and about an average of 3,000 cattle a year. The farmers in my territory are all for direct marketing, and as soon as Swift came in and opened up a hog-slaughtering establishment I could no longer get hogs to ship to the central markets. The saving on shrink and expenses on the central markets and the ready cash which the farmers received appealed to the farmer and the newly established packing house got the business on hogs.

The price paid by this local packing house depends upon how badly it wants hogs and whether or not it keeps in line with what is being paid elsewhere for hogs. Right now they seem to want hogs badly, as they are paying practically a Sioux City price out at Watertown, S.Dak. There have been times when they did not seem anxious for the hogs, and their prices seemed to be a little out of line, and the result was the hogs began to go to Huron and other points. As soon as this hog movement began, Watertown got in line and got back its hog volume.

Competition is pretty keen at all times between the packing houses in Watertown, Huron, and Sioux Falls. There is a terminal market at Sioux Falls as well as Morrell, who buys direct. The South St. Paul market also acts as a check, as we can put hogs in there overnight.

I am opposed to any legislation which will interfere with this marketing system which now exists. I am satisfied with it, and the big majority of the farmers in our locality feel they are making money by selling their stuff direct and do not want to be forced to pay the public-market charges or go back to the old system of shipping and waiting for their money.

The quality of hogs from our territory for the past year has been rather unsatisfactory, because of the drought and feed shortage, but nevertheless the grading of these hogs has been satisfactory when sold direct, and as far as would have been if sold on the terminal market. Senator NORRIS. Mr. Scott.

STATEMENT OF W. M. SCOTT, HECLA, S.DAK.

Mr. SCOTT. My name is W. M. Scott. I live at Hecla, S.Dak. I am a farmer, feeder, and shipper of livestock and have been for over 30 years. I raise cattle, hogs, and sheep, and buy enough more for feeding so that I have on hand feeding most of the time about 700 head of cattle, around 2,000 sheep, and about 700 or 800 hogs. The livestock that I feed outside of what I raise myself I buy from the farmers in my neighborhood.

Taking the livestock that I feed along with what I buy to ship to market without feeding, I handle in a year about 30,000 hogs, 10,000 sheep, and ordinarily 5,000 cattle. In order to purchase this livestock I buy at railroad yards practically every day or whenever I am called on at 6 points in North and South Dakota all within a radius of about 50 miles of each other.

Both the farmers and myself depend upon the radio very largely for our market news. We get the radio market every day from Ames, Iowa. Of course, I also am in touch right along with the buyers at the packing houses to which I ship, and I know from what they are offering how far I can go with my buying. With the radio and good roads the farmer waits until he thinks the market is favorable and brings his stock in. I can sell the stock on the very same day I buy

it and on the same market on which I buy. That takes the gamble out, and I can work on a much less margin than if I were to ship to the terminal markets. I have tried shipping to the terminal markets but always find that I would have been better off if I had shipped to the packing houses near home on direct sale. There is always at least a saving to the amount of the charges on the terminal market, and I also save the shrink on shipments to distant points. The farmers up in my country like very much this opportunity to sell direct and they are all in favor of it. I do not know any of them that are opposed to it.

When I sell I reach the packing houses at Fargo, Huron, Watertown, Austin, Minn., and also the concentration point at Aberdeen. When I get the best bid I make my trade and ship my stock. The packing houses always give me the market on the day I ship. I, therefore, know what I can get for the stock before it is loaded at my home shipping station. My dealings have been very satisfactory, and I often ship to these packers without first making a trade on them. I have never had any trouble with weights and grades.

There is no need for anyone to interfere with this business that I carry on because it is entirely satisfactory to all concerned. Further, any extra expense which was occasioned would have to come out of me as a farmer or the other farmers from whom I buy.

If this proposed legislation were put through I understand that all these yards where I buy would be posted yards and be under the Government supervision and require the presence of Government inspectors. I understand I would be a dealer and have to register with the Secretary of Agriculture and make reports to him and keep accounts like he wanted and give a bond. I understand, also, that these packers' pens to which I ship would become posted markets and would have to have a Government inspector there. This is unnecessary expense as far as I am concerned and I am opposed to it and opposed to this interference with the normal course of business. Competition is keen enough to keep everybody concerned in line. There are plenty of places for the farmers to sell in my territory if they don't like my prices, and there are plenty of places for me to sell if I don't like any packer's price.

