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Mr. ANDERSON. That represents the difference between the value of your stock on the 3d day of November, 1917, and on the 2d day of November, 1918?

Mr. CHAPLIN. Yes; I think that would be a fair statement of it. Mr. ANDERSON. Now, you have "earnings from departments and investments, $23,723,098." That also represents the same kind of profit?

Mr. CHAPLIN. A great deal of it; not all of it.

Mr. ANDERSON. Well, have you any idea how much of it?

Mr. CHAPLIN. No; all I can say the illustration of what I say is this: In paying our dividends and in paying the Government excess-profit taxes we have got to go to the bank and borrow money. Now, if we had made all that money in cash we would have the cash in the bank. But we did not make that in cash, and we have had to go to the bank to borrow the money to pay the taxes, like lots of other people.

Mr. ANDERSON. In this same period, how much did your inventory on November 2, 1918, exceed your inventory on November 2, 1917? Mr. CHAPLIN. I think I can tell that. [Referring to memoranda.] It was $121,000,000 September 29, 1917.

Mr. ANDERSON. And it was $179,000,000 on November 2, 1918. So you still had considerable leeway in that inventory. Is that the inventory merely of plant and equipment, or inventory of stock?

Mr. CHAPLIN. Inventory of merchandise. It shows an increase of of $58,000,000.

Mr. ANDERSON. Yes. Well, this $58,000,000 is the same thing as the $50 I had in my cow, I take it?

Mr. CHAPLIN. A good deal of it is; not all of it.

Mr. ANDERSON. So you had this increase in both places; both in your inventory and in your earnings?

Mr. CHAPLIN. Oh, no. We have it in our earnings, because it is in our inventory. Our cow has gone down quite a bit from the $150; it has gone down about $10,000,000.

The CHAIRMAN. The committee will now stand in recess until 2 o'clock.

(Whereupon, at 12.30 p. m., a recess was taken until 2 o'clock p. m.)

AFTER RECESS.

The committee met pursuant to recess at 2 o'clock p. m.
The CHAIRMAN. Who is the next witness?

Mr. RAINEY. Mr. Sansom.

Mr. ANDERSON. Mr. Chairman, I have no personal objection to Mr. Sansom going on at this time, but if Mr. Weld is going to give way to other witnesses, I have one gentlemen here, and possibly two, who have been here for more than a week, and they would like very much to go on to-morrow morning, one of them at least, and if Mr. Weld is going to give way to other witnesses, it seems to me we ought to be permitted to put on a witness to-morrow and let him get away.

The CHAIRMAN. Can we not arrange to accommodate all the people outside of town who desire to be heard?

Mr. RAINEY. I think we should. That is perfectly agreeable, Mr. Anderson.

Mr. ANDERSON. All right.

The CHAIRMAN. Who are they!

Mr. ANDERSON. Mr. Burke has been here a week and wants to go on in the morning. I think he can finish up in the forenoon if he goes on in the morning; at least I will urge him to, because I want to get through as quickly as we can.

Mr. RAINEY. I think that will be perfectly agreeable.

STATEMENT OF MR. MARION SANSOM, OF AZLE, TARRANT COUNTY, TEX.

Mr. SANSOM. I will state, Mr. Chairman, that I have my transportation and brought my grip with me to leave at 4.50 this afternoon, and have my ticket and reservation, and hope I will not detain you very long.

Mr. RAINEY. That is perfectly agreeable to all the members. You may proceed.

Mr. SANSOM. Mr. Chairman and gentlemen, on second thought I prepared a written statement instead of saying what I had to say in an oral way, and I only did this and received it back at 1 o'clock this afternoon, since which time I have gotten my dinner and therefore have not had much time to look it over for corrections. After I have read this statement, or during the time, it is immaterial to me, if there are any questions you would like to ask me, it is perfectly all right with me. I am here more by accident than otherwise; not by accident but not on this business at this time. However, I feel interested in it and have the following statement which I dictated at 11 o'clock to-day.

