Mr. VOIGT. Oh, you need never fear anybody putting you in jail for making a mistake. Mr. DENNIG. You have never had any experience in the packinghouse business. With all due respect to the pure food law it all depends upon the inspector as to whether or not you are going to have pleasant conditions. If he is what is sometimes called a crank or an objectionable fellow he can make his little job cost you ten times his salary and not do any good to anybody. Mr. VOIGT. All laws are executed by human beings and you might offer that same objection to any law. Mr. DENNIG. Yes; but leave us as we have been with the balance of the country and not single us out. Mr. GERNERD. And don't have any law for you at all? Mr. DENNIG. Well, do not leave the other fellows out and put us in. Men are very much the same the world over, and why single us out? Mr. VOIGT. If I were you, I would not worry about this packer legislation at all. I do not think it will hurt you one particle. Mr. DENNIG. Well, I fear it would. If I had this body of men sitting around here to administer it, I would not care at all how you wrote the law, because I would try to do what is right and I would feel that you would agree with me. Mr. VOIGT. There will not be anything in any packer legislation that is going to hurt anybody who does business on the square. Mr. DENNIG. We have refrigerator cars and all that kind of business, and we have to run a modern plant, and we have to have everything, and it means a continual investigation. I can not say with all of them that we lost money last year. We made a little money. Mr. GERNERD. I want to congratulate you. You are the first fellow I have met yet who has made any money. Mr. DENNIG. I did not want to throw a cold curtain over everything. But I want to say that within the last month we have lost over onehalf of what we have made during the year. But I think we will make it up. Mr. VOIGT. Average it up for five years and it will be all right I think. Mr. DENNIG. Take the year 1819 Mr. VOIGT (interposing). Why not take the year 1918? Mr. DENNIG. Well, the year 1819 was a fair year I understand from some of my ancestors. We were fortunate in selling our calfskins about August, 1919, for $1. That price held good until about September 30 and it fell to 50 cents. That is over a year and a half ago. On September 1, 1920, we inventoried them at 25 cents, and we inventoried them on March 1 at 17 cents, and we sold them the other day at 15 cents. We have been holding the bag ever since. Mr. VOIGT. I had a letter from a farmer in my district about six weeks ago. He said he took four cowhides to town and did not get enough for them to buy a pair shoes. He wants to know what is the matter. Mr. DENNIG. He is right. Mr. VOIGT. He is worse off than you are. Mr. DENNIG. Take the matter of steer hides and they were up to We were bid the other day 10 cents on condition that we 62 cents. would give the man, let me see, his first note is to be paid in five months, and in five different payments. And from 62 cents the price drops down to 10 cents, and we had to give him seven months pay the money in. to Mr. VOIGT. Well, if you consider the condition of the other fellow, you have much to congratulate yourself on. Mr. DENNIG. Where does the shoemaker come in in the matter of the big price? I paid $12 the other day for these shoes, and the top price for them was $14.50. They have only gone down $2.50 and leather has gone down 10 times that amount. Mr. GERNERD. Do you know what the cost of labor is in the making of a pair of shoes? Mr. DENNIG. No, sir; but I know it is nothing like that. Mr. GERNERD. Do you know the actual cost of the labor in the making of a pair of shoes? Mr. DENNIG. No, sir. Mr. GERNERD. Well, that is according to the cost of labor in a pair of shoes, and then there is the cost of selling. Mr. DENNIG. It is the idea of hating to give up the profit they have been getting the last four years. Mr. GERNERD. You believe in reciprocity in business, don't you? Mr. DENNIG. Yes, sir. Mr. GERNERD. I happen to know just that end of the business, and there are three items which hold up the cost of shoes, labor, transportation and the cost of selling, and newspaper advertising represent 10. per cent of the cost of the retail business. Mr. DENNIG. I think that is so, and I think it ought to be cut out. Mr. GERNERD. That is why you are paying $12 for a pair of shoes. Mr. DENNIG. Still, when I think that hides have gone down ten times, the cost of a pair of shoes ought not to be that much. Mr. GERNERD. But the man that has a store down on Pennsylvania Avenue pays the same rent that he has been paying, and the same clerk hire and other similar expenses. Mr. DENNIG. Then there are other things which are much more out of line than in the case of our business. The CHAIRMAN. The committee will now stand adjourned until to-morrow morning at 9 o'clock. (Thereupon, at 6 o'clock and 17 minutes p. m., the committee adjourned until tomorrow, Thursday, May 5, 1921, at 9 o'clock.) MEAT PACKER. COMMITTEE ON AGRICULTURE, The committee met at 9 o'clock a. m., Hon. Gilbert N. Haugen (chairman) presiding. There were present: Mr. Haugen, Mr. McLaughlin of Michigan, Mr. Purnell, Mr. Voigt, Mr. McLaughlin of Nebraska, Mr. Riddick, Mr. Tincher, Mr. Williams, Mr. Sinclair, Mr. Hays, Mr. Thompson, Mr. Gernerd, Mr. Clague, Mr. Clarke, Mr. Aswell, Mr. Kincheloe, Mr. Jones, and Mr. Ten Eyck. The CHAIRMAN. We are very fortunate in having with us this morning the Secretary of Agriculture, and we will be pleased to hear from him. STATEMENT OF HON. HENRY C. WALLACE, SECRETARY OF AGRICULTURE. Secretary WALLACE. Mr. Chairman, I have looked over these bills which you sent me, H. R. 14, the Haugen bill The CHAIRMAN. Mr. Secretary, there are a number of bills here, and I do not know whether you have had time to study them all or not. Secretary WALLACE. I have not, Mr. Chairman. When I went into this matter, it occurred to me that any service I might be able to render in this regard would be in the way of discussing the proposition in its general phases. The CHAIRMAN. One of the difficulties we have had in considering this question has been as to just where to place the jurisdiction. As one bill is drawn the jurisdiction would be given to the Interstate Commerce Commission as to the stockyards on the theory that they are a part of the transportation facilities of the country, and that the packers themselves should be placed under the control of the Secretary of Agriculture; another bill provides that the packers should be placed under the Federal Trade Commission, while still another bill provides for a new commission altogether. The bill which I have introduced places the stockyards under the Interstate Commerce Commission and the packers under the Secretary of Agriculture. In view of the activities of the Department of Agriculture in the stockyards