Mr. ANDERSON. Before Mr. Weld goes on, I should like to file for the record a statement showing the exports of hog products from the United States by months, during the years ending Decem ber, 1918 and 1919, and also a statement showing the receipts of hogs at Chicago, Kansas City, Omaha, St. Louis, St. Joseph, Sioux City, and St. Paul for 1918 and 1919, during the same periods. I do not offer this as any refutation of the explanation of the reasons for the hog prices going down when the pork-loin price went up, but merely as a small contribution to the sum total of knowledge on that subject.

This table shows in a general way that there was no substantial decrease in the exports of bacon until December, 1919, and that there were substantial decreases in the exportation of hams and shoulders in the months of October, November, and December, 1919, as compared with 1918. The exportations of neutral lard, canned pork, and fresh pork, I think, all increased as compared with 1918. One of the most remarkable things about this statement is that there was a very great increase in the exportation of fresh pork in those months.

The CHAIRMAN. Do you wish to have that incorporated in the record?

Mr. ANDERSON. Yes, sir.

The CHAIRMAN. Without objection, it will be so ordered. (The statements submitted by Mr. Anderson follow :)

Months.

Combined run of hogs at seven markets-Receipts of hogs at Chicago, Kansas City, Omaha, St. Louis, St. Joseph, Sioux City, and St. Paul for 1919 and 1918.

Mr. WELD. I might say that this chart shows a further falling off in the exports of bacon, hams, and shoulders, and lard——

Mr. ANDERSON (interposing). Not in lard?

Mr. WELD. From 114,000,000 in June to 68,000,000 pounds in July and 49,000,000 pounds in August.

Mr. ANDERSON. You are dealing with only October and November. Mr. WELD. I will read right through. September, 36,000,000 pounds; then it went up to 41,000,000 pounds; but reading right through, it declined very heavily, which is one of the important factors in the decline from August. We can not have any better explanation of the drop in hog prices in August and September than those figures.

Mr. MARSH. Mr. Chairman, you said that I could bring up this letter; may I do it now?

Mr. CHAIRMAN. You may before Mr. Weld starts in.

Mr. WELD. I would much prefer if you would permit me to go ahead, because I want to get through.

The CHAIRMAN. The letter was placed in the record this morning. Mr. WELD. It is not a part of my testimony.

The CHAIRMAN. Mr. Marsh, suppose you take that up when Mr. Weld finishes this evening.

Mr. MARSH. Certainly.

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. I want to say a word on the question of the turnover, the number of times our stock is turned over in the course of a year. This is a point which has come up a number of times. It is a matter I will be glad to go into. I may say, to begin with, that the different parts of our business turn over at different rates of rapidity That is, for example, the fresh-beef business turns over much more rapidly than the pork business, where the goods have to be cured. and are held for several weeks, and sometimes several months, before they are sold. In the cattle business, however, of course the fresh-beef turnover is more rapid than the hides or that part of the beef that is frozen, and probably it might be said that our running stock of cattle products would turn, perhaps, 6 or 7 times a year.

The stock of fresh beef might turn 10 or 12 times and the cured pork products, perhaps, only 4 or 5 times a year. If you consider the number of stock turns as based on the inventory, because that is the usual method in counting the number of stock turns in a regular manufacturing establishment, they divide the average inventory into the sales for the year. Last year our inventories ran a little less than $200,000,000-$190,000,000-and the sales about $1,200,000,000. That makes about six times during a year; a little over six times.

It becomes just about the same if you consider the turnover of our investment, that is, our net worth, which was about $200,000,000 with sales of $1,200,000 which means from that standpoint that it was about six times. If you take the total capital employed, including our investment and borrowed money, the total capital of the business has turned over about three and a half times during the year. Of course, this shows the relation between our profits on sales and profits on investment. It is because we can turn over our goods fairly rapidly, about six times a year, that we can do business on a profit of only 1.6 cents on each dollar of sales and still make a profit of 7 per cent on our investment.

