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state. This can only be done in cold weather, of course. The dead animals will then be put in freight cars and shipped to several places in California where they make chicken feed.
Mr. BUCHANAN. It won't give the chickens syphilis?
Doctor MOHLER. No, sir; it will not, and it is a very good way out, from our standpoint.
PACKERS AND STOCKYARDS ACT ADMINISTRATION
Mr. BUCHANAN. The next item is:
Packers and stockyards act: For necessary expenses in carrying out the provisions of the Packers and Stockyards Act, approved August 15, 1921 (U. S. C., title 7, secs. 181-229), $350,200: Provided, That the Secretary of Agriculture may require reasonable bonds from every market agency and dealer, under such rules and regulations as he may prescribe, to secure the performance of their obligations, and whenever, after due notice and hearing, the Secretary finds any registrant is insolvent or has violated any provision of said act he may issue an order suspending such registrant for a reasonable specified period. Such order of suspension shall take effect within not less than five days, unless suspended or modified or set aside by the Secretary of Agriculture or a court of competent jurisdiction: Provided further, That the Secretary of Agriculture may, whenever necessary, authorize the charging and collection from owners of a reasonable fee for the inspection of brands appearing upon livestock subject to the provisions of the said act for the purpose of determining the ownership of such livestock: Provided further, That such fee shall not be imposed except upon written request made to the Secretary of Agriculture by the Board of Livestock Commissioners, or duly organized livestock association of the States from which such livestock have originated or been shipped to market.
Doctor MOHLER. The following justification for this appropriation is presented : Appropriation, 1932
$402, 880 Appropriation, 1933
374, 700 Budget estimate, 1934.
Decrease.ad $24,500 reduction on account of continuation of legislative furlough.
WORK UNDER THIS APPROPRIATION
The work under this project embraces supervision of the business of packers, stockyard owners, market agencies, and dealers enaged in interstate commerce, and includes regulation of practices and rates and charges for service rendered at posted stockyards. Jurisdiction is exercised, through 20 field offices, over approximately 1,300 market agencies and 3,200 dealers at 73 stockyards. Varied activities are carried on under this project, the more important of which are (1) registration and bonding of market agencies and dealers; (2) investigations of complaints as to unfair and unjustly discriminatory practices; (3) supervision of the testing and maintenance of livestock scales at the various markets; (4) valuation of the properties of stockyard companies, which includes inventories and appraisals of the real estate and physical structures of such companies, together with comprehensive analyses of their financial operations and organization and complete audits of their books and records, for the purpose of obtaining information for the use of the Secretary in determining the reasonableness and lawfulness of rates and charges for stockyard services; and (5) investigations of the operations of commission men and audits and analyses of their books and records in connection with the determination of rates which would be reasonable for them to charge for the purchase and sale of livestock at public markets.
During the year just past, material progress has been made in the commission rate phase of the work under the packers and stockyards act. An order which was issued by the Secretary prescribed a
schedule of reasonable commission rates to be charged by the agencies at the Kansas City, Mo., stockyards, which it was estimated would have saved producers more than $255,000 a year. The two cooperative agencies at that market put into effect the rates prescribed by the Secretary but those agencies which are members of the Livestock Exchange, about 75 in number, filed petitions for a rehearing based on changed economic conditions. In view of a recent Supreme Court decision in which it was held that certain reilroads were entitled to rehearings on rates before the Interstate Commerce Commission, because of changed conditions, the Secretary granted the petitions and the matter was set down for a rehearing which has just been concluded. The expense of conducting this reinvestigation, which could not be anticipated, at this market, one of the largest in the country, will be considerable.
As the result of a conference following a hearing and oral argument, commission firms at the St. Joseph (Mo.) stockyards filed schedules of commission rates materially lower than those which had been in effect. It is estimated that these rates will mean a saving of more than $100,000 annually to producers who patronize that market.
A hearing had been set on commission rates at the St. Paul stockyards, but, after a conference with the department, commission men at that market filed new schedules containing substantially lower rates, which it is estimated will save shippers who patronize those yards considerably more than $100,000 a year.
Following the issuance of the Kansas City commission-rate order, market agencies at the Wichita (Kans.) and Oklahoma City (Okla.) markets filed schedules of lower rates in accordance with those contained in the Secretary's order.
