out of the city who are anxious to give their testimony and get away. They are here at an expense and I am wondering, inasmuch as we have Mr. Marsh and the attorneys for the packers with us always, if it would not be well to just cut this interview a little short and hear from the gentlemen who are from out of the city, for their accommodation.

The CHAIRMAN. Is that agreeable to you, Mr. Marsh?

Mr. MARSH. Yes, sir; since we are fresh every morning and new every evening, we are glad to come at any time we are wanted. The CHAIRMAN. You started cross examining the witness. Are you through?

Mr. MARSH. I was not quite through when Mr. Veeder came in with his ubiquitous knowledge on the subject.

The CHAIRMAN. Have you any further questions?

Mr. MARSH. Yes; unless Dr. Wilson also is going to be here longer. We have disposed now of this refrigerator car matter.

Mr. WILSON. Mr. Chairman, if this is to go on indefinitely, after we adjourn we might let some of the folks have this hall this evening. In the meantime, I know that some of these people from Omaha and Kansas City and St. Louis and Chicago are stockyards men, and they must be back at their places of business on Monday morning next, and I even think that Dr. Wilson might surrender this afternoon. Dr. WILSON. I am through, sir.

Mr. WILSON. Are you through?

Dr. WILSON. Yes; and was excused and thanked by the chairman and thought I was out.

The CHAIRMAN. Mr. Marsh, have you finished your questions?
Mr. MARSH. No; but I only have a few more.

The CHAIRMAN. How long will it take?

Mr. MARSH. About three minutes.

The CHAIRMAN. We will give you three minutes and see how we get along.

Dr. WILSON. Who will be the timekeeper?

Mr. MARSH. Dr. Wilson, on this question of stockyards, the Bureau of Markets, and, again, most of the farm organizations, feel that the live-stock producers would have a fairer show in marketing their live stock if the big stockyards were owned by the railroads and treated as part of the facilities of transportation of live freight. What do you think about that? Or what objection have you to that?

Dr. WILSON. Will you allow me to answer that by quoting from one of the market committee? There was one of the market committee at a meeting at Salt Lake City last summer. It was a publicland convention, and this man got up and made the statement that the management of the stockyards were dishonest and that they were overcharging and that they were charging for feed that the men did not get, and so on. He made a general charge against the stockyards. He did not specify any particular stockyards, naturally. There was one manager of a stockyards present, and I asked the chairman if he could not have a chance to answer the statement, that he was being accused of being a thief, and I thought while he was accused of that he ought to have a chance to answer, and he did answer. And this gentleman from the Bureau of Markets committee got up and said that that yard was absolutely all right; that that yard had

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not done anything wrong; that their record was clear. He was the only stockyards man, though, that was present. So they could not ask the others the question.

Mr. TOMLINSON. Dr. Wilson, will you not kindly correct your remarks by stating that it was a representative of the Bureau of Markets?

Dr. WILSON. The Bureau of Markets; that is right.

Mr. BROOKS. State his name.

Dr. WILSON. Mr. Hall.

Louis D. Hall, was it not?

Mr. BROOKS, And was not the Denver yards the one referred to? Dr. WILSON. Yes; I did not care to give any one yard a preference in reputation over the other.

Mr. BROOKS. It is a matter of record.

Dr. WILSON. Yes; the Denver yards is the only certified honest stockyards in the United States, certified by the Government.

Mr. MARSH. And I will reply by saying, although I have only a half minute in which to do so, that the Federal Trade Commission has got the exact records for most of the large stockyards showing the overcharges, and they have been read into this record, showing that they are making 40 per cent on some of the hay and corn and so forth, and it was testified here that they were charging down in the Kansas City yards, if I remember, an advance of 100 per cent on the corn which was fed, and from the records of such overcharges they are now taking action on a lot of these stockyards to compel them to refund the exorbitant charges.

Dr. WILSON. There was one man in the Chicago yards that did do that deal, and he was not caught up by the Federal Trade Commission or anybody else. He was turned out by the exchange, and made to refund several thousand dollars.

Mr. ANDERSON. The Trade Commission had nothing to do with that?

Dr. WILSON. No, sir.

Mr. CREIGH. That was a commission man rather than a stockyards

man.

