Senator SHIPSTEAD. Here is a statement by Swift, a short paragraph. It says:

All the packer can do is to keep the tax as an additional expense when calculating the price he can pay for live hogs. In effect the tax is an added expense in the packer's operation, and necessarily makes the live hog less valuable by the amount of the tax than it would otherwise be.

I had a letter from a farmer who said he shipped 4,500 pounds of hogs. He didn't say when he shipped them. Then he said, there was taken out of the price he got for those hogs, two and a quarter cents processing tax, and then there was $18 for hauling, and that amounted to $101 and some cents, and he had $107 and some cents left. Is that the way they do it at the market?

Mr. KEENEY. They do it, but the farmer doesn't see it. Today on the Omaha market he would get about 4 cents, but the packer very well knows that he has to pay 2 cents processing tax. The farmer figures if he didn't do that he would get 64 cents for the hogs. It is not on the bill of sale, but he knows pretty well he is paying it.

Senator SHIPSTEAD. They give it back to him later in the benefit payments, is that it?

Mr. KEENEY. Yes, sir; that is the only chance the farmer has to get some of it back. That is the theory.

Senator SHIPSTEAD. The man who does not sign up to cooperate, he pays his share of that tax, but doesn't get any benefit payment back?

Mr. KEENEY. Yes; it is taken off from his hogs the same as the fellows that do sign up.

Senator POPE. Mr. Chairman. I was talking to Mr. Davis the other day, after the assertion was made on the floor of the Senate that the processing tax was passed back on to the producer, and he reminded me that in his testimony he didn't make any such statement as that, and I happen to have his statement before me-Mr. Chester Davisand this is what he said:

In the case of hogs, I have given the figures, and I want to put the entire table into the record here, which shows that by reason of the relief purchases we have made the price of hogs has been held at a higher level than they were a year earlier when receipts were lighter in spite of the fact that there was a processing tax. I do not think that any man can take those figures and say definitely that the farmers pay the tax.

I remember his testimony was that you couldn't tell whether the farmer or producer paid the tax, or the consumer, but he said at any rate the price of hogs all during last fall and winter were higher than they were the year before.

Davis told me personally the other day that he felt that statements that had been made were too strong. He did not make the statement, and did not concede that the producer had paid the price. I felt that was fair to say for Mr. Davis.

Senator CAPPER. He will not deny that when the buyer, the packer's agent, goes and pays so much for a hog, he bases his price on the basis of a deduction of 2 cents, or whatever it may be, from the price he pays the farmer, so that the farmer is as matter of fact paying the tax. I think Congress and this committee, when we passed that legislation, thought that it would be passed on to the consumer, and the farmer would not have to pay the tax, that the farmer wouldn't be compelled to finance this processing tax, which he has been doing.

Senator POPE. You made the statement a while ago that the price in Canada was a good deal higher than here, and Mr. Davis showed here that the price now is a good deal higher than it was a year ago. for hogs in this country.

Senator FRAZIER. Does Davis give the figures?

Senator POPE. Yes.

Mr. KEENEY. How recent is this?

Senator FRAZIER. How much higher are they than a year ago? Senator POPE. Two or three weeks ago he made this statement. Mr. KEENEY. Hogs have been going down since the 1st of March. Senator HATCH. That was before the 1st of March.

Senator POPE. Here on page 21 of the hearings, he said, in September, in the week ending September 8, 1932, $4.16, compared with $3.86 this year; the week ending September 15, 1932, $4.04, and 1933. $4.06. Then he continues the statement here for all the weeks up to December 8, 1932, with the price higher every week this year than it was last year, and substantially higher. For instance, the week ending November 10, 1932, $3.62 a year ago, 1933 $4.30; and December 8, 1932, $3.18, 1933 $3.37, so there was a higher price every week this year than last year.

Mr. KEENEY. That is true until recently. The price is going down, especially since the March processing tax has been added. If the study had taken into account the farmer's purchasing power, I doubt whether there was an improvement, as the things the farmer buys: have gone up.

The CHAIRMAN. Wasn't that processing tax progressive?

Mr. KEENEY. Yes, sir, it started at 50 cents and a dollar, and it has gotten up to two and a quarter now.

The CHAIRMAN. Since it has gotten to two and a quarter, whether it is cause or effect, the fact is that the price of hogs has gone down? Mr. KEENEY. Yes, while receipts have been smaller and hogs have stayed very steady in Canada. I would like the permission of thecommittee to let my associate file the prices. I think they have them here, the prices.

Senator POPE. Weren't the prices of hogs in Canada a year ago. higher than the prices of hogs in this country?

Mr. KEENEY. I cannot answer that.

Senator SHIPSTEAD. How much have hog prices dropped since the 1st of March?

Mr. KEENEY. About 40 cents I would say, since the 1st of March, about 40 to 50 cents.