A commission-rate hearing was completed during the year at National Stockyards, Ill., and an oral argument in this case was made September 8.
An effort was made to adjust commission rates at the Chicago market, but at a conference which was held August 29 to 31, inclusive, with representatives of the agencies operating at that market it was not found possible to reach an agreement. Consequently, it is necessary to proceed with a formal hearing and preparations are being made for a detailed study of the books and records of the firms at this market, over 100 in number, with a view to holding a hearing as soon as possible after the close of the current calendar year.
All in all, as the result of hearings or conferences, or both, it is estimated that the savings to shippers and producers through reduction in commission charges, which were effected during the past fiscal year, will amount to considerably more than $1,000,000 annually.
There are still about 30 livestock markets of considerable size at which we plan to conduct commission rate investigations as rapidly as the nature of the work will permit.
In stockyard rate cases the courts handed down adverse decisions with respect to orders issued by the Secretary in which he had prescribed schedules of reasonable rates to be charged by the stockyard companies at St. Joseph, Mo., and Denver, Colo., which were materially lower than those in effect. In the Denver case a permanent injunction was issued based chiefly on alleged errors in the findings of the Secretary with respect to the valuation of the property. In the St. Joseph case an injunction was issued based on the refusal of the
Secretary to grant a petition of the stockyard company for a rehearing due to changed conditions. The department, in conformity with the views of the court, is preparing to hold another hearing in this matter which is scheduled to commence on January 10, 1933. Pending the outcome of the final decision with respect to certain legal issues arising in the Denver case, no orders have been issued in the stockyard rate cases at Kansas City, Mo., and National Stock Yards, Illinois, in which hearings and oral arguments have already been completed. It appears very probable that it will be necessary to reopen these cases and revalue the properties and bring all other pertinent data up to date. This will be a very large undertaking which will necessitate substantial expenditures and which it will not be possible, in view of the large program of work that is already under way, to commence until the coming fiscal year.
A hearing was held during the past fiscal year in the Omaha stockyards rate case and the oral argument in this case was held on September 19. Appraisal work has been practically completed in preparation for a hearing on stockyard rates at Sioux City, Iowa, and much of the work in connection with the appraisal of physical property of the stockyards at Wichita, Kans., in preparation for a hearing has been completed.
The decision of the courts in the stockyard rate cases have unavoidably retarded the progress of this phase of the work and increased expenditures very materially, because of the necessity of bringing detailed audits up to date and revaluing the properties in preparation for rehearings. There is much unfinished work in connection with these stockyard rate cases as nothing has been done at many other markets of considerable size. It is planned to proceed with the work at these markets just as expeditiously as available funds and personnel will permit.
A very large number of complaints alleging violations of the act have been received and investigated, some of which were settled informally while in others it was necessary to hold formal hearings. As in the past, every effort has been made to dispose of formal proceedings as rapidly and economically as possible, both in the interest of the Government and the parties involved. Sixteen cases were pending July 1, 1931, 38 were instituted, and 38 disposed of during the fiscal year 1932. During the same period bureau accountants made detailed audits and analyses of the books and records of one stockyard company and 159 market agencies in connection with rate cases, in additional to financial and trade practice audits of the records of approximately 35 stockyard companies and 24 commission firms at markets throughout the country. The number of posted stockyards increased during the year from 91 to 93.
The department stands ready to accept at any time schedules of lower charges submitted voluntarily, by stockyard companies and market agencies. Such acceptance is, of course, always without prejudice to any hearings that may be held or future orders that may be issued prescribing reasonable rates. Through these voluntary reductions, the livestock producer is able to enjoy the benefits of these lower charges until such time as the department through the usual procedure of hearings can determine whether they are reasonable. Several stockyard companies, principally smaller ones, have recently voluntarily reduced their charges, and practically all com
panies have been cutting down feed prices. For example, the price of corn has been reduced as low as 75 cents a bushel from a peak price of $1.50 during the past year. Voluntary reductions in commission rates have also been made recently at several of the smaller markets.
Mr. BUCHANAN. Now this court decision, I suppose, did not affect the act at all?
Doctor MOHLER. No, sir.
