Reporter's Statement of the Case 113 C. Cls. Commodities had approximately 21,000,000 pounds of whole black pepper, 4,000,000 pounds of which had been sold for future delivery. This pepper was delivered during the early months of 1942, and Commodities made very few sales thereafter from its inventory. This pepper had been accumulated by Commodities over the period from 1933 to the date of the requisition, the highest inventory having been in the neighborhood of 25,000,000 pounds in 1938. 6. On June 26, 1944, the War Department's "initial compensation officer" offered the plaintiffs, Commodities and Irving Trust Company, as compensation for such pepper, the ceiling price established under Maximum Price Regulation No. 52 issued by the Office of Price Administration, as that regulation existed on the date of requisition. Such offer was rejected by both of said plaintiffs. On or about July 13, 1944, the plaintiffs, Commodities and Irving Trust Company, duly filed with the Commanding Officer, Jersey City Quartermaster Depot, a proof of claim for such pepper dated that day. In said proof of claim plaintiffs, Commodities and Irving Trust Company, claimed the sum of $190,000 as just compensation for the 773,201 pounds of pepper which were then believed to have been the accurate number of pounds requisitioned. 7. On August 23, 1944, the Chief Requisitioning Officer, Office of the Quartermaster General, made a preliminary determination of fair and just compensation for such pepper in the amount of $50,266.76. Such determination was computed at the ceiling prices for the pepper requisitioned, as established by Maximum Price Regulation No. 52, as it existed on the date of the requisition. Prompt notice of such determination was given to the plaintiffs, Commodities and Irving Trust Company. On or about September 22, 1944, the plaintiffs, Commodities and Irving Trust Company, duly filed objections to such preliminary determination with the Chief Requisitioning Officer, Office of the Quartermaster General, who affirmed his determination by letter dated November 22, 1944. Under date of September 26, 1945, an award of compensation for such pepper was made by the Acting Under Secretary of War in the amount of $52,808.28, of which $2,541.52 244 Reporter's Statement of the Case represented compensation for delay in payment computed at the rate of four percent per year. The principal amount of the award was computed in the same manner as the preliminary determination of compensation. Plaintiffs, Commodities and Irving Trust Company, were unwilling to accept such award as full compensation for such pepper, and on November 27, 1945, fifty percent of the amount of such award, or $26,404.14, was paid to said plaintiffs. 8. Whole black pepper is grown in Sumatra, French IndoChina, and India, the Lampong type being grown only in Sumatra. In March 1942, when this country was cut off from these producing areas (except India) by Japanese military successes in the Pacific, there were about 78,000,000 to 100,000,000 pounds of whole black pepper in the hands of importers in the United States (about three years' supply), approximately 17,000,000 pounds of which were held by Commodities Trading Corporation. On September 30, 1943 the holdings of Commodities continued at approximately 17,000,000 pounds of black pepper. 9. On December 11, 1941, the Office of Price Administration issued a ceiling price on whole black pepper. This was done by Price Schedule No. 52, which established a maximum price of 6.75 cents a pound ex dock or warehouse in New York City for Lampong type whole black pepper. During the years 1936 to 1940, both inclusive, the average annual prices for Lampong type whole black pepper in New York City, computed from daily spot prices throughout the period, expressed in cents per pound, had been: During the year 1941, through the month of November, the average monthly prices, expressed in cents per pound, had Reporter's Statement of the Case 113 C. Cls. During the first week of December 1941, the average daily price was 5.78 cents a pound. There is set forth below a graph showing the range of wholesale prices of pepper from 1865 to 1941: The average price of Lampong black pepper over a period of 50 years preceding the war was 132 cents per pound. 10. The ceiling price of 6.75 cents a pound for whole black pepper was approximately the fair market price as of December 11, 1941. 