names and disclose to Mr. SMOOT. It was after 1909 when they purchased con­ the world that they were stockholders in the company. They trol of the western factories. procured Mr. Warren to buy the stock and take the stock in Mr. WALSH. It was· from 1902 to 1904 when they picked up his own name and thus conceal from the world that the Ameri­ the stock of the individual original independent sugar com­ can Sugar Refining Co. was securing the control of those com­ panies. They organized the :.Michigan Sugar Co. in 1906, turn­ panies. ing i.n the stock of the local companies until, as I said, they had l\Ir. SMOOT. Mr. Pre:ident-- acquired 46 per cent of the stock of the !\lichigan Co. The PRESIDING OFFICER. Does the Senator fi•om Mon­ Mr. Sl\IOOT. I did not remember the date of the acquisition tana yielcl to the Senator from Utah? of the control of the l\Iichlgan Co. I do know the date with l\lr. WALSH. I yield. reference to the western concerns. Mr. SMOOT. That may be true in some cases, but I do Mr. WALSH. lJpon the evidence thu given by l!r. Hath­ know that when l\lr. Warren came to buy the stock of the away, secretary of the Michigan Sugar Co., before the House Western concerns it was distinctly 1mderstood that l\lr. Have­ Committee on Ways and Means, Senator Burrows, of the meyer was to have absolute. control of it. We were told so. State of ~Iichigan, on the floor of this Chamber solemnly as­ 'Ye were threatened with the fact that there was money and sured his colleagues that the American Sugar Refining Co., the power sufficient to destroy us unless we sold a controlling Sugar Trust, and the Havemeyers, had absolutely no stock interest in the company. whatever in the ~Iichigan Sugar Co.-I have the record here Mr. KING. That would only add to the dishonor of l\Ir. before me-when as a llltltter of fact at that time they owned Warren if he participated in the scheme to get control of the 46 per cent of the stock of the Michigan Sugar Co. It is stated companies to which my colleague refers. in a circular letter wllicll I suppose has come to every l\fember l\Ir. Sl\IOOT. I am not saying this was done by l\lr. Warren. of the Senate that at the time :U:r. Hathaway gave that testi­ The Senator from Montana was spe.aking of the Michigan mony Mr. Warren was preHent before the Ways and 1\Iean.":: factors. If it was done in Michigan in the same way it was Committee of the House. I have not been able to confirm that done in Idaho and Utah and the ·west, then, of com·se, the and I shall assume, as I think il· the case, that it is without ~ame instructions that were given in those cases must haYe foundation. Neverthele · · ~Ir. ·warren at that time was the been given in the case of Michigan. pre:ident of the Michigan 'ugar Co. and he could not by any l\lr. ·wALSH. I thank the Senator for giling his contribu­ po8sibility have been ignorant of the testimony given by l\Ir. tion to the policies of the organization of which l\lL'. Warren Hathaway before that committee. I .submit whether it was was the representative and to whose purposes he lent his power­ not his duty to come forward at once with a public statement ful aid. Of course, if this was a new situation, ha\ing no such correcting the misinformation given by the secretary of his background as that to which I have endeavored to imite the company. attention of Senators, Mr. Warren could say: "I did not kuO\Y Howe,er, · the Government ~oon thereafter di. covered the anything about th,is. They asked me to take the stock in my truth about the matter, notwithstanding the asseveration ma(le by the secretary of the Michigan Sugar Co., and in 1910 be­ own name and I did not know what it wa~ for, and I wa: gan the Hnit to which I haYe adwrted. perfectly willing to accommodate them.'' But if l\lr. Warren ::llr. ClDDII~S. Was not that suit brought in 1912 in tead did not know all ahout what they were endeaYoring to do to of secure the control of the beet-sugar industry of America, he 1mo? ::llr. WALSH. ~o: it was brought in 1!)10. did not ha'e sagacity enough to become Attorney General of )lr. UC:JDHX. '. I think it wa · brought in 1912. the United States. )lr. S1IOOT. I think !->o, too. - Mr. BAYARD. Mr. President-- l\fr. CUM~IIKS. I am not altogether sure about it but that The PRESIDING OFFICER. Does the Senator from }lon­ is my recollection. The suit was brought after the' so-called tana yield to the Senator from Delaware? Hardwick in'estigatiou. l\Ir. WALSH. I yield. Mr. W A.LSH. My information i:· otherwise. l\Ir. BAYARD. Does not the record show, I would ask the l\lr. CuMMIXS. The .'enator may be right. I am not sure. Senator from Montana, that l\Ir. Warren himself wa ~ a hea'y Mr. 1'\.ALSH. However, it i:::; not a matter of any . conse- stockholder in the Michigan Sugar Co. and therefore knew qnente. about the matter? .Mr. NORRIS. l\lr. President, may I make au inquiry of the l\lr. WALSH. He owned stock in the c·ompany to the extent Senator? of S445,000 in his own right and held stock for Havemeyer and The PRESIDING OFFICER. Does the Senator from Mon­ his associates or the Sugar Trust to the amount of $800,000 tana yield to the Senator from Nebra.·ka ': more. He held that for a number of years, both in the local l\lr. WALSH. I yield. companies and in the general company until, a· I have hereto­ l\lr. NORRIS. The Senator said that Senator Burrow., fore stated, Mr. Ha,emeyer and his associates owned 46 per of Michigan, assured the ~enate that the so-called Sugar Trust cent of the stock of the American Sugar Refining Co. and then did not own any of the .:tock of the l\lichigan Beet Sugar Co. were charged with having entered into a conspiracy with the Was that an occasion when a tariff bill was before the Senate? American Sugar Refining Co. in violation of the Sherman l\Ir. "\\ ALSH.. It wa:s. antitrust law and became the subject of a snit on the part of l\lr. NORRIS. Ancl at that time the Sugar Trust owned 46 the Government of the United State., instituted during the per cent of the beet-sugar company? Taft administration by Attorney General Wickersham, then l\Ir. WALSH. Of the l\Iichigan Sugar Co. Attorney General of the United States. The charges in that l\Ir. NORRIS. The Michigan Beet Sugar Co.? bill of complaint wiil be of interest. I might flay, before I reach Mr. WALSH. Ye ·. that point, tllat I should advert to another thing. l\lr. NORRIS. Was that in the name of l\lt'. w·arren at that In the year 1909 there came before the Congre!";S what was time? Was that being held at that time in the name of :ru 1•• known as the Payne-Alclrich tariff bill. Extensive hearings Warren? were held by the Ways and lVleans Committee of the Honse ~Jr. W A.LSH. Just when tlle stock wa.: tran~ferrecl on the considering that measm·e, and particularly the sugar schedule. l'{'Cord from :llr. Warren to the real owners I am unable to ap­ When it was quite generally charged that the sugar tariff prise the Senator. v:ould simply benefit the Sugar Trust, the American Sugar ~lr. XORRIS. It would be interesting to know, or at least Refining Co., those who were interested in the beet-sugar iu­ I think it would be intere!";ting to kno\~, in re"ard to that par­ du"try, as indicated by the Senator from Utah [~Jr. S::\IOOT], ticular point. insisted that it wa in order to pre ·erve the beet-sugar in· ~Ir. WALSH. I will read from the ~ peech of former Senator uusti·y, and the disposition was, of course, eYinced to help Burrows to wllich I lHlve a

Mr. KING. l\Ir. Pre ident-- reference has been made several times by the author of the '.fbe PRESIDL'\G OFFICER. Does the Senator from Mon- book from which I have quoted. tnna yield to the Senator from Utah? Mr. .KING. Mr. President, I dislike to interrupt the Senator Mr. 'V.ALSH. I yield. from Montana, but will he yield to me? :Mr. KING. If the Senator is not able to apprise the Senate The PRESIDING OFFICER. Does the Senator from Mon- of the date when the stock was transferred by Mr. Warren to tana yield to the Senator n·om Utah? the real owner~, to Ha1emeyer or the Sugar Trust, does the 1\Ir. WALSH. I do. Senator have the matter in mind as to when the stock was Mr. KING. In view of the investigation which was going transferred to :.\Ir. Warren? on, and Mr. Warren being president of the company and lrnow- ::\Ir. WALSH. Yes. The stock was acquired in varying quan- ing that a Senator f1·om his own State upon the floor of the titles from the original six independent companies between Senate had made a statement that the Sugar Trust did not own 1902 and Hl04. The Michigan Sugar Co. was organized in 1906 any particle of this stock, and knowing that that statement and then the stock of the local companies thus standing in the made by a Senator was for the purpose of influencing legisla­ name of l\lr. "Wan~en was surrendered and new certificates in tion and determining the conduct of his colleagues, I can not hi name taken in the Michigan Sugar Co. understand how it is possible that l\Ir. Warren did not make )!r. KING. And he was the president of the sugar company some statement to correct the Senator or to bring to the atten- for Rome time? tion of Congre.. s the fact that the Sugar Trust owned 4G per :.\lr. WALSH. Ye . cent of that tock. Mr. CUl\D!IKS. At what time did Mr. Warren become pre i- Mr. , MOOT. ~!r. President, will the Senator from Montana dent of tbe Michigan , ugar Co.? yield to me'? :.\fr. WALSH. He became president of it upon its organiza- The PRESIDING OFFICER. Doe the enator from Mon- tion in 1906. tau a yield to the senior Senator from Utah? l\Ir. CUl\HIIN'S. How long did he remain president? Mr. 'VALSH. I do. ~lr. WALSH. According to my information, until the 25th Mr. SMOOT. I thin!~, perhaps, I ought to say that at the of January last. time of the purchase of the control of the sugar indm~trit• s of Mr. CUMMIKS. I think the Senator is right. But the Have- the West it was distinctly understood there that that stock meyer people, the American Sugar Refining Co., acquired their wa not for the Amedcan Sugar Refining Co., but that it wa.· for stoc.k in the l\Iichigan Beet Sugar Co. beginning in 1902. :\Ir. Ha1emeye1· individually. I think more than likely, tbougb ~!r. W AL 'H. Ye . I do not know, that in ~Iichigan the .Jtuation wa the "arne. )Jr. UMML ,.S. And continued to acquire it until 1904 or I do know, howeYer, that that stock was carried in the name 1!)05. of l\!r. HaYemeyer was transferred to Mr. llaverneyer. and :.ur. WALSH. Yes. that to-day Mr. Ha1emeyer owns some of the stock in one of Mr. CU~IMIXS. And the certificateH bad been is ued-I want the western concern. . It is in his own name. I do not lmow that distinctly to appear-the certificate:'! hacl heen issuf'd or whether he carrie~ it for the sugar-refining company or not, trR.n ferred to l\Ir. 'Yarren, and he tran ferred them for deli1- but I do know tllnt it wa in his name and a part of it is ery to the purcha~ers. in his namf' to-day. )lr. WALSH. :llr. Warren indorsed the certificate· in blank Mr. CO"CZE~S. Thnt wa~ not true in Michigan. and ent them to l\Ir. HaYemeyer; that is corred; and, of course, Mr. W ..i.LSH. 1\!r. Pre:::in sold by Mr. w ·arren. and tran~ fers werf' made fTnm :Mr. It \Tould not make a hit of difference whether the stock was \Ynrren'~ name to the name.' of the individual purclla ers who owneu on the books in the name of Havemeyer or Havemeyer's bought the to('k in the State of l\.lh-higan. companie~. the effect would be just the same. ::\Jr. C U~LUlX~. :Mr. l'rc:-:i lid if I dicl not l're~i

was the situation, although I do not know as to the Michigan "Mr. U:xDERWOOD. What is the name of the company you represent? companies. "Mr. HATHAWAY. The Michigan Sugar Co. ' Mr. CU:\UliNS. 1\Ir. President-- "~Ir. UxDERWOOD, That bas six factories? The PRESIDING OFFICER. Does the Senator from Mon­ "Mr. HATHAWAY, Yes. tana yield to the Senator from Iowa? "Mr. U::..l>Enwooo. Some in Michigan and some in Colorado? ::Ur. WALSH. I yield to the Senator from Iowa. "Mr. lliTHAWAY. No, sir; all in Michigan. 1\Ir. CUl\1:\IINS. I would not have anyone for a moment "Mr. UxnEnwoon. IIas that company any connection whate>er with think that I make any distinction between 1\Ir. Havemeyer the American Sugar Refining Co.? and the American Sugar Refining Co.; but, at the same time, "Mr. liATHAW.!.Y. Ko, sir." I do not think 1\Ir. Warren is to be criticized because he did Then, after Mr. Smith concluded his testimony, he said: not publicly deny the statement made by the then Senat?r "Mr. HATHAWAY. What I want to say is this: That every director Burrow" in the Senate Chamber. There were GOO people m of the lllichigan Sugar Co. is a Michigan man. I want to say next that l\licl1iO'an-I do not know but a thousand people in Michigan­ every certificate of stock issued by the Michigan Sugar Co., so far as who knew that the American Sugar Refining Co., through the records are concerned, with the exception of about $100,000 of some one connected with it, had acquired a large interest in stock, is held by a Michigan man or Michigan men. the :Michigan Beet Sugar Co.; it was not a secret at all. " The CHAIRllAN. What about the $100,000? 1\Ir. REED of Missouri. 1\Ir. President-- "Mr. H.-tTHAWAY. That is scattered a~ound in different places. l\lr. WALSH. If the Senator from Missouri will excuse me "The CHAIRMAN. Let us have the whole truth. for a moment-- "Mr. HATHAWAY. That is scattered around in different places out- Mr. REED of :Missouri. Certainly. side the State. ~Ir. W .ALSH. I can not follow the Senator from Iowa. If " Mr. BOXYNGE. What is your capitalization? it vrere the fact that 500 or 1,000 people in the State of Mich­ "l\Ir. HATHAWAY. $12,500,000. igan knew tllat the Sugar Trust had, as a matter of fact a "The CHAIRMAN. Is there one director that represents that $100,000? 1 large, if not a controlling, interest in the beet-sugar comparues, "Mr. HATHAWAY. No. and Senator Burrows a representative from that State, de­ "The CHAIR~ux. Is there any director outside the Michigan people clared upon the floor ~f the Senate that they had no interest, in the concern? it seems to me that the reason was all the stronger for lli. ".:llr. ilATHAW.lY. No, sir. 'Yarrcn to come out and tell the truth about it. "Mr. GAINES. Are any of those Michigan people directors, directly or indirectly, connected with the Sugar Trust? Mr. CU~D1L'S. I do not want to reflect upon Senator Burrows; l1e undoubtedly was in perfect good faith in making "Mr. IIATHAWAY! Not to my knowledge in any way. the statement, if he made it. " :Mr. GAINES. Do es not a Michigan man hold it as trustee? 1\lr. w· ALSII. I have no doubt of that. "Mr. HATH.! WAY. He does not." 1\lr. CU:Ul\li.~. rs. I have not inquired into that at all. That testimony was given by the associates in business of l\Ir. 'V ALSH. I assume he was. 1\Ir. Warren at the time the particular business in which Mr. Mr. CUMMINS. All that I know is from the record to Warren had been concerned was tmder investigation. which the Senator has already referred; there were hundreds 1\lr. KING. And this man was the secretary and 1\Ir. Warren of stockholders in these six or seven beet-sugar companies iu was the president of the company? Michigan, ancl those stockholders, long before ll!r. Warren had Mr. REED of Missouri. Yes. Then the chairman said-- anything to do witll the matter, approached 1\Ir. Hav:emeyer, 1\lr. COUZE~S. 1\lr. President, will the Senator yield? or some representative of the American Sugar Refining Co., Mr. REED of Missouri. Will the Senator let me finish the for help, because they were all, with one possible exception, reading? Then the chairman said : losing money ; and the stockholders of these companies knew-- :Mr. WALSH. They were losing money because the trust wal:) Mr. Fordney suggests that I should ask 1\lr. Warren if that is a underselling them. corre-ct statement. 'Mr. CUMMINS. They were losing money because they were Mr. WARRE~. I do not think I can add anything to what I have inefficiently and incapably managed, as well as because, pos­ already saiU about that statement of Mr. Hathaway. sibl:v the American Sugar Refining Co. was unde1·selling them. 1\fr. KING. The Senator says 1\lr. Warren said that? I do' not know at that particular moment as to the price of Mr. REED of Missouri. Yes. sugar, but all the stockholders of the original companies knew The CHAIRMAN. While the stock stood in your name, there was that a part of their stock, as well as some unissued stock, had no trust? been sold to the American Sugar Refining Co. or to orne person Mr. WARRE)f. No; he was accurate about that. There was no stock who bought it in the interest of the American Sugar Refining issued to me as trustee. Co. It was aB public as any othe1· business transaction could The CHAIR:\IAN. And be did not know that this stock was owned by possibly be. these eastern sugar people? 