such extension or facilities that the expense involved therein will not impair the ability of the carrier to perform its duty to the public. Any carrier subject to this act which refuses or neglects to comply with any order of the commission made in pursuance of this paragraph shall be liable to a penalty of $100 for each day during which such refusal or neglect continues, which shall accrue to the United States and may be recovered in a civil action brought by the United States.

Mr. ANDERSON. If there are no other questions I want to say that I am very much obliged to the committee for its very patient consideration.

The CHAIRMAN. The committee is very much obliged to you, Mr. Anderson, for the information you have given us. We will now hear Mr. Wells, of St. Paul.

STATEMENT OF MR. R. J. WELLS, SUPERVISOR OF THE STATE PUBLIC STOCKYARDS, SOUTH ST. PAUL, MINN.

Mr. WELLS. Mr. Chairman and gentlemen of the committee, as Representative Anderson has said, and as Mr. Sullivan has said, I speak from a different angle than perhaps other gentlemen that will appear here. I have no authority to speak for or against the general provisions of this bill. I have my own personal opinion, of course, but no authority to tell you what the people of Minnesota think about same. But I do know what they think in regard to the stockyard proposition.

The CHAIRMAN. The committee will be very glad to have you tell them about that.

Mr. WELLS. I know that the stock growers of Minnesota have for many years been endeavoring to work out some way whereby they could solve their marketing problem to better advantage. They appealed to the State legislature at different times to pass laws relating to regulation of stockyards at South St. Paul. The legislature took action.

The first act was an act requiring feed troughs to be placed in pens. Formerly hogs were fed by throwing corn on the floor of the pen. The corn thereby became filthy and, of course, the hogs did not get the full benefit of it, and after they were driven out the corn was carefully washed up and resold after being dried. We have stopped that evil by having hog troughs put in pens and requiring that corn shall be put into the troughs. We find that the hogs get a better fill and there is not so much corn to be resold.

In regard to supervision, the law says that the railroad and warehouse commission shall have authority. They have the power to license all dealers and speculators. They have the power to fix commission charges, to fix feed prices in the yards, corn, hay, and bedding. And they have general supervision in a sanitary way.

We have gone on under those laws and carried them into effect as far as we possibly could. The supervisor's office is maintained in the Exchange Building. We employ at the present time about 32 people who are looking after the yard proper. We do all the weighing of live stock. We have 18 scales. We have to keep about 19 to 20 weighers in order to take care of the 18 scales in case a weigher is sick or otherwise absent. Then we have four hog shrinkers as a buffer between packers and shippers.

Perhaps you do not know what a hog shrinker is. I will tell you briefly. Under the rules there is a shrinkage allowed for certain

classes of hogs, 70 pounds in the case of one class of animals and 30 pounds in the case of another class. The packer naturally wants to get all the shrinkage he can on his animals. The shippers quite naturally want to protect themselves. The shippers found it necessary to put in their own hog shrinkers or inspectors to protect themselves from the packer buyers. We keep four of them in the pens all day long. They are having a very, very good success in the work, and we are having no complaints whatever from either the packers or the shippers on that score.

The CHAIRMAN. What is the shrinkage?

Mr. WELLS. Seventy pounds in the case of stags and 30 pounds in the case of pigging sows.

The CHAIRMAN. What was the shrinkage before?

Mr. WELLS. It remains the same. It was a little higher four years ago, but was reduced by the action of the packers themselves. The CHAIRMAN. It used to be 80 pounds and 40 pounds?

Mr. WELLS. Yes, sir.

Mr. TINCHER. The quarrel on that subject was not so much over the amount as over the classification, was it?

Mr. WELLS. No. It depends upon the classification of the hogs. As I have stated, the supervisor's office is there in the Exchange Building and his office is open during market hours. If a shipper has any complaint whatever to make, he gets in touch immediately with the supervisor. In the office are clerks who are familiar with the entire workings of the yard, and immediately when a complaint is made they take it up and trace the complaint down and find out the actual facts, so that the shipper goes home the same day after his complaint has been adjusted.

I want to say something to you about sanitary conditions. When we went there the yards were in bad shape as far as sanitary conditions were concerned. We have installed a number of service stations, or the stockyards have under the orders of the commission, to provide for the welfare of the men and people doing business in the yards.

We have had the scale houses revamped so that the weigher can see the whole instrument at all times. We have had speaking tubes put in the houses and general improvements installed all over the yards.

