more, but I do not think he could keep it up very long. The packer is in competition with all these little fellows, and with the fellow I am talking about who killed this beef, and the minute he did that and the cattle were selling that much lower in town, don't you know that they would go out there and buy them and the retail meat man would go out and kill them, as many of them do. Many of them are killing their own meat.

Mr. VOIGT. Then you do admit that the packers are in a position to raise the price of meat?

Mr. SANSOM. Temporarily; yes, sir.

Mr. VOIGT. Two or 3 cents a pound if they saw fit?

Mr. SANSOM. Temporarily only; do not misunderstand me. It would be very detrimental to them because the very minute he did that, Mr. Butcher would come over to the yards himself and would go to the other fellows and would make arrangements to get his meat. There is no spread like that. Competition does not permit of it. The packer only is enabled to sell it in that way on account of the volume of business he does and do it cheaper than the man can go and butcher it himself.

Mr. VOIGT. I am not disputing that statement.

Mr. SANSOM. If that is the case, in Fort Worth, the town I live in, which is a large market, it is about the third cattle market in the United States-we had 261 retail grocers there a year ago—I do not know how many we have now, but the town is 30,000 bigger than it was-I have not kept any record of them for a year-I do not know whether they have grown-the cattle come to that market every day, and if the packer did not furnish the grocery man with the meat cheaper and in better condition than he could go out and buy it, the grocery man would not do so. He is in that kind of competition all the time. The grocery man knows what the meat is costing the packer. That is a wide-open market as any in the world. Any man on earth who has the money can buy at Fort Worth.

Mr. VOIGT. Do you think that the large packers sell their meat cheaper than the small packers?

Mr. SANSOM. No, sir. I think that the small packer sells at the same price as the big packer. He is satisfied. I know that Joseph H. Green packs on his own ranch. He has a packing house. He owns the Taft ranch in Texas, and he has his own packing plant. It is out in the country.

Mr. VOIGT. If the small and large packers do sell for the same price, then your argument that the large packer can sell meat cheaper because he handles the side lines falls to the ground.

Mr. SANSOM. No, sir; because the small packer has to-day more profit on beef than the large packer has. If you are killing 2,000,000 cattle in a year, and you are making a dollar a head, that would be some money. If you are killing only 2,000 cattle a year a dollar a head would not be very much money.

Mr. VOIGT. Will you not admit that the small packer as well as the big packer attempts to get all the money he can for his meat?

Mr. SANSOM. I think that is a fact. I do not mean that he can not temporarily, what I said a while ago, put it up, but he does what he can to hold his business, hold his business and keep his trade.

Mr. VOIGT. When he is figuring on what he is going to get for his

meat, he does not stop to think what he is going to make out of the groceries and other lines?

Mr. SANSOM. I presume he figures on his overhead charges and his income like any other business man will do.

Mr. VOIGT. That is all.

Mr. ANDERSON. Just one more question, Mr. Sansom. Did you know that Libby, McNeil & Libby and Swift International were separated from Swift & Co. in 1918?

Mr. SANSOM. No, sir; I did not. I did not know that they were to be separated. I know they are separated now, but I do not know when that occurred.

Mr. ANDERSON. Were you under the impression that the separation was in any way the result of this decree?

Mr. SANSOM. I do not know as to whether that is a fact or not. I do not know when the separation came about, but I do know that it has practically already been done. As to the date, I do not know.

Mr. RAINEY. Mr. Sansom, the Federal Trade Commission in one of its reports recommended that the Government take over the ownership of the packers' cars, branch houses, and stockyards. Afterwards, I understand, there was a committee appointed to which you have referred?

Mr. SANSOM. Yes, sir.

Mr. RAINEY. In August, 1918?

Mr. SANSOM. Yes, sir.

Mr. RAINEY. You were a member of that committee?

Mr. SANSOM. Yes, sir; I was.

Mr. RAINEY. Did you hold meetings?

Mr. SANSOM. We sat around a table about the size of this for about 14 days in mighty hot weather.

Mr. RAINEY. What happened?