Senator SHIPSTEAD. How much was the processing tax raised on: the 1st of March?

Mr. KEENEY. I believe it was 75 cents that went on then, makingit two and a quarter.

Senator CAPPER. There has been no corresponding drop in the price of things the farmer buys?

Mr. KEENEY. I think there has been an increase during that same period.

Senator POPE. The last figure Mr. Davis gave was February 9, 1934. The price in 1932 and 1933 was $3.67 in Chicago and $4.20 in 1933 and 1934. That was February 9.

Mr. KEENEY. Now I believe that regulation of methods of buying slaughter animals as suggested by this committee and the amend

ments that have been suggested to your bill, Senator Capper, will go a long way in restoring prices to the farmer, and again insure him an open competitive market, so that he will stand a chance of getting what his product is really worth.

I believe that concludes my statement. I do not want to go over what my associates have put in the record.

Senator SHIPSTEAD. You think that the stockyards' market, the public markets are really competitive markets?

Mr. KEENEY. Well, we must remember that a few men buy a very large percentage of the slaughter animals in this country. The selling agencies on the public market are honest and try to get all they can for the stock that is consigned to them.

Senator POPE. Did you want to put in that chart showing the distribution of the dollar as to cattle?

Mr. KEENEY. Yes.

(The chart referred to has been attached to the original copy of the record.)

The CHAIRMAN. What is the price of hogs in the interior markets now, the top?

Mr. KEENEY. I would say I haven't heard of the market today, but I would say out in central Nebraska it was below 4 cents quite a bit, perhaps 3.80 at Hastings.

The CHAIRMAN. What is the price of corn? You have that fixed, haven't you?

Mr. KEENEY. Forty-five cents. If you will permit me, I would like to say that in our feeding sections, like the Republican Valley and other sections, like where Senator Norris lives, the livestock feeder is up against it. The high cost of corn has made his dollar still smaller. The cost of corn has gone up much faster than the prices of hogs because of setting the price on corn.

The CHAIRMAN. So there isn't very much encouragement to purchase corn, convert it into hogs, and then sell the hogs?

Mr. KEENEY. Not unless you have a big bank roll, you can't stand it very long.

Senator SHIPSTEAD. The raising of the price of corn had some effect, you think, or no effect upon increasing the price of hogs?

Mr. KEENEY. I think it forced a great many hogs on the market. They were compelled to sell them.

Senator SHIPSTEAD. It had the opposite effect of what it was expected?

Mr. KEENEY. Absolutely. The feeders that at this time of the year used to buy cattle to take out and feed through the summer are not buying them. They can't afford to take the chance. I think the most important job that Congress has is to try and restore the purchasing power of the livestock feeder, and I think the parity price between the price of corn and hogs and cattle. We will certainly have a scarcity of hogs if this unfair parity prevails.

The CHAIRMAN. I want to state that a vote is now pending and the committee will stand adjourned until 10 o'clock tomorrow morning. (Whereupon at 4:48 p.m. the committee adjourned until 10 a.m., Thursday, Mar. 15, 1934.)

49990-34- -6

TO AMEND THE PACKERS AND STOCKYARDS ACT, 1921

THURSDAY MARCH 15, 1934

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D.C.

The committee met at 10 a.m., pursuant to adjournment, Senator George W. Norris presiding.

Senator NORRIS. The committee will come to order.

The next witness I have here on the list is Mr. Stebbins.

Please give your name, address and occupation to the stenographer.

STATEMENT OF GLENN T. STEBBINS, SECRETARY, UNITED STATES LIVE STOCK ASSOCIATION, KANSAS CITY, MO.

Mr. STEBBINS. Mr. Chairman, if the committee please, I have submitted to the reporter a bound copy of these photostat copies of these charts which I have here. If possible, I would like to jjust lay these charts on the table for the committee, for the committee to look at and then pick them up, please.

(The bound copy of photostats referred to is attached to the original of this record.)

Each one of these charts is different, and I thought you might pass them around.

My name is Glenn T. Stebbins and I am executive secretary of the United States Live Stock Association, which, as our president, Mr. Hildebrand, stated yesterday, represents a membership located in 25 States in the United States.

A study of the relationship between large receipts of hogs coming into the packing houses direct from concentration points and private stockyards, and daily fluctuations of hog prices on public markets in the year 1933, reveals the damaging effect of direct holdings on the value of hogs.

After tabulating the daily receipts of directs, and comparing the daily totals with market fluctuations on those days, it is disclosed that

In the main the largest supplies of direct receipts reach the packing houses on Monday and on either Thursday or Friday. These heavy receipts of "directs" on Monday enable their owners to stay off of the public market on the day of the week when the supplies of farmers' hogs on the competitive markets usually are largest. Thus we find from the tabulation that the public hog markets in the year 1933 were lower on 29 Mondays out of 52 weeks ranging anywhere from 10 to 30 cents lower.

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