454 AGRICULTURAL APPROPRL\TION BILL, 1924. 



PRESENT STATUS OF THE COLLECTION" AND DISTRIBUTION OF EXCESS WOOL PROFITS 



TO NOVEMBER 25, 1922. 



Net excess profits collected $650, 682. 15 



Amounts mailed to j^rowers $.i60, 066. 41 



Undistributable (growers unknowu) $106, 798. 37 



Total number of checks mailed 105, 576 



Balance in hand is held under ])r()te.st or is comjxjsed of partial pajTnents on pend- 

 ing cases or .sum.'' in process of distribution. 



Total excess profits ascertained and uncollected $816, 056. 07 



Total excess in hands of .solicitor or Department of Justice 615. 198. 87 



Excess pending uncollected in our hands 200, 857. 20 



This sum is covered by excess profits due from estates which are in course of set- 

 tlement, the executors of which have promised settlement without suit; cases in 

 which ])artial pajinents have been made and notes given for balances due; and a 

 few in which attorneys for the dealers have assured us that settlement will be made 

 without suit whenever the exact amounts due under the regulations have been 

 agreed upon. A few of these cases are still open because of unusual conditions sur- 

 rounding the dealers' business which caused him to deviate from regulations in 

 handling the 1918 clip, resulting in eiToneous audits of the reports originally sub- 

 mitted. There are in all only 21 pending cases, which have not been passed to the 

 solicitor for legal action and their number is decreasing almost monthly. 



More than 5,000 dealers participated in the handling of the 1918 wool cli]). Final 

 settlement has l)een made with all but 78 of these firms. Among these 78, however, 

 are several firms whose excess profits were large. From one of these firms we are 

 demanding over .$295,000. Their attorneys have stated that they will appeal this 

 case to the I'nited States Supreme Court before they will make paynnent. 



Three United States district judges have overruled demurrers entered by de- 

 fendant wool dealers claiming that the regulations were invalid and that the Gov- 

 ernment was without right to bring suit for the recovery of these so-called excess 

 profits. Three other United States district judges havp heard arguments on similar 

 demurrers. One has rendered no decision, another has expressed the opinion that 

 the Government has a legal and binding contract with the dealers but that it is mis- 

 appr()])riating the moneys received or is recovering them for an illegal ]>urpose. He 

 has withheld decision as to whether this fact established a condition which is open 

 to demurrer. The third judge expressed the verbal opinion that the contract, 

 evidenced by the acceptance of a permit, was binding, promised to render his judg- 

 ment on a stipulation of facts submitted by the (tovernment and defendant and, at 

 the request of the Government, to put his opinion in writing, which thus far has 

 not been received. 



Mr. Anderson. Have any of the lawsuits been tried ? 



Mr. Sherman. In several cases arfjjument has been heard on 

 demurnM's. In nearly every case the defenchmt has (Unniirretl to 

 our complaint, and has alleged that the Government had no rii^ht to 

 maintain a suit. There have been three decisions by I'nited States 

 district judges, the decision in each case upholding the Government's 

 right to sue. Argutnent on similar demurrers has been made before 

 three other judges, who still have the matter under consiileration and 

 liave not hantknl down decisions. 



Mr. A.NDEK.soN. You have had no adverse decisions? 



Mr. Sherman. No, sir. We have, however, an expression of 

 opinion by Judge Maitin, o! lioston, that in his mind (here is no 

 doubt that the Government has a legal ami binding contract with the 

 dcalei's, but that there is no doubt in his mind that tlie j)urpose to 

 wbicli the money is being devoted is wholly illegal. So he alloweil 

 the (juestion to be reargued as to whether (he illegal piupose for which 

 the money was being collected and expended was a matter open to 

 demurrer. On thai point he has no( rendered a decision. 



Mr. A.NDEK.SON. \N'ha( is (he basis ol" this reduction < 



Mr. Sher.man. The basis of this reduction is the release of auditors 

 from the work. 



