I can't understand why the packer would want at any time to feed livestock when we know that he cannot compete on a fair basis with reference to costs in the feeding of livestock. Every farmer has more or less roughage that must be consumed by livestock. When livestock are fed by packers, they are fed at some central yard tributary to the market. The only argument that has ever been presented to me by the packers in supporting their position is to the effect that they only feed livestock to fill in weak spots that they might have in the market. I have told these packers from time to time that so long as they would provide us and our people with a fair market for livestock, they would be furnished all of the livestock, whether it be cattle, hogs, or sheep, at all times of the year, and it would not be necessary for the packers to try and attempt to compete with these feeders in the feeding of livestock, which I feel is wrong.

Better close these public markets if this is to continue rather than have the farmer misled by a false price standard set on markets daily forestalled by the biggest buyers. And to close them would spell ruin to all small farmers, and reduce them to that state of peonage, present in the Argentine, for those of this class, due to the absence of open competitive markets.

Their bigger neighbors would gobble them up, because they would be the only ones who could then deal with the packers on equal terms. The rules for equitable treatment of all alike in price, grading, and sorting, under Federal supervision, regardless of ownership, size of consignment, or character of livestock, now established on public markets, should be extended to all packers' livestock purchasing. It is the salvation of the small producer and his only hope for the future. That is my understanding of what these amendments to the Packers and Stockyards Act accomplish. They permit the interior packer to buy directly from the farmer at the farm all the livestock he slaughters if he does not use the public markets. But he cannot operate stockyards unless under Government supervision. And the packer who buys at public markets cannot blow hot and cold on them or forestall their operations, thus rigging the prices they establish.

Gentlemen, the organization that I represent, their membership comes from 25 different States of this Union, and I feel that I am representing the small man more than anybody else, not the big producer.

I can better substantiate the benefits of our terminal markets by giving you some of the figures on the direct purchases for the four big packers for the month of January 1933 at Kansas City. For instance, the selected shippers of the Fowler Packing Co., now owned by Armour & Co., had shipped to this plant from stations in Kansas, Nebraska, Missouri, and Iowa some 968 cars of hogs, and I want to call your attention to the fact that they received from the towns-I am going to give you some of the principal points where they had the larger shippers the number of cars indicated:

During this same period and from the same States, the Cudahy Packing Co. received a total of 570 cars from their selected shippers, and I want to call your attention to the following records with reference to the number of cars received from certain stations:

Wilson & Co. during the same period and from the same States received a total of 438 cars, and I beg to call your attention to the shipments from the following stations, to wit:

Swift & Co. during the same period and from the same States received 252 cars.

So during the month of January 1933 these four packers received a total of 2,228 carloads of hogs at Kansas City. Do you feel that a packer that was able to purchase such a large number of hogs in the country would be a very active buyer on the terminal market, when his needs had been so well supplied by direct shipments? I want to expressly call your attention to the manner in which competition has been eliminated in these purchases. For instance, at Grand Island, I find that the Cudahy Packing Co. was able to purchase 44 cars of hogs during the month of January 1933, and during this same period at Hastings, Nebr., which is only a matter of 20 to 25 miles distant, the Fowler Packing Co. was able to purchase 42 cars. I do not have the exact number of cars purchased by Swift & Co. at Aurora, Nebr., which is only around 25 miles from Grand Island.

We are told that there is no collusion with reference to any territory, and of course I would not assume that there could be a gentleman's agreement between the packers with reference to territory. It would seem such a strange coincidence that these three market towns in Nebraska, so close together, and yet the packers apparently did not feel the need of competing for the hogs in this territory, but were contented to let the Cudahy people buy them at Grand Island, Fowler Packing Co. at Hastings, and Swift & Co. at Aurora. And as you look over the record with reference to the territory around Beatrice, Nebr., we find that Wilson & Co. bought practically all of the hogs around the towns mentioned above, which are all in close proximity.

I submit the matter to you gentlemen for your consideration as to whether you feel that without some understanding that the direct buyers for these various packers would remain out of the markets of the communities in which hogs are being offered for sale, if there was not some good reason in which they were to be the direct benefiters at the expense of the producers.

