Section 402, on page 22 of the railroad law, paragraph 10, says: (10) The term "car service" in this act shall include the use, control, supply, movement, distribution, exchange, interchange, and return of locomotives, cars, and other vehicles used in the transportation of property, including special types of equipment, and the supply of trains, by any carrier by railroad subject to this act.

(11) It shall be the duty of every carrier by railroad subject to this act to furnish safe and adequate car service and to establish, observe, and enforce just and reasonable rules, regulations, and practices with respect to car service; and every unjust and unreasonable rule, regulation, and practice with respect to car service is prohibited and declared to be unlawful.

I believe that gives ample power to require the railroads to furnish additional special equipment, if there is sufficient special equipment, which means, of course, refrigerator cars as well as tank cars and other kinds of special equipment, if there are not enough in existence.

It is also, of course, a well-known fact that railroads have been so starved by overregulation in the past 10 years as to make it almost impossible for them to finance the purchase of all the refrigerator cars in the country, if they were required to do so. Thus there is a very practical difficulty in that respect at present.

But I think the main point in connection with refrigerator cars is that it must be recognized that that is a very special service, that the packing companies, through their transportation departments, can carry out more efficiently and probably with fewer cars than the railroads could if the railroads owned them; and, second, that the principal thing that seems to be desired is more cars for the smaller packers, and that can be accomplished just exactly as well by requiring the railroads to furnish such additional equipment as is necessary, rather than require them to take over all refrigerator equipment that there is in the country.

That brings me to some general considerations with respect to the legislation, as to why it is unnecessary and positively undesirable. First, I would say that, so far as the clauses respecting the stockyards are concerned, I believe that is taken care of by the consent decree, at least so far as the large packers are concerned. If it is worth while to pass legislation to require other packers than the large ones not to own stockyards, why, that is another matter, but I think it is sufficiently covered by divorcing the stockyards from the large packers.

Second. With regard to refrigerator cars, which have already been eliminated from the bill reported in the Senate, I can only say what I have just said, that that matter is sufficiently covered by the present railroad law, and that no possible benefit could accrue by taking our cars away from us; that the real solution lies in requiring the railroads, under the new railway law, to furnish such cars as are needed for those who want them.

Third. With regard to the side lines, I have already expressed my opinion on that. I have shown you that I believe that establishing the power to say what commodities a concern may or may not handle is an impossible principle to establish by legislation, and that the court decree has already taken care of this matter in a way that you could not even accomplish by a law.

Fourth. A very important point is that the evils complained of with respect to the packing concerns simply do not exist. The Federal Trade Commission report, as I have shown you, is full of descriptions of what are supposed to be abuses, but which turn out to be perfectly legitimate and ordinary trade methods. I think I am safe in saying that not a single definite abuse has been established that legislation is necessary for. It all simmers down to the principal argument that has been used here that we need legislation to restore confidence. That means that without knowing just exactly what to go after, and not being able to find anything definite, yet there is a suspicion, there is a feeling, that there is something wrong, and, therefore, we ought to have a law and establish a commission so that we will know everything is all right.

In the first place, of course, I do not believe that is a good principle on which to legislate, and I am not so sure that it would remove suspicion even if we passed such a law. I was thinking, when Mr. Sansom was speaking this afternoon, if the administration in Washington is pledged to lower prices, as it has been for the past few months, that general scheme might easily be reflected through such a commission as might be established under this law, and the stock growers could very easily become extremely dissatisfied with any such commission.

On the other hand, if the object of the commission seemed to be to encourage live-stock production, the tendency might be the other way and, whether justified or not, there might be a feeling on the part of the consumers that the general effect of such regulation as was brought about was toward a higher level of prices rather than a lower level of prices. I can not see any chance that such a law establishing a commission, or appointing one man to have charge of the carrying out of the law, how that could possibly restore confidence-how it could remove suspecion-and I believe it is open to very grave objections along that line.

