Mr. WYLLIE. And that is the only stockholding interest you or your firm has in any bank?

Mr. CLAYTON. That is correct.

Mr. WYLLIE. Now, I will ask you to please name the future exchanges on which either you are a member or on which any of your firms or associations enjoy membership privileges.

Mr. CLAYTON. New York Cotton Exchange, New Orleans Cotton Exchange, Chicago Board of Trade, Liverpool Cotton Association, the Havre Cotton Exchange. I think that's all.

Mr. WYLLIE. Do you hold membership yourself in all of these exchanges?

Mr. CLAYTON. No, sir; I do not. I belong to the New York Cotton Exchange, the New Orleans Cotton Exchange. I think that's all. Mr. WYLLIE. The other exchange seats are held by other members of your firm?

Mr. CLAYTON. Yes, sir.

Mr. WYLLIE. Which of the clearing houses of such exchanges are you or your firms members?

Mr. CLAYTON. New York and New Orleans.

Mr. WYLLIE. They are the only two exchanges of which you are a member of the clearing house association?

Mr. CLAYTON. Possibly Havre. I don't know whether they even have one or not. Liverpool has no clearing association. We may possibly belong to the Havre Clearing Association. I don't know. Mr. WYLLIE. Will you explain what is meant by the clearing house of an exchange? Just make a brief statement. I don't want to go into all the details at this time.

Mr. CLAYTON. I will use the New York Cotton Exchange Clearing House as an example. All the trades of the members of the clearing house go immediately when they are made into the clearing house; that is, if A should sell on the exchange today 500 bales of May cotton to B, they each in the afternoon report those trades to the clearing house, and thereafter the clearing house has the other end of each transaction. The relationship between A and B ends when the clearing house takes the transaction into its books. Then if A

has sold, the clearing house stands as the purchaser from A; if B has bought, the clearing house stands as the seller to B, and thereafter that trade is carried in the clearing house until it is finally liquidated.

Mr. WYLLIE. And such clearances can be had only by and through members of the clearing association? Is that not correct?

Mr. CLAYTON. That is true.

Mr. WYLLIE. I doubt if you will be able, without referring to your records, to answer my next question, Mr. Clayton, but I would like to have you ascertain from your records and give me an answer at a later date. How many bales of cotton of American growth did your firm or association buy in each cotton year from August 1 to July 31, during the period beginning with the year 1928-29, and ending with the year 1934-35.

Mr. CLAYTON. Now, Mr. Wyllie, I have that information in a prepared statement that I have here, which I will request you to please give me the privilege of presenting at this time. I think you have gotten over the preliminaries that lead up to it. I have that information and probably a great deal of information that you will

require or ask for from time to time, and I would like at this point to be permitted to present this statement.

Mr. WYLLIE. Of course, that is addressed to the chairman, but I will ask, Mr. Chairman, that Mr. Clayton at this time be required. or requested, to proceed with the answers to the questions which I shall ask him, and after we have concluded our examination, I have no objection whatsoever to Mr. Clayton reading his prepared statement, but I think we will get along much faster and get pertinent facts into the record better just as are proceeding now.

Mr. CLAYTON. Mr. Chairman, before you rule on that I would like to say that as a result of this investigation Mr. Wyllie has made, certain charges against my firm were made in his report to the committee. I so read in the newspapers, and I have prepared here an answer to those charges. In the preparation of it I have necessarily included a great deal of information, statistical data and factual information regarding the method of operation of our business, which will be asked for from time to time during the examination by Mr. Wyllie. He has just asked the first question. Now, if Mr. Wyllie should proceed in the way that he has suggested with his examination, I will necessarily be in the position of having to give a great deal of this information twice and take up a good deal more time, I think, rather than less time of the committee.

Furthermore, the continuity of my story, if you wish to call it that, will be broken and will lose a good deal of its value. I can well understand that the committee will probably not wish to have everyone present a statement, but I think that at least in my case, and perhaps in another one, we are in the peculiar position of having been accused of something, and I think that on that ground the Chair should permit me at this time to present my statement.

