AMENDMENT TO PACKERS AND STOCK that the Government, through the Federal Tr other means had tried so hard, and succeed out of. The CHAIRMAN. Who was the man? Mr. SWIFT. It was Mr. Brand. It was a mat Senator. The CHAIRMAN. I wanted to get this in the re Mr. SWIFT. You can not make these things we can not get action under the terms of the cons the evils that exist there; the fact that we have Government disseminating this propaganda, ar propaganda on behalf of the packer. It certain a well-conceived plan of propaganda to break decree, and I think the efforts now being exer are directed to recouping the losses they suffer The CHAIRMAN. Of course, I think anybody v study and be square about it, must admit that awful mistake and never ought to have been a understand how anybody could reach a conclusi Mr. GAGE. I would like to say with regard to Swift referred to, that this mortgage was recorde lieve it secured $2,515,000-in bonds. Not man Mr. Waddell had testified under oath at Kansa: the property covered by the mortgage was only It was after that that the recorded mortgage bonds to be $2,515,000. The CHAIRMAN. Now, Mr. Swift, your opinion ped the Morris plant, the most efficient plant of the Fowler plant because if they had not done tha their Mistletoe yards out of business? Mr. SWIFT. Yes, sir. Mr. SWIFT. No, sir: it was located in the san as the plant of the other packers. The CHAIRMAN. How was it located with reg plant was it advantageously or otherwise located Mr. SWIFT. It is much closer to the Kansas Ci the Fowler plant. Mr. GAGE. It is also connected by driveways City yards. Mr. SWIFT. And I would say that it was bett shipping standpoint. It is on the main line of and the Missouri Pacific, and the Belt. The CHAIRMAN. And the Fowler plant is not? Mr. SWIFT. No; the Fowler plant has one line do their switchingI have forgotten whether it was the Frisco or the Missouri Pacific. It is the Missouri Pacific. The CHAIRMAN. Now, just why-it may be repetition, but I have in mind where I want to use this testimony-it may be a repetition, but state again now, in addition to what you have said, why they would have to continue to operate the Fowler plant in order to conduct their operations at the so-called Mistletoe yards? Mr. SWIFT. Because when our first complaint was filed with the Secretary of Agriculture, their answer alleged that the Mistletoe stockyards were purely a part of the Fowler Packing Co. and were solely used for the supply of hogs necessary for the Fowler plant. The CHAIRMAN. Therefore, if the Fowler plant were scrapped, it would have at once, if they told the truth, scrapped the Mistletoe yards? Mr. SWIFT. Yes, sir; and that is what they were afraid of. They were operating three of them, and after an exhaustive study by their experts they were advised that the Fowler plant should be closed. The CHAIRMAN. Now, then, why would it not have paid them to have operated both the Fowler plant and the Morris plant which they scrapped. Mr. SWIFT. Because they had too much killing capacity as it was. The CHAIRMAN. In other words, if they had maintained them all they would have had a bigger plant than the situation would have warranted? Mr. SWIFT. They would have had one idle plant out of three. The CHAIRMAN. Why could not they operate all three? Mr. SWIFT. Because they were not buying enough. They had more killing capacity in the plants then they could use. The CHAIRMAN. When Morris still owned the Morris plant, before the merger, they all operated, did they not? Mr. SWIFT. Yes. The CHAIRMAN. To their full capacity? Mr. SWIFT. No, sir. When we tried this case originally, the Armour manager, Mr. Carlson, testified the Armour plant was running 50 per cent capacity on hogs and the Fowler plant was running 50 per cent on hogs, two separate and distinct plants, with two separate power plants, and we asked him if, as a business proposition, it would not be cheaper to operate only the one plant at full capacity and he could not answer. The CHAIRMAN. What did he say? Mr. SWIFT. He said it would not be cheaper to operate only one plant under all conditions. We asked him what all the conditions were that he referred to. The CHAIRMAN. What did he say? Mr. SWIFT. He could not say anything. That was his story, and he stuck right to it. I examined the witness myself, although I was only a commission man; and in answer to a direct question from me in which I said, "Mr. Carlson, you are manager; you have entire charge of both these plants, and if you knew that you had 5,000 hogs at the Mistletoe vards and your requirements for the day were only o their switchingle Missouri Pacific. >etition, but I have t may be a repetiyou have said, why vler plant in order tletoe yards? was filed with the that the