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When you complete your investigation and study, it will be very evident to you that instead of maintaining a price that would at least provide cost to the producer, distributors of our meat products have been able to saddle onto the producer extra overhead costs which they have not assumed to pass on to the consumer or their own organizations by the easiest and most efficient way.

Senator NORRIS. În giving those three towns in Nebraska that are all right there in a bunch together, the population practically the same, about the same size towns, 10,000 to 15,000 population, does it strike you that there would be any coincidence in the fact that the commercial clubs, the chambers of commerce of those townsI don't mean the farmers around there but the men in town-are writing to their Senators and Members of the House urging them to oppose this bill? Would that be some more evidence of collusion? Mr. HILDEBRAND. Yes; I know about that, Senator. Senator NORRIS. I thought you did. Isn't that true?

Mr. HILDEBRAND. That is true. There were three auction sales at Grand Island, Nebr., yet the Cudahy was able to buy every car that went out of Grand Island during that period, except one. At Hastings, Nebr., they had another auction sale there. At Aurora they have the main line of the Burlington. As you well know, those towns are all almost adjoining. Ordinarily, the average business man that is out for all the business that he can get usually is a competitor for the raw materials that he has need for, but the farmer is denied this under this present system of direct marketing of the packers that has developed, in which it is cheaper for the packers or processors to divide this territory up and appoint selected buyers or shippers.

Senator NORRIS. The thing that I wanted to emphasize was that the business men who probably haven't given any thought to the effect on the farmer, the members of the commercial clubs and chambers of commerce of those towns, they are all looking after the interests of the town, and they want those local buyers there, they want them to be there, they want them to stay there. They are opposed to this bill for that reason.

Mr. HILDEBRAND. You know why that is? It is for this reason, Senator: They feel that they draw from a large territory, and that money will come to Grand Island and Hastings, and the major portion of the money will be spent in that town.

Senator NORRIS. But are they giving any consideration that you know of now to the fact that they all ought to be interested in the farmers of that community getting a bigger price for hogs?

Mr. HILDEBRAND. They are not.

Senator NORRIS. They are not thinking about the farmers?
Mr. HILDEBRAND. No, sir. It is selfish.

Senator NORRIS. That explains somewhat the propaganda that is against this kind of legislation.

Mr. HILDEBRAND. Yes, sir; and the farmer is not able to put out. his propaganda today like the chambers of commerce are.

Senator NORRIS. Õh, no.

Mr. HILDEBRAND. I am wondering how a poor, weak producer can compete with a business so highly organized as the distributor of our meat products through the packer and the retailer, when the producer is given so little consideration in the buying of his raw material.

We have asked Congress from time to time to provide us with the protection that we are entitled to in which special privileges are divorced from all interests, whether it be the terminal market, packer, retailer, and we must include the transportation rates of our meat products. It is absolutely useless to attempt to provide aid for agriculture and livestock unless you safeguard at the same time a fair competitive market to our producers in which all interests must compete on a fair basis for the raw material that they have need for. It is my understanding that Mr. Wallace is at this time making a study of the practices of direct buying complained of. We have had those investigations before, Senator, as you well know, which have never come to life. This amendment will strengthen his authority. Why not go all the way and have a complete investigation of the methods employed by the packing industry in the operation and distribution of meat products. It should be clear to everyone that the producer is and has been carrying the burden throughout this depression.

Gentlemen, when you go into the details of how our meat is being distributed at this time, we all did foolish things during the war period. Probably these packers took on a lot of distributing houses that they wish they didn't have today. Yet they are capitalized, and when you find they are able to make a profit on that capital, which they have been able to maintain, you can better appreciate the depressed condition of our livestock producers today because they paid the bills, and are paying them under these prices they are receiving for their livestock.

You only have to review the statements that have been put out to convince you that while the profits of our producers have been nothing, the processors are able to show a substantial profit while the producers have not only lost on the produce that they have had to offer, but in a large number of cases have seen their entire capital lost in their livestock operations.