1\Ir. \VALSH. Let me inquire of the Senator upon what Mr. WARREX , He said he did not, and I had never told him about It. authority does be say that it was public? · l\Ir. CUlll\1IXS. I say it upon the authol'ity that all the If there is anybody in this Chamber who wants to believe stockholders of the e companies knew it. that 1\Ir. Warren did not know what 1\lr. Hathaway had testi­ :\Ir. WALSH. How doe the Senator reach that conclu. ion? field to, of course he is entitled to his opinion. l\Ir. CU~lliXS. It appears from the testimony' of Mr. 1\lr. CUMMINS. l\lr. President, I do not know anything about "-an·en af-: well a the testimony-- 1\Ir. Hathaway's testimony; but Mr. Warren was asked a dozen l\£r. WALSH. It escaped my notice. times whether he held any stock as trustee for the American 1\Ir. CC:Ml\IIKS. I am sure that there is no other inference Sugar Refining Co. or for any one ~onnected with it, and he to be dl'a' 'n from the testimony than that. invariably replied that he did not hold any stock as trustee, Ur. WALSH. I can not reeall any testimony of that char­ and immediately explained precisely how he did hold that acter. stock. It had been issued to him; he had indorsed it in blank ; l\lr. REED of Mi "'ouri. 1\lr. President, will the Senator from he had delirered it to the company for delivery to tlle owners Montana now indulge me on this point? of the :;tock. One can not question Mr. ·warren·s good faitll when he explains exactly how he held the stock, for what pur­ 'l'he PHESIDI~G OFFICER. Does the Senator from :Jion­ tana yield to the Senator from lUis ouri? po2e he held the tock. Mr. "\V ALSH. I yield to the Senator. Mr. KI~G. Did not Mr. "Tarren know tbat it W"US held by i.\lr. REED of Missouri. Mr. President, if this fact were Havemeyer, that he had indorsed it in blank to Havemeyer known to everybody, I should like to have the Senator from and the trust? Iowa tell me how he accounts for the fact that in the organi­ 1\lr. CGMMINS. lle did not hold it in trust, because he had zation of tlle Michigan Sugar Co. it apvears that Frederick R. indorsed it for delivery; but 1\Ir. Warren testified 40 times Hathaway was one of the organizer , and it appears that during the course of his examination that the American Sugar Charles E. Warren was one of the directors? I find that at Refining Co. and l\1r. Havemeyer did own this stock and that G33 thev bad owned it beginning with 1902. He made no conceal­ page of the heariugs of the Hardwick committee. Ov~r and rneJ~t ,yhntcver of that. over again in tho ·e hearings it appears that l\lr. Hathaway and l\1r. Warren were associated in the trano·actions ; and now I l\1r. <..;OrZENS. Mr. Pre ident, will the Senator yield? ~'he PHESIDIXG OFFICER Does the Senator yield; and if find this testin10ny when Mr. Warren was upon the stand: so, to whom? • The Crr.iillllA .. ~Ir. 'YARREX, I want to call your attention to exactly Mr. CUl\llliNS. I have not the right" to yield. The Senator what :;\1r. Hathaway did say on this subject of your connection with from Montana has the floor. this company and the American Sugar Refining Co. This is a colloquy 1\ir. 'V~~LSH. Before I yield to the Senator n·om 1\Iichigan, between himself and 1\Ir. U~DERWOOD: which I shall do presently, I desire to say now that in view of 26 CONGRESSIO~_A_L RECORD-SEXl1TE l\lARCH 7 what I regard as tlle very remarkable statement made by the "Mr. Welliver included in his list of companies which he denomi­ S('nator f1·om Iowa concerning this testimony, when I get nated trust concerns the West Bay City Sugar Co., the Holland Sugar througll with my discu. ion of this matter I am going to ask Co., the Owasso ~ugar Co., the German-American Sugar Co., the my seat mate, the Senator from Tennessee [Mr. 1\IcKELL.A.R], to Mount Clemens Sugar Co., the St. Louis Sugar Co., and the West read the testimony given by Mr. Warren both before the B;ard­ Michigan Suga.r Co. wick committee and before the lobby committee. I can not at "I now assert that the American Sugar Refining Co. does not own all agree with the Senator from Iowa, and it is strange that we a dollar of stock in any one of these concerns, eith£>r directly or :;-hould differ about the matter. I have the testimony here. I indirectly, and that it bas no beneficial interest in any stock of a.ny can not agree at all with the statement made to the effect that one of the e companies. Mr. ·warren explained his ownership of the stock. We dragged "And I now assert in addition that the so-called trust do£>s not out of him a few admissions concerning his ownership; and he own the control of a single corporation engaged in the manufacture wa not at all desirous of explaining anything to us, as is per­ of beet sugar in the State of Michigan. Mr. Welliver has tried to fectly well disclosed by the testimony. make 1t appear as though I had stated that the Am£>rican Sugar 1\ir. CUMMINS. I am not asserting that Mr. Warren wanted Refining Co. was not a stockholder in the Michigan Sugar Co. I never or was pal'ticularly anxious to reveal the a.trairs of his clients in made such a statement either recently or at any time, but do deny that investigation; but I do say, and the Senator from Montana the statement that the American Sugar Refining Co. controls a majority will not, of course, dispute it, that whether it was dragged out of the stock of the Michigan Sugar Co." or whether it came out willingly, Mr. Warren di closed just That is the extent of the statement. e ·actly what he had done in the purchase of the stock of the l\Ir. CUMMINS. Is not that statement absolutely true? original beet- ugar companjes, and what he had done with the Mr. WALSH. Why, of cour. e it is absolutely tn1e. They stock when he bad a<·Quired it. did not own 51 per cent of the stock of the Michigan Co. lli. WALSH. Yes; the testimony, I think, disclo es in sub­ They owned 46 per cent. Of course, it is true. True? It is stance what he did, how he acquired the stock. and what he did only the half truth. ""'Ylly did not .llr. ·warren come forward with it. Unfortunately, the Senato1· from Iowa and I do not and say, ··They do not ow·n control of the ('Ompany; that is, rE.'ad the testimony just exactly the same, and for that reason they do not own a majority of the stock of the company ; they I am going to a. k that it be read. own only -±6 per cent." Anybody who knows anything about I was interrupted, however, by the inquiry addre. :-ed to me corporate management and corporate organization h.11ows that by the Senator from lJtah [Mr. KI~G] concerning how it could 46 per cent is enough to control any of the great companies come about that Mr. 'Varren did not feel imn.elled, in \iew of who. e stock is distributed throughout the country. The Michi­ the statement made upon this floor by Senator Burrows, and gan Su~ar Co. was eonh·ollee had recom· ·e. telling . o that Knight again. t The "Lnited States became a controlling of the acquisition of the controlling intere·t in the Michigan case in the law of trusts and monopolies under the Sherman Sugar Co. by the Sugar Trust, an2 the American Sugar Refining Co., pro­ he did not disclose. This is his second interview- ducing about 6.3 per cent of all the sugar refined in the United State , had purchased control of E. C. Knight Co. and three other independent Sugat· Trust's interest small- sugar refining companies, producing among them some 33 per cent of These are the black headlines of the article­ the country's output of refined sugar. The Government chllrged that the contracts under which these purchases had been made constituted Sugar Trust's interest small- combinations in restraint of trade; and 1t brought suit to compel Forty-six per cent only! their cancellation. Botll tbe circuit court and the circuit court of Mr. NORRIS. What is the date of the matter which the appeals ordered the suit dismissed. Thereupon an appeal was tak£>n Senator is reading? to the Supreme Court. . Mr. WALSH. This is February 25, 1910. The Supreme Court in its decision rendered on J anuary 21, 189.3, Mr. Warren, who is general counsel of the :Michigan Sugar Co., sustained the lower courts. "The fundamental question," aid the when asked for a statement regarding the asset·tions of Mr. Welliver com·t, " is whether conceding whether the existence of a monopoly in as to the ownership of the b~t-sugar manufacturing companies in manufacture is established by the e>idence, that monopoly can be Michigan, said : directly suppressed under the act or Congress in the mode attempted "In the January number of IIampton's Magazine Mr. Welliver gave by this bill." The argument which wa advanced by the Government a list, on page 93, of the companies manufacturing beet sugar in was, to use the court's summary, that " the power to control the Michigan, which he denominated trust concerns. And at page- 84 of manufacture of refined sugar is a monopoly over a necessary of Ufc, the same article he stated that 'probably a majo!'ity' of the stock of to the enjoyment of which by a large part of the population of the the Michigan Sugar Co. was held by the Americ~n Sugar Refining Co. united States interstate commerce is indispensable, and that, there­ "In an inteniew shortly af-terwards I said that the statements of fore, the General Government in the exercise of the power to regulate l\Ir. Welliver were a mass of fabrications, and that statement I now commerce m:1y repress such monopoly directly and set aside the instru­ repeat and am willing to close the matter by putting my word 1n this ments which have created it." With reference to this argument the e<>mmunity against the word of lli. Welliver. court said: "Doubtless the power to control the manufacture of a • 1925 OONGRESSIO~ .AL RECORD-SEN .A. 'IE 27 given thing iuvol>es in a. c€'t'tain sense the control of its disposition, The Peninsular Sugar Refining Co., Caro, ~Ilcb., ..,1,000,000, 1,100 but this is a secondary and not the primary sense; and although the tons. cxf'rci e of that power may result in bringing the operation of com­ Saginaw Sugar Co., Saginaw. Mich., $650,000, 600 tons. merce into play, it does not contL·ol it, and affects it only incidentally The Continental Sugar Co., Fremont, Ohio, $1,~00 , 000, 400 tons. and indirectly. Commerce succeeds to manufacture, and is not a part Detroit Sugar Co., Roche ter, ::Uich. $:100,000, 500 tons. of it. Kalamazoo Beet Sugar Co., Kalamazoo, lllich., 350,000; ~00 tons. " The power· to regulate commerce is the power to prescribe the rule Holland Sugar Co., Holland, 1.\Iich., $400,000 ; 330 tons. by which commerce s!Jall be governed, and is a power independent of West Bay City Sugar Co., West Day City, Mich., 200,000; 600 tons. the power to suppres monopoly." .And by the act of July 2, 1890, Marine Sugar Co., :Marine City, Mich., ---: 330 tons. Congress did not attempt "to assert the power to deal with monopoly Lansing Sugar Co., Lansing, l\lich., $::100,000; 600 ton . directly as such. What the law struck at was combinations, German-American Farmers' Cooperative Beet Sugar Co., Salzburg, contracts, and constllracies to monopolize trade and commerce among ~Iicb., $1,000,000; 440 tons. the sewral States or with foreign nations; but the contracts and acts Wisconsin Sn~ar Co., l\Ieuominre Palls, Wis., $3~0,000; 400 tons. Qf the defendant related exclusively to the acquisition of the Philadel­ Minnesota Sugar Co., St. Louis Park, Minn., ---; 400 ton~. piJ.ia refineries anu the business of sugar refining in rennsylvania, and Binghamton Beet Su•'":Jr Co .. Binghamton, N. Y .. ---; 600 tons. bore no direct relation to commerce between the States or with foreign Empire 'tate Sugar Co., Lyons, T. Y., ---; 600 tons. natious. * It i true that the bill alleged that the products ABOCT TO BEOIX of the c refineries were sold and distributed among the several States, and that all the companies were engaged in trade or commerce with The Sebewaing Sugar Co., Sel.H~waing, Mich., .,_300,000 ; GOO tons. the several States and with foreign nations; but this was no more Sanilac Sugar Refining Co_, Cornell, :\licb., $000,000; GOO tons. than to say that trade and commerce sen·ed manufacture to fulfill its Yaney ugar Co., Carrollton, l\lich .. $~00,000; 600 tons. function. * 'fb~r·e was nothing in the proofs to indicate any ~lncomb Sugar Co., Mount Clemens, 1Iich., $300,000; 600 ton jntention to put a restraint upon trade or commerce, and the fact, as ~t. Louis Sugar Co., St. Loui.:;, :\lich., .. 430,000 ; 600 tons. we have seen, tllat trude or commerce might be indirectly affected was Charle>oix Sngar Co., Charlevoix, )lich., ---; 600 ton·. not enouo-lJ. to entitle complainants to a decree.'' • • • .A vigorous dissenting opinion wus 1·endered hy Justice Ilarlan, who (Page 104 :) In January, 100:.?, the "beet-sugar committee" com­ discu ~ ~cd the legal asprct.· of the case fully. With respect to the ment·ed purchasing the capital stock of the afore aid beet-sug-ar com· t>conomic effect's of the f1t>ci ·ion, he held that freetlom of commercial in­ panics, and by .July, 190~. with the as i. tanc·e of Charle B. Warren, tercour~e embraces the right to buy goods to be transported from one had purl'ha~l'd for the .\mer·icnn Sugar Refining Co. at least 50 pt>r f;tate to another, witlwut buyers being burdened by unlawful restraints cent of the i,;;;ucd capital stock of the above-mentioned :Michigan Sugar imposed by combinations or corporations or individuals; and that if Co., l:la)- City Sugm· Co .. the Penin~ula-r ugar Refining Co., ..l.Jma thi priucivle were not aclhPreu to "interstate traffic, so far as it Sugar Co .. and Sanilao<: :-;u!!nt· Refining Co., r€'spectively; and by ...in­ involves the price to be paid for articles nece. sary to the comfort and g-ust, 1!)03, haer ·hadou·ing combinations having financial resources with­ and Yalll:'~- Sugar Co. out limit and an audacity in the nccomplir;hment of their objects that {rage 10:5 :) During tueit· respt>etiYe lives €'ncb of said corporations rt•cognize none of the restraints of moral obligations controlling the was engagerl in operating it,; factory and in interstate tmde and com­ action of indi\idual ; rom!Jlnations go;erned entirely by the law of merC'e in beet ·ugar, except as hrreinnt of. and actuaily comp<'1ing with all of the others and with Xo"-· recurring- to the 1910 suit. The Government of the the Ame1·iea n ,_ugar Refinin~ Co. in intNstate trade and commerce in United State·, speaking through the .lttorney General, George rPfined ugar. After the acquisition of such t;tock thE' .American Sugar "\'Y. -n'ic:kersham. chargE>d in the bill of cornl)laint in that case as Refinin~ Co. dominated and controlled all of s.aitl companies during follows-and bear in mind that the Michigan Sugar Co. and thl:'ir respective lives and elect<'cl their boards of director , man­ Charles n. Warren were both defendants: agrd their affairs. and restrained all of them from all competition with it and with each other in interstate .and foreign trade and com­ The def~ndant for ~;ome time past ba•e been and now are engaged mercl' in r~>fined ugar. In an unlawful combination und conspiracy to reNtrain the traue and (Page lOT:) In June, l!J0-1, through it. O\Vnership of capital ::-tock commerce among and lJetween the several State, and 'rerritories of the of Bay City-lfichigan Sugar Co., ..tima Sugar Co., the Penin ular "Cnited States and -with foreign nations in raw ·ugar, sugar beets, re­ Sugar Refining Co., 'ebewaing Sngar R€>1ining: Co .. Sanilac Sugar Re­ fined sugar, mola es, slrup , and other by-products of raw sugar and fining Co., and Saginaw-Yalley Sugu.r Co., the A.merkan Sugar Refining sugar beets, and to monopolize the same. Co. can. ed each of them to appoint Gilbert W. Lee, William H. Wal­ SnC'h unlawful combination and conspiracy is the result and out­ lace, Worthy L. Churchill, Charle.