The Nonpartisan Leader Newspaper, January 4, 1917, Page 7

{ ~, ¥ “Ethics” at S(mth St. Paul Yard | { | | | | Last of a Series of Articles on the Livestock Exchange by Ralph Harmon, Staff Correspondent of the Leader OUTH ST. PAUL, Dec. 30.—Under the heel of the speculators at South St. Paul, the shippers of livestock have for years been subject to rules and a code of commercial usages that they have had no part in framing, that they would have escaped from if they “could, but which were saddled securely upon them by a poweg too big for one shipper, or one shipping association to break. This-series of articles on the handling of livestock at-South St. Paul has pointed out some of these unjust and wasteful methods, and as though to admit the full force of these, the South St. Paul Live- stock Exchange about two weeks ago passed a rule that forbids any member to use stock he has received from a shipper on commission, to fill any order he may have from a would-be buyer. The ‘articles in the Leader had told about ‘this general custom, which was seldom deviated from hecause of the silent - resentfulness of the speculators, who thus failed to get their rakeoff, but even while .it was being told, the Exchange made it “uncommercial con- duct” for a commission man thus to make a good bargam for his clients—compelled the commission man by the law of the Exchange to turn his customers over to a supernumerary middleman, for the latter to exploit. This means that the speculator’s con- trol of the Exchange is complete—at least predominant. ' It proves what has been said in these articles, that the shipper and the buyer who have no other avenue of dealing at South St. Paul, except through the interlocking commission men and specu!ators, are caught both gomg and coming and must pay a commission to have their livestock sold, pay a specu- lator for yarding them and slapping on an extra doHar or so per 100 pounds, and then, in a great many cases, pay the same or another commission man to buy them back at the advanced price. Of course the same man does 1ot sell and buy back the same stock, but any man, whether buyer or seller, is put through this system of economic. gymnastics, and whereas it was formerly merely a “gentlemen’s agreement,” now it is the cast iron rule, and violation gets a hard cash fine instead of a pointed hint to do it no more. The news item in the South St. Paul Daily Reporter, announcing the final adoption of this rule, did not state the amount of penalty. RULES PROTECT MEMBERS BUT NOT THE FARMER The shippers and the buyers of live- stock are interested in the rules of the South St. Paul monopolists. a right te be. Those rules deal with their own property. ©nce they put live- stock at the mouth of this machine it must geo through the system, just as inevitably as a bundle of wheat goes through a separator, once the teeth of the cylinder have ripped into it. The results ‘are not exactly the same, ‘and yet there is some similarity. The rule dealing with “uncommercxal_ conduct” provides that any member who, is guilty of soliciting a shipment of stock already cons:gned to anether member or, _ firm, or any. member who seeks:business by false representation or by reflecting on the ability, honesty or character of - prising solicitors.: They have. Upper picture—a view on a hog farm in the Northwest. the private packing plants of the Northwest, where the farmers’ pigs are made into ham and bacon after passing through the alzyother ‘member, shall be punished by a fine of $250 to $500. It will be noticed that the rule provides only for the pro- tection of “members” from such enter- That is a peculiarit of most of the Exchange rules. They "do not-protect the hosts of farmers unfamiliar with stockyard ways, they do not put the stranger coming to the yards for cattle or sheep in the way of getting a good dea! at’'a minimum of cost, but they make it a serious offense for one member to interfere with the profit get- ting of another member. As an illustration of the way this rule works towards strangers, it happened that one of the' first carloads of hvestock consigned to the Equity Livestock Exchange, an outcast in the eyes of the ring, through a similarity of names, was turned over by mistake to an Exchange firm instead of to the Equity. Did this firm let go when the man found the error and tried to correct it—=which was really an error on the part of the railway? Did this . ostentatious rule purporting to fine a man for soliciting punish him for soliciting this business? The firm dis- covered the error as quickly as the ship- per, and induced him to sign an order guaranteeing the handling of the stock to it, before the shipper knew what he was about. But this was not in violation of the rule. It only applies between mem- bers. The Equity is not a member. The shipper was put through the machine against his will, and the Exchange didn’t even frown, it only winked. ~ High handed monepolizing of “justice” in the interest of membership is also authorized by the so-called “crook rule,” which provides that no member shall have any dealings at the yards with any non-member whoni the board of directors holds is. dishonest or for other reasons ought to be ostracized. The nor-member must submit to a hearing before this board of directors or be boycotted out- right, and he may be boyeotted even after a hearing. The board of directors, quot- ing the rule, is “authorized to pass upon and determine the ‘question of the guilt of anyone thus accused by a majority vote,” and another rule provides that no one thus accused ‘is to have the assist- ance of professmnal counsel. Thus the dealer who is not a member of the exchange is forbidden: all business inter- course with the other dealers, by a Lower picture—One of stock exchanges. majority vote of a 'small” group of men, whom he has no hand in choosing, his business chances put into their power, and “he without even the right to a defender before this alien court and jury. This boycott rule has been .recently applied to the Equity Exchange and to Charles Fitch, the pioneer commission man in the yards. Not only that, but the salesmen whom the Equity hired were told pointedly that if they hired to help out that organization they would forever be blackballed in the South St. Paul stockyards "To enforce this rule there is a well systematized espionage of the boycotted dealers. Every employee of the boycotting Exchange firms becomes a detective to report the movements of any boycotted dealer who may be suspected of trying to do business with any Exchange firm; and word of his passage down the yards is telephoned from different points, so that there is little or no possibility of his ever again making a deal, after the dis- pleasure of the rExchange has been directed against him. FITCH SPIED UPON WHEN IN THE YARDS Mr. I‘ltch told of being thus spied upon * so that he dared not go down in the yards with any client who might wish his judg- ment, for fear that the holder of the cattle the man desired would not sell them to him. Thus the oldest member of the Exchange has been ruled out, and the only way he can ‘now ‘operate is to walk down the yards alone, note the quality . of the cattle, keep a. mental note of the ren and block as he goes by and then sonjewhere over town, meet his customer, the country buyer who wished to employ, him to select a good bunch of steérs, and there give him the-tip as to which pen and block to buy at a certain price. Thus the country buyer is forced to go down alone, and (relying upon the judg- ment. thus surreptitiously. given him) :compelled to deal with the speeulator who ‘had the cattle of his choice. If the spec- ulator knew ‘the buyer had falked with Fitch, he would not dare to sell him the cattle. Here is a most iteresting ‘rule that has been violated under the mnoses of many a farmer, and no one but an insider could 'be expected to get next to it: “No member of this Exchange shall render or cause to be réndered an account of sale of livestock not actually 50, and no member of this Exchange shall weigh, or cause to be weighed, any live stock to any party in his employ or in the employ of the firm of which he is & member or to a fictitious name, or to any, party not a bona fide purchaser.” Of course the obvious purpose of this " rule is clear: to prevent commission men selling to themselves, their employes, or making other than a straight, fair deak But it does not. It is common practice to weigh livestock to fictitious names. Let every shipper -ask himself, why is this? Why should any commission man | or dealer wish to conceal the name of the purchaser, if he is getting for his client all the cattle are worth, and has no connection with the buyer? There can be only one reason, the fictitious ~~name conceals some “party in his employ™ ~or some “firm of which he is (se ¥) - member,” or some interlocked spep lato It works this way: HOW FAKE BUYERS - ARE USED IN DEAL , Farmer Smith sends a double deck d’ lambs to the Square Deal Commission company on consignment, with. "L up that he does not want to fall into the grip of a.speculator, but would like his stock sold directly to -a country buyer. Why, aertainly; ¢an be done very easily, The Square Deal ‘company e¢alls up 1ts chosen speculator, the Ring Cattle-¢oir pany, tells the buyer about Snuth lambs, closes the deal, and then Smith and the Square Deal salesman go down into the yards and drive them onto scales. When they are weighed, a salesman steps into the weighing hou @ and announces the sale to “Brown Brot%-' ers,” and Smith believes he has got a1 his sheep were worth directly from some buyer from Towa: or Illinois. After Smith is gone the salesman qmetly txpa} off the welghmaster that Brown’ Brothers” is a pet name for ‘the Ring Cattle company, and the latter speculat< ors get their chance to their: customary rakeoff. Then there are some polite little rules that sound very well in any argument a to honesty of Exchange methods, for instance that against cruelty to ammalsgJ the one forbxddmg members to-buy meals for anyone in South St. Paul, or the one forbidding the = members to accept presents from anyone. There is a little _rule that forbids Exchange firms td employ anyone who owes a debt he w- not pay—that is if he owes it to ahy member of the Exchange. But these rules do not prevent cruelty to the farmers, by multiplying the bury dens they must bear at selling time They ‘prevent paying for a farmer’s d.\& Vi ner, but do not prevent paying bomn equivalent to bribes to salesmen shrewd enough to extort an extra guarter. from a buyer. They prevent giving gifts buf do not prevent throwing deals wi emoluments far ' bigger than “ 'gifts They do not prevent the farmers bein; shaved for a nickel here, a dlme there and a dollar elsewhere, nor in the least impair the rapidly mounting fortn.nes oi the speculators who have everythi own way at South St. Paul.