time the positive efforts we have made to prevent local price agreements among our country cream buyers. The matter is written up in such a way by the Federal Trade Commission as to imply that we are consciously having our agents enter into agreements with competitors, and that we are trying to cover up the matter by admonishing and instructing our agents to be careful in the phraseology of their correspondence. In this connection, the Trade Commission has failed to reproduce certain letters that it took from our files which more clearly define our real attitude and policy than any other of those which are actually reproduced in the report.

As an example of the Trade Commission's unfairness in this respect, it failed to reproduce the following positive instructions that were issued to our representatives on February 15, 1915, copy of which was available to the commission, and which shows our definite attempts to prevent price agreements. Similar instructions were issued from time to time.

"No. 331.

Legal buying.

66 PRODUCE INSTRUCTIONS.

"FEBRUARY 15, 1915.

"1. Managers should keep in mind the fact that buying prices and selling prices should be based on value, taking into consideration quality, freight rates, and competitive conditions.

"Attention is directed to the so-called antidiscrimination laws under which uniform prices must be paid. While these are construed to permit variations to meet legiti mate competition, the conditions must be extreme to induce managers to make such variations.

"2. Managers must not, under any circumstances, enter into any agreements, verbal or written, restricting competition in any manner, or dividing territory with competitors, or in any manner threatening or seeming to threaten shippers. Any acts that might be so construed should be avoided.

"3. Anything that might tend to affect the company from a legal standpoint should be called to the attention of the produce and legal departments, with all the facts that can be gathered concerning them."

Another evidence of the unfairness with which the Trade Commission handled this matter is shown by the method in which general instructions issued by Mr. L. F. Swift, ordering compliance with the old Supreme Court injunction of 1903, are introduced at the bottom of page 149 of the report. This incident is explained as thoust it were a special precaution taken by Mr. Swift at the time of the introduction of resolutions in Congress calling for an investigation of the packing industry. As a matter of fact, these instructions, based on the 1903 iniunction, have been issued periodically by Mr. Swift to all heads of departments at intervals of about — monthfor many years. This matter was explained and the instructions reproduced on pages 11 to 12 above.

An attempt is also made, as on page 150 of the report, to intimate that auditors have been employed merely for the purpose of going about among our agents in order to destroy the incriminating evidence. The truth is that one of the duties of ou traveling auditors has been to check up the operations and correspondence of our rep resentatives in order to prevent the actual occurrence of collusive practices. This is clearly shown by the letters reproduced at the bottom of pages 148 and 151 of the report.

It is also significant that in reproducing the letter of March 9, 1916, on page 151 of the report, the Federal Trade Commission failed to reproduce the following letter of April 3, which was written by the head of our produce department to two submanagers in the department, which again explains our attitude and efforts, and copy of which was actually taken from our files by the Federal Trade Commission.

"APRIL 3, 1916.

"QUESTION OF MAKING AGREEMENTS WITH OTHER PRODUCE DEALERS.

"Messrs. J. Y. MARSHAL and L. L. DUNKER:

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Want you to take up especially with each manager, assistant manager you visit the question of making agreement of any character.

"You fully understand our requirements in this matter. The managers are ali under instructions from Mr. L. F. Swift covering the matter. We desire you to further handle as follows:

"Explain to them clearly that they have been thoroughly instructed in this matter and any deviation from these instructions will revert against them in person.

"You are to thoroughly and clearly explain to them that if for any reason they have a conversation with any other dealers, they are not to make any statements of any character that could be construed as an agreement and unless this is fully understood by them and unless this is followed to the letter, we shall find it necessary to instruct them that no conversations of any character are to be had with any other dealers that touch any feature of the produce business.

You are to make a definite memorandum of this conversation with each of these managers, showing the date thereon and hold same in your files as permanent record and responsibility is placed with you to see that interview of this character is had with every manager of the produce plants under your direction, within reasonable time."

acter

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It will be seen that in this letter the manager of our produce department said that it might be necessary to instruct our agents not to hold "conversations of any charwith any other dealers that touch any feature of the produce business." That is to say, we were trying so definitely to prevent our agents from entering into price agreements that we were thinking of instructing them not even to talk with other dealers about the produce business. Again, on page 147 of the report, the Trade Commission introduces a letter written to Mr. H. B. Collins on September 10, 1915, but fails to reproduce the reply written by Mr. Collins on September 20, copy of which was taken from the files by the Federal Trade Commission and which clearly explains our attitude.

Mr. R. C. MCMANUS,

Legal Department.

SEPTEMBER 20, 1915.

Answering your letter of September 10: I may be mistaken, but I do not believe there is anything about these letters that proves clearly illegal.

In conclusion, it is obvious from the foregoing discussion that the Federal Trade Commission not only misrepresented the facts with regard to the cream buying situation at country points but that it also actually suppressed pertinent and relevant correspondence which it took from our files. The insinuation which carries the weight of positive assertion in the minds of those who do not understand the matter is that Swift & Co. was sanctioning local price agreements, whereas a true interpretation of the correspondence reproduced in the commission's report, and especially of the correspondence which the Trade Commission failed to reproduce, shows that Swift & Co. was doing its best to prevent illegal price agreements. Swift & Co. doubts if any other concern has made such definite efforts to cope with this difficult situation.

(The remainder of the testimony of Wednesday, March 24, is printed in the part following this-Part 26.)

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