As just an ordinary farmer I read market reports and have studied market history as much or more than the average, and I defy any man to dig into market history for the past 50 years and show a comparative spread in prices that has existed since 1926, starting there and up until the present time, between choice to good grades of cattle and choice to good grades of hogs; and I believe firmly that if the packers had the ability-and of course they have got the ability, but if they had the means to bring it about there would be a narrowing down on the cattle business just like they had the hogs whenever they obtained command of sufficient numbers. For I do know this: That the only time that the packer buyers ever contracted me to buy fat cattle on the farm was when it was in his favor. They never came out there to contact me any other time. I have had offers to sell cattle at home, and when they made me a bid it was in the packer's favor. I don't blame them. I am dealing for myself and they are too. They are business men, but I claim the average farmer needs the protection of the supervision and regulation applied to all points from which they obtain their supplies.

Senator NORRIS. Mr. Alkire will be our next witness.

STATEMENT OF L. J. ALKIRE, MANAGER OF THE FARMERS UNION LIVESTOCK COMMISSION CO., WICHITA, KANS.

Mr. ALKIRE. My name is L. J. Alkire. I live at Wichita, Kans., and for the past 9 years have been manager of the Farmers Union Livestock Commission Co. at Wichita.

Among the first things that I can remember as a small boy was my father having a public farm sale. I can well remember the bills that he had printed, listing the livestock, corn, hay, machinery, and I also remember that when the day of the sale arrived it happened to be storming, and the auctioneer got up and announced that the sale would be postponed on account of the weather conditions.

I am sure that all of us here have at some time in our lives attended those public farm sales, and we appreciate the necessity of a crowd of competitive buyers. That is necessary in order to have a successful farm sale, and that condition is not so much different on our open livestock markets. It is not merely the fact that packers are able to procure their meat slaughtered at country points at the saving of freight and other advantages that they might be able to have through that process of country operation, but if any or all of you members of the committee could spend a little time on an open market, especially at the time when there are heavy receipts of direct hogs and no order buyers operating on that market, and be able to observe the attitude of the packer buyers at that time, there would not be any doubt in your minds in the world as to the evil of the practice in establishing the price of these meat animals that are offered.

From 1922 until 1925 I was manager of a cooperative livestock shipping association located at Adrian, Mo., and during that period of time we were able to build up a considerable volume of business, and we established a system of grading at that point wherein the hogs were graded, sorted, and weighed, and kept in separate pens, loaded in cars, graded and billed to the Kansas City open market. It was no uncommon thing for us to get a premium of from 15 and even to as high as, I think one outstanding case was, 40 cents a hun

dred above the packer's top on the day that the stock was on the market.

Since this idea of direct marketing has become prevalent, at that particular point that livestock association I think has not been operating for the past year or two, and I have talked to a good many farmers in the immediate locality and they tell me that they have no hope of being able to get more than the packer's top under the present condition there. They also tell me that it takes the very best hogs that they can produce to bring that packer's top. This is largely due to the fact that the shipper has been pretty much eliminated from that Kansas City market.

To show a little more what competition will do, I would like to mention a little incident that happened down on our market in the fall and winter of 1929. The Cudahy Packing Co. in that year established a concentration yard at Amarillo, Tex., and it seems that the hogs that were moving through this point at Amarillo were originating in a territory that was tributary to the Oklahoma City and Fort Worth market. Along in October and November there were considerable hogs moving from the Amarillo concentration yards direct to Cudahy's plant at Wichita.

About the first week in December of that year there were two buyers entered our market, one a Mr. Vining of Chicago, who said he was with Swift & Co., and another Mr. Trushard from Omaha, who said he was with Armour & Co. Immediately the hogs on our market, which is ordinarily about 20 to 40 cents under the Chicago market, rose up to level with the price being paid for hogs in Chicago, and in some instances they got as high as 40 cents a hundred above the Chicago market. Now, these gentlemen were shipping their hogs to plants, to Armour and Swift plants at Oklahoma City, and of course you know that that sort of an arrangement was very satisfactory to the producer but it did not last long. They had about 3 weeks of it, and it ended just as abruptly as it started. One morning these two men came down, changed their clothes and looked over the yard, and something happened. They got some messages or something and they packed their grips and left town and we have not had them back since, and our hog market at Wichita immediately dropped back to its old custom level.