Doctor MOHLER. Yes, sir; and it was based on a decision of the Interstate Commerce Commission which placed the valuation on a certain railroad but did not bring it up to within a reasonable time of the hearing to show the changed conditions.
Mr. BUCHANAN. When the court issued the permanent injunction, I suppose that was based upon the fact that the valuation placed on the property by the Secretary had not properly been arrived at.
Doctor MOHLER. Yes; that was one point. That was in the Denver stock yard case, where they have about 7 acres of railroad tracks.
Mr. Hart. I just want to ask a few questions in connection with the act itself. Is there no competition—the business is not competitive?
Doctor MOHLER. Yes, sir; it is competitive.
Doctor MOHLER. Yes. They vary from point to point, and nearby points vary considerably.
Mr. Hart. Then why does the department attempt to fix their charge? Won't competition fix it?
Doctor MOHLER. The reason this work is done is because we are trying to comply with the language of the act itself, which requires that.
Mr. Hart. Do not you think the act itself is foolish?
Mr. Hart. For instance, here is a group of farmers patronizing this stockyard. Now that stockyard's business, or the business of the commission merchants who operate the stockyard depends upon a satisfied clientele, does it not?
Doctor MOHLER. Yes.
Mr. HART. The lawyer runs his office on the same basis, does he not, of having a satisfied clientele?
Doctor MOHLER. Yes.
Mr. HART. And why should the Government appropriate money to interfere between these men and their clientele, any more than between the law office and its clientele?
Mr. BUCHANAN. The object of the original act was to prevent those commission houses, stockyards, and so forth, from entering into a combination and fixing prices themselves and making them uniform, which trust, if you want to call it a trust, would necessarily exclude competition.
Mr. Hart. Now they have cooperatives operating there, too?
Mr. BUCHANAN. That is a recent development.
Doctor MOHLER. All cooperative marketing operations were given a great impetus during the early days of the present administration by the passage of the marketing act followed by the organization of the Federal Farm Board. However, there was considerable cooperative marketing of livestock even before this, but it has become more widespread in the last two or three years as you state. Nevertheless, many farmers are reluctant to handle their stock cooperatively.
Mr. Hart. I will tell you why they do not—they do not get as efficient service.
Doctor MOHLER. There must be something of that kind.
Mr. Hart. I have actually handled some cattle. Now you go into one of these old-line companies and ask them for a certain grade of feeders, and when the car of feeders arrives you get just what you ordered. Now I have never bought any of a cooperative, but they tell me that you order from one of them and you are liable to get a mixed lot; it is some politician running the cooperative and not a fellow started in and built the business from the ground up.
Doctor MOHLER. Yes.
Mr. Hart. And personally I object to a lot of appropriations for interfering between these business men and their clientele; I would rather spend the money on hog cholera.
Doctor Mohler. What we are doing is to try to enforce the packers and stockyards act as passed by Congress. I am not expressing an opinion; I am just trying to enforce the act.
Mr. Hart. There is too much interference. You might as well go and interfere with a lawyer and his clientele; you might just as well go and interfere with a department store and its customers; it is the same thing.
MEAT INSPECTION ACT
Mr. BUCHANAN. Now, Doctor, you have an item for meat inspection:
For additional expenses in carrying out the provisions of the meat inspection act of June 30, 1906 (U. S. C., title 21, sec. 95), as amended by the act of March 4, 1907 (U. S. C., title 21, secs. 71-94), and as extended to equine meat by the act of July 24, 1919 (U. S. C., title 21, sec. 96), including the purchase of tags, labels, stamps, and certificates printed in course of manufacture, $2,074,590.
Doctor MOHLER. I offer the following statement: Appropriation, 1932: 1. Annual act.-
$2, 661, 140 2. Permanent annual.
3, 000, 000 Total appropriation, 1932
$5, 661, 140 Appropriation, 1933: 1. Annual act...
$2, 604, 860 2. Permanent annual.
3, 000, 000 Total appropriation, 1933
5, 604, 860 Budget estimate, 1934.
2, 074, 590 Permanent annual..
3, 000, 000
5, 074, 590 Decrease
530, 270 (1) Eighteen thousand eight hundred and twenty dollars decrease by reason of the retirement of employees whose places will not be filled, including differences. in salaries of retired employees and present incumbents.