Senator BRICKER. But that is not the way it is working, is it? Mr. OVERMAN. I think so. It was my interpretation of Mr. Dice's testimony that the amount was relatively small, at least as to what it might be if there were no coupon control.

Senator MCCARTHY. You perhaps were not here, but we read into the record yesterday a letter from the Retail Grocers Association, calling attention to the fact that in a number of cases the black-market coupons amounted to more than their entire allotment of sugar. Mr. OVERMAN. I heard that.

Senator MCCARTHY. For the coming year?

Mr. OVERMAN. Yes, sir.

Senator MCCARTHY. And that that was rather widespread?

Mr. OVERMAN. I would like to leave with you this thought-that as soon as controls can be logically dropped-and we think that means when the supply is in balance with demand-that is what we are looking for.

Senator FLANDERS. You are excused, sir. Thank you.

Mr. OVERMAN. Thank you, sir.

Senator FLANDERS. The last name on my list is Mr. Harold O. Smith, Jr., manager of the Washington office of the National Confectioners Association of the United States.

STATEMENT OF HAROLD 0. SMITH, JR., MANAGER, WASHINGTON OFFICE, NATIONAL CONFECTIONERS ASSOCIATION, WASHINGTON, D. C.-Resumed

Mr. SMITH. Mr. Chairman, members of the committee, I am Harold O. Smith, manager of the Washington office, National Confectioners Association.

Mr. Chairman, if I may suggest, in view of the fact that the time is running out and we have been requested to keep our representation down to a minimum, and I am answering for a number of industries that appeared in rebuttal, I have three subjects that I would like to briefly cover.

One is the supply, the other is the price, and the other, the third, is the new user.

If I may go through these and cover those subjects I would greatly appreciate the opportunity.

To start with, the question was raised as to the present applicability of the analysis of the world-food-sugar situation as prepared by the Food Industry Council sugar committee. Membership of that committee was composed of Mr. Edwin O. Blomquist, chairman, Mr. Talbot O. Freeman, Mr. Ridgeway Kennedy, and Mr. Ralph D. Ward, whom you all heard last Thursday:

I have additional copies of the report, should any members of the committee be interested.

Senator FLANDERS. I believe we have had that.

Mr. SMITH. I think you have; yes, sir.

Senator MCCARTHY. I believe we have all had it. I wonder if you would hand me one, anyway.

Mr. SMITH. Yes, sir [handing to Senator McCarthy].

Senator MCCARTHY. When was this prepared-in November 1946? Mr. SMITH. Yes; that is right.

You have all heard the testimony of Mr. Ward, which is in the record, in which he reaffirms the current applicability of this report. Mr. Bloomquist, chairman of the committee, had just returned from the west coast, and I talked to him in Chicago last night. He asked me to present to you this telegram. If I may have permission, I would like to read it.

Senator FLANDERS. You may do so.

Mr. SMITH (reading):

I feel that conclusions as given in our committee's analysis of situation on sugar and United States supplies and requirements issued in November of 1946 are still applicable to the current situation on sugar. There are no important changes at all that would warrant any changes in those conclusions and recommendations, in my opinion. On page 9 of our report we state

if you will refer there, the various things leading up to the fact— that this would bring the 1947 requirements to 6,800,000 tons for civilian use. We have not taken military requirements into consideration in this analysis, as they are not large enough to be an important factor. I understand the allocation of sugar to the United States for 1947 is 6,800,000 tons for civilian, military, and some export, so there is no indicated increase that would be available above our estimate.

In fact, the figure is approximately 200,000 tons below our estimate. In estimating production of Cuba we used figure of 5,500,000 tons. There is no definite proof as yet that Cuban production will exceed that figure, and there is opinion to the effect that Cuban production may not reach this figure. For example, B. W. Dyer Dyergram

they happen to be one of the very large sugar brokers—

of February 27, under heading "1947 Cuban crop probably smaller than generally calculated," says: "Earlier in the year

Senator MCCARTHY. I missed that last line.

Mr. SMITH. I beg your pardon. May I reread it.

