when it became a serious situation, or else abandon this provision, and let the chips fall where they will.

The last provision of this bill is the punishment provision. There is not a great deal of punishment in the packers and stockyards act. There is a great deal of discussion given to complaint, but the packer can go a long time without getting caught on the horn of punishment. We, therefore, suggest if this substitute is to be considered, or any provision is to be considered, the packer be told what he can not do, and punished if he does it. So we put in a provision for a fine of not less than $5,000 or more than $20,000 for each offense, because it is a big operation and calls for fairly elaborate punishment-punishment which will equal, possibly, the profits of violation. And. Senator, we have made each day a separate violation. It reads this way:

Each day, when violation of this section occurs, shall be deemed to be one separate and complete offense.

I have very little else to say, but I think the record ought to disclose the order of the Secretary of Agriculture in Docket No. 1, under the packers and stockyards act.

The CHAIRMAN. That has already been put in the record.

Mr. COOKE. I wish to call attention in passing to what I deem to be the uncertainties of the findings. Of course, the reviewing authority in the Department of Agriculture was confronted with the uncertainty of the law. which apparently confused the reviewing officer as to the pertinency, bearing an application of the facts that were disclosed; for instance, that I have been able to discover, of the testimony of Eugene Kern, that has been referred to, the buyer for Armour & Co.

The CHAIRMAN. His testimony is in the record.

Mr. COOKE. His testimony is in the record, but there is no reference in the findings in Docket No. 1, of the Secretary of Agricul ture, to that testimony, which was a complete manifestation. as I understand the testimony, of the vicious practices that can grow up in this private purchase by large packers off the markets.

Mr. FEAGANS. There was testimony contradicting Mr. Kern as well.

Mr. COOKE. But there was no reference to the averment made by him disclosing the facts.

Now, the next to the last paragraph of the conclusions of the Secretary of Agriculture, as signed by Mr. Wallace, contains this statement:

These conclusions should not be taken to be an indorsement or approval as a whole of the buying plan of the Fowler Packing Co. at the Mistletoe stockyards in view of the fact that the Fowler Packing Co. is dependent for its price basis upon the open competitive market where Armour & Co. is an important buyer, that the Fowler Packing Co. applies the daily average market price as ascertained in the public stockyards by its own employees in the morning to hogs of like grade and quality on the afternoon of the same day in the Mistleto stockyards, and that its own employees have been doing the grading, sorting, weighing, feeding, and applying of prices without representation of absent shippers.

While an order made in these proceedings must be confined to requirements to cease and desist from specific practices that constitute violations of the packers and stockyards act, the Secretary of Agriculture possesses the general power under that act to make such rules and regulations from time to time as he may find necessary to carry out the provisions of the law. In such rules

lon this provisio provision. Ther and stockyards act complaint, but the ht on the horn of itute is to be cor acker be told what we put in a proethan $20,000 for Ils for fairly elabDossibly, the profit h day a separate

be deemed to be on

cord ought to dis in Docket No. 1. he record.

g to what I deem rse, the reviewing s confronted with fused the review. pation of the facts n able to discover. n referred to, the

it there is no refretary of Agricul anifestation, as I that can grow up markets. ing Mr. Kern &

verment made br usions of the Secontains this state

ent or approval as a Mistletoe stockyards endent for its price Co. is an important age market price as s in the morning to day in the Mistleto the grading, sorting, sentation of absent ned to requirements te violations of the ossesses the general rom time to time as law. In such rules

and regulations he may make requirements with respect to methods of c of business to the extent that, after investigation, he may find such r ments to be justified and applicable to all yards under like circumstan order to correct or prevent conditions that are potential of violations insure conformity to the provisions of the act and effectuate its objects

Now, I think that the Secretary of Agriculture and his asso in this matter must have been confused on the whole matter that the confusion under which they labored is perfectly mani in that second to the last paragraph, in which they state the evil which must inherently exist in any such market practice warn the public who may read this order, that this conc should not be taken to be an indorsement or approval as a of that procedure. The finding won't parse against the evi and the conclusion won't parse against that part of the evi that is employed in the finding, because, of course, Congres the hog grower, and even the hog buyer, who believes in a free ket, can not indorse what is there described in that languag holding of the pigs off the market, the participation in the market by the buyer for Armour, then that buyer and h sistants going and classing and grading hogs and paying for on the basis of the price current, and Armour's own employees the grading, sorting, weighing, etc., without representation absent buyer.

