E. It is assumed that the Office of Price Administration in Puerto Rico will control the selling prices, at wholesale and retail of all merchandise and that no other agency of the Government of the United States shall have any price jurisdiction. The Office of Price Administration will, therefore, be the sole arbiter of questions of price covering all merchandise handled by Agricultural Marketing Administration and it will be unnecessary for any other agency to involve itself in pricing policies, nor is it legally possible for any other agency to do so.

2. All merchandise purchased on open bids in the United States or already accumulated by the Agricultural Marketing Administration for eventual shipment to Puerto Rico shall be sold, upon delivery in Puerto Rico, in the following

manner:

A. All merchandise upon delivery at the piers of Puerto Rican ports shall be priced at cost by the Agricultural Marketing Administration. Wholesale and retail prices or price ceilings shall be set by the Office of Price Administration. B. All rice and flour so imported by the Agricultural Marketing Administration shall be sold by brokers who had been in the brokerage business for a period of 1 year prior to the 30th of June 1942, in quantities proportionate to the sales of such brokers in the year 1941. All such sales, at wholesale and retail, shall be under prices or price ceilings set by the Office of Price Administration, but all discounts, brokerages, and other trade arrangements shall be in the hands of the trade itself providing that all such arrangements within the trade comply with the laws of the United States and Puerto Rico.

C. All other merchandise bought on open bids by the Agricultural Marketing Administration or already bought for shipment shall be delivered, at the ports of Puerto Rico, to the importing firms and wholesalers normally handling the same articles and commodities during the 12 months from January 1, to December 31, 1942, and deliveries shall be proportionate to the quantities imported by those firms in the 12 months of the calendar year, 1941. These import figures are available from neutral sources and are acceptable to the trade. All differences of opinion regarding such distribution shall be submitted to an arbitration committee composed of one representative of the trade, one representative of the Department of the Interior and one representative of the Agricultural Marketing Administration, which decisions the undersigned do hereby commit themselves to accept and observe.

Conclusion. The present supply situation is admittedly in a chaotic condition. Its effect upon the lives of Puerto Rico's people is crucial. We are fully aware that the Government of Puerto Rico earnestly desires to find a rapid and satisfactory solution. It is equally true that the members of the various trade groups affected are equally anxious to find a solution without making the people of Puerto Rico objects of charity, and to this end offer cooperation to the fullest extent. They are ready to make any reasonable sacrifice that the situation demands.

The Governor of Puerto Rico has already recommended that the tonnage allotment for Puerto Rico be increased to approximately 56,500 tons of shipping space per month. There is no question but that, with the cooperation of all parties interested, the shipping situation, both import and export, will be improved. The undersigned only ask to be given the opportunity to take their proper place within the framework of the new trade structure which everyone realizes must be conceived and elaborated if the people of Puerto Rico are supplied with the necessities of life at a price which represents an absolute minimum of handling costs and service charges. The undersigned stand, above all. for the elimination of all waste, in every sense of that term. Their experience, resources, and personnel are at the service of the people and Government of Puerto Rico. They should be used to the fullest extent as an economic force capable of assuming to the full the obligations accruing to them in the present struggle for survival.

The undersigned do, therefore, most earnestly urge that a minimum of time be permitted to elapse before the adoption of an intelligent, practical food distribution program for the island of Puerto Rico during the present war-created emergency.

Respectfully submitted.

(Here follow the signatures of over 600 individuals and firms of Puerto Rico.)

EXHIBIT No. 110

On page 965 reference was made in the testimony of Mr. De Hostos to the following exhibits A, B, C, D, and E:

Margarine.

Normal inventory: 2 months:

EXHIBIT B.-Duration of stocks at end of February 1943

Reserve, over 2-month supply:

Critically low, 1- and 2-week supply:

Animal feed.

Canned sardines.

Beans-old

spoiled.

Cured meats.

stocks, considered

Fish, dried and pickled.

Onions.

Canned meats.

EXHIBIT C.-Inventories, basic commodities

1 Mostly Argentine corn beef and jerked beef imported directly by the trade.

EXHIBIT D.-Business casualties caused by the present situation in Puerto Rico

EXHIBIT E.-Analysis of Food Distribution Administration distribution in San Juan

during 1 week

EXHIBIT NO. 111

Reference was made on page 967 in the testimony of Mr. De Hostos to information on specific instances where food was brought into Puerto Rico by the Food Distribution Administration at a loss. This information may be found in exhibit No. 94, and in exhibit No. 125.

EXHIBIT No. 112

On page 991 reference was made to the following press statement on the 500-acre law from the Department of the Interior, for release May 12, 1941, supplied by Mr. Manuel Gonzales Quinones at the end of the hearings:

DEPARTMENT OF THE INTERIOR

INFORMATION SERVICE

Office of the Secretary

[For release Monday, May 12, 1941]

A second series of public hearings on methods and procedure in obtaining the objectives of the 500-acre law will be held by a group headed by Rexford Guy Tugwell, special adviser to the Secretary of the Interior, on land use and social and economic problems at San Juan, P. R., starting May 26, the Department announced today.

Simultaneously, there was made public as an agenda to the hearings 11 proposals for procedure in the matter of the 500-acre law. Witnesses will be invited to discuss these proposals during the full hearings which are being accorded before Dr. Tugwell makes his recommendations to the Secretary of the Interior.

The 500-acre law, which must now be complied with in accordance with legislation and court findings, limits the amount of land which may be held for agricultural purposes by a corporation to 500 acres. Since the economy of the island is chiefly dominated by large corporate agricultural sugar operations, a new and acceptable land-tenure pattern must be evolved to replace the existent pattern with as little difficulty and dislocation as possible.

