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In the use of the statements made by persons interviewed, particular care was taken that opinions for and against each phase of the subject should be fairly presented. In many cases, as will appear from the report, verbatim statements have been used. In other cases, for the sake of brevity and clearness, the gist of statements is presented in compact form. Anyone who reads the report has in substance all of the evidence bearing on the problem, and is thus able to trace, step by step, the considerations upon which the conclusions of the bureau are based.

Thus the entire report is based very largely upon statistical evidence of unquestioned validity, carefully secured, digested, and interpreted by men of high ability, giving a great amount of time to this single work. All the conclusions arrived at were tested by interviews with men of practical knowledge in the business, which confirmed, from the practical side, conclusions which were in essence in the nature of mathematical demonstrations. Very little is contained in the report of mere opinion and nothing of bare assertion.

Mr. MARSH. May I ask another question? One or two members of the committee suggested to us that we should file with the committee a brief covering the representations of the New York Cotton Exchange in this matter. I do not think that you as chairman spoke on that point. May I ask you whether it will be in order for us to await the printing of the full record and then to prepare and submit to this committee a brief ? (See appendix following p. 678.)

The CHAIRMAN. If you will permit me, I will let the answer to that question rest until I can submit it to the committee; but I will take the matter up and consider whether it would be necessary. I shall advise you later as to that.

It has just been brought to my attention that Mr. Sumners, of Texas, is here. Of course, I knew that he was in the room, but the suggestion is now made that he might desire to make a statement.

Mr. Sumners was before the committee last year and discussed this question very fully and intelligently, but if he desires now to make a brief statement, or if he desires to file a written brief, we will be glad to consider it.

Mr. SUMNERS. Mr. Chairman, I hardly know just what to do about it. I think there are some very important matters in connection with this subject that, so far as I can see from the record, have not been brought out. I realize that this committee has been here very faithfully through all these hearings, and I simply tender myself to the committee. There are some points here that I think are vital, and which have not been brought out so far as I can read the record.

The CHAIRMAN. May I inquire how long you expect to be in town?

Mr. SUMNERS. I shall be here to-morrow. I regard this as one of the most important legislative matters that has ever come before Congress, in so far as it affects the whole industrial interests of the South.

The CHAIRMAN. The committee will take it under consideration. We can not remain any longer to-night.

Mr. SUMNERS. Yes; I understand you can not. (At 5 o'clock p. m. the committee adjourned.)



Washington, D. C., March 4, 1910. The subcommittee met at 11 o'clock a. m., Hon. Charles F. Scott in the chair.

(Subcommittee composed of Messrs. Scott, Hawley, Plumley, Lever, and Beall.)

The CHAIRMAN. The measures under discussion having been by the full committee referred to the subcommittee, a meeting is held at this date for the purpose of continuing the hearings. Representative Hardwick, of Georgia, is present, and the committee will be very glad to hear any observations he may have to make on the subject.



Mr. HARDWICK. Mr. Chairman, I hope to be able to commend myself to the favorable consideration of the committee by promising to be very brief.

For some years, living in the very heart of the cotton belt of the South, I have been considering this question and studying it as a man who understands the cotton business as a practical business, and as a man who has had some experience as a lawyer. I have considered both phases of the question, and I wish to submit some observations on both phases of it.

In the first place, it has struck me for years, even before I came to Congress, that it was an extreme hardship for a great people to be the football of gambling and speculating interests to the extent that the cotton-producing people of the South are and have been for a number of years. Of course, when a people produce anything they are subject to all the natural and ordinary vicissitudes and changes and fluctuations and chances that come from the laws of trade, the natural laws of supply and demand; and whether what they plant will be worth more or less than it costs to make it, or whether the margin or profit be small or great of course can not be removed from the operation of this natural chance, which is controlled and governed by the law of supply and demand; but it seems to me it is an extremely hard thing for many millions of people, producing a great part of the wealth of the country, to have this natural chance that they must undergo so greatly enhanced by artificial causes, such as you have heard outlined to your committee and which I will not go over again with you.

