dollars. I don't believe anyone should be allowed to sell diseased meat.

Mr. SMITH. No; I agree with you on that, but then the farmer should not have our money.

Mr. KINCHELOE. I am not arguing with you on that proposition, as to who should stand the loss, but I am arguing the fact that the Federal Government has put an inspection service in there to stop the sale of diseased meat for which you were not responsible when you bought it.

Mr. SMITH. You are absolutely right, but you are not going far enough.

Mr. KINCHELOE. When the public pay the top price for the stuff they ought to have good meat.

Mr. SMITH. We get it both ways. When the farmer sends in these hogs and we buy them and they are condemned, we have no redress. And if we send out hams that are tainted, if they were not properly cured, why we have to allow the man for them. If we ship them out, why they would want to put us in jail if we didn't allow them for those hams. So we have to allow them for those. And in that way, as I say, we get it both ways.

Mr. KINCHELOE. Well, I am not arguing about who should bear the loss; I don't care about that, for the purpose of this legislation. But now don't you think that it is a wholesome thing for the public, and doesn't it keep the confidence of the public in you gentlemen as packers, if there is a representative of the public there to see that they get nothing but good and sound meat?

Mr. SMITH. Well, do you mean to see that we do not use diseased meat?

Mr. KINCHELOE. Yes.

Mr. SMITH. Absolutely.

Mr. KINCHELOE. I don't mean that you intentionally would do that.

Mr. SMITH. Yes; sure; I understand.

Mr. KINCHELOE. But I am talking about the law.

Mr. SMITH. Yes.

Mr. KINCHELOE. I am talking about the law requiring that an inspector be placed there to see that the public get nothing but good and sound meat.

Mr. SMITH. Yes. I don't think any reputable packer in the United States would attempt to do anything like that.

Mr. KINCHELOE. No; I didn't mean that.

Mr. TEN EYCK. Do you state all there is to that transaction when you state that when those hogs were condemned, because they were diseased, the farmer having received his money for them, that you got nothing?

Mr. SMITH. We have no redress whatever, absolutely none.

Mr. TEN EYCK. You don't get any compensation from anybody? Mr. SMITH. None whatever.

Mr. TEN EYCK. Isn't there a law in the State of Maryland that when they condemn cattle of that sort they compensate you to the extent of a certain amount?

Mr. SMITH. If the State animal inspectors condemn cattle on the farm, they give the farmer a certain amount of the value of the stock, a certain per cent. But if the packer kills his hogs, and the Govern

ment condemns them, after the packer has bought them and paid the top price for them, he has no redress. He may buy the hogs in the morning, and he may have handed the man from whom he bought the hogs the money that very morning, and that same afternoon they might be condemned by the Government, but we would have no redress. We lose it all.

Mr. TEN EYCK. Haven't you got any experts who are on the lookout for such things?

Mr. SMITH. We can not tell if a hog is tubercular when he is walking around in the pen. Some of the finest hogs we have might have what they call generalized tuberculosis, and you can not tell by looking at a hog if he has tuberculosis.

Mr. TEN EYCK. Can't you tell before you kill the hog whether he is tubercular? Don't you take a certain percentage in large purchases of that kind and examine them? Don't you take every tenth hog and make an examination?

Mr. SMITH. No; nobody would do that. If you undertook to do anything of that kind you never would get your stuff out of the stockyards.

Mr. TEN EYCK. You don't?

Mr. SMITH. No.

Mr. TEN EYCK. But it is possible to test a hog when he is alive and find out whether he is tubercular?

Mr. SMITH. No.

Mr. TEN EYCK. Don't you know that from your own knowledge? Mr. SMITH. No.

Mr. TEN EYCK. How long have you been in the business?

Mr. SMITH. Thirty-one years.

Mr. TEN EYCK. Don't you know as to whether you can test a hog or cattle while alive, for tuberculosis?

Mr. SMITH. Well, yes; you can, I suppose.

Mr. TEN EYCK. Don't you know that?

Mr. SMITH. But you would never get the stuff out of the yards if you attempted to test every hog in there and every steer.

Mr. TEN EYCK. No; I was just merely asking you whether you knew from your own knowledge if that could be done. You made the statement that there was no way to tell while the animal was alive.

