terms and conditions as it may prescribe," subject to the limitations and conditions provided for in the act of 1902.

All moneys realized from the issue and sale of the bonds authorized by the sections of the act recited herein must be applied to the acquisition of the property and to no other purpose. The moneys received from the sales and disposition of the lands constitute a trust fund for the payment of the principal and interest of the bonds and also a sinking fund for the payment of the bonds at maturity. There are conditions prescribed in the act of Congress and carried into the Philippine Commission act. The intention of Congress was to abolish a system of ownership disadvantageous to the Government; and, at the same time, to provide for the sale of the acquired property, so that the bonds issued for the purchase might not become a permanent burden.

I am of opinion that the limitations in section 15 do not apply to the estates purchased from religious orders under sections 63, 64, and 65 of the Philippine act.

Very respectfully,

The SECRETARY OF WAR.

GEORGE W. WICKERSHAM.

Mr. WICKERSHAM. There were two opinions, either printed as appendices or as a part of the report.

The CHAIRMAN. În each of these reports there was a recommendation that some provision be made by law to restrict the sale of these lands?

Mr. WICKERSHAM. I think so. Of course, that dealt with future . legislation.

The CHAIRMAN. I noticed somewhere, probably in this report of that committee, a letter of Mr. Hammond, who had originally been connected with the negotiations, at a certain period severed his connection on the ground that there might be involved some discretion upon the part of somebody connected with the Government in respect to the sale. As I understand, of course, you think there was no discretion involved in your department in rendering an opinion upon a legal phase of the question?

Mr. WICKERSHAM. I had simply a question of statutory interpretation put to me that involved the exercise of my best legal judgment, but not any individual discretion.

The CHAIRMAN. Of course in preparing the opinion you consulted all the sections of the Philippine act dealing with the question of the disposition of the Philippine lands?

Mr. WICKERSHAM. Oh, certainly. The whole question involved was whether the friar lands were subject to the same limitation with respect to their distribution as was imposed with respect to the public domain, and it called for a construction of the sections dealing with the friar lands in view of that consideration.

The CHAIRMAN. You knew at that time that there was a conflict of opinion as to whether or not the friar lands were controlled by sections 13, 14, and 15?

Mr. WICKERSHAM. No. I know of no conflict of opinion. On the contrary, I think up to that time, so far as I knew, there was no conflict of opinion. The opinion which I expressed was in conformity with the views of the Philippine authorities, as I understand it, and the position which had been taken by the previous Secretaries of War, and the Philippine Commission had legislated in accordance with those views. The first time I heard of their being any difference of opinion was sometime subse;ent to rendering my opinion, when an opinion written by Mr. Moorefield Story was read on the floor of the House by, I think, Mr. McCall. That is the first time I knew that there was really a difference of opinion. That is in the Congressional Record. You will find it in the report.

The CHAIRMAN. You would interpret sections 13, 14, 15, and 16 of the Philippine act as throwing restrictions around the amount of land that might be sold, public land in the Philippines that might be sold, to individuals?

Mr. WICKERSHAM. Yes, sir. The sale of the public domain was, of course, restricted. My opinion is that the same restrictions were not intended to be imposed on the friar lands. They were acquired under totally different circumstances and concerning which, I can see from the statute, a very different view was entertained.

The CHAIRMAN. You understand from sections 13, 14, 15, and 16 that the purpose was to prevent the exploitation of the Philippine Islands by Americans and by foreigners?

Mr. WICKERSHAM. I suppose with respect to the public domain it was intended to apply a policy similar to that which Congress has enacted regarding the public domain of our continent, that it was not to be owned in large parcels and by large interests, but to be opened to settlement in small amounts and to stimulate industry and production on the part of a large population.

The CHAIRMAN. Considered as public policy, was there any reason why a different policy should be pursued as to the friar lands from that pursued with reference to the public domain?

Mr. WICKERSHAM. I think Congress thought so. Of course, I can not speak for a policy, but there were other considerations. They were all discussed very elaborately before the committee, and, of course, my view as to that policy is only that of an individual.

The CHAIRMAN. In one case I think the land was called the public domain?

Mr. WICKERSHAM. Yes, sir.

The CHAIRMAN. And in the other case public property. Do you draw a distinction between those two terms?

