500, and the result was that he went into many channels of trade that were new to him.

The wholesaler who would ordinarily order his sugar from my firm, would go to my competitor or would go to anybody's competitors and try to buy sugar, and people in Savannah were buying sugar from New Orleans and people in Chicago were buying sugar from parts in the country that they never theretofore had bought sugar, and they were buying any kind of sugar. Even raw sugars were actually sold to some extent for domestic consumption, and even washed turbinado sugar, that never had any market in this country before, was accepted at high prices.

Mr. MCLAUGHLIN of Michigan. Mr Chairman, I think all of us have a pretty good idea of what the situation in the sugar market was, and it seems to me the only thing that is relevant here is the relation of these gentlemen with the Government. If the situation were not half as bad as stated or if it were ten times as bad, the one point remains, what was their relation with the Govrenment; did they have a contract, express or implied; was there a legal or a moral obligation; and on what testimony do we found that situation?

Mr. LAMBORN. But when the gentlemen ask me questions, I must go ahead and answer them.

Mr. MCLAUGHLIN of Michigan. We are filling the record with a lot of testimony which is very interesting, and I do not blame the witness for giving it, but I think every one will agree that it is not a all material. We know there was a shortage of sugar and a very acute situation.

Mr. LAMBORN. If the chairman will instruct me to only answer question in regard to my relations with the Department of Justice, I will confine myself absolutely to that. Mr. TINCHER. While the gentleman from Michigan was out of the room, there was a statement which went into the record which I think might be confusing, concerning the fact that you were permitted to take sugar out of the Argentine. It might look as if some other parties were not permitted to do that. Do you know whether, as a matter of fact, the embargo on taking sugar out of the Argentine was a conditional embargo, under which any one could remove sugar from the Argentine by purchasing certain classes of sugar and leaving a certain percentage, and you do not know but what your company did that, do you?

Mr. LAMBORN. I know that Lamborn & Co. in Buenos Aires did not, but probably the people they bought from, namely, Moss & Co., the people who represented the great refiners of the Argentine, and Portellis, one of the great refiners down there, sold the sugar to us for prompt shipment. Whether they reserved 30 per cent of pilet sugar for home consumption or not, I do not know. I presume they did, because the edict of the President, Irigoyen, signed by all the members of the cabinet, indicated they must reserve 30 per cent.

Mr. TINCHER. And that is probably the explanation for your being able to get the sugar out of the Argentine?

us,

Mr. LAMBORN. I presume it is, but I do not know.

I know.

Nothing special was done by

Mr. ASWELL. And also there was the further fact that you maintain offices there? Mr. LAMBORN. Yes, sir; we had our own office.

Mr. ASWELL. And shipped it from your own offices?

Mr. PURNELL. I just want to ask you one question, which, I think is directly to the point: you have been in business for a number of years

Mr. LAMBORN (interposing). Thirty years in New York alone.

Mr. PURNELL. And I want to know if you regard it as the act of a good business man to enter into an arrangement of this kind, involving the amount of money which it does involve

Mr. LAMBORN (interposing). I think

Mr. PURNELL (interposing). Just a minute, please. Without having some definite, businesslike understanding as to what would happen in case of a loss?

Mr. LAMBORN. I think I have made quite clear my attitude before the Attorney General and his assistants in Washington. We did not think it was good business, but you must recall, as I said before, that anyone in the sugar business, whether he was a refiner, a merchant, a broker, an importer, a wholesaler, or a retailer, was continually plagued, either mentally plagued or plagued by the department or by newspaper reports. We were ashamed to even meet our friends because they would feel that everyone was profiteering on sugar. Naturally, the pressure was very great. Ordinarily I would say, "Certainly not," and if you asked me the question as an individual or as a Member of Congress, I would say that I certainly would not do it, but here the Department of Justice had absolute charge of the sugar industry of the United States, and they were using very great pressure in every line, not only against

people profiteering or possibly profiteering, but also to bring in sugar here at a time when we, as merchants, did not believe the market justified it.

