or our existing contract would take a year and a half to deliver instead of a year. Now, this figure is based from March 1942 until February 1943. Now, in the next year there are 4 months at 550 tons per month, which is 2,200 tons to be manufactured and 2,064 which you have left over from these first 12 months, means that you have 4,264 tons to move and your next quota from March 1943 to February 1944 on the basis of shipment of 170,000 tons gives you 3,536 tons, meaning that you would be short, through the quota system, of 728 tons which you could not ship and further, that the plant would have to shut in June 1943 and remain closed for the rest of the year. Now, this position is not very pleasant. Now, along with this picture with the offer of 1,000 tons quota, was the indication that efforts would be made to direct Cotan, Weisburd, and Chaqueña extract into our hands together with 7,000 tons of Asociados del Norte, further, that all molestation would stop and that nothing more would be done, that the relations would be friendly provided your company withdrew this protest. We asked this gentleman if he thought he had the power to withdraw a legally presented protest and his answer was that he thought it could be easily arranged and by the way he painted his picture, we believe it could. Now, here is what we see. First, if we take a position that we are not interested in the 2 percent, that you have no intention to withdraw the protest, that you are prepared to go to the mat with anybody, this is what we believe will happen. You will be subject to many questions, the Tanners Trading Co. will be molested. In the show-down, if fairness and honesty rules, we would come off best. There would be an intervention of foreign governments as well as the Argentine and the final result would probably end up in an undesirable compromise, a reflection on Tanners Trading Co. and a future position which might be against the interests of Tanners Trading Co. It would probably bring in its trail a lawsuit, which even the Government, according to a statement made, feel that we have more than an even chance of winning. It would probably take more than 2 years, cost a lot of money and gain us nothing. We would be a target to be shot at, and goodness only knows what the position in the world markets will be 2 years from now. That is one position. The other position is: To withdraw your company's protest, accept the 2.08 percent or better if we can secure it, take the 1,000 tons, endeavor to get the quantity we require with the Government's assistance or these other manufacturers and let the ball roll and the future work its own salvation out, as we believe that eventually this whole thing will crack up by its own weight and it would be better that we were friendly with the Government than being one of the outstanding protestors. The problem involved out of this is the interference to your plant operation, but even this could be adjusted, possibly, by negotiations as time goes on. We told you that the Government had intimated to us that thy desired to see the operation carry on, that they would like to see us buy from these small people, but they were suffering from pressure from other interests. Now, taking into consideration your recent remarks about the United States Government showing more interest in tanning materials and appointing a controller, bearing in mind that much tanning materials from the Philippines, India, Mediterranean, Middle East, and Dutch East Indies, together with wattle from Africa and Australia are severely curtailed and in some cases actually denied the Allies, it is only natural that there will be an increased demand for quebracho and possible Government intervention to secure supply. Increased demand would naturally affect the capacity of your plant and should the demand for Argentine extract arrive at 250,000 tons per year, that would give you a plant capacity of 5,200 tons per year and this would not affect the financial structure of the plant very much. Now, there is another angle to be borne in mind, that if you accept the 208 percent and are only able to ship, say, 3,600 tons a year, your costs are going to suffer severely as well as the price of the extract to the tannery. This naturally will have to be given due consideration and even if we hold a contract, we believe that that price will have to be readjusted to compensate for the reduced working quota. This letter wants to be read carefully and, as your go-between, I want definite instructions what to do. I have pointed out to you that the position is lined up noncommercially in such a way that we are at a great disadvantage even though we have right and justice on our side. We have not political pull, nor influence, nor the time, nor the information nor actual proofs to combat a situation alone in this market; however, on receipt of this letter I want you to cable ns immediately whether you are agreeable to accept the 2.08 percent plus the 1,000 tons for this year, plus the right to buy further Asociados del Norte, plus the possibility of securing the production of the two small plants and Chaqueña, with the influence of the big chief and the Government to see that we do; or, whether you wish to stand pat with the company's protest, fight the big chief and virtually fight the