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Senator NORRIS. Well, those that are there and those that are not there, part of them are on one side and part on the other of this proposition?

Mr. Mollin. But the attitude of the livestock industry on the Pacific coast, Senator-and they have been intensely concerned and have fought this case very hard, is that they would rather have the added competition of the small plants that they have out there now than to run the risk of doing away with that competition with the packer shipments of dressed products from the Middle West. It is a hard-fought case. It has been going on for some months.

Senator CAPPER. If the packers bought their hogs, bought their hogs out there in the central market, it would naturally make a better price, would it not; tend to make a better price on the central market?

Mr. MOLLIN. On the central market? Senator CAPPER. Yes; bring a better price on the central market. Mr. Mollin. Well, that is the contention of the proponents of the bill. I have not paid any attention to the hog marketing on the central markets for 5 years. They do, however, as you know, Senator, buy most of those hogs at concentration points that go through to the Pacific coast. But I am not taking any position or not urging you to handle the thing one way or the other. In other words, I am not appearing at all for the people who buy hogs and ship them to the Pacific coast. I have had nothing to do with that.

There is just one thing more, Senator. I want to say about the Pacific coast price level that they have maintained a pretty satisfactory price level on cattle out there, relative to the central markets, and it is so satisfactory that, of course, they keep reaching back farther into the Midwest territory for their cattle.

I think that is all I have to say, unless you have more questions. Senator NORRIS. The next witness, as I have it here on the list, is Mr. Ward, of Salina, Kans.

STATEMENT OF CAL A. WARD, SALINA, KANS., PRESIDENT OF

THE KANSAS FARMERS' UNION

Mr. WARD. My name is Cal A. Ward, Salina, Kans. I am president of the Kansas Farmers' Union, and I also want to speak for the National Farmers' Union at this time. Of course, we are all deeply moved at the death of Mr. Simpson.

Senator CAPPER. I noticed Mr. Simpson here the first day of the hearing. He was very much interested in the hearing and it is too bad we did not get his statement.

Senator NORRIS. I think the committee will agree with me that we have known Mr. Simpson intimately for a great many years, and I believe during all that time, even before he was a national president, he was outstanding for his great interest in these problems. I knew him well and was always interested in what he had to say, and we feel that his death has been a great loss to the farmers' movement in this country.

Mr. WARD. That is right, Senator.

Senator CAPPER. Those are my views, absolutely, Senator. I think he was one of the most useful men in the movement.

Senator Pope. I know our farmers in Idaho thought he was their friend.

Mr. WARD. He was the farmer's friend. He came to me the other morning during the hearing and whispered in my ear saying

I have got to go before the Finance Committee and testify on the Federal Gas Act. If they call for me and you don't think we have time, you have our resolution, and you insert it in the record.

The National Farmers' Union at its last convention held in Omaha last fall passed this resolution:

The National Farmers' Union goes on record as being unalterably opposed to the direct purchasing of livestock, such as is being practiced by the big packers at this time, by which they are thwarting the intent and purpose of the open competitive terminal-marketing system, where values of livestock are established.

Now, if Mr. Simpson was here this morning, he would tell you, of course, that he was speaking for around 100,000 farm families, and I might say that he was speaking for the average farmer, not the largest producer as a rule, but the largest farmer—the little fellow—and I think that has some value.

Of course, I am president of the Kansas Farmers' Union, and in our membership we have more than 40,000 of the farmers of Kansas who are either stockholders in our Farmers' Union Cooperative or belong to the State Farmers' Union. The facts are, we have checked up, and almost one third of the farmers of Kansas are associated with some of our activities.

I am just going to speak briefly this morning, not on the technical side of this question, because we have heard that, but I do represent a lot of people, and I know what their wishes are. We have a farm paper out there in Kansas that is a Farmer's Union paper, that goes out to about 20,000 farmers, and some time ago, when this question was up before our people, we asked the opinion or our farmers through the columns of our paper. I have perhaps five or six, maybe seven thousand signatures that have come in voluntarily in the form of petitions, or letters, or post cards, or telegrams, all protesting against the present system and, in addition to that, my time is wholly occupied with my organization, and when I am in Kansas I am speaking before groups of people all the time; and the farmers, gentlemen, are unanimous in feeling that the present system over a period of time has been a depressing influence on market values. They are unanimous in that, and I think we ought to give that considerable weight.

