him to make studies and findings and recommendations for them from the standpoint of a grower-processor division of returns, for example, since you mentioned that relationship, the Secretary would be empowered under this act to obtain whatever information is required for a study, finding, and recommendation, and then to recommend what he considers a desirable division to the industry. That is all he would do. He would merely say what he recommends as a fair division.

Similarly, if it were a determination with respect to wages, he would recommend what he considers fair. It would have no other force than that recommendation, because the conditions for payment have been removed on those factors.

The CHAIRMAN. Now section 407 provides that persons engaged in the manufacturing, marketing, or transportation or industrial use of sugar shall furnish information to the Secretary where he requests, in order to administer the provisions of the act. Just what do you understand the authority of the Department to be in administering that section? How far can you go? Could the Secretary get information under that section which could be used in putting into effect section 410?

Mr. MARSHALL. I would say "yes," Mr. Chairman. Since section 410 is a part of this act, and if section 410 was operated by one segment of the industry asking the Secretary to make such a recommendation, he would be authorized under section 407 to obtain all the information that he might deem necessary for such purpose. The only limitation on him that I would see on getting any information that he deemed necessary is merely the limitation of making public the records of any individual operator.

The CHAIRMAN. A similar provision has been in the existing law. Have you had any difficulty in getting that information?

Mr. MARSHALL. I believe, sir, we have had no difficulty in getting all the information we have asked for under the act. I believe we have not had to ask, within my remembrance, for any information under section 511, which was the similar provision. But there was some discussion by us with a grower and processor group about section 511 and what could be done under it. That was only recently, and in view of the fact that this bill was coming up, we have taken no action under that. We would like for it to be understood clearly, however, that if it is not the view of the committee that the interpretation I have given is correct, we would like to know, because we would not want to be put in the position of being asked to make a recommendation under section 410 and then find we cannot get the information necessary to make it. It is our opinion that section 407 clearly gives us that authority.

The CHAIRMAN. Are there any further questions? As far as the Chair is concerned, he has finished.

Mr. BAGWELL. Mr. Hope, before you leave that section I would like to add that the industry has questioned our authority to get the information under section 511 of the Sugar Act. In view of their position on that, the committee may feel it important to spell that out in here, if it is the committee's desire that the Secretary have the authority under section 410 to get the information necessary to make the recommendations which the section contemplates.

Mr. PACE. Would it be possible for your staff or the Department to furnish the members of the committee a copy of this bill in the shape or form where we can have the bill with the old law and new law

side by side?

The CHAIRMAN. I might say Mr. Parker has it all worked out. He has it mimeographed. You can have that by Friday.

You may proceed, Doctor.

Mr. FERNÓS-ISERN. I have here a list of figures that I understand was taken from the Yearbook of Statistics of the Department of Agriculture, with the sugar-production areas. I see the maximum production of beet sugar in the whole area since 1936 took place in the year 1940 with 1,897,000 tons. The quota allowed under section 202. would be 1,800,000 tons. That is 97,000 short of the maximum averagesince 1936.

Now as to the cane-sugar production on the mainland, the maximum year during that decade was 1938 with 583,000 tons. The quota allowed would be 500,000, which means 83,000 tons left out.

When we come to Puerto Rico, the maximum production took place in 1941, with 1,148,000, and the quota allowed, adding together shipments to the mainland and local consumption on the island, would be 1,035,000. That is 113,000 less than our maximum year in the 10 years; 113,000 as compared with 97,000 and 83,000.

Now taking into consideration the fact that sugar is practically the basis of the island economy and that that is practically the only income we have and 2,000,000 people have to live on that, is there any reason particularly why the reduction from our maximum should be any larger, or should it not be less than reductions in other areas which have many other articles of production on which they can live?

Mr. MARSHALL. I think, Dr. Fernós, all I can say on that is this: So far as I know, no area has the amount of quota under this proposed bill that it wants and thinks it ought to have. Naturally they all want all they can get. The sugar interests from all of those areas got together and had a great deal of discussion and came to the Department of Agriculture with a suggestion on which they said they could get together and on which they could agree. It was not entirely satisfactory to the Department and suggestions were made for changes. Some changes were made to it, including some change for Puerto Rico. But it eventually reached the point where they could make no further changes and reach an agreement on it, and the Secretary of Agriculture thought they had done about as well as could be expected under the circumstances. They had made some concessions, and as long as they were in agreement on it he thought that that was a very important. thing.

Mr. FERNÓS-ISERN. Of course my question specifically is why the reduction concerning Puerto Rico is the largest. It is 113,000 as compared with 97,000 and 83,000. If there was any particular reason for that I would like to know it.

Mr. MARSHALL. I don't think they set up as a standard in determining these quotas, the maximum production each area might have had in any one year and then made a uniform subtraction from that. That would not seem to be a very good basis to do it, for a number of reasons. The crop may be far out of line in any given year in any given area, up or down. For example, if you should take that type of

determination as a standard, look where you would be this year, or where Cuba would be this year with 6,400,000 tons of sugar or more. Mr. FERNÓS-ISERN. I am referring to domestic areas.