The CHAIRMAN. The Chair wishes to make this statement: Mr. Wyllie, at the request of the committee, made a confidential report; that is, he gave us a brief outlining the lines along which he would carry this investigation. It is not perhaps for me to say that the report that the papers got hold of and published is or is not the report that was submitted to the committee, but either someone got hold of the confidential report and used it without the consent of the committee, or else some member of the committee inadvertently left it where it was gotten hold of. The intent and purpose of the committee was to have the witnesses come before this body and give their testimony as it was developed here; and in view of the fact that this report was not officially given out by the committee and was only handed to them for their information, I think that Mr. Wyllie, in justice to all the others who will come before him, should be allowed to go ahead and ask such questions as he wishes; and, so far as any duplication is concerned in what you may say, all the committee is interested in is getting the facts; and I think that it might be very well for him to develop the line along which he is now starting; and, of course, later on you may hand in your written statement, because your written statement will necessarily cover all the ground and might not have the same effect before the committee as this examination is now bringing out.

Mr. CLAYTON. Mr. Chairman, may I just say that I do not know in what way Mr. Wyllie's report reached the press. I merely know that it was carried by the Associated Press all over the country.

throughout the South, in the New York newspapers. It called my firm by name, and one other. It made charges against us which, if I may say so, an unbiased analysis of the figures and facts which Mr. Wyllie has obtained will not support; charges which I do not think Mr. Wyllie would have made if he had discussed the matter with me to get some explanation of some of these facts and figures which he had gathered. That report has gone out all over the country, and I presume in Europe as well.

My firm is over 30 years old. It has got a good will and a good name, a respectable name, and I respectfully present to you again, Mr. Chairman, and submit to you that I think under these circumstances I should be permitted to present this statement here to the committee myself, instead of handing it in to the committee.

The CHAIRMAN. You may do that; but you mentioned a moment ago that Mr. Wyllie could have discussed this with you. I take it that Mr. Wyllie, investigating the figures, the facts-because I do not think this committee will allow anything to be considered that is not established as a fact-you said you and he could have gotten together and discussed it and he might have drawn a different conclusion. The committee would prefer for you and Mr. Wyllie to discuss it in their presence. That is the reason we are having this investigation. We would like to have it discussed right here. He has, through quite a considerable amount of expense, gathered certain facts. He will present those facts as he sees fit. They are of record. And you will make such replies, and other witnesses also, before the committee, as you desire to make. We want to know all the facts. If he has made a mistake, let us have it right here before us as it comes up, each one. I prefer to have it that way, and then have the testimony that anyone wishes to submit. I think that would be the best way, because if you think that Mr. Wyllie has made any mistakes in the so-called preliminary report, right here is the place to discuss it now, seriatim, but not in a categorical continuous way. Let Mr. Wyllie develop his facts here first-no cross-examination, but just asking you certain questions. Then after he is through with the pertinent questions that he desires to ask you, we may go into the details and find out just where any mistake has been made, if there has been any.

Mr. CLAYTON. Mr. Chairman, of course, I must abide by your decision, naturally, but I do feel that I should be permitted at this time to present my story, because Mr. Wyllie is going to ask me a great many questions, the answers to which I have right here and in so much better form than I could give them from memory. When he asks me this question right here, I have got to go to my statement and find it and make reply; and all of this information will come out, Mr. Chairman, if you would just permit me to go through with my statement, and then I am willing to sit here a month and subject myself to all the cross-examination that you or Mr. Wyllie or any member of this committee wants to engage in. I am perfectly willing to stay here as long as necessary, but I do feel that I have been here before you on numerous occasions and you have always been very liberal in the matter of letting every witness tell his own story in pretty much the way he wanted to tell it before being subjected to cross-examination; all you wanted has been all the facts,

and all the light you could get on it, and I just make this final appeal to you to let me present my statement here, and a great many of the questions that Mr. Wyllie will ask will be answered in it. The CHAIRMAN. We will let Mr. Wyllie ask his questions, and you make the answers, because I don't know myself along what lines he is going to ask them, and I think it will be better for us to go through as we started. The committee will get a better idea than to have a formal statement made.

Mr. WYLLIE. Mr. Chairman, in view of the statement made by Mr. Clayton that I have charged his firm with certain things, as you have just stated, Mr. Chairman, the preliminary report to which Mr. Clayton referred was presented by me to you and your committee at your request, with the understanding that it was to be a confidential report.

The CHAIRMAN. Yes.

Mr. WYLLIE. That report was obtained from sources which I do not know, and part of it was published in some of the papers. It was garbled in some of the papers in which it was published, and it was never intended to be more than a confidential report from an attorney to his client.