· Bt>wick, Tllomas _\, IIaney, Frank growth of a series of wrongful acts ertendlng over a period of many B. Ewen, Uilmore G. Scranton, Frederick H. Ilathaway, and harlcs B. years, and participated in hy defendants, respectively, in the manner Warren its joint agents, with power and authority as such to manage and to the extent hereinafter more fully set forth. In participating and conduct it. buRine:;;s of purcha. ing sugar beeti'l, manufacturing the in tl1e varion acts, agreements, and combinations hereinafter de­ same, soliciting purchasers for and :elling its refined sugar: and from scribed all of the dt>fendants ha>e been actuateu by wrongful intent to June, 1004, to September, 1900. these agents conducted such busine. s r«.> train said inter tate and foreign trade and commerce in raw and for each of said companie and so regulated the same that there was rE>finPd sugar and related articles, and to monopolize parts thereof. no competition between tht.>m or l1etweeu any of them, and the ..imerican (rage 104 :) Ju 1901. pnrl';nin!? their unlawful plans. Ilenry 0. HaYe­ Sugat· Refining Co., or an.r of the companies who~t' capital . toclt it meyer, acting for the .Amel'ican Sugar Refining Co., entered into an un­ held, in the lmsine;:s of purcha ing raw sugar or sugar bPetF:, manu­ lawful agreement with defendant Charles B. Warren, whereby Warren facturing, selling, and shipping refined sugar throughout the "Cni ted wa to purchase and endeaYOL' to purchase for the .American Sugar Re­ States: and at all such times the prices at which each of aid com­ fining Co. a controlling interest in all of the f(\llowing beet- ugar com­ panies sold its refined sugar "·ere fixed by agreement between aid panics as and when Ilanmeyer might thereattet· de. ignate, and also agents and the Am('rican Sugar Ticfining Co. to assist the American Rugar llefining Co. to prevent any new company (rage 10 :) In -~ugust, 1906. the .~merican Sugar Refining Co. a011 or companies from building beet-sugar factories in said States, and to Charles B. Warren, with the purpose of further a:suming the elimina­ a. si 't it to pro-.ent any new companies from engaging in the busine s tion of competition between the aboYe-mentioned Michigan companies of selling and shipping refined or beet sugar in said States, and when and of establishing a mono1oly of interstate trade and commerce in unable to preYent any such new companies from so building or engag­ beet sugar in the "ea::~tern group" of State , caused defendant ~llchi­ ing in such hu ines , to endea,or t;o purchase a controlling interest therein for the .American Sugar Refining Co. gan Sugar Co. to be incorporated unr the laws of Jiichigan, and upon 1 its incorpomtlon the .\meric:m Sugar Refining Co. became the purcha;;er ' (Page lOS:) In the year 1!)01, within the State compJ:ising the " ea. tern group," 17 roJ·pora tion were actin>ly engaged and G were and boluer of one-half of it authorized capital stock, and in September. 1006, it cau. ed Bay City-Michigan Sugar Co., the Peninsular Sugnr about to begin operations independently in the manufacture of and Refining Co., Alma Sugar Co., Saginaw-Yallt'Y Sugar Co., Sebewaing intNstate trade and commerce in beet suga1·. Tht>ir names, the loca­ Sugar Refining Co., and Sanilac Sugar HE'fining Co. to . ell, tram;fer. tions of their factories, their capital stocks, and dally slicing capacities in tons follow. They were in active competition witli each other, and and deliver their respective factories and all other as:ets to defendant willl all others engugt>d in tbe trade and commerce in refined sugar .Michigan Sugar Co., ancl it ha Her ~ince owned and operated the !'aid factories, located, respecth"ely, at Bay City, Caro. Alma, SelJPwain!!. among the States. e~rwcially with the .Ameriran • m;-ar Uefining Co. Carrollton, and CroF:.'WPll. In February, 1907, the _-\mt'lican ~ugar I~ OPEU.!TIO~ Refining Co. caused Bay City-:llicblgan Sugnr Co.. Saginaw---Yalley Michigan Sugar Co., Day City, Mich., 200,000. 500 _ton Co., the renin ·ular Sugar Refining Co.. Alma Sugar Refining Co., Alma Sugar Co., Alma, ~Iich., $6~0,000, 750 ton .. Sanilac Sugar Refining Co., and Sebewaing ..;ugar Refining Co. to be B~ty City Sngar Co., Bay City, Mich., $600,000, GOO tons. dissolncl. · r

28 CONGRESSIO~AL RECORD-SENATE ~lARCH 7

(Page 109 :) En•r since the incorporation of defendant Michigan Mr. BUTLER. Certainly. Sugar Co., the American Sugar Refining Co. has held and voted ap­ Mr. BAYARD. Will the Senator pardon a question? proximately 50 per cent of its issued capital stock, through which it :Mr. WALSH. Will the Senator wait until I finish reading has dominated and controlled said company, and, at the date of filing the decree? this petition, of 37,033 shares of preferred and 55,343 shares of common Mr. BAYARD. Certainly. stock of )Iichigan Sugar Co., is ued and outstanding, the American 1\Ir. WALSH. I continue reading from the decree as follows: Sugar Refining Co. holds and votes 20,438 shares of preferred and But during the pendency of this action the said defendants, the 20,555 shares of common. American Sugar Refining Co., and said certain other defendant cor.­ Thus the complaint. The case hung fire until after the two porations, have abandoned their said combination and conspiracy to in'"estigations to which reference has been made took place, restra.in said trade and commerce and to monopolize the same, and the investigation of the Sugar Trust by the Hardwick com­ have ceased to carry on their business pursuant thereto; the stock­ mittee appointed by the House in the year 1911, and the in­ holders of the American Sugar Refining Co. in other corporations and vestigation of the lobby conducted by a committee of this body the personnel of the officers of said corporations and the conditions in the year 1913, in the course of both of which the actual of the commerce in refined sugar have so changed that full relief facts concerning the matter were disclosed. against said unlawful combination and conspiracy and said attempt As I ha'"e said, at the same time the Steel Trust case was to monopolize said interstate and foreign commerce will be obtained before the courts, and had found its way to the Supreme Court. by the several inhibitions herein set forth. It was believed that the principles which would be announced • • • • • • • by the Supreme Court in the Steel Trust case would be in­ Fourth. When this action was brought the Michigan Su!!B.r Co. had fluential in the correct determination of the Sugar Trust case, a capital stock of $9,237,700, of which the American Sugar Refining and so it was held in abeyance tmtil the war carne on, when all Co. owned $4,098,300, which stock had been procured pursuant to of tlle trust prosecutions were, for public reasons, su pended. the aforesaid combination and conspiracy to restrain and to monopo­ However, the Steel Trust case was eventually decided, .and lize the interstate and foreign trade and commerce Jn refined sugar. then a consent decree was entered in the Sugar Trust case in During the pendency of this suit the American Sugar Refining Co. the year 1922, in which a decree was rendered against all of has disposed of a part of its holdings of the stock of the :Michigan the companies, the American Sugar Refining Co. and the ugar Co. and is now the o"\tner of only 34 per cent thereof, and Michigan Sugar Co., and the action was dismissed as to the neither of the directors or other officers of the American Sugar Re­ incliYidua.l defendants, all of the relief which was secured fining Co. is a director or officer of the Michigan Sugar Co., and but under the consent decree being available to the Government by one is the owner of any stock and his holding is but 400 shares of the injunction against the companies, the relief against the in­ $10 each ; and the affairs of said corporations are not now conducted dindual defendants being of no consequence. pursuant to the said combination and conspiracy to restrain and l\II·. CU::MMIXS. \Yas the relief granted' against the Michi­ monopolize the interstate and foreign trade and commerce in refined gan Sugar Co.? sugar. Mr. WALSH. I propose to read from the decree. Bear in mind that the American Sugar Refining Co., or at least Have­ · 'l'herefore while the American Sugar Refining Co. is not required to dispose of the stock of the Michigan Sugar Co., which it now owns, yet meyer and his associates, bad secured con h·ol of -!6 per cent of the stock. Pending the dE-termination. on an intimation from it is perpetually enjoined from acquiring, directly or indirectly, any the office of the Attorney General apparently or the Depart­ greater proportion of the tock of said Michigan Sugar Co. than it now ment of Justice, that that would indicate a deo.:ire to monopo­ owns, and from voting or in any way using the stock now held by it in such way as to impair or restrain competition betw~n it and the lize the busiue. s, they were permitted to dispo~ e of their Rtock Michigan Sugar Co., or to otherwise restrain interstate or foreign until it was reduced to 331,~ per cent, the t::toc:k having been disposed of as heretofore indicated. The derree re.ads as fol­ commerce in the products of sugar cane and sugar beets ; and the liichigan Sugar Co. is perpetually enjoined from issuing or permitting lows: to be transferred upon its books any stock to the American Sugar Refin­ L ' THE DISTRICT COURT OF 'fHE U~ITED STATES, SO C THER~ DISTRIC'l' ing Co. or any trustee for its use a.nd benefit the effect of which would OF NEW YORK b to increase the proportion of stock of said Michigan Sugar Co. owned The United States of America. petitioner, v. The American SuJ!ar by the American Sugar Refining Co., and from electing or appointing a Refining Co. et al., defendants. In equity a director or other official any person who shall be at the arne time an FIXAL DECREE official of the American Sugar Refining Co. ; and both of said corpora­ tions and their officer and agents are perpetually enjoined from agree­ 'J'his cause having come on for final hearing upon the pleadings and ing, combining, or conspiring together to fix or affect the price of all the proof heretofore taken and on file, and agreement of the parties refined sugar, or to impair or in any way a1Iect full and free competi­ stated by counsel in open court, before three circuit judges of the tion between said companies herein. second judicial circuit sitting in the district court under the pro>isions Fifth. Each and every one of the said defendants, the American of the act of Congri:'SS known as the expediting act of February 11, Sugar Refining Co., National Sugar Refining Co. of New Jersey, Great 1903; and the said pleadings, proofs, and agreement of the parties Western Sugar Co., and Michigan Sugar Co., are perpetually enjoined having been du1y considered by the said judges, 1t is now, on this 9th from further committing any of the acts described in the petition the day of May, 1022, by the said judgl's, ordered, adjudged, and decreeu effect of which would be to prevent full and free competition between as follows: said the American Sugar Refining Co., National Sugar Refining Co. First. That sufficient of the allegations of the original petition stat­ of New Jersey, Great Western Sugar Co., and Michigan Sugar Co., ing acts done and performed at and prior to the date of filing said and from further agreeing, combining, or conspiring among themselves petition, to wit, November 29, 1910- to restrain interstate and foreign trade and commerce in said products, That is the an ~ wer to the inquiry addl·essed to me by the . or either or any of them, and from hereafter committing any act pur­ Senator from Iowa [Mr. OuM:AHNS] some time ago- suant to the aforesaid combination and conspiracy to restrain and to have been proved to entitle the complainant to a decree as herein monopollze interstate and foreign trade and commerce in refined provided; that the .American Sugar Refining Co. and certain other sugar. defendant corvoration were when said petition was filed, and had been The said defendant corporations, or any of them, at any time in for some time tlleretofore, engaged in an unlawful combination and the future may apply to this court for a modification of this decree as conspiracy to re ·train the trade and commerce among the several States to any of the provisions hereof and jurisdiction hereof is retained and Territorie of the United States and with foreign nations in for such purpose. refined sugar and to monopolize the same. The petition is dismi d as to all defendants other than said The American Sugar Refining Co., National Sugar Refining Co. of New 1\lr. KING. The allegation, as the Senator read it in the Jer ey, Great Western Sugar Co., and Michigan Sugar Co. bill of complaint, bowed that l\Ir. Warren was the instru­ Filed May 9, 1022. mentality, or one of the instrumentalities, in securing the stock? HE:-IRY WADE ROGERS, Mr. WALSH. The instrumentality. CRAS. M. HOUGH., Mr. BUTLER. 1\lr. President, will the Senator yield? :llARTr~ T. MAX'TON, Mr. W ALRH. I yield to the Senator from l\Ias::;achusetts. Circuit J1tdges. Ur. BL""TLER. I assume the Senator desires to place before the Senate the entire record. I would like to call his attention I shall now be glad to have the Senator from Massacbu3etts to what appears to be an important factor in this situation. place in the RECORD the stipulation under which the decree was )lr. W .:\LSH. I have not quite finished reading the decree. made. I sball be VE'l'Y glad to have the stipulation put in the RECOR.D. lli. BUTLER. It seems appropriate to submit this part of :Mr. BUTLER. The Senator is reading from the decree? the record at this time in order that the whole matter may be ~Ir. "WALSH. Yes; I am reading from the decree. I trust before the Senate. I refer to the stipulation which is found that will be agreeable to the Senator. in volume 15, page 8!H2, of the record in the case of the United 1925 CONGR.ESSION.A_L RECORD-SENATE 29

States against American Sugar Refining Co. That was in 1915. At the company's office in this city the News was told tbat the At the conclusion of the testimony mtb reference to the l\Iichi­ company did not care to give out to the public the amounts that had gan Sugar Co. and Mr. Warren, the stipulation is as follows: been paid in dividends. "I don't think it is a matter that intere ts the public," said RE'c· It i-' admitted by Mr. Knapp, on the part ot the Government, that retary Douglass. "The statement of dividends concerns the stock· Charles B. Warren or the law firm in which he is a partner is not now holders only." employed in any capacity by the American Sugar Refining Co. and has With the sugar companies asking that the tariff on their products not been so employed since the organization of the Michigan Sugar be continued and that the public pay for it, there is much interf' ~ t Co. in September, 1906. And it Is further admitted that the American at this time. Sugar Refining Co. paid no service charge for the organization of the With the company refusing to glYe exact information, the nf'arest Michigan Sugar Co. to 1\Ir. Warren or any -firm with which he was accurate statement available is from the evidence given by Charles connected. B. Warren, president of the company, before the congressional com­ That stipulation was filed in 1915 by l\lr. Knapp, a repre­ mittee. sentative of the Government under the Wilson administration. In 1906 the company was formed with $4,644,1:i3.2G worth of l\Ir. WALSH. The Michigan Sugar Co. was not only engaged property. thu · in a conspiracy with the American· Sugar Refining Co. in This was capitalized at $12,500,000 and 59,245,755 of stock i suf'd violation of the Sherman antitru t law, but it likewise, as on the property that year. shown in the ca e of the Michigan Sugar Co., was watering its The company, for the first four rears, paid 6 per cent dividends stock. I ha\e before me the Detroit News of F1·iday, April 25, on the prefelTed stock, and 6 per cent one year and 7 per cent another 1013, containing an article beaded as follows : year on the common stock, had a surplus left of about $3,000,000, making the total profit of about $4,000,000 for the four rears, or Buyers of Michigan Sugar Co.'s stock paid $5,000,000 for good will. about $1,000,000 a year. The surplus was · afterwards dish·ibuted Le.; than half the stock sold is represented by tangible property. among the stockholders 1n the shape of stock dividends. Exactly $4,500,000 was added to the " ...