Mr. WELD. I take it from that statement that you would have the legislation cover all equipment privately owned, such as oil cars, tank cars, and live-stock cars, and so on?

Mr. VOIGT. I think the same principle covers that.

Mr. WELD. Any legislation on that subject should cover all privately owned cars, shouldn't it?

Mr. VOIGT. Well, I do not think it is up to the Committee on Agriculture of the House to go into that question, but rather to the Interstate Commerce Commission.

Mr. WELD. It would be rather curious legislation for the Congress to pass to require one type of private cars to be taken away and to leave others in the hands of their present owners.

Mr. TINCHER. Not necessarily. Another kind of private cars may be handling an entirely different product. One may be handling a product upon which the public does not so much depend and is not so much interested in. Another type of private cars might be handling product which the public might not care so much about; in fact, might be better off if it did not have it.

Mr. WELD. It seems to me more a question of private ownership than of the commodity handled.

Mr. TINCHER. No; I do not agree with you. Here is a question dealing with a food product in which the good of humanity has a share.

Mr. BORDERS. You have to have oil, too.

Mr. TINCHER. And they often have private cars for other things. I do not think the principle of the Congress legislating against all private equipment applies to the case of legislating against private equipment for the handling of the food products of the Nation. I do not think it is the same thing at all.

Mr. WELD. Tank cars carry food products, such as cottonseed oil. That is a food product.

Mr. YOUNG. On that point, however, in the oil fields, where a company is strong enough to own its private cars and get the oil out regularly from day to day, they could soon pump other wells dry; wells belonging to another fellow on adjoining ground and who is not able to own private cars.

Mr. WELD. And require the railroads to furnish private cars in that case?

Mr. YOUNG. I believe they ought to do it.

Mr. WELD. Then, you ought to cover the whole field of private case if you are going to legislate on the subject.

Mr. YOUNG. I believe I agree with you.

Mr. BURKE. I am very anxious to finish my statement so as to catch the 1.45 train, if possible.

The CHAIRMAN. You may proceed.

Mr. BURKE. We have just been discussing the question of whether equal opportunity was furnished to potential competition. The question of distributing facilities, I believe, is covered in section 25, known as the voluntary registration section of the Gronna bill. I wish to say in this connection I believe it is very well covered there, and that with a few changes that section would provide universal cooperative market service which would furnish storage and distributing facilities for all on an equal basis. It is a section which I believe

is not very thoroughly understood. In fact, I think there is more misunderstanding in regard to that one section than in regard to any other section of that bill.

I happen to know something about that section because my partner, Mr. Kent, I believe, is more or less responsible for it; he spent a great deal of time working it out, and I think I know pretty well what he had in his mind when he worked that section out. I think it is the one section that the producers of the country think the most of. They believe it is going to furnish such universal cooperative market service that it is really the hope of the future for small distributors. Properly worked out, I believe it would result in the establishment of municipal abattoirs; it would furnish branch-house facilities for small packers who are not able to furnish them for themselves, and it would do it on a cooperative basis.

Mr. LIGHTFOOT. Is that framed with an idea of enabling the cooperative packing concern to avoid the Sherman antitrust act in the matter of combinations?

Mr. BURKE. No; I do not so understand it.

Mr. LIGHTFOOT. In what way do you think it would encourage that?

Mr. BURKE. It would encourage what?

Mr. LIGHTFOOT. The establishment of these cooperative societies. What provision of that section 25 of the Gronna bill do you think will encourage the establishment of the cooperative associations in addition to the encouragement they already have under existing laws?

Mr. BURKE. Well, I think it furnishes them the assistance of the stamp of the Government, for one thing; the plans, specifications, and so forth furnished by the Government-by the commission or the Secretary of Agriculture, as the case may be, depending upon whether it is the Anderson bill or the Gronna bill. They would cooperate with these registrants to work out the cooperative enterprises. And it would have the stamp of Government approval. I think that is the big feature. And they would have not only the stamp of Government approval but would have the active assistance and cooperation of the Government in building up these cooperative distributing market-service plants, and without the Government itself putting a dollar of investment in them or taking a dollar's worth of risk in

any way.

