EXPOSE PACKERS' COMBINE
Expose Packers' Combine Attempt to Control the Cattle and Meat Market of the Country Brought Out by Federal Trade Commission---Facts Suppressed by Many Newspapers STARTLING revelations as to the...
...Twombly declared, " I found that the same percentages have been parceled out among the big packers, with hardly any variation of importance.' One memorandum submitted showed the percentage of hogs purchased in 1917 as follows: Swift, 36.01...
...The minutes continue: "We then explained to him our ideas in reference to periodical publicity of average beef prices and cattle prices and also average division of the receipts of beef between the livestock producer and the packers, etc...
...Heney said, was shown in the reports of cattle purchased by the Swift and Armour companies at Fort Worth and for the year 191C...
...He also saw Senator Thompson of Kansas, of the firm of Thompson and Robertson, Wahlstmaier building, Kansas City, Kas., who is a personal friend of Mr...
...19, 1915, by his nephew, Philip D. Armour, was submitted by Mr...
...Cudahy, 11.04...
...At first the Madison meat markets showed up the invoices so that we could see the prices, but when complaint was made by the government they suddenly stopped showing the invoices...
...From calculations which I have made on the purchase of all live stock from 1913 down to the present time," Mr...
...Others have bought about 900 cattle more than we have the last two weeks...
...Armour & Co., 31.79 per cent...
...The packers contemplated the appointment of E. Dana Durand, former Director of the Census, to represent them before the committee...
...Gates' request...
...The farmers' company is in competition with the five big packers—Armour, Swift, Morris, Cudahy and Wilson...
...Make an extra effort to get closer in line...
...Gates says Thompson is a poor man and for that reason should not be in Washington, but that he thought so much of him personally that he gave $1,000 against his campaign expenses...
...Report of Committee IN A report under date of April 10, 1916, this committee said: » "This administration has not disturbed business by prosecutions, and does not wish to be known as appealing to the mob spirit...
...Wilson and Mr...
...For instance, the invoice showed shipments per order, but did not specify what the order was...
...17, 1916, said: "You, no doubt, have seen the margin figures for the week ending Aug...
...He testified that he was the manager of the Farmers Cooperative Packing Company at Madison, Wisconsin, since July, 1917...
...182,040 The difference for the year was only four head of cattle...
...Some of the most interesting revelations as to the political activity of the packers were made from the letter files of these concerns in connection with their efforts to stifle consideration of the Borland resolution...
...Conclusive evidence of collusion in buying, Mr...
...A telegram from T. E. Wilson to C. H. Hill, Aug...
...Wilson buyers in the field were submitted by Mr...
...Heney also showed to the committee that a protest of a number of Detroit bankers that the present investigation was disturbing "economic conditions had been inspired by the packers...
...Underneath this wa3 written: "A...
...Twombly said he to him that and asked him if he had...
...The testimony taken by the commission is included in several volumes and goes into almost every phase of the business of the packers...
...M. & Co., 13.19," which were said to be rtpresentative of the holdings of Armour, Swift an(j Morris in the National Packing company...
...Gates, and Mr...
...b. Company percentages...
...Louis F. Swift while the Borland Resolution was still pending, Mr...
...He thought it an excellent scheme and would assist...
...Wilson, 10.90...
...M . 14.9g...
...In a letter to Mr...
...C, 10.00...
...Congressmen wish to go home to attend to their fences...
...2The packers are each allotted a certain • percentage of the cattle or hogs that come to market...
...Retain Old Percentages ATTORNEY HbNEY, for the commission, declared it h^ been found that when the National Packing company was dissolved the properties were divided so that each of these three packers could retajn the same percentages of business in each city w)uCh they had, enjoyed before the dissolution Furthermore, he added, in 1913, the Sulzberger corporation, wh;ch iater became Wilson & Co., and Cudahy & Co...
...5. Oklahoma is 40 cents worse than Kansas City and 65 cents worse than Chicago...
...This was referred to the committee on Judiciary of the House...
...From the correspondence read by Mr...
...He suggested that he go to Washington at once, have an interview with his friends in the Bureau of Markets, in the federal trade commission and in the agricultural department to see if he could not bring them to his way of thinking and have them suggest the adoption of such publicity scheme...
...3They do not bid against each other and if • the cattle raiser, not satisfied with one seeks another market, the price is so manipulated that he usually takes a loss by the operation...
...Armour, 27.05...
...Gates laid a great deal of stress upon the senator's friendship and believed that we would make no mistake in keeping close to him, and that we could reciprocate by giving his firm some of the legal business we have to do in Kansas City—and I be- . lieve it would be in the interests of the situation to consider Mr...