I will say that 95 percent of our farmers sell direct, and I don't think they would be doing that unless they felt it was the best system. Senator NORRIS. Mr. Thomas.

STATEMENT OF F. A. THOMAS, ARLINGTON, S.DAK.

Mr. THOMAS. My name is F. A. Thomas. I live in Arlington, S.Dak. I am a feeder and shipper of livestock and have been in the business about 10 years.

I own a feed lot on the edge of Arlington. In 1932, I bought and fed or bought and shipped a total of about 25,000 head of livestock, most of which were hogs. Sometimes I truck hogs to the markets for farmers without buying them, charging so much per hundredweight. All the farmers have radios or have a neighbor who has one so that when they have stock to sell they listen to the radio. There is market news coming out steadily from 8:45 until about 1:45. It comes from the Government broadcast at Ames and from river market towns.

You can tune your radio and get it from some point at any time during the morning. When the market sounds favorable, the farmer gets in touch with me on the telephone and a trade is made. I keep track of the market just like the farmers do and also of course I am in telephone communication with the buyers at the packing houses all the time.

I can sell the day I buy and that narrows the margin and eliminates chance for loss. I do practically all my selling to the packer direct and not through a terminal market. I have tried shipping a truck load of hogs on the same day through the terminal market at Sioux Falls and another truck load of similar hogs direct to Morrell's plant at Sioux Falls. The result is always the same-the check from the hogs that went to the terminal market would be about $20 less than the check that came from the direct shipment to the packing house. This experience has resulted in my doing practically all my business direct to the packing houses to save this unnecessary expense. Sometimes this is the difference between making and losing money on a truck load of hogs. In trucking for farmers over a period of years I have not had over half a dozen loads of hogs that farmers have requested me to take to terminal markets, and I have had hundreds of loads that the farmers themselves have asked me to take to the direct buyer.

The farmers in my neighborhood prefer direct selling to the packers over selling through the terminal market. This is proved by the way in which they constantly market their livestock.

The shrink on handling direct is so very small as to make very little difference. We know what we are going to get and we avoid the expenses and charges of the terminal market. It would be too bad to interfere with this comparatively new system of marketing which has developed and to try to force livestock back through the terminal markets or to add unnecessary expense to the producer and to me. I am opposed to this legislation for that reason, and also because it might put such burdens on me that I would have to go out of business. The farmer is well able to take care of himself and I am well able to take care of myself.

In the early part of 1928, there was existing in my neighborhood a shipping association that shipped lots to the open market. Within 6 months after I started they went out of business and they were in the red when they closed up.

There are buyers and truckers in every town in our territory and they give lots of competition for the farmers' livestock and the packing houses compete with each other in accordance with their requirements.

We can drive with a truck in from an hour and a quarter to two and a half hours and get to any 1 of 3 packer buyers.

Senator NORRIS. All right, Mr. Thomas.

There is another man from South Dakota, who spoke to me just when we adjourned. We will hear from you now. You are not on this list. We want to put the South Dakota fellows all together. Mr. Hardt.

STATEMENT OF H. A. HARDT, OF ABERDEEN, S.DAK.

Mr. HARDT. My name is A. H. Hardt. I live at Aberdeen, S.Dak. I operate the Hardt Packing Co. at Aberdeen. I operate a meatpacking business, and have done so for 12 years. I have no affiliation either directly or indirectly with any other packing concern. I have only one place of business.

We slaughter cattle, calves, sheep, and hogs. All of our livestock is purchased by myself direct from the producer at the private yards owned by the Chicago, Milwaukee & St. Paul Railroad at Aberdeen. We have not shipped any livestock on the terminal markets for the past 2 years, which is due to the fact that the prices we are now paying the producer do not allow us to make these shipments. It would be unprofitable.

At this point, there are several other buyers. Armour and Swift have their own buyers located there, and there are also two order buyers who buy on orders for various other packing companies, which are Carsteen Packing Co. on the Pacific coast, one located at Great Falls, Mont., and one at Butte, Mont. Also these buyers purchase hogs at various times for both John Morrell & Co. and Hormel & Co. of Austin.