But I want to say this, Mr. Chairman: There is another view of this matter that appealed to me very forcibly from the beginning, and it is a view that has been presented to me by hundreds of small cotton buyers in the different sections of the State in which I live, not only in my district, but in every district in Georgia. There are a number of those men who claim that they can not command the capital to buy the farmers' cotton unless they can sell against what they buy day by day on the boards in New York, and for some years I have struggled in my own mind with that difficulty in an endeavor to frame a bill that will draw the line properly, so as to abolish the gambling transaction, pure and simple, and at the same time leave to the man who wants to buy the farmers' cotton an opportunity to do legitimate hedging, if there is such a thing as legitimate hedging, against his daily purchases from the producers themselves in the open markets of the country.

At first I was fearful that the bill offered by the chairman and the bill on the same line offered by my friend from Texas (Mr. Burleson) did not draw that line properly; that it drew it too stringently against the man who wanted to buy the farmers' cotton and who, therefore, was obliged to hedge, if he was a man of small means, against his purchases; but I am glad to say that after careful consideration of these bills I have come to the conclusion that is not true; that under these bills every legitimate hedge is possible that ought to be allowed, and I am glad to say that this opinion is entertained by numbers of small cotton buyers throughout my district and throughout other parts of Georgia, who say that every legitimate transaction that is permissible and that ought to be fairly permitted can still be had under this bill, because if a man goes out and buys cotton from day to day, as these men do, he can come within the terms of this bill and he can sell futures, make a future-delivery contract, with an actual intention to deliver, because he has the cotton against the “future" sale that he has made. I think the bill is fully safeguarded on that point, and I am willing to commit myself unreservedly to its provisions.

There is one other thing I want to call your attention to before I make some observations on the legal questions involved in this legislation.

In connection with two or three years' study of this proposed legislation I have investigated very closely, of course, as doubtless you gentlemen all have, the Louisiana lottery legislation. I found that at first when the Louisiana lottery was first legislated against the legislation was imperfect and incomplete, in that it did not protect people in the United States against the distribution of lottery tickets if they came from a foreign country. The result was that after the Louisiana lottery went out of business under the legislation directed against it by Congress it was first transformed, I believe, into the Honduras National Lottery, and then, possibly, into the Mexican National Lottery. There were two or three of these Central American or South American countries that started successors to the Louisiana lottery, so that Congress, in 1895, some years after the legislation was passed, had to amend the Louisiana lottery legislation so as to include in it language broad enough to cover the lottery business when it came from foreign countries as well as our own, and that was done, if you will permit me,I will put it briefly in the record-in exactly these words, because I have copied it from the Revised Statutes: Be it enacted, etc.

I will not read it in fullThat any person who shall cause to be brought to the United States from abroad for the purpose of disposing of the same, or deposited in or carried by the mails of the United States, or carried from one State to another in the United States, any lottery ticket, etc.

That was the language used in prohibiting the foreign transactions.

Again, another section: Or shall cause any advertisement of such lottery, etc., to be brought into the United States or deposited in or carried by the mails of the United States, or transferred from one State to another in the United States, shall be punishable, etc., by imprisonment.

That was the way they finally got at it in the lottery legislation. The bills presented by the chairman of this committee, and by the gentleman from Texas, both sought to prohibit gambling transactions if they were going from one State to another or to a Territory, or to the District of Columbia, or from or to a foreign country; but in providing the machinery for enforcing the law there was no reference made to anything except telephone and telegraph companies, and to the mails; and I have suggested to the chairman and to the gentleman from Texas, and I want now to submit to the consideration of the subcommittee, the following amendments to the bill. I have not undertaken to draw a bill of my own, although I have studied this question for years, because I want to say—and I say it in great compliment to the two gentlemen to whom I have referred—that I believe the bill they have drawn is the best that can be presented on this question. I say that after years of effort, because I was not able to get anything, until I saw your bill, that exactly suited me.

On page 1 of the bill, line 12, after the word “line," where it says “telegraph or telephone line"

Mr. LEVER. That is, the Scott bill ?