Mr. PURNELL. Then, in other words, if the interests of the Government and the people had not been involved, you would not have undertaken this thing

Mr. LAMBORN. We certainly would not.

Mr. PURNELL (continuing). As a business proposition, on your own initiative? Mr. LAMBORN. We certainly would not, and that is the only reason I say there is a moral obligation. The question of legality, I told you, I will dismiss, because I do not presume to be a lawyer.

Mr. PURNELL. That ought to be the basis of the moral obligation, if there is one. Mr. RIDDICK. I am not able to understand why, as a business man, knowing the business and recognizing that there probably would be a loss, you would go ahead and sustain this loss without having some arrangement for it to be absorbed.

Mr. LAMBORN. You are assuming I thought there would probably be a loss. Had we been left to our own initiative, we would certainly have entertained that view. At that time we did feel that the market was high enough and too high; nevertheless, as I told you, right in the Department of Justice, I made a bid from our Philadelphia office, which was sent by telephone, for 50,000 bags, or 7,000 tons, to the importers sitting there, at the highest price that raw had sold in 70 years, and they all declined it. Now, regardless of what my opinion was, we had the actual attitude of the Department of Justice, with the head of the Department of Justice there, and we had the importers there at the same time, who were importing and producing raw sugar, refusing the highest price that had been known here in 70 years. Therefore, I say that ordinarily I would not have considered, as a business man, such a thing; but under the circumstances, yes.

Mr. RIDDICK. In other words, you made a bad bargain in reference to this sugar, expecting there would probably be a loss, and yet you made no arrangements to take up that loss?

Mr. LAMBORN. I beg your pardon. I do not know how I am going to make it clearer. We did not anticipate a loss. We believed before we went to that meeting and we believed subsequently that the market was too high, and as I have said, left to our own initiative, we would not have purchased that sugar, but when they not only spoke of their own statistical department but urged and implored us, practically, to bring in this sugar, naturally our mental attitude changed.

Mr. KINCHELOE. Let me ask you this question: You speak of a moral obligation. As you know, during the war the price of wheat for the farmer was fixed by the Government at about $2.20, and he had absolutely nothing to say about it. He was urged and implored to raise the wheat at that price when, of course, if it had not been fixed there is no telling how high the price would have gone.

Mr. LAMBORN. Your argument may be on straight lines, but it is not on parallel lines.

Mr. KINCHELOE. Wait a moment; you do not know what my conclusion is. They went to thousands of farmers and caused them to raise millions of bushels of wheat in this country. They could have gotten $3.50 or $4 a bushel, but by reason of a law passed by Congress they were limited to $2.20 or practically that on the Chicago market, so, of course, there was a loss of the difference between $3.50, say, and $2.20. Do you not think, as a matter of justice and as a moral obligation on the part of the Government, they would be just as much entitled to that difference that they lost by reason of an act of Congress, not by the persuasion of any official of the Government, as was true in your case and these other claims pending here?

Mr. LAMBORN. Assuming your hypothesis is correct, I would say they had just the same right to a claim, but I do not agree with you because I do not think anybody in this room or anyone but God Almighty knows how the market would have been with an open market. Here the market to-day on sugar is open.

Mr. TINCHER. We know how the market was. We know the market was over $3 for wheat and over night, by an act of Congress, they reduced the price over 70 cents a bushel.

Mr. LAMBORN. But the price might have gone to $10 a bushel or $1. We know that raw sugar on the 21st day of May, 1920, was 23 cents bid, and we know that on December 23 of that same year the price was 33 cents.

Mr. KINCHELOE. I would like to finish my question. You say that moral obligation would be just as just as yours, if my hypothesis is correct. Now, wherein is my hypothesis wrong?