Mr. WICKERSHAM. I would hardly want to justify my opinion by simply a comparison of those two phrases. I think the friar lands were intended to be disposed of without the restrictions which were imposed on the public domain. They were acquired for the purpose of getting rid of a class of tenantry that had become objectionable under the conditions there. The Philippine Government had undertaken a large obligation to acquire them and was desirous of getting back its money, and in that effort I did not understand that Congress had imposed upon it any limitations concerning the amount sold. One consideration, in passing, may be mentioned and that was the option given to the existing occupants to acquire the land they occupied without the slightest limitation as to amount. So, if there was a tenant with 5,000 acres he had the first opportunity to purchase it and there was no limitation upon it.

The CHAIRMAN. I believe the final result was that these three gentlemen had a Mr. Poole purchase about 60,000 acres of the friar lands?

Mr. WICKERSHAM. My only knowledge on the subject is what I have derived from the reports, and I think it is about 55,000 acres which they acquired.

The CHAIRMAN. Do you know the owners of that property now? Mr. WICKERSHAM. I have not the remotest idea, except I remember reading in the report of an improvement company-the Mindoro Improvement Co.

The CHAIRMAN. These three gentlemen were in one way or another connected with the American Sugar Refining Co. ?

Mr. WICKERSHAM. I assume so.

The CHAIRMAN. Mr. Horace Havemeyer was the son of the former president?

Mr. WICKERSHAM. That is my information.

The CHAIRMAN. Mr. Welch has been connected with it, within your knowledge?

Mr. WICKERSHAM. Connected with the improvement company ? The CHAIRMAN. The American Sugar Refining Co. ?

Mr. WICKERSHAM. I think he was one of the directors; that is my recollection.

The CHAIRMAN. Have you any knowledge of the price that was paid for the San Jose estate?

Mr. WICKERSHAM. No; I have no knowledge except what is in the report. I read the report, but I do not recall now what the figure

was.

The CHAIRMAN. I notice on page 4 of your 1910 report the statement that

In April, 1910, charges were laid before the Department to the effect that certain individuals had formed a combination and conspiracy to monopolize raw cotton and withhold it from the market for speculative purposes, with the object of greatly increasing its price.

Would you consider it proper to advise the committee as to who supplied this information?

Mr. WICKERSHAM. I would prefer to be excused from that. That prosecution is still pending, and there is an appeal to the Supreme Court pending by the Government from a decree sustaining the demurrer to certain counts of the indictment, which will be heard, I hope, in the early fall, and then the remainder of the case is still pending, undetermined, and I prefer to be excused from mentioning anybody connected with it.

The CHAIRMAN. Would you object to saying whether any Senator or Member of the House made any complaint to you?

Mr. WICKERSHAM. I would not object to saying that no Senator or Member of the House did; not to me personally.

The CHAIRMAN. Did you get your information from any spinner of cotton or manufacturer?

Mr. WICKERSHAM. I can not tell you; I am not sure. I do not know personally whether it came originally from such an one; I can not tell you.

The CHAIRMAN. Did your department get the information from any member of the New York Cotton Exchange or any attorney?

Mr. WICKERSHAM. If you will pardon me, I really think I can not tell you, because I think it is not consistent with public interests to give any information as to where that information came from at present. The prosecution is pending and it has been the subject of a great deal of discussion, some vituperation, and much abuse, both in Congress and out. I consider that the prosecution is abundantly justified by the decision of United States Judge Noyes on the demurrer, although he held-that is the point to go to the Supreme Court that the Sherman law could not reach a corner which he declared to be immoral and wrong, but, he says, "not within the Federal law." I hope to satisfy the Supreme Court to the contrary, and then we will have to try out that case.

The CHAIRMAN. Your effort was to show that it was an unreasonable restraint of trade?

Mr. WICKERSHAM. It was.

The CHAIRMAN. I desire to ask you a number of questions similar to the ones you have already declined to answer on the ground that these prosecutions are still pending. I hope you will not consider it done in any spirit of disrespect.

Mr. WICKERSHAM. Not at all. I want to answer all your questions, but respecting pending litigation I must be cautious.

The CHAIRMAN. Do you know of Craig & Jenks, in New York? Mr. WICKERSHAM. Not that I am aware of.

The CHAIRMAN. Would you care to say whether any of the information came from them or from McFadden Bros. ?

Mr. WICKERSHAM. I would rather not make any statement as to where it came from. I do not want to be understood in making that statement that it came from any of these gentlemen who have been mentioned, and I want the same reservation to apply to all of them. My point is that I consider that it is inconsistent with the public interests at this time to state where any of this information which resulted in this indictment came from.

