Senator BRICKER. You use a good bit of that in the manufacture of ice cream?

Mr. HIBBEN. Yes, sir; we do.

Senator BRICKER. That is what I thought from your statement here. Mr. HIBBEN. And if I speak, sir, I would have to speak from a personal standpoint and not from the standpoint of the association.

Senator BRICKER. Well, if it were changed, to, say, 10 percent, as the statement was made yesterday, an increase of 10 percent, or even 25 percent, it would not materially affect the over-all picture, would it?

Mr. HIBBEN. You mean a lessening of the sugar rationing?
Senator BRICKER. Yes.'

Mr. HIBBEN. Of course, we have already been cut down 5 percent, not by that but by the other order, No. 35. That is the one that gives sugar to the war babies, as they call them.

Senator BRICKER. The war plants?

Mr. HIBBEN. The war plants; yes.

Senator BRICKER. And how much were you affected by the new businesses, the 8,000 new businesses started by veterans?

Mr. HIBBEN. I don't think to any great extent.

Senator BRICKER. Not to a considerable extent?

Mr. HIBBEN. No, sir; because they are all small enterprises. Senator BRICKER. What are most of these war plants that you are talking about engaged in at the present time?

Mr. HIBBEN. They are manufacturing in our industry, ice cream. Senator BRICKER. Any other products?

Mr. HIBBEN. Well, no.

As I understand that order, as it applies to the ice-cream industry, if you as an ice-cream manufacturer before Pearl Harbor had two freezers, and then there was a camp down there, and you had to increase to put in five freezers or four, now you have two freezers lying idle. You have made that investment, and therefore you are going to get some sugar to take care of these other two freezers. It is just reward for expansion of your plant during the war.

Senator BRICKER. Of course, you have both groups, do you not, in your association?

Mr. HIBBEN. Yes, sir.

Senator BRICKER. Both those who did and those who did not? Mr. HIBBEN. About 20 percent of the ice-cream manufacturers during the war went for war use.

Senator BRICKER. About 20 percent?

Mr. HIBBEN. Yes, sir.

Senator BRICKER. Was there that much increase in facilities? Mr. HIBBEN. No; I wouldn't say that, because you will find a lot of these chaps put on extra ships and used their same equipment. Senator BRICKER. A lot of the business was just diverted from domestic channels into war channels?

Mr. HIBBEN. In some cases, it was necessary to do that; yes.
Senator FLANDERS. Senator Maybank?

Senator Sparkman?

Senator MCCARTHY. Mr. Linville of the State Department is now here. I understand he testified this morning. I would like to ask him about two questions, if I may.

Senator FLANDERS. Mr. Linville?

STATEMENT OF FRANCIS A. LINVILLE, ASSISTANT CHIEF, INTERNATIONAL RESOURCES DIVISION, STATE DEPARTMENT-Resumed

Mr. LINVILLE. I am sorry I was not here when you asked for me. I did not know I would be called this afternoon.

Senator MCCARTHY. I did not know that either.

We have been getting information, Mr. Linville, to the effect that, according to the Japanese bookkeeping, there is roughly 2,000,000 tons of sugar available in Java at this time.

Apparently, other estimates have placed that figure at about a million and a half tons.

Now, the question I would like to ask of you, if you know, is whether or not the Dutch are presently blockading the Javanese ports.

Mr. LINVILLE. They just issued a decree or something of the sort just very recently requiring that any plantation products that come out of Java or territory held by the Indonesians pass through Dutchheld ports for their clearance.

The idea of course is that plantations had been Dutch-owned, and they were afraid that the Indonesians would be selling products from those plantations, the value of which should go to the Dutch owners, and they wanted to have a check on that.

Now, that is presumably on a very temporary measure. The Dutch and the Indonesians, as you probably know, negotiated and worked out an agreement here fairly recently which was, I suppose, initialed by the negotiators, and which has been approved by the Netherlands Government.

The Netherlands Government feels itself bound by the agreement, I believe, at the present time, and is prepared to sign it.

