Ann and I are both very well and send you our love, and hope that you and Jane are well and enjoying life. Let me hear from you soon.

Very sincerely

MY DEAR JACK: The dividend question this year has brought again very forcibly to our minds here the fact that we are undercapitalized, due to the fact that the company has been paying excessive dividends over a period of 15 years, and while the deferred payments which you have arranged will keep us in moderate funds, it seems only proper that I should call attention to this picture in order that those who do not know may be made aware of the facts.

I am enclosing a comparison of balance sheets, working capital and net worth at the end of 1924 and as of November 30, 1941, and also a memorandum showing the profits and dividends for this same period.

I am perfectly satisfied that you are thoroughly conversant with our whole picture, but I am not so sure that the Forestal Board in London realize what has transpired during the period above-mentioned, and my thought is that, if you concur, I would like to write a letter to Palmer, sending him the above information, which he could put before the Board and make them fully cognizant of the facts-or, better, if you would like to do it for me.

You will recall the formation for good and practical reasons of the Tannin Products Corporation in 1925, at which time a very large dividend was paid, which procedure continued in a more or less degree during the following years, particularly in 1929 and 1934. The company, as you will see, earned $3,284,427.28 and paid out dividends of $4,200,000. In other words, we declared practically $1,000,000 more during the sixteen-year period than we earned.

Under the circumstances I have no fault to find with this, provided our principal stockholders, the Forestal Co. are aware of it and are prepared to take care of our money situation as the same arises.

In line with the earnings and declaration of dividends, you will note our working capital dropped from $2,270,812.39 to $1,648,995.26, and our net worth from $3,472,559.50 to $1,430,288.31. I might also add that during the same period we reduced our capital to $100,000 and have outstanding in place thereof $1,300,000 of debentures on which we have been paying 6 percent interest, which is additional income to the stockholders.

Another thing that militated against us was the necessity for your changing the terms of sale for solid extract from a 6 months' credit to 60 days. This came at a time when our volume had increased tremendously, and we could least afford to have our funds restricted, and, as a matter of fact, due to many complications-late arrival of steamers, the time necessary for analysis, etc.we very often did not receive our money from our customers until after we had paid for the extract.

To come right down to the last analysis, we have been living on Government funds, which under proper business procedure should be reserved for income tax payments, but, as these payments are not due until next year, it has been possible to use this money. We owe the Government today $500,000. This money, together with your most helpful postponement of payments, has made it possible for us to have cash to pay the dividend we did. I believe that with the extra terms on future purchases of extract we will make our position stronger during the next 6 months, and we are trying diligently not to borrow from the banks, as in this particular case it would appear that such borrowing was done to pay dividends. This I believe would have a very bad effect on our good will and financial standing-and we enjoy today the good will and respect of the tanning industry as we never have before.

Looking forward to your reactions, and with warmest regards, I am,

Your most sincerely,

THE TANNIN CORPORATION.

EXHIBIT No. 179

GENERAL AGREEMENT BETWEEN PRODUCERS OF EXTRACT OF QUEBRACHO

The extract of quebracho industry for the past several years has been crossing an intense crisis by reason of the lack of an organization that should adjust the exportations with the demand for the product in the markets of the word. This disequilibrium has involved, as is natural, a superproduction that has given rise to ruinous competition due to the low prices at which the product has come to be sold, and this, in addition to injuring seriously the large amount of capital invested in the industry, has been translated into a considerable loss (estimated to be a million pounds sterling per year) from foreign exchange, which has ceased to come in to our exchange market, with consequent loss to our finances themselves and to the national economy.

That the National Government has recognized the gravity of this situation and the necessity of remedying it, is abundantly proved by the subject-matter of the decree of July 15, 1933, creating the National Commission of the Extract of Quebraco.

