MEAT PACKER.

COMMITTEE ON AGRICULTURE,
HOUSE OF REPRESENTATIVES,
Monday, May 2, 1921.

The committee met at 10 o'clock a. m., Hon. Gilbert N. Haugen (chairman) presiding.

There were present: Mr. Haugen, Mr. Purnell, Mr. Voigt, Mr. McLaughlin, of Nebraska, Mr. Riddick, Mr. Tincher, Mr. Williams, Mr. Sinclair, Mr. Hays, Mr. Thompson, Mr. Clague, Mr. Aswell, Mr. Kincheloe, Mr. Jones, and Mr. Ten Eyck.

The CHAIRMAN. The committee has been called together this morning to give consideration to packer legislation.

What arrangement can we make as to division of time and who shall control the time? Who will take charge of the time in opposition to the legislation?

Mr. LIGHTFOOT. We are perfectly willing to leave that, Mr. Chairman, to the selection of the committee, or if you desire, some of the counsel for the packers are here and they might take charge of that, if there is no one on the committee who desires to do so.

The CHAIRMAN. Can an arrangement be made between the packers, traders, commission men, and others affected?

Mr. LIGHTFOOT. I think so. We can divide the time according to the witnesses who are here.

The CHAIRMAN. Then whom do you suggest?

Mr. VEEDER. Gen. Lightfoot and I between us will see to it that one of us appears here all along and see that the witnesses for the opposition are allotted time, if that is what is desired.

The CHAIRMAN. If that is agreeable to all opposed to the bill, I am sure it will be agreeable to the committee.

Mr. SULLIVAN. Mr. Chairman, there is an independent witness here who desires to be introduced into the discussion, from the State of Minnesota, and will take only a very few moments of your time, the point being that Minnesota already has a stock yards regulation of its own, and desires to introduce the subject of amending the bill so as to exempt Minnesota from the operations of the bill.

The CHAIRMAN. Would the arrangement suggested be satisfactory to you?

Mr. SULLIVAN. Mr. Chairman, there is only one feature involved, and that is it will only take a few moments and his engagements are such that he would like to be heard early, if that is compatible with the division of the time on the part of those in opposition. Mr. LIGHTFOOT. That is agreeable to us.

The CHAIRMAN. The thought is to give everybody an opportunity to be heard in the time alloted.

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Mr. TINCHER. Mr. Chairman, I presume every one understands that the proponents of the different measures are to have to-day and to-morrow, and Friday afternoon, and the opponents are to have Wednesday and Thursday, and the morning of Friday.

The CHAIRMAN. Yes. The secretary of the National Live Stock Exchange is also here. You will confer with him. If there is any disagreement among you

Mr. VEEDER. We will refer it to you to arbitrate.

The CHAIRMAN. The committee will arbitrate for you.

Mr. LIGHTFOOT. We will try to accommodate anybody, so far as our time is concerned, who wants to appear in opposition to the bill, whether they are packers or commission men or whatever they may be. Mr. TINCHER. And the chairman will control the time of the proponents of the legislation.

Mr. KINCHELOE. Yes; and I think it is very necessary for these gentlemen to control the time of those who are in opposition to the bill so that the time is not only allotted but they can pick the personnel of those whom they want to appear before the committee.

The CHAIRMAN. Of course. If there is any member of the committee who desires to control the time in opposition to the bill, we will be glad to have him do so. I understand no member wants to control the time against or assume the responsibility.

Mr. KINCHELOE. I think the chairman ought to control the time of those in favor of the bill.

Mr. LIGHTFOOT. Formerly, Mr. Chairman, the Congressmen who happened to represent the district in which these large interests are located

The CHAIRMAN. Mr. Rainey and Mr. Anderson controlled the time last Congress.

Mr. LIGHTFOOT. The Congressman from that district is detained at home on account of very serious illness in his family, and we feel that unless there is some member of the committee who would like to control that time we will undertake to do it for ourselves.

The CHAIRMAN. Then, I think we are all agreed upon that.

The Chair lays before the committee the various packer bills introduced: H. R. 232, introduced by Mr. Anderson; H. R. 5034, introduced by Mr. McLaughlin, of Nebraska; and H. R. 14, introduced by Mr. Haugen.

I have introduced a bill, H. R. 14, but do not care to take up the time of the committee in a lengthy discussion of it now. We can discuss it later. It is the bill, practically, which was reported to the House by the last committee, and, if agreeable, I will only have my statement on the bill inserted in the record.

STATEMENT OF HON. GILBERT N. HAUGEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA, AND CHAIRMAN HOUSE COMMITTEE ON AGRICULTURE.