-alue " of the " good will" in a The investment (in round figures) of $5,000,000 paid 11 per c nt single year. Sugar Tru t now own most of preferred stock, which bas on a capitalization of $9,000,000. first title to propf'rty that now exists. IIere is where the tariff comes into question and is or vital inte.rf'st A detailed statement from the reports of the companies.is set to both holders of sugar stock and buyers of sugar for table u e. forth in the article sustaining the charge that is thus made. The Denwcrats figure that if a· company goes into busiuf'ss with an I shall not take the time to read it, but ask that it may be inve tment of $5,000,000 and gets 6 per cent on the inve tment, it doe· incorporated in the RECORD. fairly well. The PRESIDIKG OFFICER. Is there objection to the re­ Six per cent on the $5,000,000 invested in the Michigan Sugar Co.. quest of the Senator from l\Iontana? The Chair hears none, would produce an annual dividend amounting to $300,000. and it is so ordered. To raise 6 per cent on the $5,000,000 of assets classed as good will The article is a follows : would require another $300,000 a year, but, according to Mr. Warreu, the company was able to raise both itE'ms during each of the fir~t "When buyers of stock of the Michigan Sugar Co. inve ted their four years and have $400,000 a year besides. money they got $5,000,000 worth of " good will " for thf'ir cash. Mr. Warren's testimony coYered up to 1910. What the company' They also invested $909,16;).90 in stock that is rcpre ented by no profits have been since then can not be stated, as the officers in charg~ ...-alue at all, E'ither tangible or intangible. refu e the information. The value of the tangible holdings of the company do not amount to The Democrats figure that if the company can pay the profits it ditl one-half the ::u:nount of stock solq. under the tariff, it can pay a rea onable profit without the tariff, and The la t report of the financial condition of the company, filed with that the $300,000 asked for dividends on "good will" should remaiu the ,ecretary of state (July 3, 191.2), shows the following "a~sets ": in the hands of the consumers by reducing the price of sugar. Rcru estate ______$2,994,217.41 The Republicans claim to take the tariff off will injure the industry Goods, chattels, mf'rchamlise, materials, and other in- and reduce the profit to nothing. tangible propertY------1, 509,007. 13 C'ash on hand and in banks______275, 171. 05 Charles B. Warren, the prf'sident of the :Michigan Sugar Co., who Good will------5,000,000.00 unloaded most of his holdings in the company before the recent slump Credits due company----,------487, 038. 51 in market price of tock. reducing his interest from $45;),000 to Total ______10,205,434.10 $84,000, has invested 1n a Minne ·ota sugar factory. The tock issues of the company are listed a<; follows: A statement sent out by the wholesale grocers' committee on holding~ of the Sugar Trust say, : C'ommon stock sold and paid for______i, 471, 100. 00 Preferred stock solu and paid for______3, 703, 500. 00 " In 1912 the Sugar Trust announced the sale ol its holdings in the Carver County Sugar Co. (:llinMsota) to Charles B. Wanen, presidf'nt Total ______11,174,600.00 of the Michigan Sugar Co. 'l'he effect of this transfer was a chang(> The good will of the company was carried on the books at 500,000 of name to the Minnesota Sugar Co., and the increase in the capital until 1909, when $4,500,000 more was adued to this item, making a stock from $600,000 undf'r the trust to $1,:!00,000 under 1Ir. Warreu total of $5,000,000. and the rest of his associates of the ~licbigan Sugar Co. The offi cer· Taking the •· good will" out of the a. sets it leavE's $5,365,434.10 ot the Iowa Sugar Co., with oue or two exceptions, are either officer ot tangible property. or directors of the Michigan Sugar Co.'' It means that the Michigan Sugar Co. was doing business to that l\Ir. W A..LSH. It will be remembered tllat the Kational Su()'ar amount of real valdt!, was formed with an authorized capitalization Oo. of New Jer. ey was made a party defendant in this suitby of $1.2,500,000, of which stock $11,174,600 was sold and paid for. the Government, and tile American Sugar Refining Co. wa. re­ That mean for Her~· $100 of stock sold only $47 of real property strained by the decree from ever acquiring more than 25 per was put into the company. cent of the stock of the National Sugar Co. of New Jerser. The question that naturally interests the mf'n, their wives, daugh­ But, as will have been observed by the decree, any one of the tet·s. and sons, who ha...-e invested in the common stock of this com­ defendants is permitted at any time to ask for a modification pan;\'· is, what is the real value of their holdings now? The preferred of the decree. Under that provision the American Sugar R{'­ stock comes in first. There is $3,703,500 of this stock out. More than fining Co. submitted to Attorney General Stone some time ago half of this preferred stock is owned by the Sugar Trust; to be exact, a petition asking t11e Attorney General to con.~ent to a modi­ ~ ~.0-!3,800 worth. fication of the decree so that the American Sugar Refining Co. Deducting the preferred stock from the tangible property and the would be entitled to become the owner of more than 25 per cent following is reached : of the stock of the J\ational Sugar Co. of New Jer8ey. That \alue of tangible propf'rty ------$5, :!6i:i, 434. 10 petition was denied by Attorney General 'tone. A paper de­ Amount of preferred stock______3, 703, 500. 00 voted to the sugar trade, which I bar-e on my de!'k in my office. giving the re. ult of thL application to the di~cretion of the Difference------~------1,561,934.10 Attorney Ge~eral, said that the American Sugar Refining Co. Against thi value of $l,G61,934.10 over and above the preferred would withdraw its petition "for the pre._ent,' clearly indicat­ stock there has been $7,471,100 worth of common stock sold and ing that it proposes to renew the applicarion for that modi­ paid for. fication of the decree which will, of course, accordingly come That is, fot• ('Very dollar or value in property above the preferred before Mr. Warren for resolution should he become Attorne:v stock there has bf'en $5 of common stock sold, This common stock is General of the United States. · helcl by the "investing public." I want to call the attention of the Senate now to what i_. Tile amount of stock sold in excess of the tangible value of the before us in the way of trust pro. ecutions which we are to property is $5,909.16;).00. intrust to Mr. Warre!l. I do not recall jut exactly what 30 CONGRESSIONAL R.ECORD-SENATE nl.ARCH 7 amount of money we now vote annually for the prosecution of reau, Ash Grove Lime & Portland Cement Co., the Bonner rortland theRe ca es under the antitrust law. Perhaps the Senator from Cement Co., Dewey Portland Cement Co., the Monarch Ccm<>nt Co., North Carolina [Mr. OvERMAN], who serves so well upon the Oklahoma Portland Cement Co., and the Western States Portland Committee on Appropriations, will be able. to tell us. I re­ Cement Co., defendants. Final decree. member very distinctly that for a long hme the sum was The United States of America v. the Atlas Portland Cement Co. ct $400 000 annually that we turned in to the Department of Jus­ aL Indictment. tice 'for the prosecution of these great trusts that thus prey United States of America, plaintiff, v. Mid-West Cement Credit & Statistical Bureau et rt.l., defendants. retitl.on. upon the people of the United States. . . The United States of America v. Lehigh Portland Cement Co. t>t ul. Mr. OVERMAN. That is correct, and I thmk the amount IS Indictml'nt. about the Sc'l.me now. Maple Flooring Manufacturers' .Association et al. v. United States of 1\lr. WALSH. It is about the same. . .America, in equity. Reply brief on behalf of the United States. l\Ir. KING. Mr. President, if the Senato~ ':ill pardon mel United States of .America 11. llitchell Bros. Co. et al. (Maple Floor­ I should like to state tllat liberal appropnut10ns have been ing Manufacture1·s' Association.) Indictment. made for a number of years for the enforcement of the Sher­ United States of .America, plainti.re, 11. General Electric Co. et al., man antitrust law, as well as all otl,ler criminal tatu~es. In defendants. Petition and brief on behalf of the Government. 1915 nearly $485,000 were appropriated for the d~tectwn and United Stutes of America v. Standard Oil Co. (Indiana), Stanll:lrd prose<:ution of crime. In 1921 the amount wa mcreased to Oil Co. (New Jersey), Texas Co., Gasoline Products Co. et al. Petition. ~2,400,000. In 1924, $2,242,000 were appropriated,. and for United State of .America v. Tile Manufacturers Credit A.,socla­ 1!)26, · .,·2,224,500 have been appropriated. In addition, there tion et al. Final decree. were amounts aggregating several hundred thou~and dollars United States of Amet·icu, petitioner, v. Oscar Kern and other , de­ appropriated specifically for antitrust pro ecutw~s. . As a fendants. Original petition. matter of fact, it was tmclerstoocl that the appropnatwns for United States of .America, petitioner, v . .American Coated Paper Co. thf> prosecution of antiu·ust cases would be more than (Inc.) et al., defendants. Original petition. .~1. 000,000, possibly $1,500,000. . The United States of America v. James B. C1ow & Son et al. Iu­ I remember a ·king the former Attorney General, Mr. Daugh- dlctment. erty, to pro ecute the trusts, and tate~ that. I wa" sm:e the The United State of Amt-rica v. Andrews Lumber & Mill Co. et al. Democrats would join with the Republicans rn appropnatlng Indictment. additional fund to enforce the provisions of the 1:4herman law The Unitt-d State of America v . .Atlantic Terra Cotta Co. ct al. aud the Clayton Act: I regret that, notwithst::mding the large Indictment. :lppropriatiom; made, the results have been ummportant. The nited States of America v. The America Terra Cotta & Ceramic Mr. WALSH. So deeply concerned, Mr. Pre ident, are th.e Co. et al. Indictment. people of the United States in the effo.rt. to preserve co!llpetl­ United Sbttes of America v. Johnston Brokerage Co. et al. Inuict­ tion in this country that they are w1llrng to appropnate a ment. million and a half dollars annually for the prosecutio~ of Uniteu • tatl's of America v. The Central Founc1ry Co. <>t a.l. Inrtict­ thu,'e who violate the laws intended to pre erve that precwus ment. competition. ·wen may we do so, for not since the early years nlted States of Ameriea, petitioner, 'tl. National Enameling ~, of the present century has there been such a furor in ~he Stamping Co. et al., rlefendants. Original petition and final uecrce. matter of the organization of great trusts aud monopolies United States of America v. The Trenton Pott('ries Co. et al. In­ as now. The junior Senator from Nebraska [Mr. HoWELL] dictment. the other day deli1ered in the Senate a remarkable speech United States of America, lX'titioner, v. A. Schrader's Son (Inc.), which was entitled to greater consideratioJ;l than was accorded Henry P. Kraft, Philip G. Cole, Wllllam T. IIunter, jr., F:reclt>rick Tris­ it. He called attention at that tinle to a letter which ~ad b~n man, and Julius Volck:hausen, defendants. Final decree. addressed to him by the Acting Attorney General, disclos1_ng United States of America, petitioner, v. New York Cotiee & Sugar the enormous burden thrown upon the Department of Just1ce Exchange (Inc.), New York Coffee & Sugar Clearing Association (Inc.) in the prosecution of cases of this character. et al., defendants. Original petition, memorandum of authorities, anrl I do not recall that that letter was put into the RECORD in appeal. connection with the speech of the Senator from Nebraska but United States of America, petitioner, v. Live Poultry Dealers Pro­ it will do no harm to repeat it, and I ask permi sion to have tective .Association (Inc.) and others, defendants. Original petition the letter which is addressed to the Senator from Nebraska by and opinion of judges. the Acting Attorney General incorporated in the RECORD as a United States of America v. National Malleable & Steel Casing Co. part of my remarks. et al. Indictment. The PRESIDING OFFICER. Without objection, it is so United States of America, complainant, v. California Wholesale ordered. Grocers' Association et al. defendants. Bill of complaint. The letter is as follows : United States of .America, complainant, v. Southern California. Whole­ sale Grocers' Association et al., defendants. Bill of complaint. OFFICE OF THE ATTOR~EY GEXEIUL, United States of America, complainant, v. Utah-Idaho W'hole ~ale Gro­ Washingtol~, D. 0., February 16, 192.5. cers' AssQclation et al., defendants. Bill of complaint. lion . ROBERT B. IIOWELL, United States of America, plaintiff, v. Jeffrey Manufacturing Co. et Unite(~ States Senate, Washington, D. 0. al., defendants. Petition. MY DEA.R SENATOR; In compliance with your request I have the honor The United States of America, plaintift', v. The Wheell'r-0 ·good Co. et to nand you hPrewith a copy of a pamphlet and supplement thereto al.. defendants. Petition. publl hed by the department containing the .Federal antitrust law and United States of America, complainant, -v. Seattle Produce A ocia­ a very brief description of the cases instituted ther{'under by the tlon, a corporation, et al., defendants. Bill of complaint. United States, together with copies of uch pleadings, briefs, and United States of America, complain:wt, v. Oregon WbolE>Snle Grocers' opinions, of which the department has coples, in cases instituted since Association et al., defendants. Blll of compl:lint. 1\Iarch 4, 1921, involving combinations or monopolies formed for the Dnited States of America, petitioner, v. Colgate & Co., defendant . purpose of fixing or maintaining prices or necessarily having the Original petition. effect of controlling priees. In addition to the cases in tituted since The United States of America v. Lindsl y Bro~. Co. ct al. Indict­ March 4, 1921, I am inclosing a copy of the brief for the United States ment. and final decree in the case of United States v. American Column & United State of America, petitioner, v. The National Pe!lnut Clr:m­ Lumber Co. et al., and a copy of the bill of complaint, opinion, and ers & Shellers' Association et al., defP.nda.nts. Original prtition. decree in the case of American Linseed Oil Co. et al., as these two cases The United Stat('S of AmPrica. petltioiH'.r, v. Int('rna tiona I Ilarve ter were the first of the sP.rie"' of very important traue a ociation ca~es Co. et al., defendants. SupplPmental -petition. ;vhlch the department instituted. The United States of Ameriea, petitioner, v. Si"al Sales Corporation, The following 1s a list of the cases involved, together with a descrip­ Eric Corporation, The Equitable Trust Co. of N~>w York, The Royal tion of the documents therein whieh the uepartment is able to furnish: Bank <>f Canada, Interstate Trust & Banking Co., Comision Exportadora American Column & Lumber Co. et al., app('liants, v. united States de Yucatan, Hanson & Orth, Charles D. Orth, Allin W. Krech, Fred­ of America. Brief for the United States and final uecree. erick T. Walker, Lynn IT. Dinkin , F. W. Black, J. A . B cat:~ou , l\Iichael nited State: of America, plaintiff, v. American Lin.·eed Oil Co. and J. Smith, Cbarles D. Orth, jr., and Tomas Cut:ltellanos .Acevedo, defcntl­ others, defendants. Bill of complaint, opinion, and final decree. ants. llrief for the United Statef-l on motion to uism is,;. united Jtates of America, petitioner, ·v . Cement Mnnufacturers' rro­ A referenee to the pamphlet containing th(' descdption of the CllSC'S tective A~ ociation et al., defenuants. Brief for the United States and institut d will disclo e the outcome or pre eut status of the ahove­ nnal decree. mentioned case' and the followin"' ca C'S in which thf' df'partment i United State~ of America, plaintiff, 1.1. Hiram No1·cross, sole ownP.r unable to supply a copy of any of the piNtding . brief . or opinion , and manager of and operating as the Norcross Audit & Statistical Bu· which latter cases also involve price-fixing comlJinations : 1925 CO:NGRESSIOX lL RECORD-SENATE 31

