MEAT-PACKER LEGISLATION. COMMITTEE ON AGRICULTURE, The committee met, Hon. Gilbert N. Haugen (chairman) presiding, and resumed the hearings. The CHAIRMAN. You may proceed, Mr. Weld. STATEMENT OF MR. L. D. H. WELD, MANAGER COMMERCIAL RESEARCH DEPARTMENT, SWIFT & CO., CHICAGO, ILL.-Resumed. Mr. WELD. Yesterday afternoon I was analyzing some of the testimony given by Mr. Colver before this committee, and I showed that the chart exhibiting the price of pork loins as compared with the price of live hogs was entirely unfair, that the same was true of the chart showing the relation between the price of live lambs and dressed lambs; I also showed that Mr. Colver's advice that the packers be allowed to continue in the tanning_business was not in consonance with the report of the Federal Trade Commission itself in its report on the leather and shoe industry where it was said that some way should be found to divorce the tanning industry from the production of hides. I also showed that Mr. Colver said that the Federal Trade Commission had found no reason to change its recommendation, that his recommendation now apparently does not include the original recommendation of the Federal Trade Commission that the branch houses and cold-storage houses of the packers be taken over by the Government, and be operated by the Government as public markets, a recommendation of which we hear practically nothing, although it is in the summary of the Federal Trade Commission's report. I want to take up the charge that the large packers are driving the small packers out of business through the use of unfair methods. You will remember when the committee tried to pin Mr. Colver down as to specific examples of small packers being driven out of business, he referred to the Hurni plant at Sioux City as a typical case. I believe he was unable to give another case where a small packer had been driven out of business. I might suggest that this matter is treated in the Federal Trade Commission's report in Part 1, pages 486 to 488, about two pages of testimony which show the complaints of the small butchers. I would suggest that if you care to examine the two pages you will not find a single bit of positive evidence of unfair methods being employed against small packers, and I think you can not but be impressed with the paucity of the evidence and the lack of quality and character of that evidence on which the Federal Trade Commission based such an important and sweeping charge. To come back to the Hurni matter, which is the one typical instance that the Federal Trade Commission has furnished you of the large packers driving the smaller packers out of business, in presenting this case, Mr. Colver had inserted in the record the Federal Trade Commission's explanation which had already been put into the record. Of course, he did not have inserted at the same time our explanation of the same matter which was also in the record. and so it remains for me to do that at present. I request that the letter which appears in the Senate Committee on Agriculture hearings on the bill, S. 5305, part 2, beginning on page 1044, be introduced into this record at this place. I shall not stop to read that long letter, but shall briefly explain the points that are covered there. (The letter referred to by Mr. Weld, appearing on page 1044 of part 2 of the Senate Committee on Agriculture hearings on the bill, S. 5305, follows:) Mr. L. F. SWIFT, Union Stockyards, Chicago, Ill. JANUARY 14, 1919. DEAR SIR: Replying to your inquiry regarding the dwellings of the Sioux City Stockyards Co. with Rudolph Herni, I am sending you the following statement, which I have condensed as much as possible: Sometime previous to 1895, Mr. Herni was running a small slaughtering plant on the bank of the Floyd River. He was doing a very small business, hut gradually increased it and finally left the location that he had (which I understand he held by lease) and bought one lot on Chambers Street in Floyd City. The size of the lot was 50 by 150 feet, and it was the only lot in that vicinity which was not owned by the Sioux City Stockyards Co. Mr. Herni built a small plant upon this lot, but soon found it was not large enough for his busi ness, and the Sioux City Stockyards Co. sold him the two adjoining lots in March, 1899, for $750 apiece. In July, 1900, they sold him another lot north of the lots he then owned and separated from them by an alley which had been vacated and was owned by the stockyards company, for $1,000. South of the original lot purchased by Mr. Herni was a vacated street owned by the stockyards company and vacated sev eral years before Mr. Herni bought the lot. The Floyd River took about half the street adjoining Herni's property, but later the course of the Floyd River was changed at the expense of the stockyards company, and the old bed filled in by the stockyards company. The stockyards company then deeded to Mr. Herni without consideration (in order that he might have more ground for his packing plant) the north half of the street adjoining his property on the south, and also gave him the right of way over the vacated alley running east and west between his lots. There was an alley running north and south behind Mr. Herni's lots, which had been vacated, and the title was claimed by the stockyards company, and the property had been used by them for years. Mr. Herni claimed to have purchased that alley from another party, and one night built a fence through the middle of the alley behind his property, and later put a shed over the fenced-in portion. The