Mr. SMITH. I retract that. I mean there is no way of telling by looking at the hog.

The CHAIRMAN. But you take the loss into account in estimating cost and profits? The loss is distributed among all?

Mr. SMITH. No, indeed. If there are so many hogs lost and if there are so many cattle lost out of the purchase, that is usually counted up in the shrinkage.

The CHAIRMAN. If no losses were incurred on account of tuberculosis you would pay more for them?

Mr. SMITH. Yes; I should judge so. The more they lose the higher the cost is.

The CHAIRMAN. I always understood that that was taken into account, and was taken as part of the cost in estimating.

Mr. SMITH. No; that would just be the shrinkage on that particular purchase, whatever the loss may be.

Mr. KINCHELOE. What is the reason you would not have an action in court against the person from whom you bought that carload of hogs?

Mr. SMITH. I Couldn't answer that. Maybe some of the legal gentlemen here can answer that question.

Mr. JONES. But you are in a little different position from the farmer in this, that the farmer does not fix his own price, and you, in a large measure, fix the price you pay him, and the price you sell your products for. And in fixing this price you charge this to profit and loss, in the general run of the business, these losses you have here, and the prices are fixed in such a way, the prices you pay generally, and the prices you sell your meat for, that you make a profit.

Mr. SMITH. No; you can't do that. There may be 10 packers in a town, and each one of them might kill 10 carloads of hogs, for illustration. Now 1 man out of the 10, we will say, might have 2 cars condemned for tuberculosis. Now, that man can put his price. anywhere he wants to, but he can not get any more than the other nine fellows.

Mr. JONES. But in the general run of the business, they all have the experience, and in the general run of the business this is charged as one of the expenses of the business, and the prices are fixed in such a way that most of the packers that operate properly make a profit, and, of course, this goes in as one of the expenses, doesn't it, in the general run of each man's business?

Mr. SMITH. Well, you can call it expense if you want to. I call it a dead loss.

Mr. JONES. Well, it is an expense even if it is a dead loss, isn't it? Mr. SMITH. Yes.

Mr. JONES. Most expense is a dead loss, isn't it?

Mr. SMITH. Yes; that is true, but there is no reason why we should hand out our money for diseased animals. Now, as the gentleman asked there: Can't you tell by examining these animals? Certainly, a veterinarian could examine each one of them, I presume, unless it is a very concealed case, and tell whether the animal is diseased or not before the animal is slaughtered; but if you attempt to go into the stock yards and buy hogs and cattle and have each one of these animals examined before it is purchased and bought, why you could not operate.

Mr. JONES. That is a matter of business judgment. Whether it is better to go ahead and take your chances on the loss, or whether it is better to examine each animal and make a test of it before you buy it, is a matter of business judgment. Now, as to whether it is better, a better business policy, to take all of them as they come on sight and take your loss when they are condemned, along with the other fellow, or whether it is better to have them examined by a man of your own, that is a matter of business judgment. In either event it should be charged to expense.

Mr. SMITH. Well, you go out to the stockyards and examine a couple of carloads of hogs, and you will see how long it would take. You couldn't operate.

Mr. JONES. Well, you are not in any worse position than your competitive packer, are you?

Mr. SMITH. No.

Mr. JONES. You are on the same basis?

Mr. SMITH. Yes; but nevertheless the farmer ought not to receive money for a whole lot of diseased animals.

Mr. JONES. But the farmer should receive a profit on his animals. Mr. SMITH. Yes; and so should the packer.

Mr. JONES. But it frequently happens that the average farmer can not make the profit that the packer can make.

Mr. SMITH. I have not been in the farming business, so I couldn't

say.

Mr. TEN EYCK. I didn't mean, when I was asking you the question, that we wanted you to test every animal. I mean that you would test, say, 1 out of every 10, if you were buying a large number of hogs, which would mean a large investment. In addition to that, isn't it true that some cattle that are tubercular, and that the State has condemned, and for which the farmer is paid, that a lot of those cattle are permitted to be sold and eaten, because the meat is not bad for human consumption?

Mr. SMITH. I don't know of any cattle that the State veterinarians have condemned with which that is allowed to be done. I never heard of such a thing.

Mr. TEN EYCK. You never heard of such a thing?

