AMENDMENT TO PACKERS AND STOC THURSDAY, FEBRUARY 14, 19 UNITED STATES COMMITTEE ON AGRICULTURE A И The committee met, pursuant to adjournmer a. m., in room 326, Senate Office Building, Senato. presiding. Present: Senators Norris (chairman), Capper, and Johnson. The CHAIRMAN. The bill to be considered this bill 2089, and I will request the reporter to ha in the record. (The bill is as follows:) [S. 2089, Sixty-eighth Congress, first session A BILL To amend the packers and stockyards act, 1921, ar Be it enacted by the Senate and House of Represen States of America in Congress assembled, That the packe 1921, be, and it is hereby, amended by inserting in Title be known as section 202a, as follows: "SEC. 202a. It shall be unlawful for any packer, o packing plants or slaughterhouses connected by runways with any stockyard posted under this act or located w such stockyard, to (a) own, lease, operate, or control, any place, establishment, or facility furnishing stockyar as defined in this act other than receiving pens for yardin purchased by said packer for slaughter at the packin slaughterhouse or slaughterhouses of such packer; "(b) Enter upon or engage in any habitual or custom of action calculated or tending to divert the purch slaughtered by it in such packing plants or slaughterhou proportion thereof from the competitive markets at sto Secretary of Agriculture under the provisions of Title SEC. 2. That the packers and stockyards act, 1921, amended by striking out all of sections 203, 204, and therefor new sections 203, 204, and 205, as follows: "SEC. 203. (a) Whenever complaint is made to the Se or whenever the Secretary has reason to believe that an or is violating any terms of this title, he shall cause a c be served upon the packer, stating the charges in that the packer to attend and testify at a hearing at a time therein, at least 30 days after the service of such co time and place there shall be afforded the packer a reas be informed as to the evidence introduced against him ( cross-examination) and to be heard in person or by cou nesses, under such regulations as the Secretary may pres good cause shown may on application be allowed by the in such proceeding and appear in person or by counsel. the close of the hearing the Secretary may amend the complaint; but in ca of any amendment adding new charges the hearing shall, on the request the packer, be adjourned for a period not exceeding fifteen days; "(b) If after such hearing the Secretary finds that the packer has violat or is violating any provisions of this title covered by the charges, he shall ma a report in writing in which he shall state his findings as to the facts a shall issue and cause to be served on the packer an order requiring such pack to cease and desist from continuing such violations to the extent that t Secretary finds that it does or will exist. The testimony taken at the heari shall be reduced to writing and filed in the records of the Department of Ag culture; "(c) The Secretary at any time, upon such notice and in such manner as deems proper, but only after reasonable opportunity to the packer to be hear may amend or set aside the report or order in whole or in part: "(d) Compla nts, orders, and other processes of the Secretary under th section may be served in the same manner as provided in section 5 of the a entitled 'An act to create a Federal Trade Commission, to define its powe and duties, and for other purposes,' approved September 26, 1914. "SEC. 204. (a) Any packer who knowingly fails to obey any order ma by the Secretary under the provisions of this title shall forfeit to the Unit States the sum of $500 for each offense. Each distinct violation shall be separate offense, and in case of a continuing violation each day shall deemed a separate offense. Such forfeiture shall be recoverable in a ci suit in the name of the United States; T "(b) It shall be the duty of the various district attorneys, under the directi of the Attorney General, to prosecute for the recovery of forfeitures. costs and expenses of such prosecution shall be paid out of the appropriati for the expenses of the courts of the United States. "SEC. 205. (a) For the purposes of this title, the provisions of all lav relating to the suspending or restraining the enforcement, operation, or ex cution of, or the setting aside in whole or in part the orders of the Intersta Commerce Commission are made applicable to the jurisdiction, powers, ar duties of the Secretary in enforcing the provisions of this title, and to ar person subject to the provisions of this title; 66 (b) Any packer, or officer, director, agent, or employee of a packer, wh fails to obey any order of the Secretary issued under the provisions of th title or such order as modified after such order or such order as modified ha been sustained by the courts as herein provided, shall on conviction in a pr ceeding instituted in the name of the United States brought in the distri court of the United States for the district in which such violation or viola tions were committed, be fined not less than $500 nor more than $10,00 Each day during which such failure continues shall be deemed a separat offense." (The following substitute bill was presented during the cours of the hearings, and is here printed in full for convenient refere ence :) A BILL To amend the packers and stockyards act, 1921 Be it enacted by the Senate and House of Representatives of the Unite States of America in Congress assembled, That the packers and stockyard act, 1921, be, and the same is hereby, amended by inserting in Title II a nev section, to be known as section 2024, as follows: 66 SEC. 2024. It shall be unlawful, from and after three months from th enactment of this amendment to this act, for any packer, by himself or a agent or subsidiary, or directly or indirectly, or by agreement with the owner or operator thereof, to maintain or use at any market point or within the switching limits thereof, at which is located a stockyard posted by