stockyards company protested against this action of Mr. Herni's as they claimed title to the property, but did not begin any action to oust Mr. Herni, hoping that before he could secure any adverse title by possession the matter could be adjusted without litigation. Mr. Herni's business had increased, and he had built more buildings upon his property, and he asked that a gate be put in the fence which he had built in the alley and the stock purchased by him in the stockyards be delivered at that point. The stockyards company refused to put in this gate, on the ground that if they agreed to it they would be accepting Mr. Herni's claim that the fence was on the proper line, which would result in giving Mr. Herni the part of the alley claimed by him; but the stockyards company repeatedly told Mr. Herni that if he would put his fence on the east line of the alley the company would join with him in putting a gate in the fence, secured by property locks. This Mr. Henri would not do, and so his stock was driven from the yards to the plant in the street. As a matter of fact, the distance by way of the street necessitated driving most of the stock but a few rods farther than would have been the case had a gate been put in the fence. Mr. Herni bought a good many cattle in the yards, but most of the hogs which he slaughtered he purchased from the farmers on the street, and they never went into the stockyards, nor were these hogs handled by commission men. During all these years Mr. Herni was given every opportunity to purchase and handle stock at the Sioux City yards on exactly the same terms enjoyed by any other packer, and without any discrimination in any form whatsoever. A few years ago Mr. Herni applied to the State railroad commission for an order requiring the Sioux City Terminal Co. to put a track into his plant. The commission came to Sioux City and looked over the ground, and decided that the track could not be put in as Mr. Herni desired. At that time Mr. Herni's total business in and out was less than two cars per week, and he was hauling his supplies and shipments and loading them on a street one block east of his plant. The Terminal Railway Co. at that time offered to put a track in from the track where Herni was then loading if Mr. Herni would furnish the right of way for the track. This right of way would go through a quarter block which Mr. Herni had previously purchased, and he refused to have that ground used for the track, so none was put in. At about that time the stockyards company offered to purchase the ground owned by Mr. Herni if Mr. Herni would move his packing plant one block to the east, where he would have track connections; but Mr. Herni wanted a much larger price for his property than the stockyards company thought it was worth, and no trade was made. Some time afterwards, probably in 916, Mr. Herni applied to the city council for a right of way for a railroad track on Chambers Street to connect with the tracks of the Terminal Railway Co. The previous year the R. Herni Packing Co. (Mr. Herni having incorporated his business) did the largest business it had ever done, and the total number of cars handled for his company was about 300 for the year. One-half of this was building material, which left only 150 cars, or 3 cars per week, as the entire in and out business of the company which could be counted upon. The city council was unwilling to have the track built on Chambers Street, which is the main street from the city to the stockyards, for a concern doing only this amount of business, and the ordinance which Mr. Herni asked for was not granted. Mr. Herni had not been in good headth for some years and he was having to rely more and more on other people to handle his business, which was not satisfactory to him, and so he finally determined to sell out his business. He came to the stockyards company and asked them to buy his property. He said that he also had the matter up with other parties, but after negotiations extending over a considerable period of time the stockyards company offered him $162,500 for the property, which he accepted. Mr. Herni stated at the time that other parties had offered a few thousand dollars more, but wanted long-time payments, and he preferred to sell to the stockyards company for cash rather than retain any interest in the property himself. The property purchased from Mr. Herni consisted of a piece of ground 256 feet on Chambers Street by 150 feet deep upon which the packing house was located, and another piece of property one block east, being 250 feet on Prospect Street by 130 feet deep, which latter property had been used by Mr. Herni in the anti-hog-cholera serum business in which he was interested. The buildings upon the latter piece of ground were a small office and laboratory and large sheds. After the stockyards company purchased the property they tried to find tenants without success for some time, and then finally leased the property on Chambers Street to Swift & Co. for $3,000 per annum, Swift & Co. taking the plant just in the condition it was and doing all the repairs themselves, and a considerable amount of repairs and changes were necessary to do the larger business which Swift & Co. agreed to. The property on Prospect Street was leased to the Purity Serum Co. for $275 per month, as that property was well adapted for the business of the Serum Co. without changes. The business of the R. Herni Packing Co. was to a great extent with local butchers, and was therefore a wagon business. Swift & Co. proposed to do at |