I believe that that indicates that there must be some agreement there as to the zone of the territory. A condition of that kind is so hard to get any evidence on, but it occurs to me that there must have been something along that line.

Senator CAPPER. It indicates that competition helped the producer, did it not?

Mr. ALKIRE. It certainly helped us at that time, sir.

I have talked to a good many of the representatives of the packers who were buying at country points. I have tried to contact a number of those fellows, because the practice of direct hogs, shipping direct hogs to the Wichita market has been more or less prevalent since my time on that market, and I find that almost without exception these men have a contract or an understanding with the packer that they will buy hogs so much under the Kansas City packer's top, freight rates and everything taken into consideration, and in most cases they are allowed to add to the unloading weight on those hogs a given number of pounds per head to take care of the shrink that

might be incurred in transit. That sounds very reasonable, but the thing where the packer holds the whip hand in that case is that the shipper of those hogs, or their country representative, also agrees to accept as final settlement for these particular hogs the packer's grade and sort at destination.

I have also talked to a good many of these fellows when they were down there with complaints on the grading, the close grading that they had been receiving, and it seems to me the general opinion of most of those fellows that their grades were pretty liberal. For awhile when they first started buying for the packer, and after they got control of the movement of stock at that point, they began to sort out more on them at the unloading point. They began to grade them closer, and that is generally when they come to town to talk things over, and of course that is when I would contact them. This close grading would continue to such a point that somebody out at those local points would again begin to operate and go through the open market, and then at that point the grading appeared to ease up a little on the part of the packer, until they eliminated that competition again, and then you started all over the same procedure.

I have talked to a good many farmers around at different places relative to this situation, as to what they thought of this direct method of buying. Most of them agree that in their opinion it is all wrong, but they also know that they are powerless to correct this evil, working from just one locality, as the practice has become national in scope, and the attack made on it by these localities would be ineffective. The only hope that they have is that there can be some sort of legislation to regulate this thing; not that they feel vicious toward any one individual group of people, but they would like to have some sort of a plan brought about through legislation wherein the law of supply and demand could again govern the value of the products that they are producing for sale.

I believe that is all I care to offer.

Senator CAPPER. Does the Cudahy Co. have a plant in Wichita? Mr. ALKIRE. Yes, sir.

Senator CAPPER. How do they buy their hogs for packing purposes? Mr. ALKIRE. All of the hogs that come-they get their supplies both direct and on the open market.

Senator CAPPER. On the hogs that they buy direct and bring to Wichita, do they pay yardage charges to the stockyards company? Mr. ALKIRE. I understand they do.

Senator CAPPER. So that is reflected back to the farmer, or he pays the cost of the yardage charges, does he not?

Mr. ALKIRE. Of course, it is an item that has to be figured in somewhere along the line.

Senator CAPPER. That is what I mean.

Mr. ALKIRE. It is my understanding that Dole have their own scales. Dole is on that market, and they do not pay yardage charges. Senator CAPPER. The Cudahy Co. does pay the charges?

Mr. ALKIRE. Yes, sir; that is my understanding, that they pay a yardage charge. I might add that Cudahy does not have a plant in Oklahoma City. Swift and Armour do.

Senator NORRIS. Now, why is one packer required to pay a yardage charge and another packer, his competitor, pays none?

Mr. ALKIRE. Due to the facilities of the Dole Packing Co. there. They have their own scales and their own pens to yard these direct shipments in, and Cudahy does not have.

Senator NORRIS. Cudahy, for instance, when they buy direct on the market, they ship to the same stockyards in order to weigh them, do they?

Mr. ALKIRE. Yes, sir.

Senator CAPPER. They are weighed on the public scales, then?
Mr. ALKIRE. Yes, sir.

Senator NORRIS. But still they are not sold on the market?
Mr. ALKIRE. No, sir.

Senator NORRIS. And in order to get that privilege of weighing on the public scales there, they pay a yardage charge?