...The Farmers Company is discriminated against by the big five...
...Expose Packers' Combine Attempt to Control the Cattle and Meat Market of the Country Brought Out by Federal Trade Commission---Facts Suppressed by Many Newspapers STARTLING revelations as to the existence of a combine of the packers to control the cattle and the meat markets of the country were Drought out in the Federal Trade Commission inquiry into the meat packing industry...
...7.70 per cent...
...It has a capacity of about 1,000 hogs a day and 75 cattle a day...
...Cudahy, 10.77 per cent...
...Prior to September or October, 1917, the farmers' company was selling at least 60 cattle in the city of Madison each week, but after the big five adopted their unfair practices, the farmers' company's sales dropped immediately to less than 60 cattle in the entire month of November...
...Durand and he objected to the employment on the ground of his former government connection...
...4The price of meat and hides is so manipu-• lated as to drive out of business the Independent packers...
...the Omaha market was divided among Armour, Swift, and Wilson, and the Denver and Fort Worth market between Swift and Armour...
...O. S. Bowman at Kansas City wrote Mr...
...Heney as further evidence of agreement as to stock purchases...
...46.70...
...On beef, formerly the invoices showed the quality as "light heifer," "medium heifer," "light steer," and "medium steer," but later the invoices did not show the grades...
...It does not wish to spend money, as its revenues are in bad shape...
...prior to that time he was employed by Swift & Company through the Plankinton Packing Company at Milwaukee for about seven years...
...This basis, he said, covered the purchase of cattle, sheep, and h^ throughout the United States, even the coi^yy buying...
...The big five are keeping up the practice now all the while...
...Durand while in the government service...
...In the minutes of the meeting of the packers to consider this plan, Mr...
...Cudahy, 9.57...
...This was true even to the allottment of the expense of maintaining a lobby at Washington...
...A letter to Mr...
...Heney said: "We have letters to show that this understanding has been in eeffct since 1913 and is still in effect.' Special Agent Twombly exhibited copies of memoranda and letters which he had secured from the private files of Swift & Co., showing that for the year ended Dec...
...It said: "Of course, as you know, everything here is done on a 50-50 basis, and with the facilities we have it is almost impossible to keep up this ratio...
...Wilson, 8.06...
...Gates had an interview in which the Borland bill and the causes leading up to it were discussed by Senators Shafroth of Colorado, Thomas of Colorado, W. J. Stone of Missouri, Reed of Missouri, Thornton of Louisiana, and Hoke Smith of Georgia, and Congressman Taylor of Colorado, who are all unfavorable, to the resolution and to the agitations now going on in Washington by the radicals in the cattle associations...
...There it was permitted to sleep and nothing was done until after the elections were out of the way when the present inquiry was ordered...
...They take turns in selling at a loss...
...S., 86.75...
...Packers Private Files BUT Louis F. Swift vetoed this proposition to have the bureau of markets publish the bulletins referred to...
...HENEY told the commission that in addition to showing that purchases of live stock were made in the exact proportions set forth in the memorandum, all joint expenses of the packers, such as the opposition to the Borland resolution in congress for an investigation of the live stock industry, were met in the same proportion...
...McManu3 wrote: "Wo believe the situation to be serious and recommend that everything be done in every direction to head off the present movement and to relieve the tension...
...Another exhibit showing the cattle purchases for 1915 and 1916 was as follows: Swift, 34.58...
...A letter to McManus signed L. A. Carton, treasurer of the Swift Company, 13 very illuminating and is as follows: "Mr...
...He said Edward F. Stsphenson, an employ of Swift a Co., Entered the room where he wa^ working, and notieing the memorandum, askes him if he had something...
...White appear to have objected on the "ground that they might be charged with having subsidized Mr...
...Marris, 17.86...
...Mr...
...Heney in support of his contention...
...letters to Thomas E. Wilson and from Mr...
...Armour, 30.82...
...It is not possoble here to more than indicate the scope of it, but one of the most interesting developments came in the testimony of Mr...
...A memorandum taken from the files of the packers addressed to the bookkeeper of Swift and Company asked this question "Can you give me Nat...
...Morris, 18.17...
...were brought in on a new basis, which hb declared was still in force...
...W. H. Gates, chairman of the Democratic state committee of Colorado, whom you met in my office the first of this week, returned from Washington and New York today, and while in Washington met some of the president's advisers who told him that the president was unwilling to do any-- thing to disturb business, and that he did not approve the Borland resolution and that the advice he had concerning it did not appeal to him, according to Mr...
...The same was true of sausages...
...No, just forget it,' Stephenson was said to have replied...
