took the manager of our South St. Paul livestock house and went to Chicago and got an interview with Mr. Sherwood direct, and he called in his attorney and I asked him for this same privilege that I had asked Mr. Ashley, the submanager, for, and he told me that he was afraid to allow us to come into the yards for fear they would be declared public stockyards. I said to him: "Mr. Sherwood, if I can get a ruling from the Department at Washington saying that they will not declare those yards public yards, will you then consent to have this representative placed in your yards to grade our livestock?" He said: "Yes, I will."

I spent some 8 or 9 months, and I finally got the ruling from the Department at Washington that they would not be declared public yards in this case, but about this time an agitation had arisen for a public stockyards at Fargo, and it has been in the air ever since and has lain in abeyance. I have gone out of the chairmanship of that board. Other activities kept me busy, and I surrendered it voluntarily to a good farmer who is my successor, so I have not followed the matter up further.

Senator NORRIS. I am interested to know, as you proceed, why Armour & Co. did not want that declared a public stockyards?

Mr. TALBERT. Well, Mr. Chairman, I have a suspicion that they do not want anybody interfering with their weights, their grades, and their buying operations in the yards. They don't even want people to have knowledge of it.

Senator NORRIS. Do you know any other reason than that?

Mr. TALBERT. Well, I would say that was sufficient, even if they might have other reasons.

Senator FRAZIER. If it was made a public stockyards it would come in under the Public Stockyards Act.

Senator NORRIS. Of course, I understand that, but I was wondering what they said about it.

Mr. TALBERT. Well, they said they were giving thorough satisfaction to the farmers. Of course, that was a nice story and "listened" good to them. It tickled their own ears, but I know how well it satisfied the farmers. I know of farmers that have hauled cattle into the plants and been bid such a ridiculous price; for instance, one farmer near Lisbon, or between Lisbon and Fargo, took a truckload of livestock in there, among which was a very good bull. They bid himI am not going to state figures, because I didn't take the record, and I must check up on that if it becomes necessary-they bid him such a ridiculous price that he got mad and said, "I will load the bull up and take him home." He let him have the other animals in the truckload, and he took the bull home and hauled him over to the buyer at Lisbon and got about a dollar and a half a hundred more for the bull than was bid the day before at the plant. There is a sample, and I can find you by checking the matter, although I am too busy personally to do it, just hundreds of such instances as that.

We farmers believe that no plant should be allowed to operate anywhere in the United States out from under public supervision; that they should be compelled to allow the producer and seller of livestock a representative in any yard that handles livestock of any consequence whatsoever. And I believe that the 250 limit that I understand goes in this bill-is that right, Senator, the limit of 250 head per day? Is there a limit placed in this bill?

Senator FRAZIER. I don't remember what that limit is.
Mr. TALBERT. I haven't studied the bill thoroughly.
Senator CAPPER. I think that is correct.

Mr. TALBERT. Well, I believe that the producers should be allowed to have a representative to serve them. Whether he be efficient or not is their concern. We hope to have a public stockyards established at Fargo, but if they are not established there we cannot tolerate a continuation of conditions such as we have at Fargo at this time, which affect our entire population, not only of North Dakota but very largely of Montana today.

To give you some of our personal experience along these lines, we set up a concentration plant for our members at Mandan, just across the river from Bismarck. We received our livestock there direct for our members and sent them on to market, concentrated them there. The working conditions in conjunction with the railroads would not allow us a full concentration privilege. They also laid down to us this mandate; that if we dared to ship livestock west, where at times we could get a higher competitive price, they would boycott us at Fargo. In other words, they would not receive our livestock from Mandan if we sold them anywhere else. We could sell to Fargo only or we could not sell to them at all.

That gave us no privilege of competitive bidding on our livestock, because western buyers would come into the Mandan concentration point constantly and try to get livestock there, and there were times when we would get 50 to 75 cents a hundred bid higher than Fargo was paying for the livestock, but we didn't dare sell a single load to go west without we had lost our entire market, which we had to have constantly, day by day, where we could send our livestock.