Mr. LAMBORN. I do not know. I can not answer a very carefully drawn question like that without giving it study, and I am not here to discuss anything except our own claims, unless you desire me to give an opinion that is worthless to you and does not mean anything to me.

Mr. KINCHELOE. I was just figuring here that that is only one instance where thousands of people lost money during the war.

Mr. ASWELL. Your question is answered by referring to the record of what the price of wheat was after the fixed price expired.

Mr. KINCHELOE. Oh, no; wheat was bringing over $3 a bushel at the time the law was passed.

Mr. ASWELL. After the law expired, what happened to it? It went below the fixed price.

Mr. KINCHELOE. Certainly; but in the meantime the people who had this wheat to sell lost that differential, and I think that constitutes as just a claim as these sugar claims.

Mr. LAMBORN. May I answer your question? You asked me a question that requires some intelligent thought. I can not answer the question without thinking it over, and let me answer you by saying that while you may mean your hypothesis to be correct, yet it is wrong. You do not know, because no one except God could know, whether the farmer lost money. Did he lose money at $2.20 or would he have made more if the price had gone to $4? For instance, take the situation in Louisiana. In October, 1919, the Attorney General permitted Louisiana raw sugars to be sold at 17 cents a pound and Louisiana clarifieds at 18 cents a pound, at a time when Cuban sugars were selling at 7 cents a pound, and he did it because the Louisiana planters said they would be ruined if he did not do it. Last year they sold these same sugars from 34 or less than that a pound, and they were not ruined. Now, would they have been ruined the year before? They simply made a great deal more money in October, 1919, and in 1920 than they made last year. They may have been badly bent, but they were not ruined because they are still there and they are going to make their crop there.

You may

Mr. KINCHELOE. Do you think that is an intelligent answer to my question? Mr. LAMBORN. I think it is the best answer I can give you offhand. have studied this question in connection with wheat. But I have not studied it, and I do not think I should go into things I know nothing about. I can give you an intelligent answer in reference to sugar.

Mr. KINCHELOE. Yet you seem to know something about it because you say my hypothesis is wrong.

Mr. LAMBORN. I did not mean to say that.

Mr. KINCHELOE. I am telling you that when this Congress passed the law fixing the price of a bushel of wheat at $2.20, the farmer was getting over $3 a bushel for his wheat.

Mr. LAMBORN. Did he lose money at $2.20? I do not know.

Mr. TINCHER. Take the fellow who, before the price was fixed at $2.20, had 100,000 bushels of wheat that were worth $3 a bushel..

Mr. LAMBORN. He lost.

Mr. KINCHELOE. He has not got any bills here asking somebody to pay him.

Mr. LAMBORN. I do not want to be drawn into a discussion of something I do not know anything about.

Mr. TINCHER. I simply want to get that matter straightened out in the record. Mr. TEN EYCK. Do you consider your understanding with the Attorney General and the Government was the same understanding as that with Howell & Co. and the De Ronde Co.?

Mr. LAMBORN. I do not know what their understanding was, except what I have seen here in the hearings. I am not going to bring the matter into a question of mental speculation or moral obligation. I know how I have conducted my business, and I am trying to state what happened if you will allow me.

Before this meeting was held, Mr. Palmer, the Attorney General, asked us if we would not appoint a committee of the importers and arrange to bring in the sugar. I said we do not want it. We are competitors. I said that while it was true we would still compete with each other, we were running our own business. I said, "You should appoint a committee." He said, "I do not know you gentlemen; I do not know who is best able to work with the department." After some discussion I suggested Mr. Rionda, of the Czarnikow Rionda Co., who was present, that company being the largest importers and producers of sugar in the world. Then somebody else suggested the representative of the Minford Lueder & Co., another firm of large importers, and then the representative of Lamborn & Co. was suggested. That committee was named to work with the Department of Justice in order to find out what supplies of sugar there were available in the world.

In the following week. I think it was on the 25th of May, Mr. Armin W. Riley, who is here this morning, and who was Mr. Palmer's assistant, absolutely in charge-Mr.