Mr. ALKIRE. That is my understanding, yes, sir.

Senator NORRIS. Now, what do you think about the possibility of the farmer getting worsted in weights where they are not weighed on the public scales and by a public weigher?

Mr. ALKIRE. Well, I think that possibility would depend largely on the integrity and accuracy of the facilities of the people that were doing the work.

Senator NORRIS. That is one of the reasons why a good many farmers' organizations are in favor of this legislation.

Mr. ALKIRE. I understand so, yes, sir.

Senator NORRIS. Because they want to get their stock weighed on public scales by a disinterested party.

Mr. ALKIRE. There is no doubt but what that is the most satisfactory way.

STATEMENT OF MILTON HAY BROWN, OF SPRINGFIELD, ILL.

Mr. BROWN. I am a feeder of cattle and hogs in central Illinois. I have now on feed 1,200 cattle and about 800 hogs. I am a member of the board and of the executive committee of the United States Livestock Association and vice president of the American Shorthorn Breeders Association.

I am naturally somewhat more interested in the cattle situation than in the production of hogs. The testimony that has been submitted has related mainly to the effect of so-called "direct marketing" on hog prices, but I feel that if the situation is not corrected the effect on cattle marketing and cattle prices will be equally apparent.

For the past 25 years I have been engaged in extensive cattle feeding operations. I ordinarily purchase my feeders from the western range producers and the burden rests on me not only to finish these cattle but to find a satisfactory market for them. People like myself buy the cattle that Mr. Mollin was talking about feeding." It is our problem to market those cattle rather than his problem. We are the people that have to find a market for them. We buy them from the western range people and feed them in our territory. We are really the marketers of those cattle rather than the western range

men.

I have observed increased cattle feeding by the packing interests. When the packers can feed cattle and throw them on the market any day that they see fit in numbers to take away from our market, it seems to me that it is unfair competition.

I am unable to understand how the maintenance of duplicated 'systems of livestock marketing can result otherwise than in increased total marketing expenses which must either be paid by the producer or passed along to the consumer. If our idea of public markets is not the proper system, let's find some other, but let's not have a duplication that is only an expense to us as producers and to the consumer, one of the two.

Senator NORRIS. So far in this controversy that has been going on for quite a number of years, so far as I know, nobody has suggested a different method than that that is maintained by the public markets. Mr. BROWN. Senator, I don't suggest a different method, but I feel that direct buying is hurting our present method. Now if that may be the present method-and I don't think it is

Senator NORRIS (interposing). You think a better method could be devised?

Mr. BROWN. Well, I wouldn't say that. I think that at least two methods are unwise, the direct method

Senator NORRIS (interposing). I don't think you get my point.. I understand your position, I think. We don't want to use one method to tear down another.

Mr. BROWN. No, sir.

Senator NORRIS. You feel that when we have one method we ought to maintain it?

Mr. BROWN. Yes, sir.

Senator NORRIS. And direct buying has a tendency to tear it down? Mr. BROWN. Yes, sir.

Senator NORRIS. And, therefore, you object to it. What I am asking you is, do you have any idea of any methods that would be an improvement over the one that we have been sustaining by law for a good many years, maintaining these stockyards and open markets? Mr. BROWN. I do not.

Senator NORRIS. Do you know of anybody that has advocated anything in their place?

Mr. BROWN. No; I do not.

Senator NORRIS. Even the people who buy and the people who sell on the direct market, as I understand it, are not in favor of destroying the public markets, even though their action may have a tendency to do that.

Mr. BROWN. Well, I don't feel that we have found anything yet that is better than the public market. I don't say that we may not in the future, but not that I know of. That is all that I want to say. I approve the bill, and I hope something can be done to help us. We need it.

Senator NORRIS. What is your residence?
Mr. BROWN. Springfield, Ill.

STATEMENT OF W. P. DOLAN, OF SOUTH ST. PAUL, MINN.

Mr. DOLAN. I am the secretary and traffic manager of the St. Paul Livestock Exchange, and also the chairman of the transportation committee of the National Livestock Exchange, which is an organization comprising exchanges on 24 of the major markets of the United States.