Dr. WILSON. Yes; it was a commission man. The stockyards, though, furnish the hay to the commission man.

Mr. MARSH. You would not feel as free on the stockyards owned by the fellow you are going to sell to as you would in your own yards, would you?

Dr. WILSON. I do not know.

Mr. MARSH. All right; I am through.

The CHAIRMAN. We are very grateful to you, Doctor. Mr. Rainey, you may proceed.

Mr. RAINEY. I will call Mr. Patrick Brennan, of Chicago.

STATEMENT OF MR. PATRICK BRENNAN, PRESIDENT INDEPENDENT PACKING CO., CHICAGO, ILL.

The CHAIRMAN. Mr. Brennan, please give your full name, address, and whom you represent?

Mr. BRENNAN. Patrick Brennan, president of the Independent Packing Co., Chicago, Ill.

The CHAIRMAN. You may proceed, Mr. Brennan.

Mr. BRENNAN. Mr. Chairman and gentlemen of the committee: In September, 1919, I appeared before the United States Senate Com

mittee on Agriculture and Forestry, and there expressed my views regarding the so-called Kenyon and Kendrick bills, and if it is not inappropriate would like you to refer to my statement at that time, even though there may be many points of repetition in what I wish to say to you now.

I gather from all that I have read regarding legislation affecting the packing industry that one of the purposes of the Anderson bill and other legislation proposed in the Senate is to protect the people who are engaged in the packing business from the effect of the power and bigness of the so-called Big Five packers. Of course, it is also stated that the farmer and consumer will gain great advantage by the passage of the Anderson bill and other legislation. I have given much thought to the entire subject, and have expressed my views very clearly to the effect that the farmer and consumer will not be benefited by the proposed legislation. I firmly believe that they will be damaged by it in a way that they may not fully realize. If the packing industry is legislated into a state and condition of uncertainty, and under the term of such legislation a department of Government is given authority to control this industry and its relations with the farmer and consumer, the prejudices, inability, and honest error in judgment of a Secretary of Agriculture or any commission authorized to act, will result in forcing the farmer into a position where he takes a greater risk than his business has ever been subjected to in the history of American business. The business of the slaughter of live stock on a large scale has become an important factor in the economic structure of our country, and by a gradual development has become essential to the farmer as well as to the consumer. It can not be substantially disturbed or destroyed without having a serious effect on the farmer. If all the well recognized and correct practices in trade are subjected to discretionary modifications by a Government bureau, it means the putting of the producer and packer into a state of uncertainty, and it naturally follows that where such a condition exists the consumer must pay the bill either in increased cost or impaired service. To those who say that there are certain elements in the packing industry who have by their power and bigness become a menace, I desire to answer by saying that I have heard lawyers and public officials say long before the present House and Senate bills were introduced, that the laws now on our statute books are sufficient to provide for the correction of any abuses in business, packing houses as well as other industries, and if there has been any violation the Government has the power and forces to bring about a proper punishment of any violator or the correction of any abuse. To me there can be no just reason for selecting the farmer, packer, or the consumer of meats for new experiments in legislation, at least until it clearly appears that abuses now exist and that existing laws have been found inadequate to overcome them.

However, my coming to Washington at this time was not to talk from the standpoint of the farmer and consumer, but rather to emphasize the views of a packer who has no connection now, nor ever had at any time in the past with the "Big Five" packers. I am just a plain business man, who in 1905 had accumulated a sum of money which seemed to justify my going into the packing business at Chicago. I am the president an principal stockholder of the Independent Packing Co. We started with a capitalization of $125,000.

.

All of the stock is owned by myself and two other gentlemen, and none of the big packers has any interest whatever in any of the stock, nor have I any interest in any of their concerns. Our company was reorganized and the capital increased from time to time until now we have issued $500,000 of common stock outstanding and $1,000,000 of preferred stock. Our surplus is approximately $1,800,000. The preferred stock issue was made necessary by the requirement of a larger capital in our business. This preferred stock was sold to the public and all of the money put into the business. Our company has never paid excessive or regular dividends. When business conditions required it we would pass dividends and permit our surplus to increase. Our business has increased annually from a gross in 1905 of approximately $2,000,000 to a gross of over $27,000,000 in 1918, and a gross of over $29,000,000 in 1919.

Mr. ANDERSON. What was the last figure?