That the situation of the industry would continue to be aggrevated is gleaned clearly from the communication issued by the President of such National Commission of the Extract of Quebracho, Mr. Carlos Brobbia, Under Secretary of Agriculture, following the meeting that this Commission held on April 23, 1934, from which communication we transcribe hereinafter the most pertinent portion, as same appeared in the press of this Capitol :

"The said Commission yesterday issued a communication wherein it is stated that Mr. Brobbia, after opening the proceedings, made an exposition designed to make manifest the objectives that the Executive Power is pursuing by the creation of this organization, and sketching briefly the situation of the industry of tannin in our country, a situation, it is said, is characterized by a serious crisis as to prices originating in divers factors that may be ascribed, on one hand, to an excess of production that would have no relation to the necessities of world consumption and, on the other hand, to the lack of an organization in commerce of exportation of this product, which gives rise to disproportionate offerings in foreign markets.

"The Under Secretary added that the Executive Power was desirous of contributing efficiently and efficatiously to the restoration of the industry of the extract of quebracho, and in this connection stated that the official thought was to seek so far as possible to effectuate such restoration thanks to the proper gravitation of the forces that intervene in the production and in the industry by means of a regulation of exports, which the interested ones themselves ought to attempt to adapt to the real exigencies of the world market. He pointed out, then, that, on the other hand, that the statistical data and information upon the quotations obtained for the product in the foreign markets, show that this industry is and has not been benefited by the elevation of prices in effect in such foreign markets, an effect that should respond automatically as consequence of the decree of November 26th of the preceding year, referring to the control of exchange; and in this respect stated that these benefits could be easily attained if the present disorganization of production and of exportation shall give way to an intelligent and coordinated action."

To attain the ends desired, the totality of producers of extract of quebracho with plants in the Argentinian Republic and in the Republic of Paraguay, have come to an accord, unanimously, as follows, which includes the fundamental bases for the reorganization of the industry:

(a) The submission of a statement evidencing the recognized capacity of production for each manufactory, and establish the consequent percentage of the same in relation to the total productive capacity of all plants.

(b) Maintaining of the best selling price in foreign markets, compatible with the maintenance and possible increase of the actual volume of sales.

(c) The designation of given agents to make sales in foreign markets so as to facilitate a rational sale and distribution, and the faithful observance of the principle of equilibrium and equity in the participation or sharing of each plant, in this striving for an intense and open collaboration among all such selling agents and each manufacturer holding himself responsible toward all the others for compliance with respect to the respective selling agent.

(d) To procure the means in order that all manufacturers shall share in the furnishing of extract of quebracho that is consumed in all foreign markets, in the precise proportion of their percentages in terms of productive capacity, in the most fair and equitable manner.

(e) To recognize that all of the manufacturers, constituted in a General Meeting, shall exercise, always, the sovereign powers of control, ratification and associative act as to everything that has reference to the life and the functioning of this agreement; that in the General Meeting each manufacturer shall have the right to vote in proportion to his percentage as established by Article "a" and that the General Meeting shall be held as many times as may be expedient or necessary and, besides, at any other time on request of any one of the manufacturers.

(f) To designate a Directive Committee of seven members, that shall constitute the executive power of the organization, and regulating their functions and powers by delegation of the Meeting, which always shall be subject to the control and retification of the same.

(g) To agree that such Directive Committee shall establish in agreement with the consumption of foreign markets, the total quantity to be exported each quarter, communicating to each manufacturer the tonnage that corresponds to him as of said total quantity, basing these quotas strictly in accordance with the percentage of each manufacturer established by Article "a".

(h) To form a unit denominated "Center of Exporters of Quebracho Extract," of which Center the totality of the manufacturers shall be members. This Center shall be under the direction of the Directive Committee referred to in the preceding article, and its principal object shall be to supervise the faithful fulfillment of this general agreement, it being able, to this end, to supply themselves with the necessary organization to effectuate adequate control and furnish complete statistics. In case the manufacturers shall so desire, this Center would be able to concern themselves with the contracts having to do with maritime rates, shipments of extract, custom house functions and any other function having relation to the interest of the industry.

(i) To recognize the right of any plant to sell its quota for export that shall be established in accordance with Article (g), but with the express condition that all purchase and sales of such quotas must be effected by medium of the said Directive Committee, which shall have the right to fix the price per ton that it may deem reasonable, and to effectuate the distribution of the quotas offered in sale among the manufacturers interested in the purchase thereof, in accordance with what is established farther on herein.