As I stated in the beginning, I do not think it is necessary i case to make any disparaging comment upon Armour & Co. i whole transaction. You can treat them with courteous conside all through the past, and justify their course of conduct o notion that they are in business to make money, that as lo they do not use false representation, steal a customer's mon violate the strict rules of law, they are entitled to go ahead; bu whole system includes every opportunity that is imaginable, a in handling hogs for fraud on the market, for, fraud on the vidual shipper into their own yard, for misgrading, missorting scaling, mispricing, and misweighing.

Now, if they have not violated any or all, if they have not advantage of any or all of the opportunities that they have b do wrong, either purposely or accidentally, it has been a re able thing. I am confident that the effect of their operation on that market has been to depress the price of hogs on the K City market. It was to their interest to do it. They wer business men if they did not do it part or all of the time.

The effect of their operation on that Kansas City market I won't undertake to state the premises by which I reach thi clusion-but their operation on that hog market at Kansas C believe, depressed the price of hogs all over the United Kansas City is one of the three great markets of the Unio is the back-up market for both the great St. Louis market ar great Chicago market. If it be true that the surplus hog mak price for all hogs, as in all other commodities, then the surplus for shipping purposes at Kansas City, that filled out the re ments of St. Louis and of Chicago, St. Louis particularly, mus a great influence in making the price on those two markets. fore, if they can depress the price at Kansas City, they regis

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important and pronounced persistent inertia of influence on St. Louis and Chicago.

Witnesses for Armour & Co. have testified-and there is no dispute about it-that those markets are interrelated, that they are all part of one pool; therefore if they can depress at Kansas City, that influence is felt all over the country, and it is wrong that that should be done by any individual or group of individuals.

Conceive that the price current of hogs in the United States is like the pressure in a steam pipe. If you can make a little leak at one point in a steam pipe you reduce the pound pressure throughout its entire extent. If Armour & Co. or any other individual or any system of trading on that great open market can give control to a buyer and thus to all buyers by means of which they can work a slight depression at Kansas City, they hurt every hog grower in the United States. They hurt the price current of hogs, and that is what every hog grower in the United States is ultimately dependent upon. The farmer can not make the price, and he can not have anything more to do with it than any other indvidual, except to send his hogs into the market. But what can be done and what ought to be done is to make those open markets absolutely unrigged, so that the farmer takes his chance if he ships his hogs on a fair price current. If he gets a low one, he is out of luck, but if he gets a high one it is his good fortune.

Cudahy, Swift, Armour & Co., any group of order buyers, any combination of individuals or any single individual must be warned clearly that they must keep hands off the price current; it has got to make itself in open, fair, competitive buying, and I am confident that with the regulation of these open markets at public utilities they will be no more expensive than is absolutely necessary to maintain the public utility, and that once fairly and closely regulated, closely observed, the hog grower is going to get the benefit of a clear market which, in the end, will be the very best thing that can be done for him, and nothing else will benefit him so much.

The CHAIRMAN. We will not have a meeting on Monday. The committee will adjourn until 10 o'clock Tuesday morning.

(Whereupon the committee adjourned until 10 o'clock a. m., Tuesday, March 25, 1924.)

AMENDMENT TO PACKERS AND STOCKYARDS ACT

TUESDAY, MARCH 25, 1924

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C

The committee met, pursuant to adjournment. at 10 o'clock a. 1 in room 326, Senate Office Building. Senator George W. Nor (chairman) presiding.

Present: Senators Norris. Capper. Ladd. McKinley, Ransde Kendrick, and Johnson.

The CHAIRMAN. The committee will come to order.

Senator KENDRICK. Mr. Chairman, before we proceed with the w nesses, I have a letter here from Mr. W. J. Tod, of Maple H Kans., that he wanted me to read to the committee.

It seems from Mr. Tod's letter that the statements contained this letter, that he has inclosed to me and asked me to read to t committee, include some ideas that have occurred to him in conn tion with the Mistletoe yards, and his viewpoint on the subject which he spoke to the committee when he was here, that ha occurred to him since he left here, so he wanted the record straight. The CHAIRMAN. All right, Senator, just read it and hand it to t reporter.