Figg was no longer in charge; we were told Mr. Riley would be appointed Mr. Riley arranged to have a meeting in his office in New York of the committee of importers, and there was a discussion of the question of the importation of the sugar from the Argentine, and he asked us if we could bring in some of that sugar.

We had a further meeting, early in June, at the office of the Department of Justice in the post office building in New York. This time some of the members of these firms-I can not remember just who the representatives were-met Mr. Riley, and he had his statistician there. Mr. Riley urged us to bring in the sugar from the Argentine. That was on the 7th of June. I walked down the street with my partner, Mr. Tameling, and I said, "We have already gone at this, and I do not like the looks of the market." Mr. Riley had a department statistician with him in the second meeting and this statistician presented figures that we did not agree with. He said those were the Government figures he had, but we did not agree with them.

Mr. MCLAUGHLIN of Michigan. Have you put into the record to-day the dates and amounts of your importations of sugar, that is the dates and amounts of the shipments into the United States?

Mr. LAMBORN. I think that is all here.

Mr. HUNT. The complete correspondence covering the contracts, and photostatic copies of the ocean bills of lading, the shipping invoices, and all other data of that kind are here.

The CHAIRMAN. When was it shipped?

Mr. LAMBORN. It is all in the record. One thousand tons were shipped from Rosario, Argentina, on June 5, and the second thousand tons were shipped by the same steamer from Buenos Aires on June 25, and arrived in New York on July 21, 1920.

Mr. MCLAUGHLIN of Michigan. I asked if you could give the dates of your pur chases in the Argentine, and the amounts purchased each time, together with the dates of shipment and arrival in the United States.

Mr. LAMBORN. It is all in the record.

Mr. MCLAUGHLIN of Michigan. Has it been put in the record this morning?

Mr. LAMBORN. I am now putting it in.

Mr. KINCHELOE. I understood it was going in the record.

Mr. LAMBORN. The second 2,000 tons were shipped on the same steamer.

The CHAIRMAN. On June 15?

Mr. LAMBORN. It was shipped from Buenos Aires on June 25.

Mr. MCLAUGHLIN of Michigan. When did you buy it, and in what quantities?

Mr. HUNT. We bought the first 1,000 tons on May 25, and it was finally placed on board the vessel on June 15, at Rosario. In the case of the second 1,000 the contract was finally closed on June 15, and that sugar was completely placed on board on June 25, at Buenos Aires. The vessel sailed from there and arrived in New York on July 21. Those were two shipments on one vessel. All of the documents showing the quantities are in the brief, which has been made a part of the record.

Mr. KINCHELOE. What do you claim you lost approximately?

Mr. HUNT. The amount is approximately $570,000. Because we got the sugar in promptly and because we shipped it out promptly our loss is not nearly so great as the loss of other claimants.

Mr. KINCHELOE. What did you do with it?

Mr. LAMBORN. We shipped it to our agents and had them sell it right away; that is, what we had not contracted for sale. When we made the original contract on the first 1,000 tons, we wanted to get a contract to resell all of it if we could. We resold by contract for future delivery a part of the first 1,000 tons. The statistics on that sale you will find in full in our brief.

We could not sell the second 1,000 tons because it was contracted for so late. A part of the first and all of the second 1,000 tons had to be sent out and sold at the best possible price.

Mr. TEN EYCK. Did you have any trouble in transporting the sugar from Argentina to the United States? Did anyone stop you?

Mr. LAMBORN. No; we made this importation under the general export permit which was issued by the Argentine Government on May 22, 1920. We made it on the same permit as Mr. De Ronde. The American Trading Co. made their importation on a special permit under the terms of which they would not have to put in the 30 per cent pilet type sugar.

The CHAIRMAN. Their statement is that the permit was not issued until the 23d of June. That the application was made on the 11th. You said you had a permit and had no trouble in making the importation.