It is something that I believe would take a great many years to work out. And if it did not seem to work out satisfactorily then it would soon die out. Or if it did work out satisfactorily it would open up a field which might in my opinion solve the whole question of distribution for the smaller operator, who, as we all acknowledge to-day, is sadly handicapped.

Now, on this question of distribution facilities, it seems to me Mr. LIGHTFOOT (interposing). Before you get into that I would like to ask you a question: You say it would encourage the establishment of these cooperative societies?

Mr. BURKE. I think so.

Mr. LIGHTFOOT. Under one section this commission would be authorized under that bill to prescribe the terms and conditions under which anyone of those people should take title to any product 166762-20-PT 28- -3

handled by them. In other words, they could fix the price at which those concerns shall buy any product. Would not it vitiate the section of the Sherman Antitrust Act dealing therewith to that extent? Mr. BURKE. I am not lawyer enough to answer that question, but I will say this in regard to that particular point; that is section E that you refer to, isn't it?

Mr. LIGHTFOOT. Yes, sir.

Mr. BURKE. I believe it would be contrary to public policy for the people who operate these cooperative plants to have any interest at all in the products, just the same as the owner of a public grain warehouse does not own any of the products in that warehouse. In the same way registrants here I believe should not take title to the products handled. I believe in that respect section E should be changed, so that it would be perfectly clear that registrants are not to become owners of any product in those plants, and not leave open to the commission to say the terms on which they may become owners. If that is your point I thoroughly agree with you that the products should not be owned by them.

Under certain conditions, however, where it came to collecting the charges against those products the commission house might have to take them over in order to dispose of them and collect their charges. I think that would be perfectly proper, that they might make rules and regulations under which they might be taken over for a purpose of that kind, and that kind only; and that should be guarded very properly by the commission.

Mr. BORDERS. You just made the statement that the small packer is now greatly handicapped. You heard these-

Mr. BURKE (interposing). Mr. Borders, I am awfully sorry that I will have to ask you to bear with me and let me go through with my statement, as I must go away this afternoon and it is now getting late. And I believe it is one of the rules of the committee here to allow a witness to proceed to the conclusion of his statement before being interrogated.

Mr. BORDERS. That is true, yet with this idea, Mr. Burke

Mr. TINCHER (interposing). I suggest, Mr. Chairman, that Mr. Burke be permitted to finish his statement; as I understand he wants to get away by 1.45 this afternoon.

The CHAIRMAN. Under the rule, Mr. Burke, you are permitted to proceed with your statement, and it is only by your consent that you may be examined during the making of the statement; that is, before you have completed your statement.

Mr. RAINEY. In this case it would not give an opportunity to cross-examine the witness.

The CHAIRMAN. After the witness finishes his statement questions may be propounded to him.

Mr. BORDERS. I would like the privilege to cross-examine Mr. Burke a little.

The CHAIRMAN. You shall have that privilege.

Mr. BURKE. It is not because I would not like to stop to answer your questions, Mr. Borders, but I am very anxious to proceed and get through.

The CHAIRMAN. As I understand, Mr. Burke, you wish to proceed with your general statement, and then answer questions when you are through?

Mr. BURKE. Yes, sir; if I may do so.

The CHAIRMAN. You may proceed.

Mr. BURKE. I started to say that I thought we had at last discovered a point of contact where the Food Administration, the packers, the producers, and the Federal Trade Commission all met. I did not suppose there ever would be such a point of contact. And that is on the question of these distribution facilities. Mr. Weld said on yesterday before this committee, if I remember, that he thought the principal reason was the small operators, packers, close to the source of production, and in other places, too, were not successful was their lack of proper distributing facilities; and he mentioned, first, branch houses, and, secondly, refrigerator service, as I remember. I think we are all apparently agreed on that point. And I think that this committee will take that same view of the matter and proceed in framing their bill, if they see fit to draw a bill, on that theory.

