Mr. MUSHER. If you want me to limit myself to Europe, only, I would have to exclude some Asiatic countries, like China. China, to-day, from an exchange standpoint, is also in a bad condition. Senator MCCUMBER. They are always in bad condition, are they not, from the exchange standpoint, at least for a good many years? Mr. MUSHER. No, sir; the Chinese money was very much appreciated during the war, and to-day it is very much depreciated. So that China is in bad shape to-day just as the other countries of the world are. China's staple dollar ran up during the war to $1.75, and now it is down to $0.75.

Senator MCCUMBER. Assuming that China would be affected by this peanut-oil situation, what is it that affects you?

Mr. MUSHER. China peanut oil imports during the 11 months were $16,960,708.

Senator MCCUMBER. All right.

Mr. MUSHER. Cotton seed, $1,302,712 altogether. Coconut oil, $31,336,565, mostly from British possessions, so that it is really British products.

Senator MCCUMBER. Of course, the British provinces are not starving for our goods particularly.

Mr. MUSHER. They are not starving, except to the extent that Great Britian must finance the exports from the United States. She is stopped from financing to that extent the products from their own countries to those European countries who are in need of both our own and the European products.

Senator MCCUMBER. What we are trying to get is, you know, to what extent this bill is going to injure the importing trade from these particular countries in Europe that are suffering.

Mr. MUSHER. I must say, Senator, that I would have to familiarize myself with the items involved in the emergency tariff. I only came here prepared to talk about oils, and only to the extent of oils can I answer questions.

Senator MCCUMBER. Turn over one page of the bill and you have a list of them.

Mr. MUSHER. You have wheat.

Senator McCUMBER. Our wheat comes from Canada?

Mr. MUSHER. Yes, sir.

Senator. McCUMBER. The Canadians are not starving.

Mr. MUSHER. In such things Canada has about 15 per cent against her, and that is not a very good thing to have against a neighborly country who is well able to pay her bills in the future, but yet can not pay in the terms of American bank balances.

Senator MCCUMBER. When we are buying their wheat and when we are doing that and underselling American farmers on the exchange we feel it.

Mr. MUSHER. When the Russian situation opens up, if it ever does, you are going to be able to buy large quantities of hard macaroni wheat from the Russian provinces. Corn, I think, would be another Canadian proposition?

Senator MCCUMBER. No; very little of that from Canada. It is a South American proposition.

Mr. MUSHER. Next is beans-I am really not familiar enough with this to tell you.

Senator MCCUMBER. That is mostly Mexico and Japan.

Mr. MUSHER. I know a lot of beans come from Italy, too. Peanuts and peanut oil are very important to Europe, particularly to France. France controls Tunis and Algeria and all through that section where they have abundant peanuts and peanut oil, and they depend almost entirely upon peanuts to give them a livelihood.

Senator MCCUMBER. I know, but they do not sell in the United States to any extent.

Mr. MUSHER. We should be getting a great deal more peanut oil, and we have been getting some peanuts from France. They do not come over so well, because they come shelled; they ought to be left in the shell.

Senator MCCUMBER. The amount of importations from France in peanuts would be a mere bagatelle.

Mr. MUSHER. Yes, sir; and would be even from Japan. We can not buy things from Japan unless we buy a lot of other things.

You have potatoes. A lot of German potatoes have come over in the past-little potatoes for making salad.

Senator McCUMBER. I do not think any are coming over, because they would not be in such great need of them there and at the same time be sending potatoes over here.

Mr. MUSHER. Spanish onions do come in. The exchange is against them to-day. It has reversed itself in the last year and a half or two years from 12 cents to 30 cents per peseta.

Rice is from Japan mostly, and some Spanish rice and some Italian rice coming for the Italian Nationale.

Lemons run into the Italian situation very much.

Oils, such as peanut oil, cottonseed oil, coconut and soy-bean oilyou are running into oils that come from countries that are mostly financed over the London counter. That is a very important thing, because when we bring over goods from China that are banked over the London counters it is helping Europe just as much as China.

I am not familiar enough with these questions to talk to you about them. But on the general principle that an emergency measure is not going to do us enough good to make it valuable, because our merchants and our importers and our consumers can not adjust themselves in a quick time to an emergency measure of any kind. If we are going to have a permanent tariff we ought to wait until that permanent tariff comes along, until after we have had an opportunity to study everything carefully and take everything into consideration from a practical standpoint in every direction, so that we will not have to keep on readjusting ourselves to new conditions in the future. Senator McCUMBER. We are having to readjust ourselves now on a continuing falling market, so I do not see that we would injure the situation by doing something to stabilize the market, at least to give to the world some legislation that would indicate that there is really a bottom to the whole.