Mistletoe cking Co. and were he Fowler plant. at were scrapped, it apped the Mistletoe ere afraid of. They xhaustive study by ler plant should be t have paid them to Morris plant which 8,000, would not that weaken you very much in the Kansas City market?" And he said, "No." you had 8,000 at Mistletoe, and your requiremen would your buying at the Kansas City yards And he answered that it would be the same. regard to 10,000, and he said it would be the sam The CHAIRMAN. Did you ask him what he w after he got them? Mr. SWIFT. This was the witness that the exami to me about from the bench. The examiner said going any further with this man. He is lying." man was sitting there with the perspiration jus face. Their stories do not agree. Here is wh pinch Mr. GAGE (interposing). They defend the me that they would put two rotten apples together one. The CHAIRMAN. Now, Mr. Swift, suppose the Suppose they said, "We are not making any mor said, "We are going broke." Mr. GAGE There is a long story connected with Mr. SwAFT. It was not lack of profit in the pac The CHAIRMAN. I think I know the story. W ord. What is your idea, Mr. Swift, about that? Mr. SWIFT. I think in the first place they w many collateral activities. The CHAIRMAN. What about overhead? Mr. SWIFT. It is outrageous. I figured up on the buyers of hogs in the Kansas City market and Armour bought, and when I had it all figured out actively engaged in purchasing hogs for Armour & would have been plenty to purchase all the hos there. As I figured it, they were not buying an 240 a day each. Of course, some of these six me addition to buying, doing other things getting other packers' buys or things like that, but that terribly overmanned they were. The CHAIRMAN. I want to ask Mr. Swift son lay a foundation for it. When this merger was resolution. It was referred to the committee, pointed a subcommittee. Members of the subco honest men, conscientious, and I know had been way through and I thought acted squarely. B hearing commenced they commenced coming to committee room, privately and frightened to de want to go on any further because they were afra panic. They had been approached by all kinds that these people had lost lots of money and tha upset; and that if we went into an investigatio impossible for them to borrow money to meet t would be likely to create a crash. Now, these m mittee and of the subcommittee were honstly f know anything about that? Mr. SWIFT. I think that was part of the same tactics that the packers used when they squeezed some of the bonuses out of the Chicago Stockyards Co. by telling them that they would move farther away. But as a cold-blooded proposition we all know that a packing plant can not be used for anything except a packing plant. You can not make any other manufacturing business out of it. It is expressly and solely made for packing use and allied things, and even if the plants did get into financial difficulty somebody would operate them as packing plants; they will still keep on going. If they have injected too much water in their respective companies, then that water has to be squeezed out, and it would be better to have the investors in these companies suffer a loss than to have the enormous tax put on the livestock of our producers for all time to come that will be necessary to make these inflated companies show a profit on their operations. These plants must be operated: they can not be operated for anything but packing plants, and there will be found somebody who will operate them. I think this proposition of frightening people is predicated on the same grounds as was the demand for the bonuses. The CHAIRMAN. You need not detail that to me. I have my own definite ideas about the matter. I do not claim to be a brave man. but I was not frightened a bit. I realized that a lot of my associates were. I was afraid I stood in the minority. Mr. GAGE. Would it be proper to give the committee the correspondence that has passed between the interested parties in this matter? The CHAIRMAN. Yes; put it in the record as part of your testimony. (The correspondence referred to is here printed in full, as follows:) Mr. WILLIAM HIRTH, Editor the Missouri Farmer, Columbia, Mo. MARCH 31, 1923. DEAR MR. HIRTH: Your letter of March 15 and later letter of March 26 received. They both have been referred to me for reply, due to the fact that previous to Mr. Armour's departure for California we were working night and day on administration matters, and it is only just now that we have secured a little relief. I have read your letter, and the press statement which you attached, with considerable care, and will say frankly that I do not know just what you expect of us in reply. You presumably are fighting for something you believe