Revelatory of the approach being made to the problem is discussion in the proposals for the hearing for further changes in the law that seem necessary, and the advantages that would accrue to the establishment of individual family-type farms and the difficulties in such establishment that must be overcome. Also the agenda indicates certain benefits to be derived by providing holdings of land through a public agency on a comprehensive scale if the agency could provide secure lifetime tenure to families on unit farms aided by broad supervision of farming and processing practices to sustain the present efficiencies and yields of the existent corporate agricultural pattern.

The full text of the Proposals for Procedure in the Matter of the Five-HundredAcre Law as prepared by Dr. Tugwell's group and desseminated in the island so that interested persons would be prepared to discuss the matter at the forthcoming hearings is as follows:

"1. The United States Supreme Court has held that the Legislature of Puerto Rico may determine, within the limits of the 500-acre restrictions, how the policy of Congress is to be realized. This policy restricts corporations engaged in agriculture to the ownership and control of not over 500 acres of land.

"The 500-acre law, in express terms applicable only to corporations, does not go far enough and the division at 500 acres regardless of value, use, or productivity is obviously arbitrary. The law does, however, provide a useful means for approaching a wider diffusion of benefits from the soil and for lessening the prevailing sense of exclusion from the land. Literal enforcement is to be regarded as the beginning of its enlargement in such ways as will advance the welfare of the people of Puerto Rico.

"2. This enlargement has recently been undertaken by the insular legislature. The land law of Puerto Rico, recently enacted, establishes a land authority to acquire the holdings of artificial persons in excess of 500 acres. But it imposes no limitation on the amount of land which may be held or acquired by individuals.

This and other changes in the law would seem necessary if it is to be useful in attaining its expressed objectives. The all important consideration is to have effective administration of the facilities provided by insular legislation or made available from other sources.

"3. Because the sugar crop is vital to the economy of Puerto Rico, and the island is already a high-cost area, maintenance of efficiency in production is imperative. For this both large-scale working areas and scientific crop and field management are essential.

"4. The most generally acceptable land-tenure pattern, assuming unlimited land, would be individually owned and operated family-type farms. That pattern has traditionally symbolized security and independence. It should be followed where conditions of soil, rainfall, and topography do not make large-scale agricultural operations imperative. To assure any considerable diffusion of benefits, however, individual holdings should be limited to genuine family-size units, with such restrictions on alienation and seizure for debt as will assure tenure and forestall reconsolidation into larger than family-type units. vidual family-type farms cannot now be established in large numbers. To do so would be to reduce yields and to increase costs. Highly intensive farming is made necessary by the scarcity of land.

Indi

"5. One suggested alternative to family-type farms is for natural persons to buy excess corporate holdings in large units or to lease them with option to purchase. This would not fulfill the spirit of the law. It would transfer to a few the incomes of present corporate owners, with no adequate assurance that present efficiencies would be retained or that whatever gains may have been made from collective bargaining would be maintained.

"6. A better procedure would be to provide for initial holding by a public agency, setting up on family places, with secure lifetime tenure, as many families as possible who desire to live that way, and establishing cash-crop farms to be operated on a participating basis. With continuous and active supervision of farming practices, present efficiencies and yields should be retained. This would leave open for the future the possibility of eventual family ownership or any other tenure arrangement which may in time be evolved as especially suitable for Puerto Rico. These arrangements ought finally to be worked out by the people of Puerto Rico.

"7. Action by Federal agencies, assuming satisfactory tenure arrangements, should center on financial assistance based upon supervised farm and home plans. "8. Valuation of properties to be acquired ought to be determined without regard to governmental benefits.

"9. The alienation of lands now controlled by corporations which also operate centrals will make necessary a thorough study of the future relations of centrals with the suppliers of cane. The objectives should be fair payment to growers and an assured sequence of supplies to the centrals.

"10. Education, health, and housing policies must be restudied to meet the new conditions of agriculture and to develop subsistence activities. Changes ought to be made looking to wider diffusion of benefits resulting from the Sugar Act of 1937. Assistance from the Agricultural Adjustment Agency, Surplus Marketing Administration, and the National Youth Administration should also be sought in stimulating insular subsistence crops and in raising the nutritional level.

"11. Planning, coordination, and the following-up of execution ought to be centered in the Governor's office under the direction of the Division of Territories and Island Possessions and the Secretary of the Interior."

Dr. Rexford Guy Tugwell was appointed as special advisor to the Secretary of the Interior on land use and social and economic problems created by the 500-acre law in February as a result of the problem that arose when a Supreme Court decision upheld enforcement laws limiting land tenure. The 500-acre limitation was first imposed 41 years ago by a joint resolution of the House and Senate of the United States which resulted from insular advocacy of this limitation. No enforcement laws were provided until recently, and these enforcement laws have now been tested and upheld in all the courts up to and through the United States Supreme Court. Thus the question ceased to be whether the 500-acre limitation should be enforced but how it was to be enforced in the interests of the public, the island, and all parties concerned. To make recommendations the Secretary of the Interior requested Dr. Tugwell to hold preliminary hearings on the island which he did starting on March 4 with the assistance of Monroe Oppenheimer, general counsel, Farm Security Administration; Dr. Rafael Menendoz Ramos, dean of the College of Agriculture and Mechanical Arts, Mayaguez; Rupert Emerson, director of the Division of Territories and Island Possessions, Department of