and in view of its splendid accomplishment, it has been a difficult question for us to determine whether they should now be divided or whether the entire authority should not be given to the Secretary of Agriculture; that is, giving the Secretary of Agriculture jurisdiction over the stockyards as well as over the packers. Your predecessor, I believe, suggested that the Secretary of Agriculture should be given jurisdiction over all of them. That has been given consideration by the committee. We would like particularly to have your views on that matter. Mr. TINCHER. And I would like to have your views on the whole subject of legislation. Mr. GERNERD. Yes; as to whether this legislation is needed and what things are to be corrected by the proposed legislation. Mr. SINCLAIR. It has been contended here by the representatives of the packers that they do not need any legislation at all. Mr. TINCHER. Their position is to strike out all after the enacting clause in all the bills pending. Secretary WALLACE. Then, perhaps it would be agreeable if I would simply discuss the general proposition. Mr. GERNERD. Yes, sir. Secretary WALLACE. And, of course, you have got to approach it with the idea that your purpose is to promote the orderly marketing of live stock with the fewest possible abuses and inequalities and injustices. When you come to consider the live-stock business, it is one great business to which there are some five or six different parties. For example, you start with the producer. He takes his stock to the local station for shipment. He either sells it to a local buyer, or in the case of the larger producer, he ships it himself to Chicago. The railroad comes in then as one of the parties necessary to the carrying on of the business. The shipper has consigned the stock to some commission man and that commission man acts as his agent and sells the stock to the packer or to the eastern buyer or to the local trader. First, before the commission man, the yard enters as one of the parties, because the stock must be unloaded, it must be yarded, it must be fed and watered, and then your commission man enters. Then comes the packer, if it is the packer who buys the stock, and after the packer kills it the railroad enters again and handles the meat products such as are shipped out from that packing point, and then your wholesaler in most cases the packer himself, through his branch house and then your retailer. These are all parties to the one great business, and I think I hardly need to say that the live-stock business is a very essential business to the agricultural prosperity of the country. No doubt as time goes on and the population increases the amount of grain that is fed to live stock will decrease, because in the final analysis, when we are in a struggle for food, as they are in China, it is more costly to get that food through the live stock than it is to get it direct; but we have not reached that point. In an effort now to maintain the fertility of the soil we should encourage the livestock business just as far as we can, and we should remove from that business anything which tends to discourage it. As to the matter of legislation and how you are going to do that, I will say frankly that I think legislation is very desirable now. Every time we have one of these periods of depression in the livestock business, when prices are unreasonably low, we have a great outcry against the packers. When I was on a farm, in the late eighties, I attended meetings of the Improved Live Stock Breeders' Association, and at that time we had the same sort of speeches concerning what we called the "big four" that we have had in recent years concerning the "big five," and the same criticisms and the same charges that they were combining to control the markets. Then, when business got more prosperous, the criticism rather died out, because we were going along fairly happy, we were making money, and then we sort of forgot about it. Then we got into another depression, and the same thing occurred over again. In other words, you have exactly the same experience in the livestock business that you have had in the grain business. During those periods we had the same demands for wiping out the boards of trade. The evidence has shown very clearly that while many of these criticisms are probably not justified, there are many others that are very fully justified, and as time goes on and we learn more about them the criticism becomes more severe, and then the consumer comes in. All of that is damaging to the live-stock business. It tends to impair the standing of all the parties to that business, and I think that legislation tending to correct these evils is very necessary, not only from the standpoint of the producer and from the standpoint of the consumer, but from the standpoint of the packer himself. I have not been able to understand why the packers should take the position of absolute opposition to any legislation. They are subjected to the fire of this criticism all the time, to investigations of one sort or another, and they are compelled to maintain men here and there in an effort to protect their interests. I should think they would welcome reasonable supervisory legislation, which would put an end to that sort of thing and which would give them a ready answer that "Uncle Sam is supervising us, and your criticism should be directed to him rather than to us." As to what the legislation should be, you have outlined it, I think, splendidly in the paragraphs of this bill on pages 4 and 5. Under that language you forbid combining to fix prices and would do away with a number of other practices to which you have referred there. How you are going to enforec that is a question your chairman suggests I should speak of. Let me say, to begin with, that as Secretary of Agriculture I am not seeking any new job. I have got plenty to do as it is, and the regulatory work of the department is the most trying work that I have to do. As you know, we administer a number of these regulatory laws, some 20 or 30 of them, and the final appeal in each case may come to the Secretary. So I am not looking for any new job, and if I should suggest that this should be under the Department of Agriculture, it would be not because I want to cover any more work into that department, but because that may seem to be the logical place. Mr. GERNERD. We would hardly put it under the Secretary of the Interior. Secretary WALLACE. No. Of course, we are not dodging any responsibility that it seems wise to place on us, but we are not seeking it. You spoke of the stockyards administration being under the Interstate Commerce Commission. On first thought, that seems to be the logical thing to do. You think of the stockyards as you would of a terminal depot, a freight house. It would seem to be a part of your transportation system; but when you come to deal |