For example, the B. W. Dyer Dyergram of February 27, under heading "1947 Cuban crop probably smaller than generally calculated," and says: "Earlier in the year some optimists calculated the 1947 Cuban sugar crop at 5.9 million short tons raw value. We consistently questioned such a figure. An interesting statement was just made by the OPA and Department of Agriculture reading: 'Any major significant reduction in the important sugar crops for 1947 below those not anticipated could require a reduction in allocations later in the year.' The second quarter allotments apparently are based on a 5.5 million Cuban crop estimate. Secretary of Agriculture Anderson allegedly believes 5.5 may be too low; we believe this estimate may be too high. The Cuban President decrees yearly a minimum sugar crop. Since 1943, reported Cuban production never even reached the minimum. The 1947 crop decree amounts to 5.6 million tons." I point out again that his previous estimates have always fallen short.

Previous years' decrees, and actual production were: 1943 decreed crop minimum, 3,612,000 short tons, raw value; reported Cuban production, 3,240,000 tons; 1944 decreed crop minimum, 4,828,000 tons; reported Cuban production, 4,478,000; 1945 decreed crop minimum, 4,480,000; reported Cuban production, 3,923,000

Senator FLANDERS. I would like to ask if the Cuban President decrees the weather.

Mr. SMITH. It is to point out the uncertainty, since man's best estimates can be in error.

1916 decreed crop minimum, 4,760,000; reported Cuban production, 4,472,000 tons. EDWIN O. BLOMQU ST,

Chairman, Food Industry Council Sugar Committee.

I would like to further request as additional evidence, if possible, and agreeable to the committee, if they could obtain the testimony of December 19, 1946, of Mr. Talbot O. Freeman, also a member of the committee, before the Congressman Jenkins Republican Food Study Committee, in which he reaffirms the necessity for continued control, and at that time the sugar crop was pretty well known so far as we have been able to guess today.

Senator FLANDERS. We will get that testimony.

Mr. SMITH. I might further point out that this report is also borne out to a large extent by the very statements set forth in Congressman Jenkins' report, the Republican Congressional Food Study Committee under December 26, 1946, in which he advocates 10 pounds to the housewife and an increase to 80 percent of base to industrial user, in which, if I may read from that report, he says:

This committee has consistently taken the position that Government controls over food production are unwise, unnecessary, and in many cases actually retard production

and I might say that industry as a whole pretty much agrees with that. We also agree that, further quoting from the report:

Unlike other food commodities, sugar was subject to almost complete Government control for several years before the war started. It is a commodity which is particularly susceptible to monopolistic speculation and profiteering. To throw sugar onto an uncontrolled free market at the present time therefore would almost inevitably result in tremendous competitive bidding for available supply, speculative hoarding of the commodity, and the gambling of huge stocks of available supply by the large consuming corporations. All this would certainly operate to the detriment of the housewife, whose welfare has always been the primary concern of this committee and who is in no position to compete with the speculators and large industrial users for scarce and expensive supplies.

I would like, if I may, to refer to a further statement-
Senator FLANDERS. You are still speaking on the supply.

Mr. SMITH. Yes, sir. A further statement that was brought out in the report by Representative August H. Andresen, subcommittee investigating shortages of food and other agricultural products, subcommittee of the House Agriculture Committee, under date of February 2, in which they estimate that the United States consumer will require approximately 7,200,000 short tons of sugar to take care of the modest minimums recommended by the committee for 1947. I believe, if I may suggest, that such evidence, in view of best estimates that have been able to develop along the lines of supply, would still indicate that our requirements are very short of the need.

I might further bring out that the population increase is sizable since many of the past references as to United States sugar consumption; also that our purchasing power is up to about 165 billion which means that more people in the classes who could buy a little sugar in the past are now demanding their fair share of the sugar. So far as the housewife on the farm goes, I do think there is no question, I know

in my own family, and the same thing seems to be true of most people I have talked to, that we, in the city, have more sugar than we need, 25 pounds is even plenty for us, and too much.

If there were some way that the additional 10 percent could be apportioned out to the person who is going to do the home canning, possibly that would give a fairer distribution.

Senator MCCARTHY. Who do you represent?

Mr. SMITH. The National Confectioners Association.
Senator MCCARTHY. I did not get your name.

Mr. SMITH. Harold O. Smith, Jr.