11. During the period immediately subsequent to the issuance of the price schedule of 6.75 cents per pound, and prior to February 3, 1942, prices for Lampong type whole black pepper did not reach 6.75 cents per pound, the price established as the maximum by the price schedule. During the month of January 1942, for example, the highest daily price was 6.45 cents per pound, with the average for the month of 244 Reporter's Statement of the Case 6.41 cents per pound. These sales were made by certain traders in pepper, importers, and grinders, particularly those who held smaller lots because they realized it would be impossible for them to obtain a greater price than the ceiling, and therefore they sold rather than hold the pepper indefinitely and incur the cost of holding. There were large stores of whole black pepper in this country at the time of the imposition of the 6.75-cent ceiling price. 12. On February 3, 1942, the Office of Price Administration amended this price schedule, reissuing it on that date as Revised Price Schedule No. 52. Under the schedule as amended the ceiling price of Lampong type whole black pepper was set at 6.50 cents per pound, plus labor charges paid the warehouse for putting the pepper in storage and taking it out, and plus warehouse storage charges for not more than 30 days. The aggregate of these charges would, on the average, raise the ceiling price for pepper which had been in warehouse for 30 days or more to about 6.63 cents a pound. Under this same price schedule it was provided that the maximum price for pepper sold for export might exceed the domestic price by no more than ten percent. 13. On May 8, 1942, the War Production Board issued two orders entitled Conservation Order M-127 and Supplementary Order M-127-a, to conserve the supply of certain spices, including black pepper, by restricting their sale and delivery. Under these orders, deliveries of black pepper by packers and receipts of black pepper by wholesalers and industrial users, were limited to 100 percent of their average monthly deliveries or receipts during the year 1941. By Supplementary Order M-127-a, issued by the War Production Board on September 25, 1942, this quota was reduced for the last three months of 1942 to 90 percent. By Executive Order 9280, issued by the President on December 5, 1942, the authority to exercise priority powers with respect to food was transferred from the War Production Board to the Secretary of Agriculture. Pursuant to this delegation of authority, the Secretary of Agriculture on February 8, 1943, issued an order known as Food Distribution Order 19, entitled "Conservation and Distribution of Reporter's Statement of the Case 113 C. Cls. Spices." This order, among other things, delegated to the Director of Food Distribution the authority to establish quotas for the delivery, receipt and use of "restricted spices," including black pepper. This authority was exercised by the Director of Food Distribution on the same day by the issuance of Food Distribution Order 19-1, establishing a quota on the delivery, receipt and use of black pepper during the first quarter of 1943, and during each succeeding quarter unless otherwise authorized, of 90 percent of the amount delivered, received or used during the corresponding quarter of 1941. By amendment to Food Distribution Order 19-1 issued on April 26, 1943, this quota was reduced to 60 percent for the second quarter of 1943 and succeeding quarters, and by amendment issued February 29, 1944, this quota was further reduced to 40 percent for the first quarter of 1944 and succeeding quarters. 14. Notwithstanding the foregoing measures taken to conserve this country's supply of black pepper, the inventory in the hands of importers had been reduced to about 28,000,000 pounds on September 30, 1943, of which approximately 17,000,000 pounds were held by Commodities. Between that date and the date of the requisition on May 26, 1944, very little whole black pepper was sold out of these inventories. 15. After December 1941 when the Government imposed price ceilings on pepper, there was no free and open market in the United States for pepper. All sales thereafter were subject to ceiling prices until August 1946, when ceiling prices were removed. Upon the establishment of price ceilings the traders and importers rapidly disposed of their stocks to wholesalers and grinders. However, there was progressively less activity from approximately the middle of 1942 as importers, other than Commodities, disposed of their holdings, and replenishment of their stocks had become impractical because of war conditions. 16. There was connected with the Office of Price Administration a board of advisers relating to commodities. The board of advisers for spices, including pepper, composed of leading men in the pepper industry, importers, brokers and dealers, recommended that the ceiling price for pepper be increased; that the trade would be able to keep this commodity |