Mr. SMITH. No, sir.

Mr. TEN EYCK. Well, I think they do that.

I

Mr. SMITH. Not in the State of Maryland. In the State of Maryland if they condemn any cattle for tuberculosis they bury them. don't know what they do in the other States. The State veterinarians there bury them. They put quicklime on them.

I

Mr. TEN EYCK. Of course, you are in the State of Maryland. don't know your laws. But I know there are laws on statute books in different States whereby there are certain degrees of infection recognized as not affecting the meat.

Mr. GREENWALD. Oh, well, that is a different proposition.
Mr. SMITH. I don't know anything about that.

Mr. TEN EYCK. And the meat can be sold, but nevertheless that cow is condemned for tuberculosis.

Mr. GREENWALD. They won't let you use a tubercular cow for human food. There may be one gland in the neck. For tapeworm they will permit you to sterilize it, put it under steam pressure, and it can be only used for a certain product. But they won't permit you to use a tubercular cow for human food. All animals that are tubercular are condemned.

The CHAIRMAN. In the State of Maryland?

Mr. GREENWALD. In any State where there is Federal inspection. The CHAIRMAN. In any State where there is Federal inspection? Mr. GREENWALD. Yes. But for tapeworm they permit you, under Federal inspection, to sterilize the meat.

Mr. JONES. They don't permit you to use any portion of the carcass when the carcass is condemned? If an animal is condemned, they won't permit you to use any portion of it?

Mr. GREENWALD. Not when they are tuberculosed.

Mr. JONES. You can use the hide.

Mr. GREENWALD. Yes; but not the carcass.
Mr. TEN EYCK. Is that a Federal law?

Mr. GREENWALD. That is a Federal law.

The CHAIRMAN. Federal regulation.

Mr. GREENWALD. In the State of Maryland we have a State inspection which is a joke. The Federal inspection is all right. The CHAIRMAN. Does that apply to cattle and hogs?

Mr. GREENWALD. Yes.

The CHAIRMAN. But the same rule applies to the feeder as to the packer. The feeder buys a steer or a carload of cattle, and if they are found to be diseased, the loss is borne by him.

Mr. SMITH. No; the packer generally buys them from the farmer. The CHAIRMAN. He puts them in the yard, and if the animal dies in the yard he stands the loss?

Mr. SMITH. Yes; he stands the loss.

The CHAIRMAN. Anything else?

Mr. SMITH. That is all I have. Thank you.

Mr. LIGHTFOOT. I will ask you to hear Mr. Taliaferro.

The CHAIRMAN. Very well.

STATEMENT OF THOMAS W. TALIAFERRO, VICE PRESIDENT AND GENERAL MANAGER HAMMOND, STANDISH & CO., DETROIT, MICH.

The CHAIRMAN. You may proceed.

Mr. TALIAFERRO. Are there any questions you want to ask of me, Mr. Haugen?

The CHAIRMAN. You can go on in your own way. Do you prefer to go on and make your statement, Mr. Taliaferro?

Mr. TALIAFERRO. Well, I came down to appear before you gentlemen in opposition to the several bills that are before you. And I did that for the reason that I can not see where any good could possibly come from them, or where they could correct any supposed evils in the business.

Now, with reference to the bills that you have before you. The McLaughlin bill I would consider a very drastic measure and one calculated to do the industry a great deal of harm.

The Haugen bill is not so drastic in its provisions, and with some eliminations, perhaps with some changes if the committee thinks that a bill at all is necessary-I believe could be made to at least not handicap the business more than it is at the present time.

The packing business now is in a very critical state. It has been in a very critical state for the past two or three years, and it needs all of the help that it can possibly get to pass over the present very unfavorable situation, and I feel that it would be in the province of this committee and in the province of Congress to do everything they could to help the business, which is the most fundamental in this country, rather than to handicap it in any way. Being a perishable business, and dealing only in perishable products, it is very susceptible to the least unfavorable conditions. The conditions in this business, as I said before, have been very unfavorable. I don't think that there is a packer in the United States that has made any money in the last two or three years, and in my estimation, the business will not survive if this is continued for another year. It certainly now is in such shape that any unfavorable legislation would react to the great disadvantage of the business, both of the producer and the

consumer.