rnlted StatP: 1'. American Lilliogntphlc Co. et al. (p. 138). United Stutes against Tile Manufacturers' Credit A.tition 1iled ~larch 1~. 1914-, in the District Court, Houthern Dil-.trict of l\'('w York, eharg-ing- the defl'ndants with having A complaint i!'-lsue1l by tbe FNlel'al Trade CommiRsiou charges the mouopolized the vrounction. transportation, and ;;;ale of antllra­ Lnrrowc Milling Co., of nett·oit, Mich., nnu 17 manufacturers of beet cite coal from mine~ tributary to Lehigh Yalley Railroad Co. in sugar, with the use of unfair methods of competition in the marketing violation of the Sherman Act. of beet pulp, a by-product of beet-sugar manufacturing. The complaint United State;>. ...: a~ainst William Roekefeller and others. Indict· alleges tbat the respondents are engaged in a wrongful combination meut returned Novelllher 2. 1H14, in the Dh.:trict Cotut, Southern and conspiracy to suppress competition in the dlsb·ibution and sale of District of New York. a~ainst 21 iudidduuls, each at some time !Ject pulp in interstate commerce. Beet pulp, the <'Omplaint states, is a director or officer, or both, of tlle New York, • Tew HaYen & a by-product in the manufacture of beet sugar, the pulp being tho Hartford Railroad Co., charging them with ~onspiring to mo­ residue after the sugnt· bas been extracted from the beet. This pulp nOl)Olize tlle trausvortation facilities of .. Tew England. is used by stock raisers and dealt'rs in cattle feeds. Tile complaint fur­ United States against Fee11ey and others. Indictment re­ ther :.>tates that the respondl'nt manufacturl'rs in the aggregate pro­ turned April 27, 191G, in the Di ·trict Oourt, Northe-rn Di ·trlct of duce approximately 75 per cent or more of the total quantity of beet Illinois, charging a conspiracy among~t labor union~ and certain pulp producPd in tbe United States. manufacturer~ in Cllicago to prevent the installation in Chicago The compla iu t recites in de tall numerous methods alleged to have of electrical appliuuceR and lighting fixtures manufactured el~e­ been used by respondents in effectuating its conspiracy to ~:~uppref1s where, the pnrpo ·e beiug to eliminate com1•etition from that competition in the distribution and sale of beet pulp. Among such ~ourcc. mf'thods, according to the citation, are tbe following: HE>spontl,..nt L'nited Rtat .-.; agninf't Cowell et al. Indictment returned Oc· manufadur<.'rs enter into contracts with the Larrowe l\Illllng Co., giv­ tober 2i, 191U, in the Di~trict Court, Di:·;trict of Oregon, ing excluRive right of seiUug all beet pulp produced by the mannfne­ turer each senson, except a small supply retained for locnl distribution; chnrging c·ertain officer~ and a~ents of nine cement-manufactur­ ing companie::.: with eng-uJ.ting in a combination to restrain and the respondent Larrowe Co., acting upon intormalion received ft·om with monopolizing int(•rstate trade aud commerce in cement on respondent mam,fucturet·s, as to the qunntity of bt'ct pulp on hand, and otllcr pertlnel'f; information and data, withdraws l>eet pulp from tbe Pacific con~t. United States ag-ainst )lead et al. Indictment rPtmned April the market in cNtu \n localities and pushes tlle sale in othPr places, and otherwise manipulates tlle market in such a manner as to secure 12, 1017, in the Di~trict Court, Houthern District of New York, charging deft>nl & Tile Con­ be to the interest of the public, it sllall issue its complaint. IIowL•vpt·, trador:"' A,·:.;odatiou, with combining and conspiring to re~train inter:"tate trade and commeree iu wall and floor tiles. the question whetber or not such metbod has been used is not passed upon by the commit~sion unlll after respondents ltave had 30 dn.rs iu uuitNl ~tate~ againf-'t A. ~chrader's Son (Inc.). InB and other vehicle~. method ot procedure; they may then appeal from tlle ordN' or Fnited States a~ainst American Lin,ee dh-:tri£•t court of Chicago against to represent tlle Governm('nt. Ou such an appeal, ther<>fon~. lG corporations and 20 individual defendant:-; ehurgerl with car­ :!\[r. 'Varren, if his nomination shall be contirm('d. will l•u rying on a con"piraey in violation of t11e law to restrain trade called upon to repre~ent the Government of the United ~tatP .-4 in plumbing and heating mutel'inl. .;. in proceeding:::; in which the :Michigan Sngnr Co. is a pnrt:r t al. the Dcvartmcnt of Ju:::;tice a long li~t of ca~C's rrfeiTC'd to 'UuitNl States against the A.mt•ric:m Terra Cotta & Ceramic that de1)artment by the Federal Trade Commil-lsiou fur am,ro­ Co. ec ·al. vriate proceedings nuder the various lawH cnaetPd by Uml· United Stnte~ again~t IIimm Norcru~s e-t al.. charging that gres::; concerning tbe re~traint of trade and commt•rcE'. t shnll !hey arc en~n~d in n c·oml•inntion and cou~virat·.r in re~trniut of not take the time now to ref('r in detail to tho~c ea:- ju~t oJJc eoH­ he wnH at the head of it before be became Secretary of the sistent thiug for the Congre ·s of the r11il<>ll ~tat s to do, and Treasury, and pre ·umttbly still ltolds hi interest in tlle organi- that is to wipe the Sherman Act off 1'1H' ·tutnt1..• I.ool>>. to repe:tl 7..J1tion-has not only been guilty of monopolizing trade and it forthwith. Confirm this nomination IUHl ~·ou lll1:;ht us \Yell commerc·e in violation of tlle 8berman Act, but ba::; actually hang out a sign that for the period of the life or thi..: n<1mlnis­ violntcd a deere of tbe court rendered again~ t that organiza­ tration the Sherman • <·t i.: su~'Peltdcd. Conii.rm thi · nomina­ tion nnd is now iu coutC?mpt of t11e court. J'm;t imagine the tion and you extcn of the "r- Olwir~ferring to yonr 1Pt1ct· of OctobP.t' 17, 1!)2--l. 2. The t.leerf'e ngainst th • luminnm ('o, of .r\mcrll'a -bas It l><>en tranRmiHing a <'(•PY of thP rPpnl't ot' ~-om· <'ommlssion (Vol. III) on vfohltetl? "Kitchen furnl,..bing. and domP~o~tic nppliRnc·""' ., : The Ul'l'ree p rpeluall~· enjnined the Aluminum Co. of Amerlcn, Hti Imnu•d1at<'ly upon r<>ceipt of the l''"'l'Ol't it WH. rt'fN•rers of tb.- departnwnt for cnn•ful l'tudy and report, a brlPf 1. Without rea::;onalJle cause deluyiog h1pmrnts of mu­ and notice, ummary of wllich l'ollows: terial to n comiletitor; 'l'he brttnche of industry covere~l by your rf'port Rro the following: 2. Refu·dng ..:hip, cl'aRlu~ cruc.le F-~"miflnish~d to or to E;bip, or aluml­ 1. Yanmm clC'anet·s; nmn to a comtl titor on contracts or onlerR placed or on p:ntlnlly filled 2. "'n:-:hlng ruarhines ; urtlers; 3 . .-\lumiuuun cooking 1ltt•usils; ~l. Charging a comr1etllor hkbt•r prlc«>s for cru1l ot• . emit\n t· hNl 4. ItP.fri~erator: ; aluminum tllao n.rc cllnrgcd nt the . ame tlmf', uudeJ· like Clr Himihtr 5. H.~wing IDI!ehlne ; conditions, a company in which 'CI•lluneou~ ldtl'itcn fni'Hi!-:hiu~s; aurl compPtltor upon llkP termH and t'Ollllitiou. of •:;11', under lil ot· slmllur .,\1":-ff'LTI•d lo :-:Hml'wbsli In 1b~ 1'1'\'PrsA lt is financially interested; and • orr!Pt' in whlf'h tlwy . Tl' ~o~f't fort-b. knu~·n dl'fP<'tlve -. !•'rom furni ·bin,.. com}Jctitors m;.ttE>rlal. •. A;~) ·lation acUvlti&l ot' hardwurt> cl~'>niPrs: ome o! the a~. o- Th l'omplrunts of competitor , witlJ rt'. pect to deliYerics and CJmlllty dalion refl'rl'<'d ro ut·c• lo ·nl, and . ome l{l'lll'l'il l. \Vhile uo t omo of material. furnlslled, may be cln.sslfiNl as folio · : of thP thin~tt ainwt.l at Ln· O!Ul' of the IllS ochllions were Ulllawful. Pt 1. Canct>llatlon of quotas; fx·oru tlH' ,.,:lc.leuc:e contal~e<'n b·o 2. Refu;.;al to proruL.:e sblpments; much ulvcrsit-.· or interest to have a•·compli,.;bed much. \Vhilc at­ 3. rnr sonnblc deluys in deli>eries; tempt:'! wPre mncle in :some in tanc:ns to 1lx Rnd mlllntuln "rulin~.; 4. \\'here two or tnrcc.l, sllippiug one price~>" nntl to control "re ale prlcctl" lllere were too many deall•r:i kind or gauge and wltbholdiug slllpment of the other; with rl!Yerg<-'nt inte•·cst to mukc hU<'h nttempt •~ll'C'dlve. The main 5. Unreasonably delaying shipment and then suddPnly dumpiu~ upon pffortH or Ill rotnil 1ll' lP.rs ecru 1o b vo hcl!ll directl'c.l against "t•uLa• t11e competitor large quantities of metal; io~e ·· house nnd to prevent w.holl'.;ule tlealN'tl from oP.lliUii direct Unrea~onnbly 6. delaying shipment and then sudtlPnly dumping upon to con UlllCl'S, l'Ompetitors large quantltle of metal llortl:r aftl•r thry h·1ve hCI'D Your l'eport . Atnt.P.~ t.bnt "no evidrnce was found ot any tllr et netton force<] to purcbusc foreign Jnetal to f'Ui>PlY their nee·~. !tiP:-<: ~1nd uy the n~Hoclat tons to comp 1 munufucturer or jobbers to confine their 7. ~.hiJlping comp tltors large quantities of material:; known at the t!ale · to 'legitimate tlt•aler8,' '' aml you mak no rccomroeuc.lation wltl! time of shipment to he defective. re. ·lJt•c·t to their a ell vlties. Without attempting to r(!Vicw the evillP.nce ubmit tn1l in your rl:'port, 7 .. U~>cellaneous kitchen fu.rni hings : nder tlllR b ad in... are em- 1t i · sufficient to say tbat the eviuence ubmltted . uppo•·t to 11 "rf'atcr urn cell cnnmf'led cooking utPu:;ils, kitchen l'auluets, tuules, nnd airuilat' or le. s extent tlle nbo n-reclted complaiuls of the competitor~. And t.lumt•stlc appli nceH. veclall: i tbls clP. t' nd convincing ln respect to the repeat t1 ship· ments of defective mnt•Jrials, known at the time of sbipruPnt lo be ''ith rt•spel·t to the.·e intlll:>trleN you state that comiJetlth'e condt· HonH were uot st uliiell, aucl you make no corurJlaint or rccommeudation defective. Thi b came . o eommon und so flag-rant :1"1 to eall forth r~>mon trnnce.~ from Mr. l•'nlton, of the Chicago office of the cnrnp. ny. with r >llJPCt to thl-'111. G. Jion~;ehohl brooms and bl'ushes: n·ith respect to "broom corn " On July !!R, 10:.!0, he wrote the company. uealcr, yuUL' l'l-'{IOrt , tates tbat YOUr reCOl'UI'I dO not ShOW that the US• GiYin~ the lctterl!. l"ociatlotl has e'fer at.iempted to fix prices; tUlU thut ilR only activity, '!'ben the Attorney Oencrnl concludes: the propriety of which mi~bt be quP. tioll~fl, was the blacklisting ot It Is apparent, therefore, tbat during tbe time CI)V •ro'd b~· yulll' repot't 1-n tomer~ with which member. hn,·e hud .dlffi<'ullles without giving tlH· .\luminum Co. of. Am rh'a >iolatcc.l eYeral pro>i. ions of tl.Je dct:rl!e. t be u1·< 118Pil pnrty an opportunity to e-xp!nln b1. siclc ot' the C;\su. Uow­ '1 hat with rel'pect to Rumt> of the practices cotuplained of, they vera L'V~'t'. that has l>een cbangcc.l, aud th•. accn r>d pnrty i uow gin~n a 0 frequent and long continnrd tllc fair inference i the compuuy t·itber httnrin;.:. wa3 inllifl'e•·pnt; to the provisions of tl1e docrec Ol' knowingly intended With r<'spect to "broom run onfacttii'PI' " you statP that tht- great tbnt 1t proyi~lons t-:houlcl be dhH'l'JiUrdl'd, wlth tl vil•w to UPlll'{' >'ing number uf Hmall ruaunractUI"cr mnke it clillicult 1o rully organlzn llJB competiti-on iH tbo alumiuum iudu.·tr~·. There ~ll<'C<·l'sf 11 ettort of the a ·.-ocintion is itA department for the coopcrntive cnnr,;e of conduct of the c•ompany up to th!"\ prt :1mt time, I bon in· purcbttf!ill~ ot Rllppl1e. llS<'d in the mannfacture Of broom!'!. :stl'llctey the DC'partment of .Tn~tic.-. 'l'bls will not iutl.'rfcre In auy wny with L()lf), ]'rice fi.tlng WB~ a topic Of dif.KilSSiOll ROOD Uftr.r it orgnni?.R· nny further inve ... t!.gation which the Feu+"ral '.frade \.:ornmh-~:;ion runy filld tlon. The "OJ ••n competiti e prlee plan., \ 'U." al,;o dlsc11. !'Nl; but it t•roper to mnkc. tlle dl'ci. ion lu the Hardwood Lumll·r cu:-<'em:-; to haYe contlnnf'd np to tho J flortiCIJ Or.ltct·al. elol:!in~ or your luvr>. tigntlon. waR ti.Jat of making W<'t>kly aud monthly I ask thnt the entire letter be hlcorpHratetl in tlle U!!:conu us reports or pro!l o~ction and . u !I'~ for t hP 111lc•ged pnrpo:e of fixing tho n11 nppeudix to ruy rem:nk . duP~ of tlw nH'mix'r~; of thr nli. oclation. However, ar.cording to yonr The PRl·1SlDING OFFICER Without ohjet"tion, it is so rPport, memh<>r were Ia in lhiR J'f'"Vl'd; und, owing to tho fact that ordered. rucwbership in the n!'soda1i•JD " bu fiul'l llUI1 11 g-re· tly from Umo to (. ce n.vpenillx.) timt•," it is ulfilc:ult to dct •t'lllhH· ll•e ,.n-~d- tba as ocla11on bad upou 1925 33 the trade. While 1t ls fair to presume one purpose of the association of Its patent, more than three years having elapsed since that time, a was to enhance prices, there is doubt as to what effect, in !act, 1t did prosecution would be barred, and a court would not restrain acts no have upon production and prices. longer being committed. Your report of the activities of this assoclfifon seems to have closed The real vice in the washing-machine industry consists in the pooling. with the year 1922. Before it can be determined whether its present ot patents EfW1led by the Maytag Syndicate and the National Jiousehold activities are such as to fall within the condemnation of the antitrust Devices Co., and in forcing other manufacturers to secure a licen e acts it will be necessary to bring the lntestigation up to the present under them, under threat of infringement suits, and apparently, in time. some instances, whether there was real reason to believe there was an Brush Manufacturers' Association. Tbls association was formed In infringement or not. 1917, its purpose being "to promote the interest of the manufacturers I tully agree with what your commission has so well said in its of brushes in the United States." Running through the letters and report, that- other information on file Ls the idea of maintaining and not cutting ., The Cestigation of the by the Supreme Court in Federal Trade Commis ion v. Beechnut Pack­ washing machine industry clo ed with the end of the year 192" . . ing Co., 257 U. S. 452 : Before any action is taken it will be necessary to bring the investiga­ "By these decisions (therein above referred to) it is settled that in tion up to date. prosecution unuer the Sherman Act a trader is not guilty of violating 3. Aluminum cooking utensils: Aluminum Co. decree 1 Your report its terms who simply refuses to sell to others, and be may withhold his covers two phases of the aluminum industry : goods from those who will not sell them at the prices which he fixes 1. Competiti;e conditions; and for their resale. He may not, consistently with the act, go beyond the 2. Decree again t the Aluminum Co. exercise of this right, and by contracts or combinations, express or im­ To understand the importance of the decree, competitive conditions plied, unduly hinder or obstruct the free and natural fiow of commerce become important. in the channels of interstate h·ade." 1. COMPETITIVE CO::\'DITIONS The report upon this indush·y does not seem to have been brought down Your report li ts 30 companies as being engaged in the manufn.cture beyond the year 1922. Unless it can be shown that the members of the of spun and stumped aluminum ware. It does not include the manu­ association have adopted som~ new methods, such a the establishing facturers of cast-aluminum ware. of a patent pool, or some agreement or understanding to enhance prices, The Aluminum Goods ~lanufacturtng Co., of Manitowoc, Wis., is the or similar scheme, since the close of your Investigation there does not largest manufacturer of aluminum cooking utensils. Nearly 31 per appear to be sufficient in your report to justify the conclusion that this cent of its capital stock is owned by the Aluminum Co. of America. association exists or is employing methods in violation of the antitrust The latter company bas two of the six members on the board of direc­ law. tor of the manufacturing company and practically conh·ols its policies. 2. Washing machines: The basic patent in the washing-machine in­ The second largest manufactmer of aluminum cooking utensils is dustry was the Stocking-Mendenhall patent, which expired June 14, the United States Aluminum Co., which is 100 per cent owned by tbe 1921. Aluminum Co. of .America. That patent was owned by the Iowa Washing Machine Co., which was These two companies produce about 65 per cent of tbe total output organized in 1007 for the purpose of holding and granting licenses of aluminum cooking utensils. under the patent. The main criticism to be made of that company, if When the .Aluminum Goods Manufacturing Co. was organized in subject to criticism, was its methods of threatening to bring and ot March, 1009, it took over the business of two Wisconsin n.nd one New bringing infringement suits, and of its failure to bring ·uits against Jersey company. Later, the New Jersey company sold its interest to strong companies. This leads to the suspicion that in some instances the WiscoMin companies. These three companies. at the time they its claims to infringement were not believed to be well founded. But were absorbed by the Aluminum Goods Co. in 1900, had for some 10 1f that company was guilty of unlawful conduct prior to the expiration years been actiYe competitors.