Government, subject yourselves to molestations from various quarters and at the best, for some considerable time have nothing but 6,600 tons of extract a year from the Argentine and possibly, difficulties to secure the necessary supplies in the United States from the tanning corporation. It is not a nice picture and I might add, that if you decide on the second course, the writer wishes to be excused from handling the proposition and would suggest that you nominate a lawyer, as the writer has not the connections nor the personality to resort to the influences and chicanery which will probably come into force if it comes to a show-down. There is no denying that the position is undesirable, unfair, but it would seem for the moment, that it is going to be a question of whether it would not be better policy to accept things as they are now, let some water flow under the bridge and at a later date, if the conditions are not turning out as expected, or are more embarrassing or restricting than they appear at the moment, there is no doubt that there would be opportunities to demand a revision and at least you would have overcome temporarily a tension which we do not believe is in the common interests, and awaiting your reply by cable, which we hope to have early next week, and with kindest regards, I am, Yours very truly, WALTER D. LITTLE. P. S.-There is just one thought that we do not believe we have made quite clear. The interlocking between the big chief and the Government office, is one so complicated, so contradictory, that it is difficult to really form a correct opinion. Personally we believe that the influence there is much greater than any of us realize and therefore we have to be rather careful how we act. DEAR MR. FEENEY: In further reference to my previous correspondence regarding outside extract, which was shipped to Cuba and New York, I must now inform you that another parcel of 100 tons has been shipped on the steamship Mormacsul to New York. The circumstances, under which this shipment was made, are rather peculiar. In fact, the steamship Mormacsul belongs to the Moore-McCormack, whose Buenos Aires agency, at the request of the Forestal Co., had promised their cooperation for the purpose of keeping out any of the new brands, as I reported to you previously. The understanding was that whenever they were offered outside extract and they had space available, they were to reject it and advise the other manufacturers, who would try to offer replacement. Now, the steamship Mormacsul has been fully booked for some time, so much so that in order to make space for our parcel of 200 tons canned corned beef for Norfolk we were obliged to shut out 50 tons of Sastre/Supremo brand for BaltiWe shipped on this steamer 122 tons Sastre/Supremo for Norfolk, Tanners Trading, 209 tons while the Forestal were not given any space at all. We were, therefore, surprised to learn that at the last minute 100 tons of the new brand Zorzal were loaded on this steamer for New York. The Forestal immediately lodged a protest with the Moore-McCormack Agency for taking this parcel, pointing out that in spite of their several requests they had not been allotted any space, and we did likewise. Apparently the fault does not lie with the freight department of Moore-McCormack but, confidentially, we found out that the shipper of the outside extract is a partner of Mr. Clarendon, ex-hide broker, who used to operate under the name of E. C. Clarendon & Sons and who is now submanager of Moore-McCormack's Buenos Aires office. Clarendon, when questioned, stated that since their steamship line is public service they must accept more. cargo from everybody, an argument, which we must reject on the grounds that he has refused to accept cargo from regular shippers in order to favor an outsider, who is shipping for the first time. I understand the Forestal will complain to the Moore-McCormack in New York, and I am acquainting you with this affair in case you should also wish to see Captain Holt about it. Strictly confidential, the freight manager of the Moore-McCormack told me that he was going to write privately to Captain Holt on this matter. By the way, it is my understanding that Mr. Clarendon is a relative of Mr. Albert Moore, president of Moore-McCormack, which, naturally complicates the situation. I learned from the Forestal that Clarendon, who is a good friend of Mr. Sullivan, denied his partnership with Macias, the shipper of the 100 tons in question, but then offered to sell this extract to the Tannin Corporation. This should be sufficient proof that Clarendon backs Macias, and the point now would be to induce Moore-McCormack's head office to instruct their local agency to only allot space to the three regular shippers, i. e., the Forestal, Tanners Trading, and ourselves. In connection with shipping space I confirm my cable 760 of last night, requesting you to kindly approach Captain Holt and endeavor to obtain for us space for 270 and 250 tons canned corned beef for Norfolk and Jacksonville, respectively, on the steamship West Maximus, sailing from Buenos Aires October 26, which, by the way, is the only October steamer for both destinations. I am just in receipt of New York's reply No. 390, advising that Captain Holt is cabling their office here, requesting them to try