As I have already explained, we have four inspectors constantly in the yards, patrolling the yards from morning till night. It is their duty to see that none of the rules and regulations of the commission are violated. Furthermore, they are to see that all the hay and grain is actually weighed out to the shipper or to the commission man and then to the shipper. It is their duty to see in the wintertime that the pens are not being overflowed with water from the watering troughs. You know that men are in the habit of going along and turning the water on for the stock and then driving the stock out, and the result often is, or was, I mean, that there is a frozen mass on the floors of the pens.

Two men are stationed at the unloading pens at all times to see that stock are not improperly treated. You know the average stockyard man does not care very much about exercising the proper care in the treatment of cattle. For instance, if a calf runs back into the car he is apt to hit him over the head or body, which injures the animal, and

also frequently injures the meat. They are there to protect that situation.

Further, as to the weighing department, we have 18 scales, and we have 18 scale men from the scale department of the State of Minnesota stationed in the yard at all times. If those scales, or any one of them, is out of balance 4 ounces to 1,000 pounds, or a pound in 4,000 pounds, the weighing thereon is immediately stopped.

We had occasion to condemn one scale entirely and tear it out. And we have practically found it necessary to reset every scale in the yard. A scale may be weighing correctly at 5,000 pounds, but if you move it an inch or so it may be wrong. All the scales when we went there had a 10-pound break on them. If you drive on a lamb that weighs 50 pounds or 60 pounds, it means you are guessing at its weight. So we had them install dinky scales, weighing down to actual pounds on which to weigh these small animals.

For every draft of animals that is taken over the scales there is a scale ticket issued in triplicate, one of which goes to the buyer, one to the seller, and the original is retained in our office as a record.

In the year 1920 we weighed over the scales 4,000,271 head of stock, 678,000 drafts, without a complaint ever coming to the office of an error in weight. Every weigher is bonded to the State of Minnesota in the sum of $5,000, and under our rules and regulations he is held personally liable for any mistakes he may make. That is, the bonding company is held liable for any mistake, and then the bonding company holds him if it can.

The commission has taken a valuation of the yards. They are just about completing that work now. The commission were working on the valuation of the real property when I left home a week ago, and I think they are about through with that. When that work is through we will have a complete valuation of the yards.

On the valuation as far as it had progressed on the 1st day of July, 1920, the commission issued its formal order fixing the prices of hay, grain, and bedding at the yards. The Lever Act being in effect the stockyards company claimed they were under the Government, and their contention is pending in the courts now. Of course, since the 3d of March that question does not apply. But I expect a decision will be handed down by the Supreme Court any day now, as it had been argued and submitted by the parties about a month ago. In regard to the delivery of hay and grain to yards, when we went there we found all hay was sent out and put in the pens at 100 pounds to the bale. As to actual weight a bale would average along about 72 or 73 pounds. We require that hay shall go in the pens charged at the actual amount when weighed over the scales. Then we require every commission man to render to our office a report, on the 1st day of each month, showing how much hay, grain, and bedding he has charged his clients with his shippers. Then we require the stockyards company to furnish us the amount of hay, grain, and bedding they have sold to those men. So that thereby we have a check on the situation. If we find any great discrepancy, if it amounts to very much, we immediately go and check back with the scales and with the commission firms.

Representative Anderson has told you about the liability of the South St. Paul yards. We assist in every way possible, the stock

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yards company, to fix liability in case of loss of hogs and cattle. Sometimes we find it is with the railroad company and sometimes with the stockyards company. They may unload cattle or hogs at a feeding station out in the country, at night or something of that kind, and in reloading may miss some of the animals or some may escape. The stockyards company, of course, is not liable for such animals. We take chute counts of those animals coming into the yards, and if we find the chute count does not agree with the shipper's count we follow those animals down through the yard and over the scales, and if it is the fault of the railroad company a claim is filed therefor.

Mr. Chairman and gentlemen of the committee, I am going to cut my remarks, because I want Mr. Sullivan to be given a few minutes of my time, if you will permit that. Representative Anderson has prepared an amendment, which reads as follows:

SEC. 405. The provisions of Title III shall not apply to any stockyard owner or market agency furnishing stockyard services at a stockyard in a State which has or may hereafter establish an agency authorized and empowered to regulate stockyard services or the rates or charges made therefor or the regulations and practices in respect to furnishing stockyard services to be established, observed, or enforced by a stockyard owner in such stockyard; nor shall the provisions of Title III apply to any stockyard owner, market agency, or dealer in a stockyard in a State which has or may hereafter establish an agency authorized and empowered to regulate the practices or devices used or employed by any such stockyard owner, market agency, or dealer in such stockyard: Provided, That this section shall not be held to limit the application of Title III to any stockyard owner, market agency, or dealer in respect to any matter of regulation not within the authority of such agency.

