MEAT-PACKER LEGISLATION. COMMITTEE ON AGRICULTURE, HOUSE OF REPRESENTATIVES, The committee this day met, Hon. Gilbert N. Haugen (chairman), presiding. The CHAIRMAN. Are you ready to go on, Mr. Rainey? Mr. RAINEY. Yes, sir; I will call Mr. Morris. STATEMENT OF MR. R. A. MORRIS, EL PASO, TEX. The CHAIRMAN. Please give your full name and address? The CHAIRMAN. You may proceed, Mr. Morris. Mr. MORRIS. Mr. Chairman and gentlemen, I have been engaged in the cattle business in the Southwest for the past 27 or 28 years in Texas and New Mexico, both in breeding and grazing and buying and selling cattle and principally the last five years in grazing and trading in cattle. I organized the Horseshoe Land and Cattle Co. of New Mexico in 1898 and was vice president and general manager of that concern for about ten or twelve years until the Santa Fe road built down through New Mexico and the country was settled up. I then closed that out. Afterwards, I bought the Delaware Land and Cattle Co. interest in Culberson County, Tex., about 150,000 acres of land, principally State land, leased land, and maintained that ranch until about five years ago when I sold it and moved to El Paso. Since that time I have been engaged in buying and selling cattle rather extensively through western Texas, New Mexico, and Arizona. Last year my partner and myself handled about 25,000 cattle. We have now between seven and eight thousand steers on hand. We feel that any legislation that tends to create agitation and disturb the normal conditions of the United States is decidedly against the cattle business. Since I have been engaged in the business, which is all my life, I have never known one of these agitations against the packers that has not resulted to the injury of the cattlemen. We have just gone through the most severe drought in western Texas that that country has ever seen, covering all of west Texas, New Mexico, and the greater part of Arizona, and it has just been an awfully hard pull. I noticed in Mr. Lasater's testimony some criticism of the cattle. loan companies maintained by the packers. We have a cattle loan concern in El Paso and I venture to say that they had something like $12,000,000 to $15,000,000 loaned on cattle, and during all of this drought, I do not know of a single instance where a loan held by that concern has been called. Now, I do know that they have granted extensions, and not only extensions, but have advanced expense money when I am sure the collateral was hazardous, not once, but many times. The truth of the matter is that the sentiment in my country is decidedly for letting well enough alone, relying on the old law of supply and demand. For instance, we have a condition surrounding us there now. We have not as many cattle as we had, on account of the recent drought that I speak of. I am buying a great many yearling steers every year. I just purchased a bunch of 4,000 from the El Paso Land and Cattle Co., and for those cattle-I bought the same identical cattle last year and the previous two years—I gave for those cattle this year $54 around. Last year I bought them for $40. We know it to be a fact that beef is anywhere from $2.50 to $3.50 a hundred less now than it was a year ago. That would perhaps seem surprising to you, that these young steers are selling for $5 more, identically the same cattle, than they were selling for a year ago, but that is easily explained by the fact that the demand for young cattle for the pastures that are short of cattle now is greater than the supply. The consequence is there has been a clamor for these young steers to restock the ranches, and the consequence is that they are being bought pretty high. As a matter of fact, I just took 4,000 at $5 a head more than I paid last year when beef is selling for $2.50 to $3 a hundred less. Mr. TINCHER. According to Mr. Lasater's testimony they were selling them for a dollar a head less than it cost to produce them? Mr. MORRIS. Mr. Lasater may have a very dear way of producing these young ones. Mr. TINCHER. What do you think of the loan business in Texas, taking the figures and itemizing the cost of a yearling steer? Mr. MORRIS. I noticed his criticism of the loan companies. Mr. TINCHER. There was a gentleman who agreed with Mr. Lasater with regard to the packers' loan banks? Mr. MORRIS. We have some Government loans in my country that got some of our people in mighty bad. They called them every one last fall. I know of some instances-I could name the parties that got in awfully bad with loans that came from the Government, and had it not been possible for them to replace those loans by obtaining the money elsewhere they would have been in awfully bad. In one particular instance that I could name, an old ranchman whom I have known for 30 