to accommodate us but so far said office has not received any instructions. Mr. Bittinger advised me that he will only be able to ship 180 tons to each port and I have informed the Moore-McCormack freight department accordingly. I hope that the smaller quantity will make it easier for them to give the necessary space. Mr. Hodsdon inquired telegraphically about additional quantities of Sastre and Guarani extract in our own containers, as well as Puerto Sastre brand for December shipment from Buenos Aires. Both companies are sold out but it is expected that sales will be reopened in a fortnight or so, when they will be in a position to make new offers, which I shall transmit immediately to Mr. Hodsdon. In the meantime I would appreciate it very much if you will explain this to Mr. Hodsdon. For your information, Puerto Sastre will probably have 1,400 tons for sale, one-half of which could be packed in Supremo bags. As to Guarani, I expect they will be able to offer us, at least, 500 to 700 tons. With very best wishes and kindest regards, I am, Sincerely yours, INTERNATIONAL PRODUCTS CORPORATION. EXHIBIT No. 169 INTERNATIONAL PRODUCTS CORPORATION, Confidential. Mr. WM. F. FEENEY, Vice President, International Products Corporation, New York, N. Y. DEAR MR. FEENEY: In connection with New York's cable No. 369 of yesterday's date, for obvious reasons, I am writing you privately, leaving it to you to acquaint Mr. Hodsdon with particulars. The fact of the matter is that it has proved impossible so far to reach a satisfactory agreement with the new factory at Santiago del Estero. For this reason, the Forestal Co., in an endeavor to impede the exportation of the extract, has seen all the steamship companies, requesting them not to give space to any outsiders but to advise the Forestal, who would immediately offer replacement cargo. The steamship companies promised to act accordingly. However, a new steamer service to Cuba was inaugurated lately by the Norwegian Line and when their principal agents, the Basal Agency, offered us space for this destination, both the Forestal and ourselves were not in a position to accept their offer. Later, a certain Mr. T. Valentine, who is in the export business, approached the Basal Agency and offered them 120 tons of quebracho extract for Cuba, which they booked on the steamship Bayard sailing on or about September 8. When I received New York's cable I immediately started investigating this matter and first of all got into contact with the Basal people, who gave me all the details and explained to me frankly why they had accepted the booking. At lunch time I met Valentine, who, by the way, is an old acquaintance of mine and has his office in the same building. He in turn confirmed to me the information I already had; namely that he had sold 120 tons for shipment to Cuba, but stated that the price of $115.60 per ton was cost, insurance, freight Habana, and not Caibarien and included also the consular charges. Valentine toid me that he had taken his free-on-board price, which works out at more or less $85.50 United States per ton, and added freight and consular charges. I also learned from him that he is the concessionnaire of the new factory, which is manufacturing hot water soluble quebracho extract, though he could not tell me the name of the brand. He stated that if I indicated to him the price, at which we are selling in Cuba, that he would quote the same price as it was not his intention to start a ruinous competition. I also saw our friend Marzorati, and in combination with him tried to persuade the Basal Agency to cancel the booking in question as Marzorati had volunteered to replace it with their extract. Unfortunately, the parcel is already in this port and nothing can be done. The Basal Agency bas informed us that Valentine wants to book a further 200 tons on the next steamer but that they would refuse to take it if we or the Forestal would offer them replacement cargo. Our friends as well as I myself are watching the situation closely, and I hope to be able to report favorable developments at a later date. Whatever additional information I can secure I shall be glad to pass on to you by subsequent mail. With best wishes, I am, INTERNATIONAL PRODUCTS CORPORATION. Confidential. Mr. WM. F. FEENEY, EXHIBIT No. 170 INTERNATIONAL PRODUCTS CORPORATION, Vice President, International Products Corporation. New York, N. Y. DEAR MR. FEFNEY: In reply to an inquiry from the New York office, contained in their letter 2271 of September 8, I am writing them by this same air mail furnishing them full details concerning shipments of quebracho extract to Cuba and Mexico by the new steamer service of the Norwegian Shipping and Trade Mission notwithstanding the fact that, when I offered them telegraphically space on steamers of this line, this offer was declined by them. You will recall that I mentioned the new steamer service in my confidential letter to your good self of September 5. Since effecting his first shipment to Cuba, Mr. Valentine has been successful in securing space for 120 tons of the new extract on the steamship Signoborg, which is sailing some time this week for New York. The agents of this steamer, Messrs. Turner & Co., stated that they were not aware at the time Valentine booked the space that they should not