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We do not mention in our educational advertising - Premium Ham and “ Premium Bacon," although we have those products in mind all the time and we believe that it is good product advertising as well as good educational advertising, and in order to overcome the prejudice and secure their good will so as to make it easy for the salesmen to move the products into the consuming channels.
Mr. Anderson was asked on what he based his claim that we had been guilty of putting out misinformation, which we consider a very serious charge, because, I might say, that we exercise the utmost care in preparing these advertisements and do our utmost to avoid any misleading statements. It is a very difficult problem sometimes, because we have a complicated industry.
There is hardly any part of our industry but what is complicated, and to tell the whole story we have to use a great deal of space and a good many words. We are trying all the time to tell as much as we can in as few words as possible. We study our copy very carefully and check it up and prove it in order to get it just as accurate as we know how to get it.
By the way, I have here copies of the newspaper educational advertisements that we put out. If there is anything misleading in them, we want to know it; if there is anything misstated, we would like to know it. We should be glad to have any member of the committee ask us to explain anything in those ads or to write us later on if you find anything that you do not understand, and if you can find anything that is wrong or misleading we certainly want to know it, because if there is anything there it has gotten in unconsciously:
When asked for specific examples of misinformation Mr. Anderson gave three instances, first, that the 45 per cent of the total annual slaughter of the country he believed was misleading, that we were not telling quite all the truth; second, that one-quarter of a cent a pound profit is incorrect; and, third, that the benefits of centralization had not been realized, as we attempted to prove from the figures which we gave the committee.
First, with regard to 45 per centMr. TINCHER (interposing). Before you leave the expense of this advertising
Mr. ANDERSON (interposing). I want to ask a few questions about the general advertising campaign.
Mr. TINCHER. I have just one matter in mind. Does the expense you give there of advertising include this yearbook, for instance?
Mr. CHAPLIN. Yes.
Mr. W'ELD. The $2,500,000 does. The $1,500,000 includes just what I explained the other day, the purchase of space in magazines and papers, the mechanical work of making the plates, and so forth, and getting that stuff placed. The total advertising expenditure does include the whole thing.
Mr. ANDERSON. Does it include all the pamphlets of the various kinds which you issue on request and scatter all over the country, including the thousands of "Swift Dollars "?
Mr. WELD. It includes the Swift Dollars. Whether it includes the answers to the Federal Trade Commission, I do not know; I doubt if it does. We have not looked on that as advertising.
Mr. CHAPLIN. I do not think that it includes the answers to the Federal Trade Commission.
Mr. WELD. The Swift Dollar is handled directly by the advertising department.
Mr. TINCHER. This advertising in regard to the cost of meat to the average family being less than 10 cents a week, that was run in all the papers?
Mr. WELD. Yes, sir: I think so.
Mr. CHAPLIN. We have gotten out the yearbook for 20 years. Most of the corporations get out a yearbook for their shareholders.
Mr. WELD. Did you have some questions on that?
Mr. ANDERSON. I should like to know whether the $2,500,000 includes the pamphlets which you issue on request?
Mr. CHAPLIN. I think so. I do not think that it includes the answers to the Federal Trade Commission.
Mr. ANDERSON. There are several of those pamphlets now?
Mr. ANDERSON. Can you state what Armour's allotment for advertising in 1919 was?
Mr. WELD. No; I do not know. I know, so far as educational advertising is concerned, that Swift & Co. is the only company that has done it to any large extent. I do not believe that the other packers together last year spent $500,000 where we spent $1,500,000.
Mr. ANDERSON. You are challenging my statement, and I am perfectly willing to have it challenged, only I ask when you challenge the figures that you bring your own figures and show the facts.
Mr. WELD. You gave the impression that a million dollars a month was spent on misinformation.
Mr. ANDERSON. I do not think that anybody would assume that all the information you are giving out was misinformation?
Mr. Weld. That is beside the point. You gave the impression that a million dollars a month was being spent to try to educate the public as to our business.