(Senator Kendrick then read the letter referred to, which is he printed in full, as follows:)

Hon. JOHN B. KENDRICK,

Washington, D. C.

MAPLE HILL, KANS., March 18, 1924

MY DEAR SENATOR: Since leaving Washington I have thought of several ad tional reasons why the Capper bill to close the Mistletoe yards should not enacted.

It is impossible to drive hogs from the Kansas City stockyards through congested streets at any time without serious loss, but in the hot weather summer it can not be done without great cruelty and practically a prohibit loss. Were this bill to become a law, it would close the Mistletoe yards, th closing down a great well-managed export industry and causing a serious 1 to hundreds of farmers, besides temporarily putting a blight on American exp industry.

The claim that the Mistletoe yards might have the effect of destroying open market is to my mind simply drawing a red herring across the tra From time immemorial we have had free markets and we shall always ha them while we are a civilized people. We are in a continual state of evoluti and a system that may appear to-day wise and economical may be quite ob lete in a few years. It appears to-day that the present stockyards system the economical way of handling livestock generally. But should conditio change so that this were no longer true, the present system of marketing wo die a natural death, which, as far as we can see at present, is out of the qu tion and not worth discussing.

The board of trade is the great open grain market in this country. Up this time I have not heard that these wheat brokers or commission men c sider it a crime for a farmer to sell his carload of wheat direct to a miller he felt it to his interest to do so. Should this Capper bill become law, 329

boards of trade would have a right to say they were discriminated against i the farmers were allowed freedom enough to ship their grain to the m lle without paying them toll in the same manner as the hog farmer would be com pelled by law to pay toll to the hog commission man, only I think the grai broker would not be so modest in asking a 1-mile limit from the elevators to the mill. I feel they would want at least a 3-mile limit."

66

It will be a sad day for this country when the time comes that the farmer or any other business man can not dispose of his produce in any legitimate manner he thinks best for himself.

Very truly yours,

WM. J. TOD.

The CHAIRMAN. Right in that connection I think I ought to read to the committee a portion of a letter from Edward L. Burke, of Omaha, whom most of the members of the committee know. H has been here on hearings several times.

Senator KENDRICK. If they do not know him I think it might b in order to explain who he is, don't you, Mr. Chairman ?

The CHAIRMAN. Perhaps so.

Senator KENDRICK. He is one of the largest feeders of cattle and hogs in the State of Nebraska, and almost a constant buyer or the open market and seller on the open market, and is a man very widely respected throughout the whole State of Nebraska and throughout the entire West. I have no idea from what you have said as to what his views are on this proposed legislation, but, what ever they are, they are certainly honest convictions, and because of his wide experience there is every reason why the committee wil be benefited by having an expression of his views.

The CHAIRMAN. It is because I knew the man so well, Senator and think most of the members of the committee know him and know his rugged honesty and the business that he does, that I fee that I ought to read what he says in a personal letter to me with regard to this bill. The reporter will have to take it down as read it, because it is only a part of a letter referring to entirely per sonal matters.

He says:

Regarding the proposed amendments to the packers and stockyards act o

1921:

I have just been looking them over hastily. I have before me eight bill: introduced in the House and four in the Senate. Outside of the bills intro duced by Haugen and yourself, they seem to be aimed largely at cripplin cooperative commission companies, and forcing the packers to do all thei business at the so-called public yards principally for the purpose of benefiting the old-line commission companies. In my opinion, it is very important tha the cooperative companies should be given every ligitimate opportunity t make good; that the packers should be encouraged to do a certain proportion of their buying in the country, thereby relieving the congestion at the centra markets and eliminating unnecessary overhead charges.

The American National Livestock Association is deeply interested in thes amendments and at the proper time wishes to be heard. Unless there i a reasonable chance of the committee doing something in the near future we would not care to go to a lot of trouble to oppose some of the bills an favor others. It is my understanding that the Secretary wishes the ac amended in such a way as to give him authority to inspect the packers books and accounts. I have not seen anything covering this point in th amendments. Possibly the Secretary thinks he has the necessary authorit and does not care to have such an amendment offered until the question i settled in court.

I would appreciate very much if you would give me your advice as to th opportune time for our association to be heard in this matter.

Very sincerely,

EDWARD L. BURKE.