Continuously they refer back to the old days and they say that when the big majority of the livestock went into the public terminal markets, there competition was keen; the packers and order buyers were out early because that was the only place they had to obtain their supplies, and bidding was brisk, and they realized that through their salesmen, the commission firms, and their representatives, they had expert men who understood values as to grade and quality and all that kind of thing, and they were assured that they would get the true value of that hog or that steer or whatever it was, regardless of what the price might be. Now they feel this way about it, that because of the fact that these concentration points and private stockyards have sprung up all over the country, Iargely without any definite supervision or regulation, they are not getting, many times, the correct value for their stock, and that the packers and the order buyers and the processors secure the choice stuff at these concentration points, and they throw out the culls and under grades which find their way to the public markets, and that the price levels are

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really determined on the basis of stuff that goes to these public terminal markets.

That is just about the whole thing in a nutshell, as I see it.

Senator FRAZIER. Well, the farmers, comparing the present system with the old days under the central marketing system, they were dissatisfied with the old system, and Congress passed this stockyard regulation act to help them, and the packers have taken advantage of that and have set up this new system of direct buying to get away from this law passed by Congress to regulate the stockyards. Now, of course, this present system is worse than the old system, but the old system was not fair in any manner. You are not standing up for that old system?

Mr. WARD. No; but it was better than what we have at the present time.

Senator FRAZIER. Yes; by comparison it is better than the present system.

Mr. WARD. And they want some governmental regulation over the purchasing of their livestock, and they are forced to sell out in the country where these concentration points have sprung up and driven out the shipping associations, which have been mostly all displaced, and it is not by choice that they sell their stuff in the country, but it is about the only thing that is left in many instances for them to do.

Senator NORRIS. Let me ask you, does your Farmers' Union in Kansas do what our Farmers' Union has been doing very extensively in Nebraska, maintain a man, a commission man, on the central market to do your work and return to you the dividends that are made?

Mr. WARD. Senator, we have a Farmers' Union livestock commission firm in Wichita. We have another Farmers' Union in Kansas City and another in St. Joe, in which I am a director, and every year we return the earnings to the farmers.

Senator NORRIS. How has that worked in Kansas in the way of profits to the farmer?

Mr. WARD. Well, it helps some. We have returned all the way up to as much as 50 percent. This year at the St. Joe house we are returning 35 percent of the commission sales. That does not, of course, save the farmers but it is a help.

Senator NORRIS. Now, I asked Mr. Keeney to come to my office, and I had a conference with him as to his testimony here. I just happened to know Mr. Keeney, have known him for a geat many years. He is a very fine man. I happened to know, too, in a very general way, what they were doing. I see the elevators of the Farmers' Union and their stockmen all over my State, and I wanted to find out how it had worked out, and he told me that since their going into the business a good many years ago they had returned to their membership several millions of dollars that they would not have had if it had not been for this dividend that they returned to them, and that all of their operations had been very successful financially. I was wondering how it worked in Kansas.

Mr. WARD. That is true. Now, over at St. Joe our St. Joe livestock house has returned to the farmers more than a million dollar since it started.

Senator POPE. How long has it been going?

Mr. WARD. I think about 13 or 14 years.

And we have returned dividends from our Kansas City and Wichita houses every year, with the exception of maybe one, and our farmers, our stockmen, are for this system. They were for this system and for the shipping associations, but they have lost them, and now here is the situation, gentlemen: Our people feel, and I might just as well give it to you, that we have gone entirely too far toward monopolistic control, and we do not have any prejudice toward anyone.

Senator NORRIS. Now, the other fellow says, as against your argument, that what you are doing tends toward monopoly; that you want to maintain these great cooperative organizations I am not arguing that, but I am just giving the argument of the other manand that he opens up to you a field that you do not have under what you have been doing and what you are trying to maintain.

Mr. WARD. Our cooperative system is just the reverse, because the producer and the man that belongs to the cooperative gets whatever saving there is there.

Senator NORRIS. Now, you feel that this direct bank has had a direct tendency, in your experience, to reduce the price that is paid on these markets?