Mr. BRENNAN. Over $29,000,000 of sales in 1919.

Mr. ANDERSON. Twenty-nine million dollars?

Mr. BRENNAN. Yes, sir.

There was no magic performed by any one in our concern.

It was

a case of hard work, attention to business, development of good will and financial credit and trying to do the square thing; the same methods that men in other lines of business have followed who have been successful. During those 15 years we have been located just outside the Union Stockyards at Chicago and in common with many other independent packers, who have also succeeded, competed with the larger packers in purchasing live stock and selling the manufactured product. At no time has our company ever had any secret or other agreements with the larger or smaller packers touching any part of our business. The only agreement that we have entered into in common with other packers is an understanding brought about by the Department of Labor at Washington that all questions of working conditions and wages of our employees should be submitted to Judge Alschuler at Chicago for arbitration. It is quite likely that during the past 15 years many have come into the packing industry who have not succeeded. The same can be said of men who went into the different professions, the manufacture of clothing, shoes, and all other commodities. Congress can not by legislation make men successful unless such men are given special favors which would be unjust, and as I understand it, not intended by those who present the contemplated legislation. Surely there is nothing in the Anderson bill or other bills which gives the small packer any advantage. On the contrary, as I will try and point out later, it makes his development more difficult.

If there is any agency or set of men who, without being requested by us, desire to protect us from the "Big Five" the answer of the independent packer is that we can protect ourselves by our own efforts and that the things now proposed by Congress will destroy our ability along that line and not enhance it. It is proposed by the Anderson bill to create a license system which will enable the Secretary of Agriculture to take away from us according to his discretion and set of rules for the administration of our business. I am advised that the license plan has been abandoned by the leaders of the proposed legislation. The commission plan proposed by the Senate committee is just as obstructive of correct business methods. Under existing conditions

the big packer can not put us out of business, and if in the past he has ever tried to do it has failed. For the purpose of the statement which immediately follows, I am going to assume that the men in governmental office, who by the terms of this bill and other legislation are given the power to control the destiny of the packing companies, are honest and of good intention. It takes years of hard work and experience to become efficient and practical in the operation of a packing plant, in addition to being honest and having good intentions. While I can still believe that men who fill these governmental offices may be honest and of good intention, experience teaches us also that such men are human and many of them have political and social ambitions. It does not take a college professor to know that favors in Washington may in the future, as sometimes in the past, be given to the company or individual who understands what Secretary Lane calls" parlor diplomacy," and who can have a force in Washington to cultivate it, while we smaller packers are at home trying to carry on our own business.

If there is any desire upon the part of the big packer to put us out of business, this proposed legislation provides the agency, whereas without putting it within the power of a secretary or commission to destroy us, the big packer can never get big enough, because our proportionate growth is coequal with his. If he was disposed to injure us he could harrass the smaller packer, and if it was his wish to frame up charges and complaints through others, Government agencies might not discover it until we were in the hands of a receiver or otherwise hampered in the management of our own business. From my experience the big packers have had no such temptation and have not engaged in any dishonest effort to destroy us, but when certain legislators or other agencies assume that the "Big Five" are disposed to do evil things, I merely desire to point out what could easily happen if the assumptions are correct. There has been much talk of their control of banks. My company and others similarly situated have prospered because we were able to borrow sufficient funds from the banks to carry on the business. It is a well-known fact that the packer can only turn his capital over three or four times in a year. It is also universally known that the packers have to pay cash for their live stock, and in consequence no packer has enough money on which to do business. All packers are heavy borrowers. A concern like ours, although a relatively small factor in the industry, is nevertheless a very heavy borrower as compared with the concerns of our size in any other line. We must either have the support of the banks or we must close our doors.

If the big packer has had control of the banks we have not suffered by it, because the banker has felt a security in our permanency and in dealing with us, which the proposed legislation would destroy. No sound banker is going to give a line of credit to those engaged in the packing business if the plant can be ordered closed by a message from Washington or if some part of the plant may be turned over to some one else for his use. In the progress of operation there are large quantities of perishable products in a plant which require processing until marketed. It does not take a very large concern to have millions of dollars worth of food products in its plant which may be destroyed by a cessation of business, even for a temporary period. After any order of the commission was issued, even to the extent of