years he had never borrowed money, but some of his friends arranged for him to get some thirty thousand or forty thousand dollars of this cheap and easy Government money. They called him last fall and had him in a mighty tight place to raise it. Money was tight and the banks were not taking on new loans. Mr. TINCHER. He did not borrow any money from the Government? Mr. MORRIS. It was financed through that medium relief that was offered. I am not familiar with it, because I never had occasion to use any of it or to make application for any of it, but he did, through some means, I do not know just exactly what the procedure was, but he got this money loaned on this cattle and I know it was taken up by the El Paso Cattle & Loan Co. The CHAIRMAN. How did the calling of the Government loans affect the market for cattle? Mr. MORRIS. I did not say that it affected the general market. The CHAIRMAN. The drop in cattle at that time was considerable? Mr. MORRIS. The cattle market was pretty bad last fall. For one thing, Kansas had an awfully bad year. The cattle that were shipped there ordinarily would get fat from August to October. The CHAIRMAN. Your contention is that the drought and the calling of loans depressed the market considerably, several dollars a hundred? Mr. MORRIS. I do not know that it was several dollars a hundred. The mere fact that the cattle did not get fat after having gone to the summer grazing country of Kansas, they naturally had to dispose of them as fast as they could. The CHAIRMAN. And that forced the cattle on the market? The CHAIRMAN. And depressed the market? Mr. MORRIS. Naturally. When that cattle was forced on the market that was not in a condition to slaughter, it naturally put down that class of cattle. There were a number of cases that I know of where men took their cattle to Kansas and had to reship them back to Texas and New Mexico and to winter them. The CHAIRMAN. So much has been said about the drop in the price last year that I was interested in knowing the cause. Mr. MORRIS. No doubt the lessening of the urgent war demand had a great deal to do with that. I would naturally suppose it did, just as the urgent war demand for canned beef put our old canner cows up to unheard of prices. It made it possible for the ranchers to clean up on cattle that were almost worthless. I sold hundreds of cars of canners myself for anything from seven and a quarter to eight thirty-five or eight forty which ordinarily I would be glad to get two dollars a hundred for. Mr. RAINEY. What was the trouble in Kansas? Mr. MORRIS. You could hardly attribute it to legislation. It was the drought. I noticed the same condition. I am sorry to say that coming through Kansas the other day I noticed the same condition through that grazing country. They have not had enough moisture. The CHAIRMAN. Did the people in your section have any trouble in replacing their loans? Mr. MORRIS. The majority of the money loaned on cattle or the greater part of it is held by the packer loaning companies and, as I say, I have not known of one single instance of anyone being pressed that had the least excuse for the extension of credit. The CHAIRMAN. You referred to the Government loans? Mr. MORRIS. Yes, sir; they were called. Mr. MORRIS. As I understand, all of those Government loans were called last fall. The CHAIRMAN. They were? Mr. MORRIS. Yes, sir. I would not say so from personal knowledge, but I feel sure that statement is correct. The CHAIRMAN. The Government loans were called. People came from Texas and from other sections of the country, appeared before Congress, and said that the price had been depressed several dollars a hundred. I was anxious to know what effect the calling of the loans had upon the market. Mr. MORRIS. Any calling of loans that forced cattle on the market necessarily very much depressed it, I should think. It would be surprising if it did not have that effect. The CHAIRMAN. And of course the loans helped that? Mr. MORRIS. Yes, sir; that made it bad. Mr. MCLAUGHLIN of Nebraska. You understand these Government loans were made temporarily to the banks? Mr. MORRIS. Yes, sir. Mr. MCLAUGHLIN of Nebraska. And the banks reloaned the money to the cattlemen. Mr. MORRIS. No, sir. Mr. MCLAUGHLIN of Nebraska. No Government loan was made. direct? Mr. MORRIS. I said that I was not familiar with the procedure, just how the loans were made and secured, whether rediscounted through the banks or not. Mr. MCLAUGHLIN of Nebraska. The Government loans were made to the banks as an accommodation and with the understanding that they would be retired at an early date? Mr. MORRIS. As I understand it, they did retire them. I will be glad to answer any questions which any of you gentlemen care to ask me. I do not know anything