Senator SPARKMAN. You said 10 percent. You meant 10 pounds? Mr. SMITH. I beg your pardon. I meant 10 pounds additional. Senator MCCARTHY. If you were to take the sugar away from the housewife in the city, of course she would be in a position to make less of her cakes and that sort of thing and the people you represent would sell more across the counter?

Mr. SMITH. Well, I think this: Though I represent the confectionery industry, I know that I enjoy home-made candy, and by the time you get all the ingredients in there, I can buy it for less than we can make it. Senator MCCARTHY. The sale of candy has increased tremendously under rationing, has it not?

Mr. SMITH. No. I beg your pardon. That is not true. The sale of candy did increase tremendously under Government purchases during the war period. The Government did purchase tremendous quantities of sugar from which our industry was given what is known as an ex-quota, and that had nothing to do with the normal percentages. Senator MCCARTHY. In the event we took the sugar away from the housewife in the city. She could bake less of her own cakes and make less of her own candy and you would sell more.

Mr. SMITH. Pardon me, Senator, I was not advocating taking away. I said there was one place where there might be some inequitable distribution. How that would be corrected, with no more local rationing boards, I do not know. I was just following the question you previously asked and offered that as a suggestion.

Now, may I suggest further on the question of price: Price came up, and I do not quite understand why, but since one witness decided to step out of his particular industry into another industry, I took the liberty of going to that industry to secure a few facts. I would like to present for the record here and, if I may have permission to read, I will not go into all the statistical figures as a timesaver—a letter from the National Preservers Asociation, addressed to me personally under date of March 3—yesterday [reading]:

In response to your request for information regarding increases in prices of preserves and jellies that have occurred since 1941, I telephoned a large and representative manufacturer of preserves who supplied me with his prices for the two periods mentioned. They are as follows

He gives comparisons, 1941 to 1947, the amount of increase, and the percent.

From the above and the increases in dollars and percentage increases I have shown, it would appear that the average increase in prices during the period mentioned is 92.3 percent.

Senator MCCARTHY. 92.3 percent?

Mr. SMITH. Yes, sir. I am submitting this for the record.

This is consistent with my general knowledge with what has taken place in the preserve industry.

It may be of interest for you to know that the primary cause for the increases shown is due to the very large increased cost of fruits, and particularly berry fruits. For example, the 1941 price for strawberries was approximately 12 to 14 cents, whereas the 1946 price was from 32 to 38 cents.

So I believe really the farmer may have benefited a little bit by those and not the others.

Senator MCCARTHY. Would you have an opinion as to whether or not the increase in price might have been caused by the tremendous amount of fruits and berries that went to waste because, as you undoubtedly know, the average farmer does not sell the fruits or the 3 or 4 or 5 apples trees or plum trees he has got or off the 2 or 3 or 10 rows of strawberries.

Do you have an opinion therefore as to whether or not this increase in the price of fruits and berries was caused by the tremendous wastage on the farm because the farm woman cannot afford to can her fruits and berries and has to buy them over the counter at this 92 or 93 percent increase?

Mr. SMITH. That I could not say. I would certainly say, having spent 20 years in industry, that transportation, labor, handling, and things like that, to get it to the market, were probably some of the factors that contributed to that cost. I fully appreciate that the farmer does not always reap the full benefit or even a fair propor tion of the benefit. However, I would like to suggest this: That the question came up as primarily that of how much the industry user was benefiting.

I merely meant to point out that the industrial user's costs had risen to a degree that he was not apparently getting any amount of profit that indicated that he was gouging the housewife, by any means.

Now, in addition, as the supply of sugar increases

Senator MCCARTHY. There has been no intimation that anybody has been gouging the housewife, except insofar as she has been gouged if I may use the term, by getting a completely inadequate supply of sugar as compared to the industrial user.

If you call that gouging then I, personally, feel she is being gouged. Mr. SMITH. I was thinking primarily of the price she was being asked to pay, to indicate that the price as far as the processor went, had not risen exorbitantly because of the fact that he had a sugar shortage situation that created a shortage and permitted him to take advantage of a price market situation if he so desired.

Senator MCCARTHY. You would not consider a nearly 100 percent price increase very high?

Mr. SMITH. Well, in view of the fact that you have about a 300 percent increase in the price of his raw fruits and vegetables, and so forth.

Senator MCCARTHY. The average cost of food has not increased that much.

Mr. SMITH. That I could not say.