Mr. LAMBORN. I think you might read the hearings which have taken place before this committee and the committee of the Senate, and you will find that this is the fact-or it seems to me this is the fact: The American Trading Co. and Howell arranged

for their importations under what was known as a special export permit. They did not come in under the general export permit for 100,000 tons. They were getting a special permit which would permit them to export sugar without putting up a deposit of 30 per cent of the pilet sugar. On the other hand the release of the embargo by general permit came on the 22d of May. That has been put in the record. Ourselves and Mr. De Ronde according to his statement, imported under that permit. Mr. ASWELL. It was a general permit, was it?

Mr. LAMBORN. They were entitled to the same permit; there was no question about that.

Mr. MCLAUGHLIN of Michigan. To comply with the conditions for a permit anyone had to deposit this proportion of sugar?

Mr. LAMBORN. Thirty per cent of pelet.

Mr. MCLAUGHLIN of Michigan. The American Trading Co., you say, got a permit for bringing out that sugar without complying with that condition?

Mr. LAMBORN. Yes, sir; because after we had felt we had complied with that special permit they could not get their sugar out of the Argentine until about the middle of August, because their permit did not come through.

The CHAIRMAN. It was the 23d of June, was it not?

Mr. LAMBORN. No, I think not.

Mr. HUNT. They did not ship it on the 23d of June.

The CHAIRMAN. There seem to be some conflicting statements, and I would like to have the matter cleared up so we will know what the delay was.

Mr. LAMBORN. We can not tell you why it was that they did not have to deposit the 30 per cent of pelet.

The CHAIRMAN. That required a special permit?

Mr. LAMBORN. Yes.

The CHAIRMAN. If they had put up the 30 per cent

Mr. LAMBORN (interposing). They could have had their sugar at first. How we came to bring our sugar out so quickly I do not know, unless the people from whom we bought it had other sugar which they could put aside so that our sugar was ready for shipment early.

Mr. ASWELL. This gentleman said you lost something over $500,000. What evidence have you to present proving your claim accurately?

Mr. LAMBORN. We have the sworn statement of our comptroller, and you can send anybody from this committee to examine our books and records.

The CHAIRMAN. He has also listed the purchasers.

Mr. LAMBORN. That is only part of it. Those are the purchasers who bought by contract.

Mr. ASWELL. The statement of losses will prove it?

Mr. TINCHER. Speaking of the Franklin special permit, I suppose the question of whether you needed a special permit to export sugar from the Argentine depended upon whom you purchased the sugar from. You speak of your people purchasing the sugar and having to deposit 30 per cent with the Argentine. The American Trading Co. had a company of their own that they purchased of, had they not?

Mr. LAMBORN. We did not purchase this sugar from our own company. We gave the order to our own company and they bought it for our account in New York. How the American Trading Co. operated I do not know. They have their own purchasing agents the same as we do. Whether their methods were less capable than ours I do not know.

Mr. TINCHER. Was their delay in exporting their sugar due to the fact that they wanted to purchase the sugar of their own company in the Argentine?

Mr. LAMBORN. I would doubt if they would purchase it of their own company. I think they probably sent their order to their own company, and that company went into the market, because they are not producers and refiners of sugar.

Mr. HUNT. It was our understanding from the advances made by the Department of Justice that the whole proposition was to get the sugar in as rapidly as possible. There was a shortage in sugar and the Department of Justice wanted to relieve the shortage. So we made our plans to purchase and make the shipments at once as we understood that time was the essence of the contract. We were one of the first importers to bring it in.

Mr. TEN EYCK. Is that the reason why both of you acted differently

Mr. LAMBORN (interposing). We do not know that we did.

Mr. TEN EYCK. You just stated

Mr. LAMBORN (interposing). As I have just stated, they may have done so.

Mr. TEN EYCK. Is it not your view that each of you had two different agreements with the Government?