Fifth. Do the agencies provided in the bills interfere with any existing agencies? I believe they do. I believe that the powers of the commission as provided for in the Gronna bill interfere to some extent with agencies already in existence, and that it is well worth the consideration of this committee to see whether it would not be possible to take care of that defect. I will call it a defect in the bill, because I myself believe where there is any unnecessary interference with existing agencies it should be, if possible, eliminated. I refer particularly to the judicial powers conferred on the commission as interfering with and duplicating the powers of the Federal Trade Commission. It is my opinion that it would be better if it could be avoided to eliminate these judicial powers from the commission; and I believe, too, that as far as they take away the duties of the office of the Bureau of Markets, Department of Agriculture, and interfere with the Bureau of Animal Industry that they should be corrected. My own idea of a commission is that it should be primarily an administrative and investigating committee; that it should have the present powers of the Federal Trade Commission in the matter of investigating, but that if necessary its powers in that respect should be increased. But when it comes to giving it judicial powers I believe they are something that the committee by temperament probably would not be particularly well fitted for, and that it would be better to leave those judicial powers where they stand at the present. It would be not only a tremendous expense to set up within this livestock commission another bureau of markets as applied to live stock in the markets, but it would also mean a duplication of machinery and probably give a service which would not be as efficient as the service that is already in operation.

Sixth. Is established business unnecessarily interfered with or discredited? That is the contention that has been made by the opposition to this bill, and I believe it is entirely a wrong contention. I do not believe there is any intention on the part of the framers of the Gronna bill or of the Anderson bill to unnecessarily interfere with any established business. I do not believe that the business would be discredited if either of the bills were passed. As a matter of fact, I am inclined to think just the opposite would eventually take place.

Right in this connection is the question of unrest and distrust. I believe that unrest and distrust would be more allayed by the passage of a bill such as the Gronna bill than anything else that possibly could be done at this time. The principal agency, I believe, for allaying that distrust would be this same commission-an impartial agency which is stationed at the market centers with both power to keep in touch with all current events as they are happening in the markets, and to give those events publicity to the country. That would have in my opinion a reassuring effect both on producers and on the public, a reassuring effect that nothing else would have.

There has been a good deal of objection offered to the appointment of a commission on the theory that the whole matter could be thoroughly covered by law and that a commission is unnecessary. Owing to the very peculiar conditions that surround the live-stock business, I believe it is absolutely essential that we have an impartial agency established at these markets which may stand between the producer and the public, on the one hand, and the packers on the other, and be in a position to find out the facts, to get at the practices and the operations as they are occurring from day to day, and give them to the public. If there is nothing wrong, if everything is being run on a fair and square basis, what possible objection could there be to a commission of this kind? On the other hand, if there are unfair practices, the commission would take notice of them and serve notice on the packers that those unfair practices must be corrected. The public, through that commission, would get that information, and they would be reassured. All the laws in the world that you might pass, unless you have provided some kind of agency of that kind, will not do away with this distrust and suspicion that surrounds the industry to-day, in my opinion.

I presume there is no other industry in the world the conditions of which are like the live-stock industry. Here is a great body of producers conducting probably the largest business in the country. They send their product to the markets knowing nothing about what it will bring. It is practically a perishable product, which has to be sold immediately on arrival. There is no opportunity to hold that product, to store it like grain; you must put it on the market and sell it immediately. On practically all these large markets of the country live stock, so far as the beef end of it is concerned, almost all of it, or 90 per cent of it at least, goes into the hands of five men. These widely scattered producers sending live stock in from all over the country are naturally suspicious of that concentration and of the power that those five men hold at the markets. Whether or not they make unfair use of that power, the suspicion is there, and it has been there for years, and it will continue to be there until you get established some kind of impartial agency with authority to clear up that distrust and suspicion. And I do not believe there is anybody who would be more benefited by the establishment of such a commission than the packers themselves.

There has been a great deal of talk about settling these matters around a table. The principal reason why matters of this kind can not be settled around a table is the fact that the producers are not organized in such a way that they can be properly represented around