Fifth. I believe there are enough laws now to cover the imagined evils. A large part of the feeling against the packing industry is due to the fact that there is a suspicion that we have a monopoly. I say that we have ample laws now to prevent our having a monopoly, and that we have on top of that injunctions. We have had an injunction continuing since 1903, which we have always lived up to, in. spite of assertions that have been made here that that was ineffectual. course, up to that time, up to 1902, there were allocations of beef to the various markets, but there has been nothing of that sort since that time, and the president of our company sends a statement about every six months to all department heads, with a copy of that injunction and specific instructions to do nothing to break the terms of that injunction.

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Then we have, of course, the Federal Trade Commission law and the Clayton antitrust law. The Federal Trade Commission law, I believe, covers unfair trade practices, and any of the practices referred to could be tackled under the Federal Trade Commission law if it could be found that they were really unfair trade practices.

Sixth. As I have already pointed out, the packing companies are not public utilities in any sense of the word. If they are, every other kind of manufacturing or commercial concern is a public utility.

I shall not stop to go into those characteristics of a public utility again, but I will repeat this point with regard to the stockyards, that the stockyards might well be considered public utilities, a natural monopoly, facilities used by the public, doing business at constant rates, and that you should not confuse the question of the regulation of the stockyards with the question of the regulation of the packing companies. They are two altogether separate and distinct things. There might be some reason for regulating the stockyards-as apparently they think in Canada, and in some of the States here—and yet that furnishes no reason whatever for extending such regulation to the packing companies themselves, which are private manufacturing and mercantile corporations.

Neither are the packing companies analogous to national banks, in that the packing companies are again private manufacturing and distributing orgnizations, buying goods and selling goods in fluctuating markets from day to day, whereas banks are the keepers, the holders, the guardians, the fiduciaries of other people's money, and there are very real reasons why some form of government regulation is necessary in their case, for reasons that do not apply at all to the packing business.

Eighth. I believe that such laws as have been proposed-and I am not talking about the Anderson bill alone, but this general form of law that has been proposed are discriminatory and might well be considered class legislation, in that they single out one single industry for a new form of corporate control. These proposed bills really open up the whole question of corporate control, and I have noticed that Mr. Colver said that if there were any such legislation he believed it should be general rather than applying to one single industry.

Ninth. And perhaps most important, we believe that placing the power of regulation in the hands of the Secretary of Agriculture or in the hands of a commission would mean that there would be a very serious danger of hampering our industry and of increasing its costs of operation. We do not feel that there is much chance of the powers under these proposed laws being exercised with ability by men who would very likely be political appointees. We believe there is danger from the pressure that would be brought to bear upon them by various interests, such as the live-stock producers, the consumers, or even the packers themselves.

If a decision or action by such a commission should happen to be favorable to some contention of the packers, there are producers who would immediately say, "Ha! Ha! Sold out to the packers." There always would be charges of that sort. bandied back and forth, and we believe that such a commission trying to pass rules and regulations to carry out the provisions in either the Anderson or the Gronna bill could be used in such a way as to be extremely detrimental to our business, that such interference could easily increase our operating expenses, and that the result would be, if anything, a lowering of live-stock prices, or a raising of meat prices or both, but the tendency would be in that direction rather than the other, whether you could measure it or not.

Tenth. We believe that the experience we have had with Government regulation is not such as to encourage optimism with respect

to Government regulation of private industry. I believe it is generally conceded that the railroads have been partially starved during the past 10 years, due to Government regulation. I do not mean to say for an instant that I am opposed to Government regulation of railroads. Railroads are a public utility. The principal object of the regulation was to eliminate discriminations and rebates, and I believe that the law has succeeded in doing that, but whether the Interstate Commerce Commission should have been given as much power as it has had over rates since 1910 is, I think, a very serious question.

But whether you give such power over rates to a public utilities commission or not, certainly nothing even suggestive of such a power should be granted over a private corporation. Not that I mean there is a power to regulate rates or practices, although I think there would be an opportunity to affect prices through the carrying out of rules and regulations that might be established.