...May said that one week, one of the big five would discriminate on beef and the next week one of the big five would discriminate on pork...
...Tumulty...
...It was decided to call Mr...
...Aside from the sensational material with respect to the efforts 0f the packers to control legislation and to Prevent public inquiry into the business most sensational disclosures were mado by documentary evidence 0f an agreement of the five great packers i0 divide the country into five districts for buying iive 8tock, for the purpose of limiting competition...
...On a 50-50 Basis « LETTER to J. Ogdcn Armour, written A from Denver Oct...
...Purchases on the Chicago and Kansas City markets, seized documents were shown to show, were divided among the big packing companies...
...Walter Twombly, , trsd* commission special agent, who found the memorandum in the Swift files, was put on the stand to testify regarding the circumstances...
...Tells of Big Five THE Farmers' Co-operative Packing Company is a co-operative concern organized by about 5,300 farmers, capitalized for $750,000...
...C The packers not only divide the market, *"*» but they shared all expenses at the same ratio that was maintained in the purchase of cattle...
...The National Packing Company was organized in 1903 and Vas dissolved by the federal courts in 1913...
...Early in 1916 Congressman Borland introduced a resolution authorizing such an investigation...
...McManus as "a sincere man ? ? * obsessed with the idea that he always got the worst of everything...
...Order of President THE PRESENT investigation was undertaken upon an order issued by the President...
...Wilson that he hoped to do "some wire pulling that will prove beneficial, and advised that pressure should be brought on Congressman Taggart of Kansas, a member of the committee and "our friend Sweeney of the First National also wired Senators Stone and Reed to "put the skids under this proposition and get rid of it...
...Another letter from the private files of the packers carried a suggestion from Arthur Meeker, vice president of Armour & Company, to F. E. White that the Judiciary Committee which had the Borland resolution should be flooded with telegrams and correspondence showed that this suggestion was carried out...
...Wilson from C. H. Hill, the Wilson company buyer in Oklahoma City, under date of April 13, 1916, said: "I could hardly believe that one of our men would interfere in any way when another buyer was trying to buy cattle, as I have always instructed our buyers positively not to do this, as we were only putting the cattle up on each other...
...This practice of not specifying the grade in the invoice was done to cover up the unfair competition of the big five and make it hard to secure the evidence of their violation of law...
...May, a packer of Madison, Wisconsin...
...It must come before the corporations for political subscriptions shortly, ns the convention is almost at hand...
...The invoices did not show the quality of the sausages...
...C% 40.11...
...We believe that as it stands today, nothing could stop criminal prosecution and that tho situation is dangerous where men like Burke, who have been in the business all their lives, regard trivial and irrelevant circumstances as conclusively proving unlawful operations...
...He called attention to a second notation, which read as follows: "A., 29.26...
...The Swift Company's counsel, R. C. McManus, was sent to Washington to keep in touch with the situation...
...While in Washington Mr...
...Am still telling our buyers to lay back and not take over 40 per cent till we get them in line with Kansas City...
...Morris £ Co., 13.17 per cent...
...These figures were: Swift & Co 182,036 Armour A Co...
...Heney it developed that a legislative committee consisting of R. C. McManus, J. M. Chaplin, and A. D. White of the Swift staff was sent to Washington in April, 1916, to direct the fight...
...One of the witnesses, Edward Burke of Omaha, was described by Mr...
...Evidence of Combine MR...
...Later when the government agents secured invoices they found that the big live had changed their method of invoicing their shipments so as not to show the real facts...
...s. & 10.00...
...In the case of "pork Ioint" the invoice showed only "pork loin," but did not show the grade...
...1913, the packers had purchased a total of 16,064,771 hogs which were divided up among them according to prearranged percentages disclosed in the memoranda furnished, as follows: To Swift & Co., 36.57 per cent...
...The same day there was the following telegram from K. C. Hill to T. E. Wilson...
...It takes the cattle and hogs of the farmer members, butchers and markets them and is supposed to pay 8 per cent dividends on the capital stock issue and the profits are divided among the farmers in proportion to the live stock delivered to the plant...
...Every week someone of the big five would be selling its product below cost while the other four maintained their regular market price...
...The following facts were proven from the documentary evidence found in the files of the packers and by the examination of witnesses by Francis J. Heney, attorney in charge of the inquiry: 1Notwithstanding the dissolution by the • courts of the National Packing Company, the big Five still divide the country into districts to stifle competition in buying cattle and hogs...
...S. & Co...
...I have been holding our buyer back the last two weeks, trying to get that market in line...
...Sulzberger & Sons (Now Wilson & Co...
Vol. 10 • March 1918 • No. 3