to be right, but you do not offer us any solution of our own problem. We have a large investment in the Fowler plant and the Mistletoe yards. This plant and our Armour & Co. plant are located in territory that is notorious for its failure to keep the Kansas City slaughterhouses operating even within a reasonable degree of capacity for more than three to four months of the year. As long as we have a heavy investment we must protect it in so far as possible by taking steps to insure a regular supply of hogs for slaughter. If the public market and the commission men fail to do this, as they have in the past, there is no other course for us to follow. That the practice is sound, both economically and locally, is unquestionable, and its growth in popularity with farmers and shippers since your colleagues began to attack us has furnished interesting proof of the fact. Yet we believe absolutely in the public market and deny your insinuation that we are doing our best to put it and the cooperative commission company out of business. You have seen fit to quote what you liked for the purposes of your argument out of the Mistletoe hearing records, and you have omitted anything that would deny your premises. Do you not recall that one of the that if the ne tactics that the we all know that a pt a packing plant. siness out of it. It d allied things, and ty somebody would keep on going. If spective companies, ld be better to have an to have the enorers for all time to d companies show a - operated: they can s, and there will be this proposition of grounds as was the me. I have my own to be a brave man. lot of my ssociates committee the corsted parties n this s part of your tesated in full, as f1 MARCH 31, 1923. principle involved in the Mistletoe yards was extended if it eliminated some economic waste over the method of marketing livestock on the open market, that it Do you also not recall that Mr. Armour replied that h the wish or the desire to have the method extended nor thing? He said: "I do not think the packers-I am sp & Co. and I assume that what is good for Armour & Co. believe in this. In some isolated cases it is necessary had it when we took over the National Packing Co., have found those yards there." Furthermore, when as to whether the principle should not be further ext United States, Mr. Armour again insisted that it is no United States, implying, as in his previous statement, th had developed due to specialized conditions. With rega we are trying to put cooperative marketing out of b absolutely contrary. We buy a large part of our requ operative marketing associations and were the first to on the public market when they established their busi buy them. The nub of the argument from an economic standpoi to this question. What difference does it make from the whether 20,000,000, 25,000,000, or 30,000,000 of the n slaughtered annually in the United States, pass throug Normally, the figure lies somewhere between twenty-fi It is obviously impossible that all hogs slaughtered sho but it is just as obvious that it is necessary for only through the public market to permit a free and unhan price as based on supply and demand. From the standpoint of its effect on price levels for th the entire Kansas City hog market would be wiped ou tween supply and demand and the registration of prices the same. I say this from the economic standpoint and the Kansas City yards do not perform a broad service point I wish to make is, that the hogs ordinarily marl could go through St. Louis, St. Joseph, and Oklahoma slack times of the year could be slaughtered in the small in which they are produced, without affecting by one of hogs, or at least the net returns from hogs, all over If you wish my personal opinion, I believe it would be of the country if all animals went through the public st less, as president of this company, what I face is not a as I have stated, but a practical business problem of ho packing-house equipment without the loss to my compa and skilled organization. You and your friends on the Kansas City exchange hav question politically. If you are sincere in it, why not help commercially? President Armour & Co., Stockyards, Chicago, Ill. DEAR MR. WHITE: The fact that I have been extremely I wanted to give your letter of March 31 careful thoug an earlier reply to that communication. That I am con which I believe to be vital to the livestock producers of you also have the right to exercise a vigorous partisansl can, I think, be safely taken for granted at the outset. You say that I have not quoted the testimony of Mr. is, that I have quoted such parts as were favorable to In this connection I will say that I was not present a and have never had access to a transcript of the full tes 93437-24- -3 |