I have a very high regard for the heads of our packing industry_and would not for a moment accuse them of any wrong doing. Yet I am reminded of a certain investigation that has been going on here in Washington now for more than 6 months in which the banking interests have had to give an account of their methods, and it goes without saying that before this investigation started that the men that were affected most, were the men that were held in very high esteem by the entire United States. But it appears from the records that when their own personal interest was at stake, they did not give very much consideration to those that had placed their confidence in their ability as well as integrity.

I am wondering if it would not have a good effect to let the truth be known in order that all concerned might be given an opportunity to understand that while the methods that prompted the packer to increase his direct market operations in which we have seen our hog prices drop to such a low level over such a long period, it might at least clear up the minds of the people of any wrongs that they feel are now perpetrated on our producers. And if the evidence shows no wrong doing, it will certainly be helpful in bringing about a better feeling between the processors and the producers.

I was very much interested in the testimony that was given at the hearings on the proposed Code of Fair Competition submitted by the

American Stock Yards Association here in Washington on March 2, 1934. At that time, Mr. J. Hormel, one of the large interior packers located at Austin, Minn., gave the following testimony, to wit:

The reason I am putting this into the record, it happened only a matter of 10 days ago, and it verifies the various statements that we are claiming here at this time with reference to the grading, the sorting, the weighing of this livestock that is being purchased direct. I want at this time to commend Mr. Hormel for the statement that he made at that hearing, in which he admitted all the charges that we have been making with reference to the way these hogs have been bought in the past. I want to read you just a part of it, and I will leave it for the record.

Mr. HORMEL. I want to correct just one point. It is not a question of replacing the weigher and grader whom we have now; it is a question of adding another one to it; because, for our own information, we would have to check this so-called "disinterested party" to see that he did not make mistakes.

The facts of the matter, gentlemen, are that if Mr. Hormel is afraid to let a disinterested man or disinterested party to weigh, and sort, and classify these hogs of these thousands and thousands of producers, why should the producers feel that they should have any more confidence in Mr. Hormel or his work than he is willing to have in a disinterested party? He admitted in this evidence under oath here some 10 days ago that he would have to hire another man in order to check this disinterested party.

It goes on, he was asked the question by Mr. Peterson:

What I was getting at is a comparison between your weighers and graders as now operated in your own buying plan and the way they might operate, say, for instance, in Chicago.

Mr. HORMEL. Well, I do not imagine there is much difference in the proposition of our own buyers or the buyers of the packers who buy on the terminal markets.

Mr. PETERSON. Why would you object, then, to a disinterested weigher and grader?

Mr. HORMEL. Simply because you are adding one expense in there. That is the purpose.

Mr. PETERSON. Cannot you eliminate this man if you have a disinterested one? Mr. HORMEL. No; I don't think so. I daren't repeat we would have to have him there to check it. [Laughter.]

The PRESIDING OFFICER. Do you think the code as proposed here, Mr. Hormel, would prevent you putting in an employee to check the disinterested weigher and grader?

Mr. HORMEL. No; it would not prevent, the only possible objection we can have to the code, I believe, is the matter of added expense, or delays and formalities that would slow up the service-just make the service more difficult. Those are the two things, as I see it, that this code is aimed to do. We might

as well get that picture clear.

The PRESIDING OFFICER. Then you consider it would be absolutely essential to have a check of the disinterested weigher and grader?

Mr. HORMEL. Well, if the boys won't laugh, I will say "yes." [Laughter.] The PRESIDING OFFICER. I wanted the record to be clear on that.

The PRESIDING OFFICER. Have you ever purchased hogs on the public market? Mr. HORMEL. Yes, sir.

The PRESIDING OFFICER. Have you ever tried to compare the unit costs on that basis with the costs involved in buying locally?

Mr. HORMEL. You mean the unit cost of marketing?

The PRESIDING OFFICER. Yes.

Mr. HORMEL. The only reason we go to the public markets is when they are cheap; but, if we can buy as cheaply in the country, we do not go to the public