the Sec retary under this act, any private stockyard at or by means of which suc packer, directly or indirectly, shall purchase, receive, or take title to or pos session of any livestock upon any price, valuation, or basis of settlement t be made, ascertained, fixed, or paid after consignment or shipment of such livestock to such private stockyard; or to operate or use as herein described and prohibited any such private stockyard or other establishment in which shall be accumulated by such packer, by himself or an agent or subsidiary or directly or indirectly, livestock for shipment to such market point for AMENDMENT TO PACKERS AND STOCK slaughter there by such packer: Provided, That this to any private stockyard established at such market p physical establishment there of the stockyard later p the Secretary, or to the purchase by any packer of stockyard where livestock is sold in open market c violating the provisions of this section shall be punish than $5,000 and not more than $20,000 for each offer violation of this section occurs shall be deemed to be plete offense." STATEMENT OF MR. JOHN B. GAGE, KAI The CHAIRMAN. What is your occupation, M Mr. GAGE. I am a lawyer. The CHAIRMAN. Do you wish to speak on Se Mr. GAGE. Yes, sir. The CHAIRMAN. Tell us what you know ab object to be accomplished by it is. Mr. GAGE. In representing the Kansas City the Farmers' Union Associations, and the Mis ducers Association, in their controversy with A Mistletoe yards, I have been brought in clo proposition that is referred to in this bill for years, and while these organizations do not att represents the complete solution, or perhaps th the problem, they do say that in this bill we ha tion, and we are supported in this belief by Agriculture, that of all other problems that department and confronted legislators with ref tion of the marketing of livestock that compl overshadows them all, and we want to present for their judgment upon it. The CHAIRMAN. Now, what is that problem a of the bill? Mr. GAGE. The packers, as illustrated by Armour & Co. has conducted and has recent panded, are operating what are known as priv Mistletoe stockyards of Armour & Co. in Kan oped in great volume a method of purchasing li hogs, on the basis of the packer applying the open market. in that market which is closed packer weighing, grading, and fixing the price representation of the shipper. Supplies are s are termed designated, selected, or protected s the surrounding territory who are given excl given locality to ship to these stockyards. It these selected shippers are protected against 1 such an extent that in a great many instances local monopolies. These yards last year received 1,039,000 head cally a third as many, or a little less than that the Kansas City stockyards, the second largest the world. The CHAIRMAN. Where are these yards locate Are they located at Kansas City, Kans.? Mr. GAGE. At Kansas City, Kans. They are located within less than a mile of the public Kansas City stockyards. The CHAIRMAN. And are owned by Armour & Co.? Mr. GAGE. Yes; in the name of the Fowler Packing Co., a subsidiary of Armour & Co., and in which Armour owns all the stock. The CHAIRMAN. And the Fowler Co. has a packing establishment there? Mr. GAGE. Yes; the Fowler Co. has a packing establishment there, located directly adjacent to the main Armour plant. Here within the last year or two they have so stimulated the receipts that possibly half of the hogs received have to be killed in the Armour plant, and some are shipped to other plants. Now, the Attorney General very recently, as a result of proceedings brought before the Department of Agriculture, rendered an opinion stating that procedure or method of marketing was, under existing law, legal and proper, and held that the Fowler Packing Co., if it was the original purchaser and acquired the hogs in that manner, could do so lawfully and resell them to whomever it might see fit, or transfer them to whomever it might see fit, to any extent, without limit. Therefore here is established a marketing route for livestock entirely distinct from that which they would follow if they went through the competitive markets. The competitive markets are regulated, and the packers and stockyards act controls stockyards charges and establishes uniform methods and requires an adherence to its regulations under penalties. They can not regulate unregulated competition of this character. The CHAIRMAN. Now, as I understand it, these stockyards of which you complain are not under the jurisdiction of the stockyards act and are not subject to its control? Mr. GAGE. As stockyards they have been held not to be within the definition of the act by the Attorney General. The CHAIRMAN. And this bill would put them under that control? Mr. GAGE. This is intended to affect only the big packers whose plants are integral parts of these public markets, connected with them, adjacent to them, and the bill is designed to carry into effective legislation the provisions of the consent decree which sought to divorce them from the stockyards business. Armour & Co. is the greatest hog buyer in the world and the biggest hog buyer at Kansas City. Through the method which I have described it withdraws to a considerable extent from competition on the public market, and in so doing naturally its action has a tendency to depress general market prices. In fact, it has been the order buyer for the eastern packer, with his plant located at the seaboard or elsewhere, who has to ship his hogs long distances and take the shrinkage and bear the necessary additional cost that attaches to that operation, who has been making in the Kansas City market a price to which the other packers have to work up, instead of the packer who is best situated to do so, by reason of this adjacent location. The CHAIRMAN. The tendency is to depress the market? Mr. GAGE. The tendency is to depress the market absolutely. The CHAIRMAN. Do you mean they pay a little less than at the regular stockyards? |