Mr. MUSHER. Except this kind of stabilization, Senator, if I may say so, is not going to prove successful. Our problem is to be able to sell more goods to Europe and keep our merchants and factories and our people employed. We can not keep them employed until we find some ways and means for providing for our foreign securities or goods. Unless we do buy foreign securities-and those bonds are the

first mortgage on the lands and tax powers-but until such time as we apply the Joseph and Pharaoh theory to feed them and give them raw material and then take one-fifth back for our services, I do not believe we can get anywhere.

Senator MCCUMBER. We are not minimizing the importance of export trade. I do not think we ought to minimize the importance of getting our own people, who are consumers of 95 per cent of our products, in a condition where they can buy.

Mr. MUSHER. Ninety-five per cent of our people who are consumers-if you are going to speak for consumers and on that principle, then a tariff of any character would not be justified, because the consumers who have to pay that tariff are always the majority as against those who receive the benefit from that tariff.

Senator MCCUMBER, And it may be that the tariff gives them an opportunity to earn something to buy with; that is the importance of the tariff, and that is the only importance. If our farmers are put down to a condition where the cost of raising wheat is twice what they can get for it by reason of importations from Canada you have destroyed their ability to purchase. We want to put them in a position in which they can purchase from the American manufacturers, and that will do a whole lot toward solving the present situation, which situation is that we are none of us buying at the present time. When you get right back to it you have got to start the buying ability right upon the farm, and the farmer has got to have something that he can sell for more than it cost him to produce in order that he can have a little balance with which to buy. is all that is intended in this bill.

That

Mr. MUSHER. That is very, very true, Senator, and to that extent you can not help but say that the tariff would be a good thing, except that you also must take into consideration the relative good as to relative value. I am in favor of protecting every commodity produced in the United States, only at the present moment, when Europe is starving and naked-they have no clothing, and they have no food; cold, and they have no shoes. And yet we have stopped our machinery because we say, "We can not give you anything; we can not sell you anything because you can not give us gold and because we have not worked out some bargain exchange to the extent of what they can pay; we are in very bad shape.

Senator MCCUMBER. We all agree with you that we want to help that situation, but in addition to that we want to help the American farmer to buy the products of the manufacturer.

Mr. MUSHER. Yes, sir; we do; that is very true.

Senator McCUMBER. Let us do both at the same time; that is all we are asking.

Mr. MUSHER. Then, is it best to do it through an emergency measure of this kind or something permanent?

Senator MCCUMBER. That is a matter for argument, and I do not want to take up your time with argument.

Mr. MUSHER. Thank you very much, Senator. That is very true. (Thereupon, at 5.15 o'clock p. m., the committee adjourned, to meet at 10.30 o'clock a. m. to-morrow, Saturday, January 8, 1921.)

SATURDAY, JANUARY 8, 1921.

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

The committee met pursuant to call of the chairman in room 310, Senate Office Building, at 10.30 o'clock a. m., Senator Porter J. McCumber presiding.

Present: Senators Penrose, Smoot, Curtis, McLean, Calder, Simmons, Thomas, Jones, Gerry, and Nugent.

Senator MCCUMBER. The committee will be glad to hear Mr. Loos, if he is present.

STATEMENT OF MR. K. D. LOOS, CALIFORNIA CITRUS LEAGUE, CHICAGO, ILL.

Senator MCCUMBER. Please give your name, address, and whom you represent.

Mr. Loos. My name is K. D. Loos, of Chicago, Ill. I represent the California Citrus League, which is composed of a large number of lemon growers in the State of California. I desire to make a brief statement to the committee with respect to the duties on lemons.

Senator SMOOT. Do you want an increase over what the House put in?

Mr. Loos. We are asking that the duty provided be increased from 14 cents a pound, which the bill now provides, to 2 cents a pound. Senator MCCUMBER. All right. We will hear you, Mr. Loos. Mr. Loos. American lemons are grown principally in the State of California, and the lemons are shipped from California to the eastern markets in standard boxes, the boxes being of uniform size and usually containing 300 or 360 lemons, depending on the size. Therefore, in my statement I will talk about the lemon box, which is comparable also to the lemon box in which Italian lemons are imported. It costs the California lemon grower $3.50 a box to grow, pick, and pack the lemons and place them on board railroad freight care To transport the lemons from California to the eastern markets-any markets east of the Rocky Mountains, all of that territory being covered by the so-called blanket rate-$1.50 a box. This cost is made up of the railroad freight cost of $1.67 100 pounds and refrigeration demurrage, reconsignment and other charges.

Senator THOMAS. What is your Rocky Mountain blanket rate?