Our method of buying at this point is: All shipments of hogs brought in by the producer are purchased in full. We do not, as has sometimes been contended, purchase only the top grades and leave the culls to be sent to the central markets.

It is my understanding that this bill is designed to prohibit direct marketing. If I were forced to go to the terminal market to obtain my supply, it would greatly injure my business. I could not afford to go to the terminal market, buy livestock, pay the freight on it to the plant and ship the processed products to the various points in my territory for sale. As I see it, this bill, by eliminating the source of supply of the small packer, would work to the distinct benefit of the large packer who is on the terminal market. This bill would not only injure the small packer like myself, but it will also result in the producer receiving less for his product. When the producer sells to me, he does not pay any commission charges, yardage charges, or feeding charges. Practically all the hogs are trucked in, and the producer almost invariably accompanies his hogs, and I want to say in this connection that it is my experience that a producer is well able to take care of himself. He knows how to grade hogs, and he knows what they are worth. He has been thoroughly posted as to what the prices are, not only at Aberdeen but elsewhere, on the radio and through the newspapers, and if he is not receiving what he considers a better price for his hogs than he could receive at the terminal markets, he certainly would not bring them to this market.

It is without doubt that direct buying has injured the livestock commission business, but the amount in dollars and cents is so small compared with the great saving it has made for the producer, who without question is the party to be first considered. It surely would be poor legislation at attempt to abolish direct buying as it is now being done. I am personally very much opposed to such legislation, and can see no reason for it. I believe that I am stating the sentiment of the majority of the hog producers in my commuuity that they do not desire the abolishment of direct buying, since this direct buying

has been in force. They realize that they are receiving a greater net value for their livestock than ever before, and at the present time with the extremely low prices of livestock, I don't believe any change should be made relative to direct buying or any other method of livestock marketing.

I am not, nor is anyone else, in a position to state what is the best method, but I am firmly convinced that the producer is getting through the method of direct buying a larger percentage of his livestock dollar than ever before in the history of livestock buying.

Senator NORRIS. All right, Mr. Tovrea.

STATEMENT OF PHIL E. TOVREA, OF PHOENIX, ARIK.

Mr. TOVREA. My name is Phil E. Tovrea. I am president of the Tovrea Packing Co., an Arizona corporation, at Phoenix, Ariz., and of the Tovrea Packing Co., a California corporation, at Los Angeles, Calif. We operate packing plants at Phoenix, Ariz., and Los Angeles, Calif., and ranches and feeding cattle, hogs, and lambs at Phoenix, Ariz. We are not connected directly or indirectly with any other packing concern. My father was the founder of this business in 1889. I have been connected with the business all my life.

At our plant located at Phoenix all of our livestock is bought direct. At our plant at Los Angeles we buy most of our livestock at the public stockyards in Los Angeles.

As I read this bill it is directed against the direct selling of livestock. I am opposed to any such legislation. I believe that the public market performs a valuable function. I also believe that direct selling of livestock performs an economic service. I do not think that either method of selling should be restricted. I feel that the producer's outlets for selling of his livestock should not be restricted. In our case if I were forced to go to the terminal market to purchase all our livestock for our Phoenix plant we would be compelled to close our plant. We could not afford to go to the terminal market, buy the livestock there, pay the freight and compete with those plants that are operating at terminal markets. Such legislation would give a distinct advantage to our competitor, the big packer, who is now located on a terminal market.

Under such circumstances undoubtedly a public yards would be made of our pens at the Tovrea Packing Co. in Phoenix. This, however, would result according to the bill, in service charges such as yardage, commission, and feeding charges being made and such charges would result in producers in that country receiving approximately $30 a car less for their livestock than under the conditions which we now operate. Undoubtedly these extra charges would also cause some of the livestock now available to us to be shipped out of our territory to central markets and would again give an advantage to our big competitors located at these markets because it would be cheaper for them to ship the meat back to our territory than for us to buy the livestock on the markets where they are located and ship them alive to Phoenix for slaughter.

Practically all of the hogs that we slaughter at Phoenix come from the territory to the east, Kansas, Nebraska, and Colorado. In buying these we are in competition with the packers located at interior points between us and the Missouri River and the packers at the