Eleventh. Another very striking radical feature of the bills that have been proposed, and one that I think is not generally realized is that they provide for governmental encouragement to municipallyowned and cooperative plants while at the same time restricting private corporations. Now, I have no objection to municipal abattoirs nor to cooperative organizations, and I am not entirely sure that I have any objection to a certain amount of fostering, especially of cooperative organizations, on the part of the Government. I do not say that I subscribe to that as a general principle, but at least I would not hinder them.

But I do think it is a very serious matter where a law combines, on the one hand, to restrict a private industry and, on the other hand, encourages municipally owned and cooperative organizations. I do not remember now in just what words the Anderson bill introduces that matter, and I think it is very vague in the Gronna bill; but I have understood, from the descriptions of the bills that have been given, that those provisions along in the latter part of the billthe voluntary registration under the Gronna bill are aimed primarily to encourage just such organizations. That is certainly a very radical feature to adopt in a bill providing for the control of a private corporation, and one that I do not think is generally realized or understood.

Finally, I do not believe we want to subscribe to the principle of passing a new antitrust law to apply to one single industry. I think that is a dangerous principle of legislation, and one that could very easily be carried too far. Of course, that is exactly what this bill is; its principal prohibitions are to prohibit us from various forms of conspiracy.

And to pass such a law would be unjust in another way, in that these forms of conspiracy do not exist, and it would be an apparent confirmation on the part of Congress that they do exist, although it has never been proved that they exist.

I have gone through those matters rather briefly, but I think I have said enough to make my principal points, and that ends my direct statement.

Mr. ANDERSON. Mr. Weld, you referred to the fact that your volume of products other than meat products enabled you to sell at

relatively lower prices than if you did not engage in these other lines. Now, is the proportion of butter, cheese, and eggs sold by Morris & Co. and Cudahy & Co. to their total business approximately the same as the proportion of these articles sold by Swift & Co. to your total business?

Mr. WELD. I do not believe it is such a large proportion. On the other hand, they have no such widespread distributing system. They do not go into as many small towns as we do. They do not reach out so far with car routes; they have not the tonnage to do so.

Mr. ANDERSON. Well, to the extent, then, that your proportion of these unrelated lines is larger than the proportion of the other packers your selling costs ought to be lower?

Mr. WELD. Well, I think our general results compare very favorably with the results of the other packers.

Mr. ANDERSON. I do not think that is quite an answer to the question.

Mr. WELD. I think it is; in the net results of our total business. As I say, it applies to the cost of handling meats and the other products.

Mr. ANDERSON. Do you think you can handle meats any cheaper, or that you have any advantage in the handling of meats as against any other packer, because of your larger volume of other products?

Mr. WELD. Well, our larger volume is not enough larger to be noticeable, hardly. As a matter of fact, Swift's volume of other products is not very heavy, outside of butter, eggs, cheese, and poultry.

I might say in that respect that the packers have different ideas as to how far it pays to go in doing that. There is a limit. Armour has apparently thought it worth while to go further than Swift & Co. We do not, for example, like to take on any product that requires special salesmen or any special work in connection with selling products. It is true we have a special oleomargarine man or a special soap man sometimes, but our regular salesmen take the order and there is just one man to help out in developing trade. The further you go with that the more problems you have in selling those products. Swift & Co. has hewed very close to the line, utilizing its selling organization, both physically and human.

Mr. ANDERSON. Leaving out of the question the so-called unrelated products, do I understand that there is any point at which there is no longer an actual economy in volume? I mean by that, does the volume ever reach a point where it is no longer possible to reduce the cost per unit?

Mr. WELD. Aside from the question of unrelated products?

Mr. ANDERSON. Yes. For example, you have such a large volume of meat business that instead of that volume reducing your costs it would increase your costs after having reached a certain point?

Mr. WELD. I think I see what you have in mind. Is it possible to say that when you get up to $200,000,000, $300,000,000, or $400,000,000 you have reached the point of greatest efficiency?

Well, I do not believe it is possible to do that. It would be possible if we were handling all of our business from, say, Chicago. As we have increased our business we have been building new plants in different markets and opening up new sales territory and operating