Mr. WARD. We feel that it has. We absolutely feel that it has, because the stuff is not-it is just like this, gentlemen: If I, as a farmer, was going to leave my farm and sell my property I would advertise and get all the bidders in there on the same day, so there would be competitive bidding. I would do that rather than to try to sell it off an article at a time, because if I had competitive bidding I know that I would get the true value for my property.

I was a farmer until I was elected president of the Farmers' Union, and when I had a load of hogs or a load of steers I didn't know within 50 cents or a dollar what that steer would be worth per hundred pounds. I am not an expert but we have these experts at our public markets, and that is what we want to look to.

Now, we want supervision of some kind and regulation as to grades and weights and quality and all that sort of thing, so our farmers will get a square deal.

Senator NORRIS. Do you think what you are advocating here would have a tendency to cut out of the picture the smaller packing establishments that have been established, for instance, in Iowa? There have

? been quite a large number of the established there. Would you cut them out?

Mr. WARD. I don't think it would, and I don't know that it is necessary to look toward that, if they are properly regulated and supervised.

Senator NORRIS. It is not desirable for the producer and the consumer that encouragement be given to the building up of such slaughterhouses, if you have territory surrounding it sufficient to maintain one?

Mr. WARD. I should say yes, if these plants are supervised by the Government so that the farmer-producer gets a square deal, à fair price. It is not our purpose to attempt to displace these interior packing plants if they are serving the community, but it is to regulate them.

Senator CAPPER. When this legislation was before the committee a few years ago we heard a good deal about the Mistletoe Yards at

Kansas City, and it seems that there was a very strong protest against that particular establishment there, and it seems to be the outstanding instance of harmful results to the producer by reason of this sort of stockyards system. Can you tell us now what the situation is at this time as to the Mistletoe Yards and the drepessing influence on the central market at Kansas City?

Mr. WARD. Senator Capper, I think we have a witness to follow, representing a Kansas City livestock house, that can give you a little information on that, which I would rather have him do.

I want to insert, gentlemen, the resolution passed by the Kansas Farmers' Union at its State convention last fall:

The Kansas Farmers' Union at its annual convention held October 27, 1933, adopted the following resolution:

Whereas the practice of shipping hogs direct to packers and of selling hogs to packer buyers in the country is destroying the open competitive market for livestock: Therefore be it

Resolved, That Secretary Wallace be urged to use the authority vested in his office to compel all packers to buy hogs in the open competitive market.

Senator Norris. That resolution, it seems to me, strikes at what, in my judgment, is the key to this situation. So many witnesses confine themselves, maybe they did before, to specific instances where they might gain or they might lose-in this case it has been mostly a loss, but when we had it before, 5 years ago, we had a lot of farmers testifying before us who were opposed to the legislation and who claimed that they got more for their hogs by direct buying, and they would give instances where they did get more. That resolution hits the very key, as I see it, to this. I am not so much interested as to whether an individual some place gets more or gets less, because I can easily see how they can afford to pay more sometimes, and the man that sells to the buyer out in the country might make a profit, but he buys on that market, that central market; his price is based on it, no matter where he sells his stuff.

Mr. WARD. Right.

Senator NORRIS. And if that central market is injured that hurts his price.

Mr. WARD. There is no question about it.
Senator NORRIS. That is the real thing involved in this legislation.
Mr. WARD. That is the real thing involved; yes.

Senator NORRIS. And if we are going to maintain-maybe we are wrong; we might devise a better system, but for many years we have had these central markets; we have built them up; we have tried by laws that we have passed to take away all restrictions so that they would be free markets, be fair to the buyer and the seller both. If that system is wrong, then anything we do that takes away competition from those principal markets hurts the man who produces hogs no matter where he sells them, on the market or out in the country,

Mr. WARD. Because your price level starts from these terminal public markets?

Senator NORRIS. Exactly. The purpose of these markets is to have a place where, without prejudice, without monopoly, without undue influence or coercion, the buyer and the seller can meet absolutely on fair terms and the law of supply and demand will be in complete sway.

Mr. WARD. I want to add this to the record, gentlemen, that this pressure is coming from the producer and not from the commission

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