The Indonesian Government, however, has not yet signed it. They may do so any day, but they have not done so as yet. And it is quite possible that up to that date the Dutch will continue to exercise this control. It puts them in a rather favorable position vis a vis the Indonesians with respect to the handling of exports. But I think you can look on that as only a very temporary measure, unless the difficulties between the Indonesians and the Dutch are not straightened out, in which case nobody can tell when we are going to get anything out of them.

Senator MCCARTHY. One of the members of the committee mentioned that he read an article in the paper-I did not see it myselfan article to the effect that the Dutch had informed all shipping that it would be sunk if it left certain Javanese ports; in fact, I believe practically all of the Javanese ports.

In other words, they were conducting a thorough blockade until the Indonesians had signed the particular agreement in question. Do you know anything about that?

it

Mr. LINVILLE. There is a United States boatload, or was at least until very recently, with a Dutch warship standing by to see to it that goes into a Dutch port, so that its cargo can be examined. Senator MCCARTHY. We have information, or estimates, I believe, to the effect that the prewar sugar production of Java was roughly one and a half million tons per year.

Now, does the State Department have any estimate as to the amount of destruction of sugar refineries during the war?

In other words, how much of that production would be cut down at this time?

Mr. LINVILLE. We probably have some information, there, but it certainly is not in my mind.

We do not have any very good information on that subject, because it has not been possible for people to get into the interior to any very great extent. So the amount of knowledge about the situation there is rather limited.

It is possible that Mr. Marshall has in mind the information that we do have to a greater extent that I do.

Senator MCCARTHY. One more question.

Do you have any estimate as to the amount of sugar presently available in the Dutch East Indies?

Mr. LINVILLE. I believe the last report we had out of there says that they believe that the best estimates there were to the effect that there would by the 1st of June in Java half a million tons of sugar at the mills, the so-called visible sugar, that the Government can probably get its hands on.

Then there is a considerable quantity of sugar, invisible sugar, in the hands of Chinese merchants. That was estimated last fall as being 850,000 tons, but I expect it has also been estimated at a lot of other figures, because no one can guess at all accurately what it is.

They know about how much was there at an earlier time, and they have some idea about how much was being consumed. They know very well probably what is in the mills, and they assume that the rest of it is or was 850,000 tons.

Now, the Indonesians themselves are consuming at a fairly rapid rate; some people say up to 850,000 tons a year.

So that the Indonesians themselves would probably consume all of the visible sugar, plus their production, up to the time when their production really will get under way, a couple years from now.

Senator MCCARTHY. Except that if there is 2,000,000 tons available, undoubtedly much of that would be available for export.

Mr. LINVILLE. I think undoubtedly the 2,000,000 tons is cut down now. It is probably nearer a million and a half, or maybe not quite that.

Senator MCCARTHY. Just one more question. I am not quite sure whether you can answer this: Would the State Department have any idea as to when we can hope for a rather free flow of traffic in and out of the Dutch Indies?

The reason I am concerned with this is that quite a number feel that once we can get the shipments of sugar flowing from Java, that may take up the slack to the point that rationing will be unnecessary. Mr. LINVILLE. Well, I think the flow out of there is going to be very small for next year. The estimate of 200,000 tons that has been given is generous enough, I think, and when you consider the fact that the Indian requirement, import requirement, is to come almost entirely from Java, if they get it; and that the Dutch requirement is to come entirely from Java-that, in itself, will take quite a little over half of that 200,000 tons.

As far as difficulties on movements, I don't think there will be any legal difficulties after the agreement is signed, if it is signed, between the Indonesians and the Dutch Government.

If you have an agreement there already to sign, and it is signed tomorrow, there will not be very much legal difficulty.

On the other hand, there is the fact that supplies are in the hands of merchants, that they will sell when they get ready, that the Indonesian Government, probably, being a new government, with an administrative system in not very good order, will not be able probably to force people to sell. They can handle what is in the mills. They can get control of that.

Senator MCCARTHY. We will send our OPA over there.
No further questions, Mr. Chairman.