The CHAIRMAN. The committee appreciates your position. I will ask you if you feel free to state whether it came from any of the firms doing business on the New York Cotton Exchange that are usually denominated "bears" on the market?

Mr. WICKERSHAM. I must confess that I really do not know what firms are usually denominated "bears" on the New York Cotton Exchange, and therefore I can not answer that question. I suppose nobody has less knowledge of the Cotton Exchange than I have. The CHAIRMAN. Did it come from Mr. Henry W. Taft?

Mr. WICKERSHAM. It did not.

The CHAIRMAN. From anybody connected with the firm of Strong & Cadwalader?

Mr. WICKERSHAM. It did not.

The CHAIRMAN. Or from any of their known clients?

Mr. WICKERSHAM. It did not.

The CHAIRMAN. I think there were two indictments returned in the cotton case?

Mr. WICKERSHAM. There were. As a matter of fact, there was some technical defect in the first one.

The CHAIRMAN. The first one was found about May or June, 1910, and, I think, the last one about July, 1910?

Mr. WICKERSHAM. About a month apart, I think.

The CHAIRMAN. When was the fact made public that this last indictment was obtained?

Mr. WICKERSHAM. I can not tell you, Mr. Beall.

The CHAIRMAN. You know whether several months intervened between the time of indictment by the grand jury and the time it was made public?

Mr. WICKERSHAM. I do not know; I can not tell.

The CHAIRMAN. Do you know any reason why the fact was kept in reserve?

Mr. WICKERSHAM. If it was, there must have been a good reason, but I can not tell you at this moment what the reason was.

The CHAIRMAN. Do you know who drew the first indictment and who the second indictment?

Mr. WICKERSHAM. No; I can not say absolutely. There were three or four lawyers of the department at work on them.

The CHAIRMAN. Were those indictments submitted to you before they were made public?

Mr. WICKERSHAM. The fact of the finding of the indictment. Whether the indictment itself was, I am not sure. I think probably not. I do not consider myself an expert on drafting indictments, and I think probably they were not.

The CHAIRMAN. Do you know what effect on the cotton market the obtaining of those indictments had?

Mr. WICKERSHAM. No, sir; I do not. I regard the indictment as involving a very important feature of the antitrust law and I think it is very desirable that that question should be settled by the Supreme Court, because I think possibly a good deal of the high cost of certain articles of common use has resulted from monopolies in commodities of the character involved in these indictments.

The CHAIRMAN. If it is a fact, I suppose it is a mere coincidence that these indictments were made public at a time when there was a bear raid in progress?

Mr. WICKERSHAM. Well, I really do not know, Mr. Beall.

The CHAIRMAN. This contract upon which Brown, Hayne, and others were indicted was a contract made between them and certain spinners, I believe. Why were not the spinners, as parties to the contract, also indicted?

Mr. WICKERSHAM. As ultimately I hope to be able to try this case, I do not think it would tend to help the Government's case to discuss why certain people were indicted and others were not, and so, if you will pardon me, I will not discuss that.

The CHAIRMAN. Was there any investigation made by your department looking to the indictment of the second parties to this contract? Mr. WICKERSHAM. I do not care to discuss that, either.

The CHAIRMAN. I come from a cotton country, and our people down there are anxious to know why all the machinery of the Government is invoked to prosecute men who are engaged in an attempt to boost the price of cotton, if I may use that term, and no indictment is returned against those interested in depressing the price of it?

Mr. WICKERSHAM. I have heard a similar complaint against almost every indictment procured at the instance of the Department of Justice under the Sherman law. Somebody always wants to know why those particular defendants are indicted and somebody else is not. Now, of course, the Government officials in the Department of Justice have got to exercise the discretion which is vested in them by law and do the best we can, and we try to. As between indicting men who are easily located, easily made defendants, and whose participation in a matter is easily established, and indicting a number of people whose participation may not be so direct and who would be more scattered and more difficult to get at, I think you can readily see that in determining a somewhat novel application of the law a prosecuting officer would naturally take the more readily ascertainable and tangible defendants.

The CHAIRMAN. Is it not a fact that in this particular case the very basis of the indictment against Brown, Hayne, and others was an agreement they had made in writing, signed by them and signed by about 60 of the spinners?