about the packing business, but I have been in this cattle game all of my life. Mr. TINCHER. Do you know of the circumstance of the Government furnishing that money to the banks? Mr. MORRIS. I had no occasion to ask for a loan of that kind, but I know the circumstance. Mr. TINCHER. Do you remember this, that from the 1st day of March until the 1st day of July there was the greatest depression in the price of live stock for the same given length of time ever known of in history? Mr. MORRIS. I do not know that I just understand that question. Mr. TINCHER. That between the 1st of March and the 1st of July was the greatest depression in the live stock market for many years? Mr. MORRIS. Now, those are just the times that I did not have occasion to watch the market very closely, that is, the beef market. Mr. TINCHER. I want to call your attention to a significant fact to be attached to the Government loan. There was a war board here that had some money that they could furnish, and I think along about the 1st of July some Senators and Congressmen went, on account of the depressed cattle market, to the board-I remember in Kansas that the cattle market was affected-and got this board to furnish money to the banks to loan to the cattlemen, so that they would not have to put the cattle on the depressed market. Mr. MORRIS. Yes, sir. Mr. TINCHER. That was a 90-day arrangement. At the end of the 90 days, I think it was pretty well understood that that board was going to cease to function, by reason of the cessation of hostilities, and that the money would be returned by those banks. Mr. MORRIS. Yes, sir. Mr. TINCHER. Do you know whether there was a depression after the 1st of October, anything like the one that occurred in the spring before there were any Government loans made? Mr. MORRIS. Last October? Mr. TINCHER. Yes, sir; this was all done last summer. Mr. MORRIS. Yes, sir. The market was very quiet last October. There was a condition surrounding that in the grazing section of the country that was undoubtedly accountable or could account for it, the severe drought in Wyoming and Colorado and through that country where they were scouting for grass and places to winter cattle from Wyoming and Montana and Utah and Idaho, all over that country. Mr. TINCHER. I will say this to you, that between the 1st day of March and the 1st day of July there was more depression in the cattle market than in any given length of time that I know of and there was more increase in the price of every by-product of the slaughtered animal than I know of, sometimes 100 per cent increase as in the case of hides. That was before any Government loan was made or before any Kansas drought, because they did not have any drought at the end of the winter; that was simply the premium paid to the packers. Mr. MORRIS. I do not know anything about the packing game, but we had a pretty vast army in the field and a great demand for cattle that would meet the army requirements, that would dress, as I understand, about 500 pounds net, especially the Government would take them. You could take a cow that would weigh 950 or 1,000 pounds and a steer of the same weight and there would be a spread of two or three dollars a hundred between them, when there would be absolutely no difference in the value of the meat of the two animals, because one filled the Govcrament contract and the other one did not. Mr. TINCHER. As I understand, you just want the packer let alone because the history of the business has been whenever anyone attempted to pass any legislation affecting the packers or to do anything affecting them that they depressed the market and ruined the cattlemen? Mr. MORRIS. I did not exactly make that statement. What I say is that I have never known of one of these agitations, the jumping upon the packers, but what it unsettled the market. Mr. TINCHER. And that is your reason for letting them alone; you do not want anything started that would cause them to depress the market? Mr. MORRIS. I would not certainly want anything started that would hurt the cattle business from my point of view; that would oppress and unsettle the business in any way. Mr. TINCHER. Do you belong to the Texas Cattle Raisers' Association? Mr. MORRIS. Yes, sir. Mr. TINCHER. Did you attend their last convention? Mr. MORRIS. No, sir. Mr. TINCHER. You do not know to what extent this matter was discussed there? Mr. MORRIS. No. I have been a member of the Texas Cattle Raisers' Association for 25 years. Mr. TINCHER. You do not know to what extent they are engaged in the cottonseed production in the South? Mr. MORRIS. The cattle raisers' association? Mr. TINCHER. No; the packers. Mr. MORRIS. I do not know from my own knowledge. I have heard it said that they had a small interest in the product. |