(j) To establish that the tenure of this agreement shall be for three (3) years.

(k) To establish that the advance withdrawal from the agreement herein on the part of any of its members, the enhancement of the productive capacity of any of the existing manufactories or the construction of a new plant for the extract of quebracho or urunday by any of the present manufacturers or any other unit, shall result in the complete liberty as to all of the members of the agreement to consider same terminated, it being understood that in any of these cases a General Meeting must be held in order to take note of the exercise of this right, prior to its being exercised individually.

(1) To recognize that all sales of extract of quebracho for domestic consumption in the markets of Argentine and of Paraguay, as well as the sale prices, are entirely free and without the scope of this agreement, and that the quantities of extract of quebracho delivered for such domestic consumption must not be computed as affecting the export quotas authorized for each plant.

(m) To take action by medium of the Directive Committee in regard to the National Government for the regulation of exportation of quebracho logs within the figures of recent years, for the purpose of avoiding any increase in the exportation of such logs, it being considered that this will be necessary for the national industry of quebracho extraction.

(n) To entrust a study of the present agreement to a special committee, composed of qualified lawyers, designated by such Directive Committee, and to assume the obligation of signing any agreement formulated by them in legal form, with the approval of the Directive Committee, that shall include all bases, obligations and responsibilities embodied herein, it being the purpose of all signatory members to comply strictly with the laws and to follow the road marked out by the national authorities in defense of the industry and of the national economy.

Once the fundamental bases embodied in articles (a) inclusive to (n) have been unanimously approved, as set forth hereinbefore, the totality of the said manufacturers, likewise by unanimity, shall manifest their agreement with the following articles, which are regulatory and elucidatory, jointly with basic articles (a) to (n), which form an integral part of this general agreement.

1. In accordance with Article (a), the manufacturers establish that the productive capacities that appear in the following table are those which have been recognized by them all, as well for their own plants as for those of the others, and that the percentages which appear in the same table for each manufacturer have been established with relation to the total capacity of production of all of the manufacturers.

La Forestal Argentina S. Anon. de Tierras, Maderas y Explotaciones Comerciales e Industriales.

Noetinger-Lepetit, S. A. Forestal, Industrial y Canadera..

Refineria Argentina (adquirida por La Forestal).

Sociedad Brestal de Puerto Cuarani.

Cia. Productora de Tanino (Atorrassagasti, Piazza & Cia.).

15,000

2.8759

Las Palmas del Chaco Austral, Soc. Anon..

Elaboradora de Extractos, Curtientes., Soc. Anon. Industrial Y Comercial.

Sociedad Anonima Materias Colorates (Adquirida por Cia. Argentina de Quebr. "Marca Formosa" S. A...

Quebrachales Dubose, Soc. Anon.

Čia. Industrial del Norte de S. Fe, S. A. Lda.

Guillermo Welbers.

Francia-Argentina, S. A. de Curtiembre

2. The General Meeting of manufacturers, referred to in Article (e), must unite in Buenos Aires, at least, once per month, and the Directive Committee must set, with appropriate advance notice, a fixed date for such monthly meetings, in order to permit the attendance of the greatest possible number of manufacturers.

Each manufacturer will have a certain number of votes in the Meeting, equal to the percentage established in the preceding article, in relation to a total of 10,000 votes (so as to take into account the small fractions of the percentages). The General Meeting will be presided over by the president of the Directive Committee.

The General Meeting will examine each month into the situation of sale and the statistics of shipments of each manufacturer, will ratify or modify the decisions of the Directive Committeee, and shall have the last word as to determination of sale prices.

Each manufacturer shall designate a delegate and a substitute to represent him in the General Meetings, being able to replace them at will, by means of previous notice to said Directive Committee. The same person may represent more than one manufacturer.

In order that the resolutions of the Meeting may be valid, a quorum is necessary of a minimum of eighty per cent (80%) of the total of the votes. The decisions, as a general rule, shall be taken by simple plurality of votes present, with the following exceptions:

(a) To modify any of the conditions or bases that are fundamental of this agreement there shall be necessary a favorable vote of not less than 9,000 votes, or 90% of the total.