Mr. MARSHALL. I am merely saying that big, abnormal crop in one year shows you what you would be led into. So it was not used as a standard.

Mr. FERNÓS-ISERN. Of course Puerto Rican sugar is domestic sugar. Mr. MARSHALL. Certainly.

Mr. FERNÓS-ISERN. My next question, Mr. Chairman, would be under section 207, where foreign areas are restricted to ship their sugar raw, which I can't understand. I would like to know why Hawaii, Puerto Rico, and the Virgin Islands, although domestic areas, are restricted in refining their sugar to 29,000 tons in Hawaii and 126,000 in Puerto Rico. If Puerto Rico and Hawaii want to develop industries why cannot they refine all the sugar, as much as they want to, within the quota?

Mr. MARSHALL. Doctor, I would say on that those provisions, of course, are the same as in the present Sugar Act. I believe that the provisions that are in there are the result of a very long debate and discussion about that particular issue, which was eventually resolved in this way. As long as the industry groups have been able to agree on it among themselves and as long as it is a provision that was determined by the Congress in 1937, we have seen no reason to take a position one way or the other on that. It seems best to us to leave it as it is.

Mr. FERNÓS-ISERN. I am talking from the point of view of the public interest of Puerto Rico, the 2,000,000 citizens there who have to have an economy and who are in dire need of industrializing because they have so little land and so many people to employ. As I said, this would prevent Puerto Rico from developing industrially precisely in a matter where all the elements are there. It would mean for Puerto Rico not only more employment and more income-because there is a great difference in the price of sugar if sold as refined and if sold raw-but also the cost of shipments from the island to the mainland. This, I understand, is predicated on an agreement on the part of those who were here in drafting this bill. The people of Puerto Rico at large were not present.

The CHAIRMAN. They are very well represented in Congress. Mr. FERNÓS-ISERN. Thank you, Mr. Chairman, but that is the first chance I had to get into this.

Mr. MARSHALL. There had been a long debate before that resulted in this provision. We have no desire to open it up again. I am sure you can speak much better than I can on what your problems are in Puerto Rico.

The CHAIRMAN. We thank you very much, gentlemen. (Whereupon, at 12 m. the committee adjourned.)

SUGAR ACT OF 1948

FRIDAY, JUNE 27, 1947

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D. C.

The committee met at 10 a. m., Hon. Clifford R. Hope (chairman) presiding.

The CHAIRMAN. The committee will come to order. The first witness this morning will be Mr. Arthur L. Quinn representing the Porto Rican American Sugar Refinery, Inc.

STATEMENT OF ARTHUR L. QUINN, REPRESENTING PORTO RICAN AMERICAN SUGAR REFINERY, INC., PONCE, P. R.

Mr. QUINN. Mr. Chairman, I have a short statement here that I want to submit for the record.

(The statement referred to is as follows:)

Hon. CLIFFORD R. HOPE,

WASHINGTON, D. C., June 26, 1947.

Chairman, House Committee on Agriculture,
House Office Building, Washington, D. C.

SIR: On Thursday, June 19, 1947, I sent you the following telegram: "Understand hearing is scheduled Saturday before your committee on proposed sugar legislation. You are familiar with past discrimination against Puerto Rico in limiting refined sugar shipments to 126,000 tons which in effect amounts to an embargo on American produced goods. If revised general sugar legislation is to be considered by your committee Porto Rican American Sugar Refinery, Inc., of Ponce, P. R., respectfully requests you eliminate from any proposed legislation any limitation on direct consumption sugar produced in Puerto Rico for mainland consumption. Departments of Agriculture and Interior in past have vigorously opposed such discrimination."

On Wednesday, June 25, 1947, I sent you the following telegram: "Refined sugar industry of Puerto Rico not invited nor did it participate in any domestic area conferences and negotiations on pending sugar bill. No agreement was ever asked or made by Puerto Rican refiners to clause restriction shipments to 126,000 tons. Urgently request your consideration figure of 175,000 short tons instead of 126,000 and feel sure the compromise figure of 175,000 will satisfy the refineries of Puerto Rico and ultimately prevent a court test of this provision of the bill before you."

I want to make it clear that I have no authority to speak for all the refineries of Puerto Rico but I do represent and speak for Porto Rican American Sugar Refinery, Inc., of Ponce, P. R., which is the largest refinery in the island and solely responsible for the 126,033 short tons which has been used as the yardstick for Puerto Rico's continental white sugar quota in previous legislation and the continuation of the same amount as Puerto Rico's continental white sugar quota is proposed in legislation now before you.

I do not feel it necessary to go into detail with regard to this particular phase of the sugar legislation which you are considering. I know from your very attentive consideration of the problem of all the sugar producing areas including the refined sugar problem of Puerto Rico, that you are familiar with the broad ques

83