Mr. SANSOM. As a result of that meeting, you might say that there was a vote of five to two, after the hearing and everything. If you want to know what it recommended, it did not stop at those things. It recommended that the packers' bank stock be taken away, that the loan-company stocks be taken from them and turned over to the Federal reserve bank to be administered by it, and to take their subsidiary interests from them, including refrigerator cars. That was favored by the Federal Trade Commission in the final report made, and also by the Labor Commission. The other three votes made a different recommendation, which was in effect to start to put the order into effect as soon as it could be done afterwards.

Mr. RAINEY. What was the majority of the committee's recommendation?

Mr. SANSOM. The majority report, in substance, amounted to ordering the Federal Trade Commission and the Agricultural Department to prepare a uniform system of bookkeeping to be put into effect and adopted by the packers and to limit their profit to 9 per

cent.

Mr. RAINEY. What was the majority report with reference to the stockyards, branch houses, and packer-owned loan companies?

Mr. SANSOM. That was all cut out. There was no report made favoring the taking over of those institutions at all. That is as far as the majority report went, in substance, except to order a uniform

system of bookkeeping, not put in by themselves, but furnished by the Agricultural Department and the Federal Trade Commission. They were to agree on a system to be adopted by all of these packers. the Government furnishing the auditors, reports to be made weekly, monthly, and so on, and to put a limit on their profits. That is what was done. That was in August. They had not more than gotten started on that, as far as I know. Of course, the war closed this in November.

Mr. RAINEY. When you began your statement, did you intend to state what business brought you to Washington. I do not know whether you were interrupted or whether you desired to state that or not?

Mr. SANSOM. I think you misunderstood me saying that. I do not care, unless you wish to ask the question.

Mr. RAINEY. I do not care to question you.

Mr. SANSOM. My business here was an invitation, a request, you might call it an order from the Federal Reserve Board, on some matters pertaining to the Federal Reserve Board at Dallas, of which I happen to be a director.

I did not come on this time for the purpose of appearing before you gentlemen. However, I might say that if I had the time I felt. it my business to have done so. I came for that purpose and wound up voluntarily by coming before this committee. You can imagine from what I said that we had some warm time down there in our convention.

Mr. BURKE. May I ask you a question?

Mr. SANSOM. Certainly.

Mr. BURKE. Do you remember whether the majority report of the committee of five approved the license system under which the packers have been operating?

Mr. SANSOM. It was not made by that committee; no license system report was made.

Mr. BURKE. Do you remember whether any suggestion was made for a still stricter supervision of the packers under a license system to be put into effect?

Mr. SANSOM. It was really not discussed. I do not think that the Federal Trade Commission pressed that itself.

Mr. BURKE. I have not a copy with me, but I have a copy of it at my room and I should like to introduce some evidence tomorrow which shows that a still stricter system of supervision of the packers under the license system should be put into effect.

Mr. SANSOM. They are practically working under a license system at this time, as far as that goes. If you call it a license system, I should say quite sure, the license system was put in earlier.

Mr. BURKE. They are practically working under a license system at this time, as far as that goes. If you call it a license system, I should say quite sure, the license system was put in earlier.

Mr. BURKE. In March or April of 1918, and, of course, the license system had to be put into effect November 1, 1917?

Mr. SANSOM. 1917; no, this report was made in August, 1918.

Mr. BURKE. I say some time in 1918 after the license system had been in effect for some months?

Mr. SANSOM. Yes, sir. They were practically under the license system at that time. There was no discussion about the license question at all.

Mr. MCLAUGHLIN of Nebraska. You made some criticism, either direct or implied, of the resolution of Congress which practically forced the War Department to dispose of the surplus meat and other goods that were held in this country. Do you think that the supplies of meat which the War Department has sold have had any considerable effect in reducing the price received by the producer?

Mr. SANSOM. I would not undertake to say that they had. I did think that it appeared unjust, but it was only an illustration of the difference in who gets the ear of the Government, the powers that be. That was the intention in complaining of that, that we, as producers of live stock, would like to have seen that meat go to Europe. It was not really for the purpose of criticizing. I want to say this, that of course there was the spirit of honor to furnish this meat to the people, and it was done to cheapen the meat to the consumer. We thought that they should not have let it go. I did not enlarge on that, but I do know, as a matter of fact, that the preparation of that meat for export cost in the neighorhood of 2 cents a pound, that is the wrapping, the cheesecloth, the burlap, and freezing down the shrinkage in it, it altogether cost somewhere in the neighborhood of 2 cents. A great deal was sent to the warehouses in New York and frozen down there. We producers naturally would like to have seen that meat get out of our way, if there had been but 1,000,000 pounds of it. We thought that it would not do any good and really do not believe that it did. I understand that some of the meat went to the Pacific coast and I know also that they sent it to San Antonio where this meat grows and is produced, and they sent it back to us there when we are trying to supply the people with meat.