have given him any; they have now promised to avoid a repetition. On the other hand the Basal Agency have informed me that Valentine has applied for another 280 tons for Cuba per the steamship Balkis, sailing m'ddle November, and that they have turned down his request. I understand that we as well as the Forestal will have to give them replacement cargo. I have spoken to our friend Marzorati, who told me that he was going to take the matter up with the Tannin Corporation and hoped that they would be in a position to take some of the space. The balance, of course, will have to be taken by us if we do not wish to see Valentine ship his extract to Cuba. I must give a definite reply to the Basal people by September 29 and would very much appreciate receiving before then your instructions as to the maximum quantity we may book. I readily understand that this is not a procedure to be continued indefinitely but, on the other hand, if through this we manage to keep the new competitor away from our markets for some time, the result will be that he will have to come to terms with us. In talking the other day with the Cuban consul, he advised me that on the consular invoice, covering his shipment per the steamship Bayard. Valentine shows a free on board value of $274 Argentine paper, whereas our free on board price for consular purposes is $91.20 United States. This means that Valentine is defrauding the Cuban Government on the consular fees and probably on the import duties paid in Cuba. The Cuban consul, who had not noticed this circum stance in time, is writing to the customs authorities at Habana denouncing the faulty declaration. I do not know if it would be any good to advise our agents too so that they could adopt the measures, which they may think fit. Anyhow, I am leaving this to your judgment. Apart from the cable to Mr. Gramajo, reporting that Mr. Norton's operation was successful, I have not heard a word of how Mr. Norton's condition is at present; I do hope that he has fully recovered and would be glad to receive definite news about it. With very best wishes and kindest regards, believe me, Sincerely yours, INTERNATIONAL PRODUCTS CORPORATION. Mr. Marzorati just telephoned me, advising that the Tannin Corporation will take 200 tons on the steamship Balkis. There is, therefore, 100 tons left for us. However, should the sales department require more space I am sure I could get it, Maizorati also advised me confidentially that the shipment on the steamship Signoborg has been purchased by the Tannin Corporation. No doubt, you will be informed of this transaction but just the same I thought it expedient to advise you. DEAR MR. FEENEY: Reverting to my letter of September 5 concerning shipment of outside extract to Cuba, I am now in a position to furnish you full details regarding the same. The covering bill of lading reads as follows: "2.440 bags of Zorzal brand, hot-water soluble first-grade quebracho extract, weighing 123,134 kilos gross; consigned to The National City Bank of New York-Habana Branch; party to be notified: Zazabon, Genin & Cia., Caibarien." The shipment is moving per the steamship Bayard, which sailed on the 9th instant, destination Habana, Cuba. The agents of this steamer service to Habana have advised us that the shipper, Mr. Valentine, has been inquiring for another 200 tons on the next sailing, scheduled for early November. However, we have their promise that if we or the Forestal can offer them replacement cargo, that they will refuse to give him any space. Cazabon, Genin & Cia, are the same people, to whom we are consigning our own shipments for Caibarien, and I wonder whether any steps could be taken to prevent them from making further purchases of this kind. There is no question that if we can offer replacement cargo to the steamers going to Habana, that Valentine or anybody else will be unable to obtain space. On the other hand, I understand that Valentine will also be denied space on the steamers going to New York or New Orleans, from which ports transshipments could be made to Cuban ports. Valentine came in to see me yesterday and asked that I advise him our selling prices in Cuba and Mexico as he does not want to fight us or the other manufacturers. Naturally, I refused to discuss this point with him. I have been informed by Mr. Sullivan that they have sold 1.000 tons to the Russians, which constitutes their first sale since 1929. I understand they are in negotiations now for another 2,000 tons; shipments are to move directly from Buenos Aires to Vladivostok. Shipments of canned corned beef are being shipped out from Buenos Aires as they arrive from Paraguay. In line with Mr. Bittinger's request I have booked 100 tons on the steamship Mormacsul for Norfolk. This steamer is scheduled to sail from this port September 23. Mr. Bittinger advised that he was going to ship 120 tons, i. e., 20 tons in excess, and then requested space for additional 100 tons. I could not obtain the additional space as the steamship Mormacsul is fully booked and the freight manager of the Moore-McCormack Co. told me that until the steamer reaches Buenos Aires he is unable to make accurate calculations regarding available space. He promised to do his best to accommodate us but the chances are slim. However, since there was no time to be lost |