MEAT-PACKER LEGISLATION. COMMITTEE ON AGRICULTURE, HOUSE OF REPRESENTATIVES, The committee this day met, Hon. Gilbert N. Haugen (chairman) presiding. The CHAIRMAN. Mr. Rainey, are you ready to go on? Mr. RAINEY. Yes, sir. The CHAIRMAN. You may proceed. Mr. RAINEY. I will call Mr. Charles E. Day, of Chicago, secretary of the National Traders' Exchange. STATEMENT OF MR. CHARLES E. DAY, SECRETARY OF EXCHANGE, THE NATIONAL TRADERS' LIVE STOCK UNION STOCKYARDS, CHICAGO, ILL. The CHAIRMAN. You may proceed, Mr. Day. Mr. DAY. Mr. Rainey, shall I give my business connections and in what capacity I am testifying here? Mr. RAINEY. Yes, sir. Mr. DAY. I am the secretary of the National Traders' Exchange, and am testifying as their representative. Mr. RAINEY. Do you prefer to make a general statement before interruptions, or are you agreeable to being interrupted as you proceed? Mr. DAY. If the committee please, I should like to go ahead and tell my story through and then I shall be glad to answer any questions that I am able to answer and shall be pleased to give any information I can. The CHAIRMAN. You might explain your organization a little more in detail. Mr. RAINEY. Mr. Day, are there others accompanying you here also members of your organization? Mr. DAY. Yes, sir; I should like to say to the committee that Mr. Bulla, of Omaha, is here; Mr. James H. Bulla, representing the executive committee of the National Exchange and the Omaha Exchange; Mr. J. B. Reese, in the same capacity for the Kansas City Exchange; Mr. William E. Hilton, of St. Louis, representing the St. Louis Exchange in the same capacity; Mr. E. S. Aikins, of Kansas City; and Mr. W. H. Mooney, of Chicago, president of the Chicago Traders' Live Stock Exchange; and Mr. Thomas Ryan, one of the directors of the Chicago Exchange. Mr. TINCHER. You all represent traders' live-stock exchanges? Mr. DAY. Yes, sir; in the various markets; not the live-stock commission men, because we have no connection with them. Mr. TINCHER. Just the traders? Mr. DAY. Yes, sir. I might say for myself so that you will know whether or not I am competent to testify that I was formerly employed on a farm in Indiana and have fed many cattle and I feed a number of loads of cattle from time to time on my farms in Illinois and Indiana. I am associated with Mr. John J. Lawler in the stocker and feeder trade in Chicago and this is the twenty-first year that I have been with that firm. I have been actively engaged on the market all these years. I am a director in the Chicago Traders' Exchange, and, as I stated before, secretary of the National Exchange. The National Exchange includes exchanges in Chicago, which has a membership of 518, Kansas City, with a membership of 330, Omaha with a membership of 149, St. Louis with a membership of 110, Sioux City with a membership of 76, and Oklahoma City with a membership of 63. Indianapolis has a traders' exchange which is not yet affiliated with the National Exchange, but expects to become affiliated this year. In both St. Paul and Louisville active steps are now being taken to establish a traders' exchange. Each local exchange is a law unto itself, as far as its business operations go. The National Exchange is sort of an association of the different exchanges to bring them together and to take care of any interests that all the exchanges have in common, such as this hearing here, for instance. The value of the membership in these different exchanges runs from $1,500 to $2,500. That is the actual market value; they have a higher book value in the exchanges, with the exception, I believe, of St. Louis, and Sioux City. I am not just posted on their valuation, but I understand that in St. Louis it is $1,500. Of course, I think the committee would not care for me to go into the purpose of the organization; that is patent to the committee, I think, and the privileges that membership confers in the different exchanges. Mr. TINCHER. Right on that point, so we may have some idea about the privileges conferred, is it practically necessary for all traders on the yards to belong to the local organization? Mr. DAY. Practically necessary; yes, sir, but not absolutely neces sary. Mr. TINCHER. From the practical standpoint it is? Mr. DAY. Yes, sir. I might say this, that we have, of course, plenty of law, I suppose I am not a lawyer--we have plenty of law in all of the different States, and Federal laws, to answer, all purposes of public trading, but we find it necessary and more convenient that we have a particular code of rules that govern and control our business practices. We have found that our trade works out a great deal better, disputes are settled much more quickly, and the general business standing and honesty of the tradesmen is greatly improved by having an organization to which all minor disputes and settlements, such as the mixing of cattle, misunderstanding about prices, and a thousand other details that enter into the daily business transactions with each other, are settled. I might say in that connection that on the Chicago Exchange we have only had one case this year, that I can recall, for hearing, on the ground of uncommercial conduct where charges were preferred against one of our members. Mr. TINCHER. Perhaps, there are many members that never could prefer charges? Mr. Day. I am not making that point. I am making the point that we only had one case brought up, indicating that our membership lined up to the rules. Mr. TINCHER. Suppose a man in Kansas City saw a member of your exchange buy 82 head of yearling steers for $6.85 and he said to the man, "I will give you $7.25 for those cattle if you will just weigh them up to me," and the man says, "I can not do that," and the man goes down the alley and this member of your exchange follows him down the alley and finally says to him, "I guess I will sell the cattle," and when he goes back to buy them the farmer sees seven head of little doughbelly cattle in the pen where the 82 were and he offers to sell him 89 head. He gets upon the fence and counts only 82. He sees what has happened, he has taken out seven head from the top and put in seven and that is the way the trade is being offered him. He accuses the man, a member of the exchange of the sale, and he says, "What is the difference, what are you going to do about it?" That is a proposition that can not be taken up with your exchange and hence it is necessary to have a separate code of laws to cover it? Mr. DAY. May I ask whether you are stating that as a fact? In 20 years I have never seen or known of a thing like that to happen. Mr. TINCHER. Do the farmers have any redress from your exchange, which is covered by a separate code of laws, if there is any complaint of dishonorable conduct on the part of a member? Mr. DAY. Yes, sir. Mr. TINCHER. If it did happen, would the farmer have any right to make complaint to your exchange? Mr. DAY. Yes, sir. Mr. TINCHER. Not being a member? Mr. DAY. Our exchange is open at all times to any complaint of any person against any member of the exchange that has made a dishonorable or discreditable trade. Mr. TINCHER. I wish you would show me the part of your by-laws and code that gives anyone, not a member of your exchange or a member of the live stock exchange, the right to redress from your exchange? Mr. DAY. Mr. Mooney, can you answer that question? Mr. MOONEY. Yes, sir; our rules provide for it. The CHAIRMAN. Have you a copy of them? Mr. DAY. No, sir. The CHAIRMAN. You can furnish the committee with a copy? Mr. DAY. Yes, sir. I shall be glad to send it by mail if that will be satisfactory. The CHAIRMAN. That will be incorporated with your statement? Mr. DAY. Yes, sir. Mr. BULLA. If the farmer can prove that, would not the members of the exchange be subject to a heavy fine? Mr. DAY. Yes, sir. Mr. TINCHER. No; here was the proposition. The farmer sees him buy them at $6.85 and he goes up to him and says, "I want these cattle. I should like to have them weighed up to me. I will give you $7.25. I do not care so much about this little difference in the price of the cattle. I want to get them direct from the producer." He can not ultimately get them in any other way, except he buys |