LX VII-S 34 CO:NGRESSIOX AL RECORD-SE~ATE MARcH 7

In 1924, the Aluminum Goods Manufacturing Co. submitted to your On October 21, 1920, Mr. Fulton again wrote the company: commission a plan looking to the purchase of the entire New Ken­ "I think 1t again of vital importance to call your attention to tho sington, Pa., business and property of the Unltl'd States Aluminum Co. class of sheet which 1.8 slipping through our inspection department. and the Aluminum Cooking Utensil Co., subsidiaries of t_!l_e ;Aluminum • • • Co. of America, engaged in the manufacture and sale of cooking uten­ "The greatest complaint is in reference to our coiled sheet. sils ; and also the Toronto, Canada, subsidiary of that company, "About three different customers within the last week have stated operated under the name of Northern Aluminum Co. (Ltd.), and having that they have hardly used any of our coiled sheet on account of the a rolling mill and manufacturing plant in that city. wide variation of gauge, there being as much of a variation as 4 and 6 You state that the combined cooking-utensil output, in 1920 and B. & S. numbers in the same coil. This, of course, indicates nothing 19~1, of the Aluminum Goods Manufacturing Co., and of the plants It but careless rolling and more careless inspection. de ired to purchase, was at least twice as large as the total combined "The next most general complaint is our shearing, in that the output of all other competing companies. You further state that the shearing is not correct to dimensions, especially width." New Kensington plant has in the past supplied a substantial portion In December, Mr. Fulton, after an inspection tour of several plants, of the requirements of sheet aluminum for the cooking-utensil com­ again calls attention to the complaints and to the defects in materials panies. bei.ng shipped. Among other things, he says : Your report does not show whether the proposed plan of purchase "There are many things which I know the operating end could wa completed; but you state that such a. merger is entirely incon­ remedy without delay which now are causing a great deal of trouble. sistent with the antitrust laws of the United States. No doubt one of the biggest sources of our poor sheet is the apparent The Aluminum Goods Manufacturing Co. rolls practically all of the increased quantities of scrap that we are putting into our 2S sheet. sheet aluminum used in its present three owned plants, each being The appearance of the drawn sheets is a direct give-away as to what equipped with a rolling mill. 1s going into the metal. The independent manufacturers of aluminum kitchen utensils are " This is something I have in no way discussed with any of our almost entirely dependent upon the Aluminum Co. of America for customers, and have steered them off the track whenever they have their supply of raw materials, the quantity imported being relatively brought it up, but went over it thoroughly with Mr. Yolton, and he small. assured me he would discuss this at length with Mr. Hunt." The Aluminum Co. of America at present controls more than 90 There is also to be found this complaint from a Cleveland customer, per cent of all known deposits of bauxite in North America, that are under date of May 9, 1921 : of such a character that aluminum can be manufactured therefrom in "Now • • • can your inspectors pass all this up at your mills? comml'l·cial quantities. Having this practically complete control of This is an idea that I wish you could confer to your mill heads with the sources of supply of the raw materials, it is in a position to and force enough to get them to take a little interest in it and not burden. does control the domestic price of sheet aluminum to utensil manu­ us with the tremendous expense of running and handling this metal. facturers. The mere fact that we send it back for full credit 'don't mean anything Briefly stated the above represents the competitive conditions of to us for we are out all the labor, time, and trouble of handling, which the aluminum industry in the United States. is a very expensive proposition." 2. THE DECREE AGAINS'r THE ALUML"WM CO. OF AMERH' .l.-H.lS IT BEEN It is apparent, therefore, that during the tlme covered by your VIOLATED? report the Aluminum Co. of America. violated several provisions of the decree; that with respect to some of the practices complained of, Tile decree perpetually enjoined the Aluminum Co. of. America, its they were so frequent and long continued, the fair inference is the officers and agents, among other things, from- company either was indifferent to the provisions of the decree or 1. Without reasonable cause and notice delaying shipments of ma­ knowingly intended that Its provisions should be disregarded with a. tet·ial to a competitor; view to suppressing competition in the aluminum industry. 2. Refusing to ship, or ceasing to ship, crude or semifinished alu­ ~·here does not appear to be much in your report touching th minum to competitor on contracts or orders placed or on partially a methods of the company slnce the year 1922. filled orders ; In order that the department may act with full knowledge of the 3. Chat•ging a competitor higher prices for crude or semifinished course of conduct of the company up to the present time, I hav aluminum than are charged at the same time, under like or similar instructed that the investigation of the facts be brought down to date conditions, a company in which defendant was interested; by the Department of Justice. This will not int('rfere in any way 4. Refusing to sell crude or semifinished aluminum to a prospective with any further investigation which the Federal Trade Commission competitor, upon like terms and conditions of sale, under like or similar may find it proper to make. circumstances, as defendant sells the same to any cornpany in which it Very tl'llly yours, 'is financially intere ted ; and HARLAN F. SroxE, 5. From furni bing competitors known defective material. Attomey General. The complaints of competitors, with respect to deliveries and quality of rna terials furnished, may be classified as follows : Mr. REED of 1lissouri obtained the floor. 1. Cancellation of quotas ; Mr. WALSH. Mr. President, if the Senator will pardon 2. Refusal to promise shipments ; me- 3. Unreasonable delays in deliveries ; ~r. REED of l\Iissouri. Certainly. I was going to make a 4. Where two or more gauges of metal are ordered, shipping one motion. kind or gauge and withholding shipment of the other; Mr. WALSH. In view of the con trover. 'Y which seems to 5. 'Cnreasonably delaying shipment and then suddenly dumping upon have arisen concerning the testimony taken before the two tbe competitor large quantities of metal; committees I am going to ask the Senator from Delaware G. "Gnreasonably delaying shipment and then suddenly dumping upon [l\lr. BAYARD] to be so good as to read the entire testimony. cump titors large quantities of metal shortly after they have been It will not take long. forced to purchase foreign metal to supply their nece..;sities; and l\Ir. BAYARD. I read as follows: 7. Shipping competitors large quantities of materials known at the tinl'C of shipment to be defective. EXTRACTS F RO:\I THE HEAlliXOS OF THEl So-CALLED IL\J::D W I C K C O ~UllTT I'l El, ·without attempting to review the evidence submitted in your report, SIXTY- "ECOI\D CO~GRESS, SECO~D SFJSSIOX, HOUSE llll:.POR.T 331, FEn­ it is sufficient to say that the evidence submitted supports to a RU.A.RY 17, 1912 greater· or less extent the above-r.cited complaints of the competit:>rs. The committee was directed "to make an investigation for the pur­ And e pecially is this clear and convincing in re •peet to the repeated pose of ascertaining whether or not there have been violations of th~ shipments of defective materials known at the time of shipment to te antitrust act by the American Sugar Refining Co. and the variou . defective. This became so common and so flagr-ant as to call forth corporations controlled thereby or holding stork or bond · therein or r emonstrances from Mr. Fulton, of the Chicago office of the comr>au:v-. whose stocks or bonds are held. in whole or in part, tllereby, and all On July ~8, 1920, be wrote the company: other per~ons or corporations engaged in manufa cturing or refining ·• In my opinion the grade of sheet which we are shipping is, in ugar and their relations with each other, wllich said violations ha,·e many cases, considerably below our pre-war standard. * * * not been prosecuted by the executive officers of the Government. Said " The last su months we have had some very critical situation committee is also directed to iJ.lvestigate the organization and opera­ with se>eral of our customers on account of the buckled sheet whi<'? h tions of said American Sugar Refining Co. and its relations with other we have been shipping. So much so that at least two have told us persons or corporations engaged in the bnsines of manufacturing or plainly that if tlley were able to get better sheet. they w_puld reject refining sugar and their relations with each other; and if in connec­ every bit that w-e had shipped to them. * * • tion therewith violations of the aforesaid laws are disclosed, to report "Of the sheet on which we have authorized replacement or credit, same to the House. I would say that at least 90 per cent of it should never have left our " Said committee shall also inquire whether the organization ani! mill and without any extra expense or trouble to the company should operations of the .American Sugar Refining Co. and other persons or have been caught at the inspection." corporations having relations with it, and all other persons or cot·po-

I 1925 CONGRESSIONAL RECORD-SENATE 35

rations engaged in manufacturing or refirilng sugar and their relationi'l Mr. RAKER. Then, as a matter of fact, you did represent them in the with eath other, have caused or had a tendency to cause any of the way you have designated? r'esults: Mr. WARRliN. Certainly; I represented them in the way I have desig­ " First, the re trictlon or destruction of competition among manu­ nated. facturers or refiners of sugar ; second, an increase in price of refined 1\fr. RAKER• .And that was a representation of that interest, was it sugar to the consumer or decrease in the price of sugar cane or sugar not? beet to the producer thereof:' Mr. WARREN. No, sir; except In the way I have designated. lli. Charles B. Warren was called before the special committee on Mr. RAKER. What do yo.u call a man's acting as attorney for a the investigation of the American Sugar Reflning Co. and others June corporation? Do you not call that representing them? 21, 1911. Hearings, volume 1, page 624. Mr. W.A.R.RIJN. Yes; when you perform any work, and when I was He testified that he was general counsel and president of the Michi­ performing any work I was representing them. But there is this gan Sugar Co. ; that he owned $445,000 worth of the stock of the distinction, which I thought perhaps you were trying to find ()Ut, Michigan Sugar Co. (637). whether 1t existed or no.t; everything I did in the sugar business in Michigan was not as a representative of the American Sugar Refining [Hearings of June 22, 1911, p. 6801 Co., nor H. 0. Havemeyer nor any of his associates. Mr. RAKE:n. Mr. Warren, it was generally understood and supposed Mr. RAKE:R. Do you not think it would be better and we would get that the American Sugar Co. was controlling tile several beet-sugar It clearer before the committee if you would state the facts and then companies in Michigan and Colorado. Was not that the fact? let the committee draw the conclusions? Mr. WARBE~. I know nothing about Colorado, Mr. Raker. Mr. WARREN. I have tated the facts, sir. Mr. RAKER. Well, the general public's feeling and understanding was Mr. RAKER. Then you represented the American Sugar Refining Co. that the .American Sugar Co. were controlling the beet-sugar interests as their attorney. You were their attorney? in Michigan? Mr. WARREN. When they were making the purchase . Mr. W Ar.IDJ~. I should not say so. I know they never did control Mr. RAKER. Certainly. If you were not their attorney, you coulu it, so I do not see why anybody should think that it was the popu­ not represent them. · But you did act as their attorney? lar understanding they did. Mind you, the .American Sugar Refining Mr. W A:RRE, . When they furnished the money to buy the stock. Co. or l\Ir. Havemeyer and Mr. Havemeyer's holdings are largely in Mr. RAKER. Mr. Warren, you can answer my questio.n, can you not 1 tbe American Sugar Refining Co. .As it now turns out, they have not Mr. WARREN. I did, sir. been interested in so many companies in Michigan, and their holdings, Mr. RAKER. You were then representing the American Sugar Re- when you total them up, compared with the holdings of the Michigan fining Co. In Michigan as the attorney for that company? people, are exceedingly small. Mr. WARREN. I would not say so. Mr. RAKER. You are Charles B. Warren, of Detroit, are you not? Mr. RAKER. At no time? Mr. WA:RREN. I am; yes, sir. Mr. WARREN. I certainly

l\1r. RAKER. And in competition with each other? Mr. GA-RRETT. Did they ever have? Mr. W .1-RRE~. They were selling their sugar in the same market; Mr. WAUREN. They did have. Mr. Ha\·emeyer owned mo t of the yes, sir. stock at one time. Mr. RAKER. In competition with each other? Mr. GA-RRETT. It stood in your name during that time? :\Ir. WARREX, Yes, sir. Mr. W.\RRE!'i. The tock stood in my name fot· whoever owned it; Mt·. RAKER. Now, is there anything in the laws of Michigan, or was but 1t appears now from what I have read in thi bill that thP.y have there at that time, that one man could not be a director of each one filed, and what I have heard since, that Havemerer at one time owned of those corporation ? a large amount of stock aud sold it to the American Sugar Refining :Mr. WAitREX. Ko, sir. Co. at various periods, and for various amount , perhaps; but the Mr. RAKER. There was nothing of that kind? Havemeyer family now own no stock in the American Sugar Refining Mr. W ARRE~. No, sir; nor no"!· Co., nor does any director in the American Sugur Refining Co. oWP Mr. RAKER. Is there anything in the laws of that State prohibiting any stock in the Michigan Sugar Co. ; and all the ·tock they haYe any such a transaction? interest in stands in their own name. Mt·. WARREX. No, sir. If I understand your que tion. it i~: I there 1\Ir. GARRETT. At the time this stock of other persons was standing anything in the State law which prohibits a man being a director in in your name did you know whose it was? more than one corporation at a time? Mt·. W.!RREX. I had no means of knowing acclll'ateiy whose it was, Mr. RAKER. Yes; competing with each othet·. except that it belorl,i"ed to the Havemeyer interest or the American Mr. W.!RRE:X. Certainly not. Sugar· Refining Co. Mr. RAKER. Is there anything in the law, then or now, prohibiting l\11'. GARRETT. You ent it to the Havemeyers? people owning various factories combining togetbN· and stifling com­ 1\lr. W'ARRE:X. Generally speaking, they wet·e . ent to Havemeyers. petition? Sometimes-for instance, Lowell :\1. Palmer. I believe, was a stock­ Mr. WAnREX. Well, I suppose there are State laws against stilling holdet· for a short time, and I think W. B. Thomas Wtts a stockholder competition. for a shot·t time; and Arthur Donner and C. R. Heili:e, I think, held Mr. RAKER. In Michigan? some stock. Yr. WARREX. In Michigan. Mr. GARRF.TT. As individuals? 1\Ir. RAKER. Was there such a law then'! l\Ir. W AllREX. As individuals. Whether they ownrd the stock as indi­ Mr. WARREN. Practically the arne law as now, but it would not vidual or whether they were holding it for other people I do not apply to this case. know, but that is of record, I say. ~Ir. RAKER. Well, was there such a law then? Mr. GARRETT. Ilow did you know who to end the tock to, then? 1\Ir. WARREN. There was not any law which applied - to this ca. e l\!r. WARREX. Because my dealings were with llavemeyer. then. Mr. GARRETT. Were all yom· dealings with Havemeyer? Mr. RAKER. I · did not ask you about this ca ·e. I am asking J'OU l\lr. W.!RREX. Practically all my dealings were with IIavemeyer. generally. Mr. GARRETT. Who else be ide Mr. Havemeyer? 1\Ir. WARnE~. There is an antimonopoly law in Michigan. Mr. WARRr:x. Some subordinate that did some part or it, but Mr. Mr. RAKE~ And was then? Havemeyer directed it. Mr. WARREN. And was then. Mr. GanRE'l'T. You mean some subordinate of ~Ir. Havemeyer? Mr. RAKER. Then if six or se.-en independent bu ·inesses like these Mr. WARRES. Some subordinate of :ur. Havemeyer; yes, sir. went in together for the purpose of preventing competition, there was l\lr. GARHE'I'T. Reference has frequently been made here to Mr. Have· a law then in Michigan preventing such a combination? meyer and those associated with him. That expression has been used Mr. WARRE'~. JS'o, sir. very oftt>n during this examination. Mr. RARER. If it was done for the purpo-e of stifling competition 1 Mr. WARREX. Yes. 1\Ir. WARREN. If a lot of men got on the witness tand and said tb(·Y 1\lr. GARRETT. Who were those indh·idual associated with ltim? were trying to stifle competition, I suppose they would be violating the Mr. W.ARBEX. He never' informed anybody. He poke of tbem that law. way himself. Mr. RAKER. You understand my question and I think you can anawented the combination of these six companies in tlle way it was The CHAIRMAN. I have this statement here, and I think it has some done. :llr. RAKER. Now, if there were six independent corporations en·~agcd foundation-from the corporate records. Whether it is right or not I in manufacturing in Michigan that were independent and competing wlth do not know, but it is to the effect that by 1902 your stock holdings each other, if they should get together and combine in one orgunlza· in seven beet-sugat· companies in Michigan bad increa ed to 87,167 tion for the pru·pose of controlling competition and changing prices, shares; that appears from the corporate records of the State of Mlclti­ was that prohibited by the laws of Michigan in 1905 and 19061 • • • gan. Whether it is true or not I do not know. I will find out. Mr. WARREX. I think there are conceivable conditions under which Mr. WARREX. In 1902? corporations doing business in Michigan might consolidate and violate The CHalll.llA~. Yes; is that true or not? the Michigan law. Mr. WARREJ~. I could not say. • • • • • The CHAIRM.L'<. Is this anywhere near the truth? [Hearings, p. 694] Mr. W.aRRE:X. I presume it is. The CH.