I want to say something in regard to the regulation of feed prices. Under the proposed bills as I have read them, or of some of them, there is notice to be given of a hearing whenever there is to be a change in the schedule of prices. We, in the South St. Paul yards, handle that matter by way of the commission making an order, or sometimes we get together with the stockyards company and get a reduction in rate when the market is fluctuating up and down. For instance, this last fall we found it necessary to make orders right along in relation to corn, in order to hold the selling price at the yards down within a proper range of the market price.

I have a petition here that was sent down during the last Congress, when you were hearing these same bills before, and with the permission of the chairman and the committee I will now read same:

ST. PAUL, MINN., January 26, 1921.

To the honorable House of Representatives and Senate of the

United States of America:

Whereas there is located at South St. Paul, in the State of Minnesota, one of the largest and most important stockyards in the country, and that stock raisers in the State of Minnesota dispose of their stock to a large extent at such stockyard, employing for such purpose the various live-stock dealers and commission men located thereat; and

Whereas the Legislature of the State of Minnesota, for the protection of the interests of all stock raisers disposing of their stock at said stockyard, has enacted laws placing such stockyard and all of the commission men and dealers engaged in business thereat under the supervision and control of officials of the State of Minnesota; and

Whereas such State regulation has proven to be of great benefit to all persons disposing of their stock at said stockyards, and it is the earnest opinion of all of the signers of this petition that local regulation of such matters are much more beneficial to the interests of stock raisers than Federal regulation would be, and that the continuance of the regulation now provided by the State of Minnesota is essential for the protection of the stock-raising industry in said State; and

Whereas a bill is now pending in Congress which, if enacted in its present form, will subject stockyards to Federal regulation and may be construed to supersede the supervision hereinbefore mentioned of the State of Minnesota:

Now, therefore, the undersigned members of the House of Representatives and of the Senate of the Legislature of the State of Minnesota and other public officials hereby respectfully and earnestly petition your honorable bodies to exclude from the operation of said law the State of Minnesota and all other States wherein local regulation is provided by statute.

(Signed by Ole O. Sageng and 58 other State senators, and 57 members of the house of representatives, making 116 members of the house and senate of the State of Minnesota.)

Mr. WILLIAMS. What is the membership of your house of representatives?

Mr. CLAGUE. One hundred and thirty-one.

Mr. KINCHELOE. What is the ownership of the stockyards in South St. Paul?

Mr. WELLS. Swift & Co. are the controlling factor.

Mr. KINCHELOE. Do any other packers have any interest in those stockyards?

Mr. WELLS. Oh, I think so. Of course, Swift owns the majority of the stock, just as at Kansas City the Morris people own the majority and at Omaha the Armour estate, and at Sioux City and St. Joe the Swifts.

Mr. CLAGUE. Are the farmers satisfied with the way your State is handling the matter?

Mr. WELLS. Yes, the livestock shippers are. And in that connection I want to say that we are the greatest cooperative State in the Union. Ours is the State I believe that inaugurated the cooperative system among shippers. We have an association composed of several hundred shippers of live-stock. At their annual meeting this year they adopted a resolution indorsing and commending the work of the railroad and warehouse commission at the stockyards at South St. Paul. There is no question about the feeling of the people of the State of Minnesota, and I might say of the entire Northwest at least among those that are shipping to the South St. Paul market, because of the improvement in conditions there.

Let us take an instance: In having a complaint adjusted theretofore the man would go to the commission man and the commission man would send him to the stockyard, and a shipper would be shifted back and forth. Of course, the average shipper of live-stock is unacquainted with the ways of the yard, and the result was that he went home dissatisfied and condemning the yard and everything else. To-day he has a place where he can go and put his matter in dispute before an official of the State who will see that he gets justice if he is entitled to it, and get it at once.

Mr. PURNELL. Is that expense paid by the State or the shipper or by the stockyards company?

Mr. WELLS. The entire expense is paid out of what we call the State weighing fund.

Mr. PURNELL. What is the annual cost of your work there?
Mr. WELLS. About $60,000.

The CHAIRMAN. How long has this law been operating in Minnesota?

Mr. WELLS. Supervision came in 1919, and general supervision of weighing, licensing, etc., came the 1st of January, 1920.