The CHAIRMAN. Mr. Weld, will you please suspend a moment? Mr. WELD. Certainly.

The CHAIRMAN. I have just received word from the Attorney General's office that he can appear before the committee either on the 1st or 2d of April. What is the wish of the committee?

Mr. ANDERSON. I move that it be on the 2d of April.

The CHAIRMAN. At 10 o'clock?

Mr. ANDERSON. Yes, sir.

The CHAIRMAN. Without objection, the Attorney General will be invited to appear at 10 a. m., April 2.

There was no objection.

The CHAIRMAN. Mr. Weld, you may proceed.

Mr. WELD. I am about where we handle other products. I do not intend to go into this very exhaustively.

Mr. MARSH. May I ask a question on the turnover?

Mr. WELD. Please permit me to finish my statement and then you can ask the questions.

The CHAIRMAN. Have you finished your statement on the turnover?

Mr. WELD. Yes, sir.

The CHAIRMAN. Then the questions will be in order.

Mr. WELD. I had planned to finish my statement, which will not take more than an hour, and then answer any questions which may be asked.

The CHAIRMAN. If you desire, you may conclude your statement. Mr. ANDERSON. Yes; finish it.

Mr. WELD. If the gentlemen will please make notes I will be glad to answer any questions.

There has been, of course, a great deal said about our handling other products than meat. That is one thing covered in the recent decree. I want to point out why, from our point of view, it is not proper to use the word "unrelated" with respect to these products that we do handle. They are "unrelated" in one sense, usually they

are not products of live stock, but there is some very good reason for the handling of all of them. Swift & Co. at least handles lines aside from meats. There are three classes of commodities in which Swift & Co. is interested. The first class is raw materials which are needed in manufacturing our regular products, such as cottonseed oil. We are interested in the raw material used in the manufacturing operation.

Second, the class of goods which are by-products of the packing industry and which we advance to the further stage of manufacture, hides through the tanning process and oleo oil in the making of oleomargarine, etc. The third are the products for which we can use our sales organization to better advantage, such as butter, eggs, cheese, and poultry. As for this last class of goods, you must realize, I think-and this bears somewhat on the point that Mr. Voigt was trying to bring out with Mr. Sansom-we have this sales. organization. We have the personnel of a sales organization, with the managers, including the salesmen, etc., and we also have the physical equipment in the form of refrigerator cars, storage houses, branch houses, delivery trucks, etc. If the sales organization that covers the country were used only for our beef line, why we could not afford to have it, except possibly in the larger cities. For packing pork and port products, lamb, etc., we are using the same equipment to handle a greater volume, and consequently can afford to have more branch houses and the operating cost is lower. The principle is that with the great volume we can be sure of the sales organization, such as the human beings and the physical equipment, and lower our unit selling cost. Therefore in the case of butter, eggs, and poultry we are using the physical equipment, the storage houses, the refrigerator cars, and the coolers in our branch houses, and the city trucks to get the eggs into the hands of the retailers, and we are using the same sales administration, largely the same accountants and the same salesmen, in selling very largely to the same class of retailers.

The handling of these goods fits very naturally into our general scheme of selling, and increases the volume of business without proportionately increasing the overhead expense. As I say, the result is a lower unit selling cost than would otherwise be possible, because both on the eggs, cheese, butter, and poultry, and on the meats that we handle it also makes possible a wider distribution, the operation. of more branch houses, and the reaching of more towns from the branch houses than with car routes. There is good economic justification for handling these products that we do handle. That also has a very important bearing on the situation with regard to butter, eggs, cheese, and poultry to be taken away from us. I think that Mr. Colver told you that as to unrelated products there was no reason why we should handle them, that we ought to be kept from handling them, and that it would be a good thing for the country if we were kept from handling them. I have already pointed out in that connection that I think it would be an extremely dangerous precedent to establish in our laws; that is, to give any single commission or any Government official power to say what products a concern might or might not handle. I think that is a practically impossible principle to establish in the law. I also pointed out that that had been