Senator CAPPER. Mr. Talbert, I am told that Armour is bringing hundreds of thousands of direct-bulk Fargo hogs in the carcass to the Kansas City plant for further processing, in order to depress Kansas City open market prices. Do you know anything about that? Mr. TALBERT. Well, I could not answer that direct. I would say this, that they do send their stock through for further processing. They cannot begin to process the volume that is brought into Fargo. I am told that they are today the second Armour plant in the United States, located out there in our wheat State. If that is true, it certainly ought to be evident to the committee that they tremendously need regulation. They have their own scales, they have their own buyers, and a famrer goes in there with a truckload of livestock and he is subject to their will entirely. He can either take it or leave it, or move on somewhere. And a farmer has got to have a commercial license if he trucks to South St. Paul and brings anything back. He has got to have a commercial license, and you can readily see that it is impossible for him to take a small farm truck and go clear to south St. Paul with his livestock. He is practically bound to that market. because of transportation costs further on. And they are sending thousands and thousands of carcasses right on through. They are killing and sending them on through, because, of course, the freight rate is lower on killed stock, as the testimony here shows, than it is on live weights.

Our shipping association, as I said in the first place, has been almost destroyed completely over the territory, and in the very near future the Armour people in Fargo will have complete control of the market

ing of livestock without any regulation whatsoever, and that affects nearly the whole State, all the producers of livestock in the State.

Now, I think there has been voluminous testimony along these lines, but I just wanted to bring my own personal experience into the testimony here, because it affects a very wide area of producers, and I myself am not only an actual producer, and we have some 200 head of cattle on the farm and 200 head of sheep and hogs at the present time, and I am concerned not particularly myself, but I represent several thousand farmers direct.

Senator NORRIS. Most of those farmers that you represent, I presume, are smaller producers of cattle and hogs than you are? Mr. TALBERT. Yes, sir.

Senator NORRIS. The average is way below what you produce? Mr. TALBERT. Yes. And let me say this, that I am not making any particular plea for myself, and I have no brief to hold for the large producer. I will tell you why. You see, we had a bill just like this before our legislature and it was passed in the last session and vetoed by the Governor, and I was called in at the time that he had decided he was going to veto the bill, along with the representatives of large shippers, for instance, a man by the name of Patterson, from Jamestown, was there. Why he was there I don't know, but we naturally believed he was there in the interest of Armour. He was protesting our attitude on this bill. I happened to know, living in Jamestown, that he would ship as high as 30 and 40 loads of lambs from Jamestown to the Northern Pacific Railroad receiving yards, and that Armour would send their buyer to Jamestown and close the deal for him for those lambs before they left the feeding yard at Jamestown, and I said to him:

I have no brief to hoid for you, Mr. Patterson. You are in a position to bargain with the packers. You can go to Fargo or South St. Paul, to Chicago, or even to the eastern seaboard if you want to, the tremendous business you do. I am representing the small fellow that raises hogs and sheep and cattle in small truckload lots where he can load them up and handle them into Fargo, and he needs the protection of an expert grader of livestock and a salesman.

And we have no opportunity to put that kind of a man into Fargo. Now, if they were declared a public stockyard or put under the stockyard regulation, then we could have our representative there to see that our farmers with their small lots of hogs and sheep and cattle were protected.

Senator CAPPER. This Fargo plant is just as important as the St. Paul plant, so far as the volume of business is concerned?

Mr. TALBERT. I should say so. I wish I had the exact figures here, and I think that probably Mr. Rumble has presented them or will present them to the committee as to the falling off of our receipts in the South St. Paul Market, as against the direct receipts that are coming in there since 1927. As a matter of fact, at the public stockyards in South St. Paul, if the ratio decreases in the handling of livestock in the next 5 years as it has in the last 5 years, in my opinion they become extinct and you will have nothing but a direct market with the packers handling the stuff coming in from the country. There is no question about it, because we can not operate under present existing receipts indefinitely.

Senator CAPPER. That is probably about what will happen to all the other central plants.

Mr. TALBERT. Absolutely. You are right, Senator. There is no question in my mind about that. You will drive the local yards out of business, because after they get below a certain volume of receipts, certainly they cannot operate without operating at a loss and will finally be checked out of business.

You have testimony here as to figures. I did not care to compile a lot of figures, because I knew that we had plenty of people from these different territories who would produce the actual figures, but I want to testify as the representative of the actual producer, of which I am a member and represent several thousand actual producers, and I know their feeling in this matter. They are unanimous for public regulation of all of these small plants, concentration points and interior packing plants.

That is all I have to offer.

The CHAIRMAN. Is Mr. Hobbs, of Kansas City, here?
Mr. TALBERT. Mr. Chairman, I did not get this.

Here are a set

of figures that I think should go into the record, from our territory. Senator NORRIS. Suppose you read them.