Mr. MCLAUGHLIN of Nebraska. Did you know that action was taken by Congress because there had been and were being hundreds of thousands of pounds of meat decaying in this country?

Mr. SANSOM. I do not know to what extent it was. Of course, if it was, it was the fault of the refrigeration. You can freeze down a side of beef and it will keep in good condition for a very long time. Mr. MCLAUGHLIN of Nebraska. There were a million pounds of this held by the War Department already in France and other European countries, and just recently several million pounds of meat were sold by the War Department at from 3 to 4 cents a pound? Mr. SANSOM. I was not up on that.

I

Mr. MCLAUGHLIN of Nebraska. That is the fact in the case. Mr. SANSOM. I should say this: I do not want to criticize the action, except to illustrate the position of the producer as against the consumer. That was what we say was for the consumer. agree with the reading of the resolution. I quoted it exactly as it is qouted in the book. There were more of these hungry fellows than the fellows losing $50 or $60 on a steer, and so I have no criticism to make. I am simply saying what I feel will be true, that the Government by commission or otherwise, with a commodity like meat, may reach the point of pressing the price down and down until the production will cease, and before you can get the law changed the fellows who are eating will be hungry. It is my idea

that you can not change this condition when it is law, with the commission and things like that, like supply and demand can do. I should like to be fully understood on that. It is not my purpose to criticize.

The CHAIRMAN. Did I understand you to say that the commission recommended that the packers be allowed 9 per cent? Mr. SANSOM. Yes, sir.

The CHAIRMAN. Your commission recommended that?

Mr. SANSOM. We recommended that. I have understood that it was put into effect.

The CHAIRMAN. Nine per cent on borrowed capital-capital and surplus?

Mr. SANSOM. Capital, surplus, and borrowed money.

The CHAIRMAN. How did you arrive at that conclusion?

Mr. SANSOM. We just took a long dive and got to it. I do not know many people who were doing business who were not making more than 9 per cent at that time. Even our poor wheat farmers out there were getting 9 per cent at that time.

The CHAIRMAN. Was the 9 per cent allowed for the year, or for what time?

Mr. SANSOM. Just for the actual time used.

The CHAIRMAN. Nine per cent for the actual time the money was in use?

Mr. SANSOM. The actual time and on the actual money borrowed. The CHAIRMAN. If they borrowed the money for 30 days, they were allowed 9 per cent for 30 days?

Mr. SANSOM. Yes, sir.

The CHAIRMAN. That was the recommendation?

Mr. SANSOM. Yes, sir.

Mr. MARSH. Does this packing plant which I understand you to say is on the Taft ranch in Texas own its own refrigerator cars?

Mr. SANSOM. No; I think not. They get cars. They do business only 30 or 40 miles away. No; they send meat up to San Antonio, which is probably 60 or 70 miles, and occasionally maybe some to Houston.

Mr. MARSH. It would be an advantage to them in competition with the strictly speaking big packers if they had refrigerator cars on the same basis as these big packers, which own 93 per cent of them?

Mr. SANSOM. I would say that it would be an advantage to have all the refrigerator cars that they had trade for and could profitably use, but I do not think that I would undertake to say that they should have any refrigerator cars that would set on the sidetrack for 3 weeks or 30 days at a time and not be rolling. They do not need very many cars. Their business has to grow. They have to find the trade and an outlet, and as they do, they are not poor people, they can buy them. The Taft people are pretty well fixed. They own lots of good stuff in Texas, several million dollars' worth. I do not mean that is the ex-President, either, but it is his brother. Mr. MARSH. His brother Charlie?

Mr. SANSOM. Yes, sir.

Mr. MARSH. No one suggests that these refrigerator cars should lie around on the tracks. What I am trying to do is to get your view

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