\IR.llAN. Did you own that stock-87,167 shares-your elf? The CHAIRll.A~. They did not make enough to supply their own Mr. WARRE~. No, sir; not all of it. locallties, did they'l 'l'he CHAIRMAN. How did it appear in your. name-as tt·ustee then? 1\Ir. WARREN. 'Ihe Michigan sugar people can not market their sugar Mr. WARRE:X. It did not. I never held any stock as trustee. all in 1Iichigan. . The CHAIRlliN. Yet the :Michigan people, but for the e combinations, * • * * * * • might get the benefit of lower sugar than they otherwise get? The CHAin!\IA...~. Well, it would depend somewhat on how anxious he Mr. W ARRE~. No, sit· ; I do not think so. Suppose one man con· was to do business. Perhaps some of them were about to fail. trolled the six companie , or suppose they were in competition and Mr. wARRl'lN. You do not want people to do business in the United were controlled by six dilferent men. The total sugar offered for sale States on the basis that they are about to fail. a"'nin t all the other sugar in the United States would be as 1 to !l9. The CHAIRMAN. Not at all; but I want every purchaser of sugat· in Kow, the man who had the 1 per cent certainly would not cut his the United States to get the advantage he ought to get from natural pt·ice below the price at which the 99 per cent was sold, would he? location and from the rate that ought to obtain. :Hr. GARRETT. At the same time you were holding stock for the Mr. W ARRl!IN. Now, let me add this, they do not get it on any com­ American Sugar Refining Co. in your own name you were also holding modity. The CH.HRMA.:-1. Tha.t is one of the reasons why there is so much stock for Havemeyer? Mr. WARREN. No stock for anybody else has stood in my name since talk about Injustice to the consumer, because the business men of this the .American Suga1· Refining Co. transfN·red theic. stock. The Have­ country have been wise enough to get together In that way. meyers have no interest in the lllichigan Sugar Co. Mr. WARREN. The business men of the country fot·m a large per- Mr. GARRETT. The IIavemeyers have no intet·est in the Michigan centage of the people. Sugar Co.? The CHATR~IAN. And the t·etailers and wholesalers constitute a large Mr. W .!RREN. None vr;:hatever. percentage? 1925 CONGR.ESSIONAL RECORD-SENATE 37 '·

Mr. WARRE.·. And I am just as much in favor of them as you are. Mr. WARREN. No; I did not have any 400,000 shares. There was no The CHAillMA.·. It seems to me you do not want to give the people Michigan Sugar Co. then. of Michigan the natural advantages they ought to have on account of The CHAIRMAN. No; that was the Penin ular. There were seven their location. separate companies then? Mr. W.A.RREX. Now, let me g.ive yon an illustration: There are some Mr. WARREN. Six. There might have been more than seven that I coal mines in Saginaw. The price of coal in West Virginia at the was interested in. mines is $1 or 90 cents, is it not? The CHAIRMAN. There were seven that you were interested in, accord­ The CHAIRMAN. I do not know. ing to this report. Mr. WABREN. Well, it usually is. The cost to transport that coal to Mr. W ABRE.N. Seven or eight: Chicago or to Detroit is a fixed item. Now, do you think the owners The CHAIRMA..'{. In 1906, according to the statement made in this <>f those coal mines in Saginaw give the same price per ton on coal at report. the public records showed your holdings in tb1•?e companies as the mine that they do in West Virginia, or do they add that advantage? 271,840 shares. Except your own individual holdings, the volume of The CHAIRMAN. I think they add every cent they can, and every which you have described, that was the Havemeyer transaction still? combination they form is for the purpo~e of adding more. You acted as the agent of Mr. Havemeyer? Mr. WABREN. Now, if you will name me any article in the United Mr. WAP.llEN. No; I was not his agent. I would not regard myself States, with >ery · few exceptions, that is not sold in that way I would as the agent at all. like to be instructed. The CHAIRMA.~. Tell us how you would regard yourself. The CHAIRMAN. I think that is part of the trouble with the country 1\Ir. WABREN. When they got to negotiating, sometimes they would now. negotiate themselves; in general, they participated in the negotiations Mr. RAKER. The more. combinations they make, the better they can at all times. I examined the legal title of the corporations, and their handle the situation. condition, and my offi<'e assisted in various work that was performed; Mr. WARREN. I am not in favor of combinations in restraint of trade. and the stock transaction was completed always with the board of Mr. RAKER. But, I say, the more combinations they form, the easier directors of the company. it is to handle; is not that correcU The CHAIR:>.IAN. I understand; the stock was left in your name when, Mr. WARREX. They do not have to handle it any differently, because really, you were doing it for Mr. Havemeyer? .everybody conducts business that way now. I presume if one man Mr. W.A.RRE~. And the stock certificates is ued to me. control the whole output of any commodity in the country, of course, 'l'he CHAIRMAN. Transferred by you in blank to Mr. Havemeyer, and he could do that. (Hearings, vol. 1, p. 605, June 22, 1911.) the corporate records left to how the stock in your name? Mr. Wanen testified that as president and general counsel be drew a Mr. WARREN. Tl1e corporate records showed the stock in my name, salary of '115,000 a year (p. 697). the corporation knowing always whose stock it was. (Hearings, EUMINA.TION BY MR. GARRETT p. 629.) [Page 729] Mr. WALSH. l\Ir. President, this completes the testimony Mr. GARRETT. I understand you to say that there is no stock now before the Hardwick committee. The remainder consists of standing in your name belonging to anyone besides yourself'? excerpts from te timony before the lobby committee in 1913, :\Ir. WaRREN. The American Sugar Refining Co. stock stands in its and simply elaborates general information given in testimony own name on the books of the company. already read. Accordingly I ask that the excerpts from the Mr. GARRETT. I understand you to say that all of the stock which testimony before the lobby committee may be incorporated in stands in your name belongs to you? the RECORD without reading. Mr. WARREN. That is right. The PRESIDENT pro tempore. Is there objection? The Mr. GARRE1'T. You are the- Chair hears none, and it is so ordered. Mr. WARREN. The bona fide owner of .it. The excerpts are as follows : Mr. GARRETT. The legal, equitable, complete owner of all that stock? Mr. WARREN. I am absolutely the owner of it, and I pa.Ia for it. SENATE HEARIXGS BEFORE A SUBCOMMITTEE OF THE CO:\IMITTEE ON TH» Mr. GARRETT. Pardon me, but how much did you say it was?· JUDICIARY ON THE MAINTENANCE OF A LOBBY TO INFLUE~CE LEGIS· Mr. WARREN. Four hundred and forty-five thousand dollars worth. LATION Mr. GARnETT. How long has it been since there was any stock of any {Vol. 2, p. 1621) other individual standing in your name? Senator WALSH. When did you first become interested in the sugar Mr. WARREN. I think the stock that belonged to-I will go back of business? that. I was in Europe ~t summer, and I left here in May and went Mr. WARREN. 1 was a stockholder in the old Peninsular Sugar Re­ over to The Hague for the Government in connection with the arbitra­ fining Co. when it was organized, I think, in 1809, th<>ugh I would not tion with Great Britain, where I was one of counsel for the Gov­ be certain about that date. It was within a year or two of that, either ernment. When I came back 1 asked the American Sugar Refining Co. way. • • The company was sold in 1906. to take that stock out of those stock certificates and transfer them Senator WALSH. What became of it? unto whoever owned them, and they put them of record some time Mr. WARnE~. It was old to the Michigan Sugar Co. after I got back last fall. Senator WALSH. You said that changed then. What amount of stock Mr. GARRETT. Since that time no stock of the American Sugar Refin- did you own at that time? ing Co. has been in your name? Mr. WARREN. I think in that particular company-the Peninsular Mr. WARnE .. No, sir. Sugar Refining Co.-I had a very small holding at that time; something The CHAIRMAN. Why did it appear in your name, then? like $1,000 or $2,000. Mr. WARRE!Q'. I acquired the stock and the stock certificates were in­ Senator WALSH. And did that represent all the stock standing in dorsed in blank and delivered. your name? The CHAIRMAN. For whom did you acquire that stock? Mr. WABREN. No; it did not. Mr. WARREN. Some of that stock I owned personally, and the stock Senator WALSH. What other amount stood in your name at that that I

:Xe~otintion. Wf'l'P openE.'tl and I !lf'rfonned lt:>gal . enice ; mauc an ex­ St·nator W.1T.SH. You are nntional committerman from ::\Iichigan? nminHtion of the title of 1bt:> com}HlDY anu participated in the nt>gotia­ Ur. 'iYARnE~. From Michigan. (IIearing!i'. p 1G31.) tion:-; a: a lawyer. I tbiuk the fir~-;t !'ltock tbey purchased was bought Senator W.AJJSH. Have you tohl u~ now, )Jr. WnrrPn. alJout the t>n­ from the treasury of that particular company, and the certillcatf:'s were tire extent of your actiYity in the campaign carrieu ou in the last ·L·ucd to IDP and forwarckd to ='il'w York for the purpo!"e of being year or two? • * * tram;ferrPtl to whoevr>r migltt own them. :\it·. WA.BRE~. In addition to the thing.~ that we have pokNl vf I Senator WAT.SH. Wbate>er stock tbe.r pnrcha!':Pd or acqnirC'd was have always, since I ban heeu conn('ct~'d with these tumpnnies, been is' ued to you in your name? a beHevcr in the uptmilding of the domestic ugnr indu~trr. It ap­ ~It·. WARRFJX. I think in the fir~t in:-;t!tnce; yr.. pt:>als to me as a fair industry to be built np, anrl I havc no hesitancy Senator W~\LStr . ..ind the certificate thus deli\'ereu to you WC're hy in saying that I am a firm believer in that, and if the occnsion ha · you tl'au,o;mitted to Xew York to go to w!Jomsoever mi .. ht be entitled to pre);ented itFel! for me to expre~ an opinion about it I have not them? been backward about expre sing an opinion about it. (Hearing', p. Mr. W.\nnEx. That i correct. 163::!.) .FlL\MlXA'fiOX OF 'lll!. WAllRE:S: BY SEXATOU nEED \ • * enator W.\L>iii. What other comp;tnies clid you become intere-.:tcd in? [Page 1639] Mr. WARI:l•: x. What other comp::tnies with ~imilnr tran actions to Senator l!EED. What do :ron know about tbe reduction of the hold­ this? ings of the .American ugar Hcfining Co. in the ~lichiga.n Co. ; that i , "enator 'YALRH. ~o; in what other beet-sugar compRnies did you the recent rrouction? aCtJUire -·tock? You Rtartrd with the l'enin:ula in 1 '99. l\Ir. WAllnE:'I'. I do not think there has been any recent reduction. l\Ir. WAnnEx. Do you mean acquired tock for tbe:;e ·arne people? The bolOin,l! bas been reduced ince 1910. Senator WALRII. N'o; in any way. Senator H.Et:o. Did any part of that stock pa s through your bandtl 1\Ir. W.\RnEx. 'l'he IIavemeyer p0oplP, or the .l..mPriran Sn;;a.r Rcfiuin~ that ball been held in your nRme? C'o. intC'rt>Rt.s, purchased stock in the reninsular Sugar Refining Co., in ::\Ir. WARRE~. What do you mean by that? the Ranilac , ugar Refining C'o .. in the A.lmn ~ugar C'o., in the Bay ..:enator REED. The . tock that was tll'led for reduction purpo es. ity-'llicbigan Refining Co., in the t::iche,...-aing Sugar Refining- Co., and :\Ir. WARn E~. ~orne of the J> eople interested in the Michigan Sugar in the :-:laginaw-Vallcy Rugar Co. Co .. iucludin" myself, haYe bought tock from the .American Sugar Senator WALSH. Hnw many, alto~e!bPr? UefiJ1ln;;r Co. 'lit·. WAHr:Ex. I think there are . ix: tba.t went into the ::\Iicbigan .'enator HE~:n. You lwn,l!ht tork when th<'r were reducing their Sugar o. bolclin,l!:>. 'l'o what extent did you buy stock when they were reducing Senator WALSH. Did the stock thu ' acquit·cll by them in the same their holdings'! war pa ·. to tbt>m tlll'ongh you? That i-,, were the certificate origi­ ~Ir. WAnJ:Ex. I could not , ar. nally is ued to you? 'enator REED. Can you not approximate it? ·Mr. WAnnE:-<. No ; I would not undertake to. ::\Ir. WARREX. Wherever I performPu any !i'enice in connection with it I think tbat generally the certificates were handled in tllat way. Senator REED. Was it a fe'v thoucand uollars or a few hundred thou. and? There was a time when :llr. Heike, the secretary of the company, and ::\!1·. WAum;x. It was a large !'Urn. 1\fr. Donner, the trf'a urcr of tbe compan~-. tool' tock that stood in their own names. I can not tell the period at which they made the "enator REED. As much a a million dollar ? ~Ir. WAnm:~. I say that I have bonn-ht hundred of thousand' of transfer. dollars' worth of stock. Senator WALSH. They were officers or employC'C'S of the _-\.merican :enator REED. Ilow m!lny hundreds of thuu~ands? • ugoar llefining Co.? ~Jr. \YAI:J!E:S:. I can not say. I can tell you, but I could not tell you :llr. WAnREX. I ~aid one was secretary antl t.he other treasurer. offhand. (Hearing , p. 1624.) Senator llEr:o. IIavc :ron some corre poudence that you had with the * Am<'rican Sugar Uetining Co. or its officN · in regard to this matter , enator WALSII. Wh<'n tbe orgnniza1ion [of the )Iichigan • U"'ar Co.] about wllich I am inquiring? came to be effected did you in the same manner repre:::ent the Have­ ~Ir. WAr.Rr;. •. I do not know. If I have, I am willing that you sllall meyer and the American Sugu Refining Co. int.erest ·? bnvc it. Mr. WARRE~. I did not repre ent the HaYCmPycr anll .AmericHn Senator REED. You did, us a matter of ftlct, embark with them or Sugar Refining Co. interests in that transaction. I was paid for tbe act for them in their efforts to r<'duce their stock holdings? organization of the company by the ::\Iicbigan Su~ar· Co., anu I did Mr. W ~nRE~. I dill not embark with them and act for them. not rcpre. ent the Havemeyer interE>sts. although stock in U10 e com­ thought it was desirable for tllem to reduce t11cir holding . panit>s still remained in my name that belonged to the liayemeyers or enator REED. Were you their l'ein·esentative in that matter? the American Sugar Refining Co. Mr. WARREX. I was not their rt>presentative in any matter since Senator V\.ALSH. Yes. 1906--since I was connected with the Michigan Sugar Co.-except as llr. W .1nREx. But tn the organization of the company I diu not rep­ I haYe explained, that these stock certificates which they had stood tn resent the American Sugar Refining Co. nor the Havemerer interest', ~py name up to a certain time. but I cooperated with the e local men in the Michigan Sugar Co. Senator REED. You thought it was desirable for them to reduce their It Senator WALSH. When the stock was i sued, that stock which had holdings? was not simply because :r'ou thought it was desirable for thus stood in your name which belonged to the HaYcmeyer intere ts, them to reduce their holdings that you purchased their stock? You did not go and in1est your money to the extent of hunureus of thou­ in whose name was that issued? sands of dollars in stock held by the Sugar Trust just because you !\Ir. WARllE:N. Whatever stock stood in my name In the old companies thought it was desirable that they should reduce their holdings? was reLsucd in the Michigan Sugar Co. in my name, and the certifi­ Mr. WARREN. Partially I did; yes, sir. cates were forwarded to New York in the arne way. But let me add, the certificates, in the first place, had been deliver d to the committees • • for each of the six factories, the same as certificates of other stock­ Senator REED. Will you tell us what your real motive was and all of holders. your motlves and all of your reasons for the purchase or these hun­ dreds of dollars' worth of that stock? Senator W .&LSH. And what amount of stock was by you thus trans­ Mr. WARRE~. Because from the decisions that had been banded down mitted to the New York office 'l by the courts in this country it had come to be pretty definitely un~er­ )It·. WARRE:'I'. I could not say to-uay how much tock, at the tlme stootl by la"')·ers that a. holding by one company in another company in of the organization or that company, those intet·e ·t owned. I know excess of a third of its capital stock ma.kes it liable to be regarded as that Mr. Atkins has stated that they owned 42 per cent at one time. violating the Sherman law. These holdings were finally collected in At tbe pre'ent time the stock is in tbe name of the American Sugar \arlons places in the country into tbe hands of the American Sugar Refining Co. il elf on the books of tbe com{'any, and they own approxi­ Refining Co., and we believed that that would get the Michlgan Sugar mately one-third of the stock of the company. (Hearings, p. 1628.) Co. in to difficulty, so I thought it a wise thing for the stockholder~; • • • • that the American S-egar Refining Co. should lessen its holdings. Senator '\\.!.LSH. I did not quite tmderstand bow much interest you Senator REED. You thought that was a wise thing for your stock­ still retain in the Michigan Sugar Co. holders? l\Ir. W.wn.Ex. I have at the present timo in the l\Iichigan Sugar Co. Mr. W alll!E))f. I did ; yes. in the neighborhood of 60.000 or .