Mr. ANDERSON. I am trying to find out how much was spent.
Mr. WELD. There could not have been more than $2,000,000 spent last year at the outside; possibly, a little over. We spent $1,500,000.
Mr. ANDERSON. Does that include any contribution to Institute of American Meat Packers?
Mr. WELD. No, it does not.
Mr. ANDERSON. How many of the subsidiaries contributed to the Institute of American Meat Packers?
Mr. WELD. None; just Swift & Co.
Mr. ANDERSON. None of the subsidiaries contributed to the Institute of American Meat Packers?
Mr. WELD. No, sir.
Mr. ANDERSON. How much is your contribution to the Institute of American Meat Packers ?
Mr. WELD. I do not know.
Mr. ANDERSON. How much are they spending for advertising, educational or otherwise?
Mr. WELD, I do not know.
There is no basis at all for the statement that we are spending a million dollars a month on educational advertising. There was not more than probably $2,000,000 spent last year. There was more spent last year than any other year. The total advertising for products, etc., would run up to a considerable figure, but I have no idea at all how much it would amount to.
Mr. TINCHER. The meat packers' association in Washington, it is manifest, is doing a great deal of advertising, and I understand the packers are paying for that?
Mr. WELD. There are 200 packers paying for that. Mr. TINCHER. I understand. Mr. ANDERSON. The packers put themselves in the same boat, and I have no objection; that is very fair. I did not say that Swift & Co. were spending a million dollars a month, or anything like it.
Mr. WELD. No; you said the large packers; that is the inference which you drew, anyway. I think you said they spent that much on advertising. I do not know whether you said educational advertising
Mr. TINCHER. I do not know why you would call it educational advertising; I do not think he said that.
Mr. WELD. I am telling you what Swift & Co. spent on the educational advertising. I have no figures on what the others spent.
Mr. ANDERSON. You have no figures on the Institute of American Meat Packers?
Mr. WELD. No, sir.
Mr. WELD. No, sir.
Mr. Young. You do not know what the total advertising cost of all the packers is?
Mr. WELD. No, sir: I do not know. Mr. ANDERSON. It is above $8,000,000 a year. Mr. WELD. I would not be at all surprised if it were for both educational and product advertising. It might well be over $8,000,000 a year and then be practically the smallest percentage of sales that you could find in any industry. The impression you gave out was that the large packers were spending a million dollars a month trying to educate the people. That is the thought that I wanted to bring out. I do not say that they are not spending a million dollars a month altogether in all forms of advertising, although I doubt if they are spending that much.
Mr. ANDERSON. Do the figures you are giving us include the special representatives who are here in Washington and elsewhere in special departments for the purpose of propaganda and advertising?
Mr. WELD. It covers all the advertising-department expense—the pay roll of the department, etc.
Mr. ANDERSOX. You have a special representative in Washington whom you are paying six or seven thousand dollars a year?
Mr. Weld. You mean the permanent representative here?
Mr. WELD. No, sir. His duties are primarily business duties down here. We have to have somebody here all the time in connection with the export business and in connection with the Bureau of Animal Industry, and those things.
Mr. ANDERSON. I think you have a man here for advertising purposes?
Mr. WELD. We have not any man here permanently.
Mr. ANDERSON. As far as my recollection goes it is to the effect that you had a man here with whom to advise and were paying him five or six thousand dollars for propaganda work and for combatting official or nonofficial reports about the industry!
Mr. WELD. A man employed by various corporations for the same purpose. I know what you mean.
Mr. ANDERSON. Is that expense included ?
Mr. Weld. I do not know whether it is. It is not in the $1,500,000 anyway, as I have explained. That includes the cost of the space, the expense of getting out the mechanical part of the advertisements-institutional advertising, we call it, advertising the business as an institution rather than its products.
Mr. Marsh. May I ask a queston, Mr. Chairman.