The CHAIRMAN. Bill H. R. 14, introduced by me, is practically identical with the substitute to the Senate bill (S. 3944) reported by the Committee on Agriculture last Congress. It is the product of that committee and the result of weeks and months of study and hard work by the Committee on Agriculture of the Sixty-sixth Congress. The committee gave 40 days' hearings, as is indicated in the 2,797 pages of

printed hearings. After the hearings were concluded the members of the committee met and decided upon the policy to be pursued and authorized the appointment of a subcommittee with instructions as follows: "That a subcommittee of five be appointed, including the chairman, to draft a bill for the regulation of packers. That a bill be drafted without providing for license system or a new commission, nor the provisions of section 14 of the Gronna bill (S. 3944)." The subcommittee, consisting of Mr. McLaughlin of Michigan, Mr. Anderson, Mr. Rubey, Mr. Rainey, and myself, together with Mr. Beaman of the legislative drafting service of the House, proceeded in an honest endeavor to draft and report a bill in compliance with the instructions of the full committee, which resulted in reporting back to the full committee the bill now before you, H. R. 14, with the exception of giving the Federal Trade Commission control over the packers, which was changed to the Secretary of Agriculture by the full committee, as is provided in H. R. 14.

In reading the bill it will be noted that it has four titles: Title I deals with definitions, Title II with packers, Title III with stockyards, and Title IV with general provisions.

Section 1 provides a short title for the act.

Section 2 defines "person," "live stock," "live-stock products," "commerce," and provides that any transaction in respect to an article shall be considered to be in commerce if such article is part of that current of commerce usual in the live stock and meat packing industry, whereby live-stock products, dairy products, poultry products or eggs are sent from one State with the expectation that they will end their transit after purchase, in another. Articles normally in such current of commerce shall not be considered out of such current through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this act. As to the constitutionality of the above regulations I quote from the report, which is as follows:

It may be argued that the attempt to regulate transactions in stockyards is unconstitutional on the ground that these transactions take place after the live stock has ceased to move in interstate commerce, and reliance may be placed upon the case of Hopkins v. United States (171 U. S., 578), in which it was held that the Sherman Antitrust Act did not include the acts of a live-stock exchange composed of commission men doing business at a stockyard and selling on commission consignments of cattle from another State on the ground that this business was not interstate commerce. careful examination of the opinion, however, shows that the court was of the opinion that the acts of the defendants had only an incidental effect on interstate commerce in the absence of proof that the charges for the services were exorbitant, and the court clearly intimated that Congress would have authority to prohibit unreasonable charges and hence unfair practices.

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Furthermore, the force of the decision, even if adverse, is greatly lessened by subsequent decisions of the court. In Field v. Barber Asphalt Co. (194 U. S., 623) it seems apparent that the Hopkins case is construed by the Supreme Court to hold that for the purposes only of the antitrust act commission merchants are not engaged in interstate commerce, the case being cited in support of the proposition "that the antitrust act is not intended to affect contracts which have a remote and indirect bearing on commerce between the States." In Loewe v. Lawlor (208 U. S., 297) the court says that it does not "pause to comment on cases such as" the Hopkins case, in which the facts show that the purpose of the agreement was not to obstruct or restrain interstate commerce. The object and intention of the combination determines its legality." In Title II, which deals with packers, section 201 defines the term "packer."

Section 202 defines the term "secretary."

Section 203 makes certain acts unlawful for packers, that is toEngage in or use any unfair, unjustly discriminatory, or deceptive practice or device in commerce;

Make or give, in commerce, any undue or unreasonable preference or advantage to any particular person or locality;

To sell or otherwise transfer to or for any other person, or to buy, or otherwise receive from or for any other person, any articles for the purpose or with the effect of apportioning the supply in commerce between any such packers;

With the effect of manipulating or controlling prices in commerce, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article in commerce, or of restraining commerce;

Engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices in commerce, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article in commerce, or of restraining commerce;

Conspire, combine, agree, or arrange with any other person to apportion territory for carrying on business in commerce, or to apportion purchases or sales of any article in commerce, or to manipulate or control prices in commerce; or to

Conspire, combine, agree, or arrange with any other person to do, or aid or abet the doing of, any act made unlawful.

The acts made unlawful are among those alleged to exist by the witnesses appearing before the committee and referred to by the Federal Trade Commission in its reports.

Section 204 provides the procedure, which is that whenever the Secretary has reason to believe that a packer has violated these provisions he shall cause a complaint to be served on the packer. After a full hearing, if the Secretary finds that the law has been violated, he may issue an order, from which an appeal may be taken to the circuit court of appeals. The court may modify or set aside the order, but the Secretary's findings of fact, if supported by evidence, are conclusive.

Section 206 also deals with the procedure and provides a fine of $10,000 for failure to comply with an order sustained by the court. Section 207 provides that every packer shall keep such accounts, records and memorandums as fully and correctly disclose all transactions involved in his business including the true ownership of such business by stockholding or otherwise. Whenever the Secretary finds that any packer does not fully and correctly disclose all transactions, the Secretary may prescribe the manner and form in which such accounts, etc., shall be kept.

Section 208 provides that section 6, 8, 9, and 10 of the Federal Trade Commission act be made applicable. These sections of the Federal Trade Commission act do the following:

Section 6 authorizes the commission to make investigations and require reports.

Section 8 requires Government departments to furnish information to the commission.

Section 9 relates to subpoenas, testimony, and immunity from prosecution.

Section 10 provides penalties for refusing to testify, for false reports, for failure to make reports and for giving out information by employees of the commission.