The Nonpartisan Leader Newspaper, February 4, 1918, Page 4

L - HELP THEMSELVES BUT The Beef Trust’s System Is Laid Bare It Controls Chemical Plants, Rendering Companies, Tanneries and Leather Supply - | But Hides Behind Dummies, Say Witnesses at Federal Hearings BY RALPH L. HARMON VERYONE knows that the beef trust sets the price on the meat we eat. For years no one has eaten a steak or ordered a bowl of soup without realizing vaguely, at least, that he owed these blessings to the beef trust. But it took the Federal Trade commission with its many-fingered probe, to show just how many blessings the world does owe this little group of “captains of industry.”” There are only a few of them—a few men whose fathers a gen- eration ago bequeathed them the softest, fattest job in the werld. The people of the United States have been dividing dimes with them a good many years, and they have been dividing millions among themselves. T But the beef trust does not only control the price and supply of the meat the people eat. It controls the fertilizer without which the farms will quit yielding crops; the chemicals made from the fats and oils of meat; the tanneries and the leather supply. The government can not even equip its army with clothing without paying toll _to the youngest branch of the beef trust. Here are a few of the things that the Federal Trade commission hearings have shown the pack- ers control: The packing houses; distributing agencies for the sale of meat; the stockyards; the banks at the stockyards; cattle loan companies, through which enterprising farmers are loaned capital to Xkeep them in the game of fattening the beef barons; the newspapers that give out packing house news and livestock quotations; the livestock exchanges, by owning the offices used by the members; the railroads that deliver the cattle to the packer-owned stock yards; the rendering plants where refuse and dead animals are coined into money; the land adjacent to the yards that might be useful to competitors. They dictate what kind of feed the farmer shall feed his livestock while he waits to have them sold, fix the price, weigh it themselves— and then pick up the leavings and sell them over again for a second profit. . They keep a watchful eye on legislative doings-and successfully head off bills that might make a dent in this solid forma- tion. All of these are admis- sions wrung from packer rep- resentatives themselves under oath. MUST BE PAID FORIT Here, then, are the oppor- tunities that the packers have made their own, but they re- fuse to show any eagerness to enter into their own. They hang back, keep energetic commercial bodies in suspense for months and years, and finally reluctantly consent to enter new territory only when the public has been hood- winked into bribing them with bonuses to come and help themselves. It was not only in St. Paul, where Armour re- _fused to enter the field until he got a cool million dona- tion from St. Paul, that this occurred. He got his million a year ago and he came, but the testimony showed this was the-regular practice by which supposed competitors were brought into new fields. Cudahy was presented with a complete packing plant to set up at Sioux City, Iowa during the eighties. He only had to give in return his promise to stay there and make money for himself for 20 years. Armour got a packing ‘plant worth $400,000 free of cost, and $900,000 in bonuses to enter Sioux City a little later, and Omaha gave Swift a huge premium — figures not given —to get him there. The joke of it is that sup- ¥ ' PACKERS USE DUMMIES - actual facts were divulged. Francis J I:Ieney, attorney for the Federal Trade commission. posed competitors already on the job help secure these newcomers. Swift, who had been in St. Paul 20 years, guaranteed Armour the slice he wanted before Armour would agree to butt into Swift's exclusive territory, and he kept his promise. Armour is now building a ‘“compet- ing” plant and ‘‘competing” with Swift in the stockyards they jointly own, where Ar- mour’s share of the livestock has risen from 20 per cent to 30 per cent, a ratio definitely fixed between them. Every hearing from the Atlantic to St. Paul has disclosed addi- tional good things the pack- ers enjoy—good ' things they have let the world share only by paying enormous tolls to Packingtown. TO HIDE THEIR CONTROL At first they denied these good things were all sewed up in one bag. They pretended the banks, packing firms, tan- neries, stockyards, etc., were independent concerns, but from schedules of ownership, submitted- to the commission, cleverly designed to deceive though they were, enough loopholes were left so that the The wider the commission tears the rent in this bag, the more it sees what the bag con- tains. This concentrated ownership was concealed through dummies. Attorneys, clerks, subordinates were found holding vast blocks of stock in their own names for their em- ployers. Sometimes