·jO,OOO. (Hearings, pp. 16:!0-30.) Senator REED. That was your motive from your standpoint, but bow Senator WALSH. You hold orne official position, do you, in connec­ did you induce the Sugar Trust to sell its stock? tion with the Repu\Jllcan ·ational Committee? Mr. W.A.nnE~. The American Sugar Refiniug Co. was not particularly Mr. WARREN. I am a member of the committee. desirous of .,elling its stock. 1925 CONGRESSIONAL RECORD-SENATE • 39 Senator REED. It was not particularly desirous, but how did you Mr. WARRE:-l. I think he was the president of the company. induce it to ell? Senator REED. Of the American Sugar Refining Co.? Mr. WAnRE~. Because they realized what the situation was, them­ Mr. WARREN. Yes. (Hearings, p. 1645.) selves. • • * * • • [Hearings, p. 1642) Senator REED. All the stock you bought from the American Sugar Senator WALSH. Senator REED has asked you about the recent re­ Refining Co. in helping them reduce their holdings in the ~fichigan duction in the stock of the American Sugar Refining Co. since the Sugar Co. you bought in good faith and paid cash for? Hardwick testimony. You told us that they then had 42 per cent of Mr. WARREX. I did, sir. · the stock of the Michigan Sugar Co. and that they had since reduced Senator REED. And it amounts to some hundreds of thou ands of dollars? It to 33 or thereabouts, did you not? Mr. WARilEN. Yes. Mr. W ARRE~. I think the testimony showed that they owned 42 per cent. Senator REED. And you have sold some of that stock anu part of it you still have? Senator WALSH. Forty-six per cent, as a matter of fact; but you ~Ir. WARREN. Part of it I still have, and some of it went to the have told Senator REED now about some reduction that was made in general manager and some of it to the nee president and som.~ of it to 1910. the secretary and some to the treasurer of that cOJIJpany. Mr. WARRE:-l. And since. Senator REED. Of what company? Senator WALSH. Did you not answer Senator REED that the reduc­ Mr. WARREN. Of the "Michigan Sugar Co. The great bulk of it that tion spoken of was made in 1910? was disposed of by me went there. (Hearings, p. 1645.) Mr. WAnRE=-<. I said it began in 1910. Senator REED. You people were simply buying it to cut your company Senator WALSH. The reduction since the Hardwick testimony was loo e, as I understand, from the American? from 42 per cent to 33 per cent? Mr. WARREN. We thought that it would be beneficial. (Hearings, Mr. WARREN. I believe so ; 33 and a fraction. 1645. Senator WALSH. And that reduction was made upon the consid­ • * * * • eration that· you speak of? Senator TIRED. The amount of reduction that you undertook to bring Mr. WARREN. It was made because of those motives. about, however. was just enough o that ron thought you would get * * * * * * * down to a point of safety from prosec~tion under the trust act? Senator REED. When you purchased these hundreds of thousands Mr. WARRE~. It was not especially uesirable to have anybody buy of dollars' worth of stock that were held by the American Sugar Re­ any more than they had to, Senator. fining Co. in your Michigan Co. with whom clid you transact your Senator Rl!.'ED. That was the point you tried to reach? busine s? :llr. WARHEX. Exactly. Mr. WARREN. With the treasurer of the American Sugar Refining Senator REED. You thought 33 per cent was permi'>sible, and you Co. or with the pre ident. _ would cut it to about 33 per cent? Senator REX:D. Do you remember bow much you purchased in the Ur. W ARRF.N. That seemed to be the line of cleavage. (Hearings, first batch that you obtained from them? 1646.) Mr. WARllE:Y. I do not. Senatot· REED. What were your holdings in the Michigan Co. at that Senator REED. Did you actually send them money? time? Mr. WARRE:Y. I did. Mr. WARREN. W"hat do you mean by "at that time"? Senator REED. Do you remember the amount? Senator REED. -H the time you started upon this campaign and paid Mr. WARREN. I can not remember the amount. I remember that at these largs sum . the time of the Hardwick hearing I held about $450,000 worth of Mr. WARREN. I can not tell yon that. stock. Senator REED. \\as it a substantial holding-a large holding? * * * ::: •. * * Mr. WARREX. I think it was a substantial holding. Senator REED. That 450,000 worth of tock that you had when you Senator REED. Does it amount to as much as the stock you bought? testified before the Hardwick committee was not tock that you had Mr. WARRE~. I do not think so. acquired for the purpose of assisting the American Sugar Refining Senator REE-D. I am trying to get at what was the inducement or Co. in reducing its holdings? reason for you to pay this large sum of money in to acquire the stock Mr. WARREN. Some part of that stock I had bought from the Ameri­ from the American Sugar Refining Co. in order to benefit the Michigan can Sugar Refining Co. Co., when you only had a small interest in the Michigan Co. Senator REED. Had you done it at that time for the purpose of as­ Mr. W" ARREN. I was very vitally interested in the l\llchigan Co. I sisting them in reducing their holdings? Was that any part of the wa its president and general counsel, and men who are my friends campaign to reduce holdings? are interested in it. I had the same motives that the vice president Mi. WARREN. Not only to assist them, but because I thought it was and the general manager and the secretary and the treasurer had. desirable for the holdings to be reduced. I think the practice is a good one. I do not find fault with the fact Senator REED. Had there been any conference before that? that the holdings of these large companies in smaller companies should :Mr. WARREN. Before the Hardwick committee testimony? be decreased. Senator REED. Yes. - Senator REED. I do not find any fault with their being decreased. Mr. WARREN. Yes; of course, the bill had been filed before that. Mr. WAnREX. I think it is a good thing. Senator REED. What bill? Senator REED. I do not think it ought e\er to have existed in the :Mr. WARREN. The dissolution proceedings. first place. Senator REED. Oh, yes. So that after suit had been brought to Mr. WARREN. You recall that the Michigan Co. was not any part of dissolve the American Sugar Refining Co. or the Michigan S-ugar Re­ the general plan-that is, that the Michigan Co. had no knowledge of fining Co., which was it? the general plan of the New York people-and when it came to be dis­ Mr. WAB.REN. The bill wa brought against the American Sugar closed what their ramifications were it was a very natural thing for Refining Co. the Michigan Co. to seek to get itself out of trouble if it were in Senator REED. Then the allegation was made that it owned stock in trouble. (Healings, p. 1646.) the Michigan Sugar Refining Co., and that was one of the allegations SENATE HEARI~GS BEFOHE A SUBCOl!MITTEE OF THE COlL\HTTEE 0~ THE upon which the trust claim was based? JIJDICIARY TO INVESTIGATE THE CHARGE THAT A LOBBY IS l\IAJKTAIYED Mr. WA.RREN. Yes. TO INFLUENCE LEGISLATIO~ PE:SDING IN THE SENATE. Senator REED. Did you start then to acquire stock fo.r the purpose [Vol. 2, p. 1633] of reducing the holdings of the trust in the Michigan Sugar Re­ fining Co~? Senator WALSH. Our attention has been called to this letter marked Mr. WARREN. We tried to reduce those holdings so that the Michigan " Hamlin correspondence, Exhibit 1," which purports to be a letter­ Co. would not be adversely affected. press copy or a carbon copy of a letter sent to you under date of Senator REED. Wbo was it made the arrangement that the American March 20, 1912. I wish you would look it over. Sugar Refining Co. was to unload? Mr. WARREN (after examining the letter). I have looked it over. Mr. WARREN. I do not know why you call it unloading. Senator WALSH. Do you remember receiving the original of that Senator REED. I mean reduce its stock holdings in your company, letter? Mr. WARREN. That was done for a purpose-- Mr. WARREN. I received the original of that letter, I believe. Senator REED. I am not saying that it was illegitimate, but who was [Page 1370] 1t who made the arrangement that it should reduce its holdings? The CHAIRMAN. The following letters, check , and copies of letters Mr. WARREN. I asked them to. are taken from the box containing the papers which, at the request of Senator REED. Whom did you ask? the committee, produced under subpcena duc~s tecum by Harry A. Mr. WARREN. I presume it was Mr. Thomas at that time. Austin, clerk to Truman G. Palmer and to C. C. Hamlin, employed by Senator lllilED. Who was Mr. Thomas? the United States Sugar Industry : 40 OONGRESSION .A_L l{ECORD-SEN ATE ~LiRCII 9

" ExHIRIT ITA~ILI~ 1 Senator WALSII. Do you recall whether you bad any communication " ~lARCH ~0, 1!)12. with him at or about that date at all? "~Ir_ c_ B. WARRF.X, Mr. WARREN. I do not remember anything about it except that I '' r-nion '1'-rust Buildi11g, Detroit-, Mich. received that letter, and the matter was up. "DEAR :Ma. \\ARTIEX: Since our meeting on Saturday I have bad two Senator WALSH. The question is whether you did have any com- conference.· with Mr. Hinman, who controls the Chicago Inter-Ocean. munication. It seems to me that the matters discussed deserve our serious con­ Mr. WARREN. If I dld, sir, I will send you tile letter. sideration. :llr. Fordney may have spoken to you something about the Senator llEED. Or telegram? matter. It seems that :Mr. Hinman has purchased or arranged to Mr. WARRE.'. Or telegram. purchase $:!00,000 of the bonds of the Inter-Ocean, formerly held by Senator W AL H. As I und!'rstand :y.ou now, you do not know whl'th!'r the Yerkes Estate, but, as I gather it, he is not in shape to handle you did or not? the propo!>ition personally and desires to place these bonds. The total l\1r. WAnREX. I do not. bond is ue again. t the paper is $600,000, including the above, and • * * • bear interest at 5 per cent and mature in 1U2G. Of the 200,000 men­ Senator WAT,sn. I call your attention to this telegram, which bas tioned, $165,000 ha. all·eady bef'n placed, and Mr. Ilinman desire just been marked "Warren Exhibit No. 1,"' and ask you if you recol­ assi ·ta.nce in handling the remaining $33,000. In placing the bonds lect having, sent that telegram? already sold Mr. Hinman bas had the assistance of the Vice President 1\fr. WaRREN (after e..'\:amining telegram). I do not. It appears to be and ex-Speaker Cannon, both of whom are interested in seeing him on a regular blank of the Western Union, and I have no doubt it i. carry through this tran action. llis proposal is that we assist him in authentic. taking care of the remainder of these bonds, $30,000 of the proceeds Senator WaLSH. It is not in an wer to the letter sent the day before, to go to working capital. is it? "The Inter-Ocean has had its vicissitudes and i now operating at l\It·. WARRF~. About the Chicago Inter-Ocean? some los , but Mr. Hinman assures me that it is on the upgrade. He Senator W ..u.sH. Yes. tells me that they are practically free from' floating inde!Jtednes and :Mr. W A.RR»X. It is not. ha>e neYer defaulted in an interest payment. The Inter-Ocean is one Senator WALSH. About how long doPs it take for mail to go from of the three papers which hold Associated Press ft·anehi~es in the city Wa bington to Detroit? of Chicago and is the only Chicago daily which publishes a weekly Mr. WARRF.N. I do not know. But that telegram i not an an wer to edition. This weekly edition has a circulation of nearly 100,000, almost that letter. exclusively among the farmers in sections which it is most desirable Senator \\ALSrr. I want an an wer to my que tion. for us to reach. I think no paper published in that section of the Senator XELSOX. He has aru wered it. He has said be did not know, country is so generally quoted by the agriculhual and country press as but that the telegram wa not au an wer to that letter. is the Inter-Ocean. The paper bas alway · been friendly to our interests, ocenator WAL H. You answer me that you do not kno~ how long it and should we aid Mr. Hlnman a specialty will be made of the sugar take for mail to be transmitted from here to Detroit? tariff and our business will recei\e particular attention all along the 1\Ir. WARH.F..-. 1'hpre i a train leaving Washington at noon and arriv- line. The daily circulation of the paper is about 86,000. Mr. Hinman ing in DetL·oit the next morning. tells me. that he has a standing offer of $1,000,000 for the pap!'r, nnd Senator W .1LSJT. That train carries mail, I suppose? while these sec·tU·ities arc not such as to be disposed of readily, it Mr. W ARm~N. I suppose so. seems to me they are perfectly safe, as a papPr with the circulation. Senator W.u.sH. We offer that telegram in evidence. franchise, and standing such as the Inter-Ocean sur!'ly ought alway. to The telegram referred to, marked "Exhibit Warren, No. 1," is as be worth $600,000. It certainly sef'ms io me that it would ue a good follows: bu iness for our people to make this investment and thereby e tabli h [Night me. sagP. The Western Union Telegraph Co.] an organ in the Middle We t which will give our industry the att!'ntion (lleceived at " "ya tt Building, corner Fourteenth and F 'treets, \\a.sh­ it deserves. So far as my own company is concerned, I feel safe in ington, D. C. eo g sr 1 nite) saying that we will do our share. DETROIT, Mrcn., M01·ch ! 1, 191.2. ' "If these bonds, or a con iderable portion of them, were taken over c. c. H.A~LINJ and then distributed among the largf'r concerns, the amount inYested by Care Sew TT'illard Hotel, Washington, D. C.: any one would not be large, neither would the money be gi\en in the Yes. way of a contribution. c. B. WA.BR "£"X. "I gather from my talk with Mr. Hinman that the matter is some· (1017 p.) what urgent in so far as time is concerned. Mt'. Hinman personally Senator WALSH. Do you recall any other correspondence with Mr. owns about three-fourths of the stock of the company. Mr. Oxnard Hamlin than this you f'po ke of, concerning the failure to get what he seems to think that his people would look with favor upon helping. wan ted in the Associated Pre s? "I am writing only to yourself and Mr. Morey. If two or three of :llr. WARREN. In further explanation of whatever that telegram refers tho stronger concerns could underwrite the remainder of these bonds, to, I will ay that neither the ~ichigan Co. not· I bought any bonds or a substantial portion of them, I believe we would have no difficulty of the Chicago Inter-Ocean. 1n distributing them among the various interests affected. Senator WALSH. I think you told us that before, l\Ir. Warren. "You had better communicate with me by wire on receipt of this, gi\ing yom· general impressions concerning same." ADJOURNMEXT Senator WALSH. Did you wire? 1\lr. CURTIS. 1\lr. Pre ·ident, to-day I am going to ask tl.te Mr. WARREX. I do not know whether 1 wired or not; but that re­ Senate to adjourn until12 o'clock on Monday, but after Monday minds me of a man who said he almost sold his horse. He asked if '"'atisfactory to the Senator from Iowa [Mr. CUMMINs] i somebody if they wanted to buy it, and they said " ...ro." We did not shall ask that the se. sion" begin at 11 o'clock. I now m~-re buy it. that the Senate, as in legislative session, adjourn until 12 Senator REED. This letter was sent you by Mr. Hamlin, was it? o'clock Monday. Mr. WARREN. Yes. The motion was ag1·eed to; and the Senate (at 5 o'clock and 3 Senator WALSH. You did not subscribe for any of the bonds? minutes p. m.) adjourned until l\Ionday, March 9 1925 at 12 1\Ir. W.aRRE~. We did not. o·clock meridian. ' ' Senator WaLSH. Do you remember having any communication with Mr. Ilamlin about the matter? :Mr. Wann~. Any communication other than that letter, do you SENATE mean? }Io ~ DAY, Mm·ch 9, ,J9~5 Senator WALSH. Yes. Mr. \\ARREN. I think ~[r. IIamlin, when he saw me sometime, spoke The Chaplain, Rev. J. J. Muir, D. D., offered tlle following to me about that. prayer: Senator \\ALSII. Did you answer the letter? Our Father, we do thank Thee for Thy care over us, for the Mr. W .umEN. I do not recall. If I did, we did not take any bonds. blessings of yesterday, and w-e rejoice in the sun hine of * * * * * to-day. We would recognize the hand that is guiding our ways Senator WALSH. Did you have any communication with him at that and feel constantly that we are children of Thy care. So help time at all? us to live, so help us to do, that with each day's work accom­ .!Ur. WA.I!REN . .About this matter? plished we may be able to look into Thy face and be assured of Senator WALSH. Yes. Thine acceptance. We ask in Jesus' name. Amen. Mr. WaRRE~. That matter of the Inter-Ocean was an acthity of Mr. Hamlin's that originated in his own mind, avparently, and evidently The Chief Clerk proceeded to read the J ournnl of the pro­ some Republicans were talking about helping Mr. Hinman out in ceedings of Saturday last, when, on request of 1\lr. CURTIS and getting control of the Inter-Ocean. I had nothlng whatever to do by unanimous consent, -the further reading was di pensed with with it. and the Journal was approved.