Mr. Marsh. I notice in your Book No. 2, “Why Swift & Co. handle poultry, eggs, butter, and cheese," and you say, “The produce business was in chaos. Collecting, transportation, preparation, and distribution was hit-or-miss, with delay, deterioration, and loss on every hand,” and “The consumer had to accept produce that, as a rule, had no known responsible name behind it.” In the issue of the Nonpartisan Leader there is a story by Mr. Henry Krumrey, telling about the fight of the Wisconsin farmers against the cheese combine; that is, against the packers. Do you think that it is correct to say that the produce business was in chaos and that the ecooperative and other farmers' organizations were not furnishing the market?
Mr. WELD. In the first place, there is no such combine as you have referred to. I will say this with regard to the cheese business, and all other businesses and other lines of produce, that 20 years ago it was carried on by a vast number of small distributers, and to a certain extent the butter, poultry, and cheese business was carried on by a very large number of small middlemen. To contrast our system–I did not want to go into this now, but I do not know that it makes any difference. To contrast our system of handling with the ordinary method of handling eggs from, say, the western States to New York City, under the ordinary method they had to be collected by traders at the local stores and sent to some commission merchant in Kansas City or Sioux City or Omaha, or some such place, and sold by him through a broker in Chicago to the commission man in New York City and from him to the shipper and from the shipper to the retailer.
The packer in handling that same kind of business buys directly from the farmer in the immediate locality of his assembling house. He has 35 or 10 such assembling houses out through the producing section, or from the local storekeepers, and to-day it is a relatively short distance from the producer to our assembling houses. There
we make up solid carloads of eggs, poultry, butter, etc., and ship them direct to our branch house in New York, or Providence, R. I., or Philadelphia, or Washington, and they are delivered by our own truck direct to the retail dealer. That is true of all the other commodities that you refer to under the general term “produce, butter, eggs, cheese, and poultry.” By developing that kind of an organization for marketing is what we refer to in the advertisement.
Mr. Marsh. You think that is not misinformation to state that the produce was in chaos?
Mr. WELD. It is certainly not misinformation. It may be a little exaggerated statement to say it was in chaos, although I think a great many people would say the trade is in a chaotic condition even to-day. Outside of the organized business of the large packers and other large distributors that have developed in the last 20 years they have built up an organized market for this produce, which was extremely cumbersome and wasteful under your old system of business, with small distributors and the number of different stag through which it passed. There was not a single corporation to make a definite quality, such, for instance, as has been brought about for eggsa definite standard quality. We have performed an extremely important service to the community at large in developing a standard for eggs and labeling them so the retailer knows exactly what he is buying Mr. Marsh. You do not quite admit that it was in chaos?
Mr. WELD. I say yes; I think it is perfectly proper to say that the situation was chaotic, and that to a certain extent it still is, although methods have improved right along all the time. I think that we have been the leaders in bringing about that improvement.
Mr. MARSH. Taking up this letter—I will go into that point later. I wonder if you would put into the record, with the permission of the committee, a list of the farm journals in which you put any advertising during the past few years, and how much you have paid each of them?
Mr. WELD. We could; but I do not know that we would care to. I do not believe that we want to give that.
Mr. MARSH. I make that request to go in the record.
Mr. WELD. We would have probably hundreds of journals not getting any advertising matter coming in and jumping on our necks for advertising space the moment we do that.
Mr. Marsh. That is a high compliment to the packers' methods. Mr. WELD. It has nothing whatever to do with that.
Mr. MARSH. You prefer not to let it be known what papers you advertise in?
Mr. WELD. We do not care to furnish that list. There is no reason why we should not.
Mr. Marsh. I wonder if you can tell us how much you think your sales have been increased by this advertising ?
Mr. Weld. I do not know of any way of estimating the increase in sales. We do know, so far as the future is concerned, that it will decrease the expense of marketing, which is the primary and economic basis of the justification, and that it will reduce the selling cost, make the goods move more freely, make it easier for the salesmen to get orders—in that way advertising is an economy rather