I may say to you that there is some of this statement that you will probably not understand why I am putting it in here, but it is in anticipation of statements that have already been made and probably will be made later with reference to our views down in Texas where we have our rows like most other people do.

At a recent meeting of the Texas Cattle Raisers' Association the resolutions committee submitted a majority and a minority report on the bills now pending in Congress. The following is a copy of the minority report, which I there favored:

Whereas there has been an agreement entered into between the United States Government and the five so-called big packers; and

Whereas that agreement had for its purpose, and was so stated by Attorney General A. Mitchell Palmer, the settlement of the agitation for legislation against the packers; and

Whereas that agreement covered the points heretofore demanded to be covered by this association; and

Whereas we do not believe there exists any necessity for any further legislation; and

Whereas it is the opinion of the majority of the members of this association that any further agitation for legislation affecting the packers is and will prove detrimental to our industry: Therefore be it

Resolved, That the Texas Cattle Raisers' Association, in convention assembled in the city of Houston, respectfully represent to the Congress of the United States that we are opposed to the passage by the Congress of any legislation looking to the Government taking control or supervision, through a commission or otherwise, of the packers at this time.

The majority report was adopted by a vote of 299 for and 127 against, making a total vote of 426 out of a total membership of over

5,000, the total vote for and against being less than 8 per cent of the entire membership.

The Texas Cattle Raisers' Association is rather an autocratic organization, the president having the power, and exercising it, to name an executive committee composed of 50 members, which absolutely controls the affairs of the association in executive sessions, allowing no resolutions to go to the floor of the convention except through a resolutions committee named by the president. The president selects these members very carefully. Few who do not agree with his views are placed on this committee, even going to the extent of removing some who become too active in opposing his

views.

Practically the entire opening day of the convention was taken up by the president in a speech favoring Government control of the meat-packing industry. The opposition was permitted on the last day to have one hour, while those favoring were allowed the same amount of time to discuss this important question.

I make these explanations for the reason that I anticipate a committee will come before you representing the association and will, no doubt, lay much stress on the resolutions being carried by a large majority. No man knows what the membership would vote if both sides could be heard and the prejudice that has been worked up could be swept aside to the extent of settling this important question in a business way rather than through prejudice.

I favor and voted for the above resolution and believe we should allow the injunction obtained by the Attorney General of the United States now in effect to be tried out. This injunction is far-reaching. It prohibits the packers from engaging in practically all other business save and except meat and its by-products. There is no doubt in my mind but what even this regulation will have the effect to increase the cost of manufacturing meat products. The volume of manufactured goods has much to do with the cost. It is economic waste to divide up large manufacturing institutions and substitute a great many smaller ones both in money and man power which will have the effect of increasing the number of city dwellers to be fed by the producer, also decreasing the number of producers on the farm. I believe we will all agree that there are already too many living in the cities.

The situation of the farmers in the West, especially in the wheatproducing country, is perhaps the worst that it has ever been. Labor is apparently all drifting to the cities where they receive better wages and shorter hours than a farmer can afford to give. In my country there is no improvement going on in the county. The cities and towns are building by leaps and bounds. I know whereof I speak on this subject as I live on a farm and ranch and have for 15 years. This constant agitation, which began years ago, but more particularly in 1908, together with the apparent desire of the Government to reduce the cost of meat, resulted in a great loss to the feeders in 1919. In 1918 the Government, through the Food Administration, especially in the latter part of it, made urgent appeals to the meat producers of the country to increase the amount of meat in every way possible. On this apparent certainty of high prices of meat, the feeders went into the market in the summer and

early fall of 1918 and bought their cattle at high prices and their feed at the highest prices ever known. These cattle were fed through the winter and spring and marketed during the year 1919 at great loss. Many of the meat producers view with great alarm the outlook for future prices, there being at this time little or no export demand and are also confronted with free trade in live stock with pending legislation for Government control by laws or commissions with uncertain effect on the large packing institutions, which should be looking around and making every effort to find a market for our surplus meat. Unfavorable legislation certainly will not have the effect to stimulate and encourage these large packing concerns of which we ought to have more instead of less to use all their efforts in finding an outlet for surplus meat.