Mr. TALBERT. I will take the time to read them.

This is from an abstract of the general evidence before the United States Department of Agriculture, Agricultural Adjustment Administration at Washington:

The set up in North Dakota, Mr. Spong states, is a distinct disadvantage to the live-stock producers. He referred to the fact that the State legislature had passed a bill regulating direct buying in North Dakota but that it had been vetoed by the Governor. He gave figures showing that in 1925, 1,264,350 head of live stock had moved from North Dakota to the competitive market at South St. Paul. In 1933 the number was reduced to 734,880 head, a reduction of 529,470 head. Slaughter hogs received at South St. Paul in 1925 from the State of (461) North Dakota totaled 752,933 head and in 1933 the total received was 177,452 head, a decrease of 575,481.

He referred to the fact that the Fargo buyer bought in excess of his killing requirements, thus taking an unnecessary volume of Northwestern livestock out of competition (462).

I think those are important figures to go into the record.

Senator NORRIS. Now we will hear Mr. Hobbs, of Kansas City.

STATEMENT OF GEORGE W. HOBBS, KANSAS CITY, MO., GENERAL MANAGER OF THE FARMERS' UNION LIVE STOCK COMMISSION CO.

Mr. HOBBS. Mr. Chairman and gentlemen, I expect probably our market at Kansas City is affected more than any other market. I think the decrease at Kansas City will show-the figures will showthat the decrease has been far greater there than at any other market. Senator NORRIS. Decrease in what?

Mr. HOBBS. Decrease in receipts of hogs.

Senator NORRIS. That is a public market?

Mr. HOBBS. Yes, sir. I am now, and for the last 5 years have been, general manager of the Farmers' Union Live Stock Commission Co., with the main office located at the Kansas City Stock Yards, and a branch house at Wichita, Kans., and for the preceding 9 years was office manager of that company.

The Farmers' Union Live Stock Commission Co. is a nonprofit cooperative livestock marketing agency, wholly owned and controlled

by producers of livestock. Its stockholders are cooperative livestock shipping associations and individuals located in eight of the great Corn Belt States, representing over 50,000 individual producers. It has been in existence since October, 1918, and has handled a gross business of approximately $100,000,000 and has refunded to its stockholders out of the earnings approximately a quarter of a million dollars.

The first 21 years of my life was spent on the farm owned and operated by my father whose principal source of revenue was derived from the sale of livestock. He depended entirely on the open competitive market to make such sale.

At the time I was employed by the Farmers' Union Live Stock Commission Co. very little thought was given to the subject of direct marketing as it was practically in its infancy.

A strenuous campaign on the part of the leaders of the various farm organizations throughout the trade territory of that market, with the sale assistance of the former manager, was put on in an effort to establish cooperative livestock shipping associations. At the peak of the life of said associations there were 345 shipping livestock to the open market at Kansas City.

In about 1928 a noticeable decline was evident, association after association discontinued shipping, managers of these livestock shipping associations would advise their company that the local packer representatives in their territory were destroying their shipping associations.

In order to break up an association a packer buyer will contact the owner of the largest number of hogs to be shipped out to market and bid so close to the top (which is established at the nearest competitive public market) that the producer will sell his hogs. This accomplished, the shipping manager cannot ship his cooperative load that week because of short weight, which of course would make his expenses too great. The balance of the load must then be held for another week or sold to the local packer buyer at his (the buyer) own price. This practically has continually increased until the number of livestock shipping associations has decreased to about 25 in the Kansas City livestock trade territory.

On the 1st day of April 1933, I secured the services of an able man who had formerly managed a successful cooperative livestock shipping association, and who was acquainted with our membership throughout the State of Kansas. During the past year he has addressed over 200 meetings with a total attendance of probably 50,000 farmers and producers of livestock. In his daily reports to the office he advises me that over 95 percent of his attendance of these various meetings are opposed to the direct method of marketing their hogs but are compelled to sell to their local packer buyer because they have no livestock shipping association through which they can consign them.

The producers of hogs are hoodwinked into believing that they actually save marketing expense, and that they should be thankful that they have a packer buyer in their territory to look after their interest. Just because an account sale rendered by a packer or his representative does not show a deduction for marketing expense, is no sign that he, the packer, has not paid enough less than the open competitive market price, through the advantages which he has in weighing, grading, sorting, and docking, to more than offset such marketing expense.