Mr. HARDWICK. The Scott bill-I would insert “or cable, or wireless telegraphy system, or otherwise."

The bill reads: That it shall be unlawful for any person or association to send or cause to be sent from one State or Territory of the United States or the District of Columbia to any other State or Territory of the United States or the District of Columbia, or to any foreign country, or knowingly to receive or knowingly to cause to be received in any State or Territory of the United States or the District of Columbia from any other State or Territory of the United States or the District of Columbia or from any foreign country, by a telegraph or telephone line.

I would insert at that point the words “or cable, or wireless telegraphy system, or otherwise,'' so as to exclude these gambling transactions, not only from interstate but from international commerce.

Now, without following the bill, except to say that the same idea is repeated in each one of these amendments, and is sought to be carried out through the entire body of the bill, I propose the following amendments:

Page 2, line 19, after the word “line,” insert “or cable, or wireless telegraphy system, or otherwise."

Page 4, line 2, after the word “line,” insert “or cable, or wireless telegraphy system, or otherwise.”

Page 4, line 15, after the word "telephone,” insert “or cable or wireless telegraphy.”

Page 4, line 22, after the word “line,” insert “or cable, or wireless telegraphy system.”

Page 5, line 15, after the word “telephone,” insert “or cable or wireless telegraphy.”'

Page 5, line 21, after the word “line,” insert “or cable, or wireless telegraphy system.”

So that, Mr. Chairman, the effect of it would be to put everywhere in this bill where these words “telegraph or telephone line” occur the words cable or wireless telegraphy system,” so that when you remember that you have in the bill already the prohibition against this sort of transactions coming from or going to a foreign country, you have the appliances by which they would be sent to or received from a foreign country included as well.

Those are the amendments I propose. They are technical only, but at the same time I think they are not without some importance, because I fear that without those amendments and without full and adequate machinery being provided on this point, the effect of this legislation might be to transfer the larger transactions of the character we are seeking to prohibit and abolish to Liverpool, Bremen, Havre, or some other foreign exchange, just as was done in the case of the Louisiana lottery; and these amendments are respectfully offered to your subcommittee with that view in mind.

There is one other phase of this question that I wanted briefly to discuss with the committee. It has not been discussed, so far as I have heard, and I do not think there is any other feature of it that has not. The other questions seem to have been thoroughly covered by both the evidence and the arguments pro and con on this proposition, and I expect it is hardly necessary to go into a discussion of the legal principles on which this legislation rests. At the same time, as all the members of the committee are not lawyers, and probably as some of them who are lawyers have not thought about it very closelyI ought not to say that. I mean, they live in a different section from where I live, and have not had the same amount of interest in this subject, and they may not have had occasion to investigate it, and I feel the committee will excuse me if I touch on that side of the question.

I have no doubt in my own mind that this legislation is perfectly constitutional and can and will be enforced by the courts of the United States without the slightest hesitation or doubt. In principle it seems to me to rest entirely upon the basis of the lottery case and of course of the cases in the Supreme Court that have followed that great decision.

Of course there have always been two lines of thought about the regulation of interstate commerce. The old fashioned, and, if I may say so, democratic idea was that the power to regulate commerce between the States did not include the power to prohibit it. On the other hand, the broad or the liberal construction of the interstate commerce clause was that under the power to regulate, the power to prohibit was necessarily included; and at the other end of the Capitol à distinguished Senator from Indiana has carried that doctrine so far as to say on the floor of the Senate that the Congress of the United States could, if it so desired, prohibit the carriage through any of the channels of interstate commerce of any article simply because it was made by a redheaded man or a blue-eyed woman, whether the article was inherently sound or not.

I do not go that far, and we do not have to go that far in this legislation. So far as I am concerned, I think we are safe in resting on the adjudications of the courts when we undertake to pass this legislation. In the lottery case, the official name of which is Champion v. Ames, reported in 188 United States, page 321, I want to call the attention of the subcommittee briefly to the principles announced by Justice Harlan, who delivered the majority opinion. He said this:

The appellant insists that the carrying of lottery tickets from one State to another State by an express company engaged in carrying freight and packages from State

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