The CHAIRMAN. Exactly.

Mr. WYLLIE. In view of the statement made by Mr. Clayton I desire to read the first paragraph of that report, to dispel from his mind, or from the minds of any others, the idea that any charges were made in that report further than a statement from an attorney to a client. I therefore desire to read the first paragraph:

To the Chairman and Members of the United States Senate Committee on Agriculture and Forestry:

This report is submitted at the request of your committee for the purpose of giving to the chairman and members of your committee in advance of the public hearings a brief summary of the work which your attorney and his staff of assistants have done, and at the same time to point out generally those matters and things which appear to have a more or less important bearing on the subject of this investigation. Any suggestions and opinions expressed herein must be regarded as preliminary only, and subject to modification and change on review, for the witnesses who will be called to testify before your committee have as yet not been heard, and we do not wish to place ourselves in the position of attempting to bring in the verdict ahead of the evidence.

Now, I do not think, Mr. Chairman, that Mr. Clayton's request. that he read a prepared statement here in reply to a confidential report should be permitted and I be thereby handicapped in presenting my case to the committee.

The CHAIRMAN. That is what I had in mind when I said that in view of that report and certain partial statements that went out, I think it is nothing more than fair to the committee and to all of us who are trying to get at the facts not to have a prepared statement in reference to a report that may or may not be developed or supported by the facts, but let us go ahead with the matter as we now have it.

Mr. WYLLIE. Mr. Clayton, if you have the information which has just been called for by my last question in your statement you may read that, but only that portion of your statement which contains an answer to that question.

Mr. CLAYTON. May I first read from an Associated Press report

55627-pt. 1-36- 2

Mr. WYLLIE (interposing). No; I object to that, Mr. Chairman. I have asked him a question.

The CHAIRMAN. I don't think that has anything to do with this investigation. I want to be perfectly fair in this, and all the committee wants is to get at the facts. We have no personal ax to grind, but once the ax is ground, if it happens to chop somebody that is their lookout. We are going to try to grind the ax, and if it happens to cut somebody, that is unfortunate; but I want the committee to understand that this investigation is solely for the purpose of finding out whether or not we have a market that is free, untrammeled, and is responsive to the law of supply and demand and meets the requirements of this enormous trade. That is all we are after, and we hope to get it before this investigation shall close. Mr. CLAYTON. In answer to your question, Mr. Wyllie, I would like to read here a little statement of the way in which my firm conducts its business, in the very beginning of which will be the figures you have requested.

Mr. WYLLIE. The question is very simple, and all I want is the figures. I do not desire to engage in any argument at this time. I simply want the figures, the number of bales of American-grown cotton bought by your association or firm-Anderson, Clayton & Co.-for the period from August 1 to July 31, commonly referred to as the "cotton year", for the period beginning with year 1928–29, and ending with 1934-35.

Mr. CLAYTON. Before answering that question, Mr. Chairman, may I ask whether I will be permitted to present my statement before the committee adjourns? I mean in this investigation.

Mr. WYLLIE. I have no objection to that, Mr. Chairman.

The CHAIRMAN. Not a bit in the world. I think any matter that is pertinent to this investigation, that any witness wants to submit, after it has been heard by the committee, and I am sure that if it is pertinent the committee will acquiesce in having it incorporated in the record, but the important thing we want to get here and now from those who appear, without any further delay, is in answer to what is alleged to be the facts gathered by this investigating committee. Once we are through with that, then I hope we can have such examination and cross-examination that will bring out and substantiate all of the facts.

Mr. CLAYTON. And at that time I may be permitted to present my statement?

The CHAIRMAN. Yes.

Mr. CLAYTON. In person, and not just have it go into the record? The CHAIRMAN. In person; yes. You can present it in person. Mr. CLAYTON. In the season 1928-29 we purchased 2,315,400 bales of American cotton, which was 16 percent of that crop.

In the season 1929-30 we purchased 2,030,000 bales of American cotton, which was 14 percent of that crop.

In the season 1930-31 we purchased 1.886,000 bales of American cotton, which was 13.7 percent of that crop.

In the season 1931-32 we purchased 2,295,000 bales of American cotton, which was 13.8 percent of that crop.

In the season 1932-33 we purchased 2,277,000 bales of American cotton, which was 17.9 percent of that crop, and is the largest percentage of any crop ever purchased by us. As a matter of fact, those