(b) For any modification of the prices or procedures as to sales, a favorable vote of not less than 7,500 is necessary, or 75% of the total. (This does not refer to small adjustments of sale prices f. o. b. Buenos Aires, referred to in Article 5).

(c) For the possible advance rescission of this agreement, save for the reasons established by Article (k), a favorable vote is necessary of not less than 8,000 votes, or 80% of the total.

In the case that a quorum should not be established, a new meeting shall be called within the following seven days, which meeting shall function with any number of votes represented.

3. The Directive Committee will be composed of seven of the delegates who represent the manufacturers in the General Meeting, whom the General Meeting shall elect at its first meeting of each year for the period of one year; they may be re-elected.

In case of the resignation or absence of any member of this Directive Committee for any reason, such absentee may be replaced by the susbstitute delegate at the General Meeting who represents said member.

The resolutions of the Directive Committee shall be arrived at by simple plurality of the members present, and for all of its resolutions the attendance of a quorum of four members will suffice.

The Directive Committee shall meet, perforce, once a month, on the day immediately preceding the meeting of the General Meeting and any moment that may be necessary, on request of one or more of their members.

The Directive Committee shall be responsible for the exact application of the decisions of the General Meeting and, in general lines, shall decide upon all current administrative questions.

The Directive Committee must exercise officiacious control as to compliance with the general agreement on the part of all of the manufacturers, and will have in its charge the organization and superior management of the Center of Exporters of Extract of Quebracho to obtain this objective. The first Directive Committee for the year 1935, who will enter into their functions at once, is composed of the following persons:

The Directive Committee will elect from among their members, a president, who will preside at their meetings, and will have right to two votes in case of tie. In the absence of the titular president, the oldest member in the meeting will preside, with the same powers as the titular president. The powers and responsibilities of the members of the Directive Committee shall continue till the General Meeting shall have designated their successors.

4. This agreement will be effective on and from the first of January 1935, but all of the manufacturers obligate themselves to respect all of the conditions and obligations immediately.

5. Referring to the sale price to be maintained, it has been unanimously agreed that this must be based on the quotation c. i. f. Hamburg of Pounds 15, Shillings 0, Pence 0, for Ordinary Extract and Pounds 16, shillings 0, Pence 0, for Soluble (in cold water) Extract, while the Pound Sterling shall maintain its present relation to the moneys of other foreign markets and the quotations for tanning materials that compete with Extract of Quebracho shall undergo no important alteration.

The minimal sale prices f. o. b. Buenos Aires which will always be the official prices of this agreement, shall be those which result once the commission of the selling agent, the maritime freight, insurance and any other expense involved in the exportation of the product, are deducted. These minimal official prices f. o. b. Buenos Aires shall always be in Pounds Sterling. In order to initiate sales under the conditions of this agreement, the minimal official price f. o. b. Buenos Aires for Ordinary Extract is 13 Pounds and for Extract Soluble (in cold water), Pounds 14. These prices are to be understood as for each ton of 1,000 kilos. The Directive Committee will adjust the official prices f. o. b. Buenos Aires whenever this may be necessary on account of fluctuations in maritime rates, notifying such modifications immediately to all of the manufacturers. 6. All the manufacturers obligate themselves to maintain the quality of their production in the highest grade possible so as to facilitate the placing thereof in all markets. The insolubie extract or ordinary extract must have a minimum of 63% of tannin and the soluble extract (in cold water) a minimum of 64% of tannin; and the color and content of the water must correspond to good practice known to everybody. In case of necessity, the Directive Committee will be able to establish any requirements as minima and insist upon respect thereto. 7. The Directive Committee, with the due ratification of the General Meeting, will be able to establish a minimal price for sales f. o. b. Buenos Aires for certain brands of difficult placement, but under the price, official, referred to in Article 5, yet with a limit differential of one Pound Sterling per ton.

8. No manufacturer may sell extract of Urunday or of other woods of Argentine or Paraguay, without the express condition of effectuating any delivery or shipment of the same strictly within his quota as authorized by this general agreement for Extract of Quebracho.