these blocks of stock would remain in one ‘“owner’s” hands only long enough for him to indorse it to another dummy owner, and it would be passed on. "Starting at the origin of such a block of stock, investigators were thrown off the scent at each transfer. Frank R. Pegram, it was claim- ed, owned a big block of the stock of the Chicago Stockyards company. Pegram " was found to be only a clerk drawing $2500 a year salary. -At South St. Paul, the Union Rendering company was said by one witness of the Swift ring to be an independent con- . cern, but when Francis J. Heney, the great graft prose- cutor, attorney for the com- mission, with a smile on his face turned to the Swift & _Co. schedule, and started to read Swift’s admission that he owns the~ Union Rendering company, hide, hair and tal- low, the witness blushed, caught his breath and said: “Oh yes, I remember now.” .~ Why, bless your soul, you can’'t even get the Union Rendering company on the _telephone without calling up Swift & Co., at South St. Paul . —it’s only a department with * a branch exchange line. The commission uncovered the deal by which Armour and Frederick. H.® Prince, a Bos- ton banker, compelled the lit- tle stockholders in Chicago Junction Railways company and the old Union Stockyards company, to sell out to the dummy-made Chicago Stockyards company, " PAGE FOUR Arssr 2y Chairman Joseph Davies of the Federal Trade commission, who conducted the hearings at St. Paul, the’ through a New Jersey corporation headed by Prince. The little fellows were told the big packers wouldn’t pay rent to them any longer and would move away. They were scared into selling, and while they got a guaranteed 6 and 9 per cent, the big fel- lows, working behind the ¥gummy organization, got a 150 per cent dividend. That the Chicago Stock- yards company is nothing but a dummy was shown by testi- mony. Its board of directors never holds any meetings, the directors don’t even know each other, and when divi- dends of $25,000 and $38,000 were declared, clerks in the offices of these stockholders, scattered through different cities, signed over their divi- dends like good dummies and didn’t get even the price of a cigar. One of these dummies was “president” of one of the huge concerns involved, but testi- fied that when a dividend of $2.50 was declared on his single share of stock-——the one share he held so as to be eligi- ble as “president”—he had to turn over the two-fifty to his master without any kind of a rakeoff for himself. Pegram, for instance, the $2500 a year clerk, was shown by the rec- ords to have paid $1,000,000 cash for a block of stock dur- ing one stock-juggling deal, but on the witness stand, he confessed frankly he was only a clerk, hanging onto the ragged edge of frenzied finance. He further confessed that when the offi- cial demand for information as to his vast hold- ings reached him, he went and asked the attorney of his employer, the Boston banker, Prince; what reply he should make to the United States investi- gators. HOW THEY CORNER PACKING HOUSE BY-PRODUCTS The investigators found that the American Agricultural and Chemical company was nothing "but the fertilizer branch of the beef trust, and that -it was — secretly —the owner of all the rendering plants in Massachusetts but one. It got this ownership by outbidding all the local concerns in their own territory for the refuse, and forced them out of business. Hugh G. Robertson was leading the independ- ents in a struggle against the trust in 1912 and had secured the indictment of heads of the beef trust rendering companies on charges of secret conspiracy to ruin their competitors, but was paid a big price to sell out to them, and he enlisted on their side. And he might as well, for right while he was closing the deal Attorney General Wicker- sham was writing a letter to the federal district - attorney, ordering him to ask the dismissal of the indictments. If Robertson hadn’t sold out, he would have been crushed out. % In Philadelphia the commission found the fight between the trust ahd independents still on. One big firm is not yet beaten. Testimony showed that butchers had accepted presents of automo- biles, or sums of $200 to $400 to sell their refuse to the trust instead of to this independent con- cern. But in Buffalo the beef trust had such a cinch that the butchers had to pay the rendering companies 50 cents per 100 pounds to haul their waste meat and fat away! In cities where inde- pendents are still doing business the pricg paid ° for bone is two to three cents, for fats 10 to 12 cents, and for suet 17 to 19 cents, the testimony showed. But in cities where the trust has got control, the price is one-fourth to ome cent for bone, three to five cents for fat and six to eight cents for suet. g When shoes were advancing in price every week, the trust was just finishing killing off the last of the independent tanneries; ~(Continued on page 18) It bought up ks e *