It is inconceivable to my mind how we may expect the enormous meat production of this country to be handled economically and cheaply except through large business concerns with capital and facilities to take care of the surplus when it comes. When cattle and hogs are ready for market they have to be sold. It is now a fact that the price paid the producer for his cattle is only about 35 per cent higher than prewar prices while all other production is as high and higher than when the war closed.

I have no sympathy with the suggestion that we should throw restrictions around big business to the extent that you destroy their efficiency. I fear the results of this proposed legislation. The most you can say for it is that it would be an experiment, and to my mind a very dangerous one.

The producer is as much or more interested in the economical handling of his products than anyone else, hence, he feels great interest in the proper distribution of his products to the consumers at fair prices. We feel that at this time the present system of the retail dealer in distributing the meat to the consumer is wasteful and that there is much more loss to the producer and much more punishment to the consumer by wasteful methods used in retailing meat than there is in the wholesale preparation of this meat. For illustration, I made some investigations in this city last year, also the city in which I live, Fort Worth, Tex. I found at that time there were 860 retail dealers in meat in the city of Washington and 260 in my own city of something like 100,000 people. Practically all of these retail dealers handle a very small amount of meat. They are forced by reason of overhead charges, high prices of meat cutters, to add about 50 per cent to the cost of this meat to pay their actual overhead charges. Then when they put a reasonable profit to this it makes it come high.

Suppose this retail business was done by one-third of the number named, as it should be. Would it not reduce the overhead charges greatly besides leaving five or six hundred men in this city to be employed in other pursuits or, preferably, left on the farm to be producers instead of consumers? Should production be taxed to maintain all of this unnecessary labor now mobilizing in the cities? It is often said that meat is high to the consumer. While this in a sense is true, we contend that it is yet the cheapest article of food that can be bought and that if economically and at a fair profit given

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to the consumer he would have no right to complain. I fear the results of legislation of this kind under Government operation for the reason that all the people eat meat and only 5 per cent produce, thus leaving about 95 per cent of the population who have no other interest in production except that they get it cheap.

It must be conceded that this 95 per cent will have much more influence with those who are elected by the people and by popular vote than the 5 per cent. This is illustrated in the action of Congress July 28, 1919, when the select committee of 15 was appointed under the resolution of the House the 4th day of June, 1919. for the purpose of investigating the contracts and expenditures of the War Department. They found on July 8, 1919, that the surplus of food stored in the United States over and above the needs of the Army was as follows:

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with the statement that this surplus was constantly growing larger because of the continued demobilization of the Army.

The committee made the following recommendations:

That these food supplies be sold without delay on the domestic markets to the American people, who at a great sacrifice bought and paid for them, and the committee looks with disfavor on the policy of exporting them from America to foreign nations for sale and consumption.

It will be understood that these supplies were bought for the purpose of export, and, as I understand it, the War Department wanted to export this as well as other surplus foodstuffs to foreign countries where it was very much needed and for the further purpose of avoiding losses to those who had produced at the request of the Government at very high cost.

The Government, in carrying out these recommendations, have shipped a great deal of beef to the West, where we were not short of beef. They shipped to Fort Worth, Tex., to the city administration, 124.960 pounds of surplus Army beef. All of this beef was shipped from Chicago to Fort Worth, where there was no shortage in meat, it being a very large packinghouse center. The first shipment of this meat was made on November 18, 30,000 pounds, billed at 12 cents delivered; on December 18, 44,960 pounds, billed at 12 cents delivered; on February 1, 46,000 pounds, billed at 13.40 cents delivered. This meat was sold on a basis of 15 per cent above cost price to cover cost of handling.

I am advised on good authority that the first cost, not including freight and wrapping in preparation for export or cost of carriage, was around 25 cents per pound.

The policy of the War Department, so far as I know and am advised, has not been to sell in competition with other manufactured articles at prices which would demoralize the manufacturing situation.

I mention these facts for the purpose of explaining to you why I oppose Government control of the meat production of this country.

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