Senator FLANDERS. Thank you, sir.

Mr. Smith?

STATEMENT OF HAROLD O. SMITH, JR., REPRESENTATIVE, NATIONAL CONFECTIONERS' ASSOCIATION OF THE UNITED STATES, INC.

Mr. SMITH. Mr. Chairman and members of the committee, I am Harold O. Smith, Jr., manager of the Washington Office of the National Confectioners' Association. I represent the confectioners' industry.

Senator FLANDERS. You have a document here, which is not overlong. We would be glad to have you read it all under those circum

stances.

Mr. SMITH. Thank you sir. I will run over it very quickly, if I may.

I wish to address you in behalf of the more than 8,000 confectionery manufacturers throughout the United States. This industry is the fourth largest in employment among the food-processing industries. This industry buys more than one-quarter of a billion dollars worth of 77 or more varieties of agricultural products each year and is the third largest industrial user of sugar.

Since sugar is our basic ingredient, an increase in our sugar supply will enable this industry to purchase even more agricultural products and provide still greater employment. We are therefore vitally interested in the sugar-supply situation.

In principle, we are opposed to any unnecessary continuation of Government controls. However, we have given careful consideration to the hazards which would result from sudden decontrol in the face of the present short supply with the conclusion that price, export controls, and the present method of rationing must be continued until the sugar supply is sufficient to permit orderly marketing.

We sincerely believe that—

1. Decontrol will not create more sugar for 1947. The IEFC has already fixed the amount available at 6,800,000 tons. The new beet crop will not be available until late in the year.

2. Much less sugar would be available for some months following sudden decontrol at this time. With inventories now depleted, and

rapidly rising prices resulting from decontrol, great quantities of sugar would be held back or brought up by those who had connections and willing to pay the price.

3. Under decontrol at this time, the sugar produced from the currect beet crop would be quickly dissipated and flow into the shortage areas. This would create a great scarcity of sugar in the agricultural areas at the time of the harvest, thus resulting in spoilage of crops.

4. Decontrol or relaxation of the present rationing method, in the face of the very evident short supply, would disrupt the normal flow of sugar for many months to come and bring about such rises in price as to cause great hardship to the housewives, farmers, and the tens of thousands of small businesses dependent upon sugar for their products.

5. Immediate legislative action to extend sugar controls is imperative. Should the pending court actions cause a halt in OPA's ability to issue rationing for the second quarter of the year, tens of thousands of small businesses will be forced to shut down.

We respectfully urge the passage of Senate Joint Resolution 58 as presently amended.

Senator FLANDERS. Mr. Smith, in urging the passage of this resolution, I would take it that you also were favorable to shifting the responsibility for administration to the Department of Agriculture?

Mr. SMITH. Mr. Chairman, we have given very careful consideration to that factor, and we feel that it could probably be most logically administered through the Department of Agriculture.

Senator FLANDERS. Are there any questions?

Senator Bricker?

Senator BRICKER. No questions.
Senator MCCARTHY. I have one.

Mr. Smith, there is a question in my mind: We have been getting a tremendous lot of mail from confectioners, bottling men, soft drinks people, and they all seem to be unanimous against decontrol.

Likewise, we have a tremendous flow of mail from the ordinary farmwife and housewife and they are about 100 percent in favor of decontrol.

I wonder why you have these two groups who differ so thoroughly on this question? Have you given any thought to that?

Mr. SMITH. If you will pardon me, Senator McCarthy, I believe that one answer to that could very readily be that some months ago two or three of the sugar brokers issued various statements pertaining to the sugar situation. I think some of those statements may have brought about certain conclusions on the part of the housewife that she should write in and ask for more sugar. On the other hand, the report that Mr. Ralph Ward referred to, the industry council sugar report, is one in which we have followed very closely the studies contained therein and have gone right along with those studies.

We have kept our people so informed, with the result that we feel the industry people who have had an opportunity to be enlightened on the facts have had a better opportunity to realize fully what decontrol would mean at this time, and the very fact that decontrol would not bring more sugar into the United States.