The Nonpartisan Leader Newspaper, September 16, 1918, Page 9

— meetings “ employed to verify the statements of the packers. : This pool terminated early in 1902, probably as a ‘THE TERRITORY WAS DI- f- Thirty Years of Packing House Graft ~- Government Regulation of the Meat Trust Always a Failure, President Wilson - Is Told by His Investigators—Both Producer and Consumer Robbed BY THE FEDERAL TRADE COMMISSION HE first public record of an in- quiry into the relations of the packing corporations is the re- port made in 1890 by a com- mittee of the United States senate. After two years of in- vestigation this committee unanimously reported that : there was an agreement be- tween the then leading packers, namely, Armour & Co., Swift & Co., Nelson Morris & Co., Hammond & Co., to refrain from competition. The commit- tee found, among other things, that there was collusion with regard to the fixing of prices and the division of territory and business. The con- ditions revealed by this investigation, it may be remarked, were in part responsible for the passage of the Sherman anti-trust act on July 2, 1890. This investigation and the passage of the Sher- man act, however, did not long prevent the big packers from combining, for it /jwas admitted by Henry Veeder under oath, in 1912, that from May, 1893, until May, 1896, representa-. tives of the leading packing companies, Armour & Co., Ar- mour Packing company, Cud- ahy Packing company, G Hammond Packing company, East St. Louis ‘Dressed' Beef & Provision company, Morris & Co. and Swift & Co., met regularly every Tuesday after- noon in a suite of rooms leased in the name of Henry Veeder, who acted as secretary and statistician of these meetings. It. is interesting, in view of certaintimportant evidence de- veloped ‘in the present inves- tigation, to note that the rent for these rooms and other ex- penses connected with these were - apportioned among the packers in propor- tion to their - shipments of dressed beef. SECRETLY BOUGHT UP LITTLE COMPETITORS AT THESE MEETINGS VIDED AND THE VOLUME OF BUSINESS TO BE DONE BY EACH PACKER WAS APPORTIONED upon the basis of statistics compiled by Veeder, penalties being levied when any one of them exceed- ed his allotment in any terri- tory. This was the first of the so-called “Veeder pools,” con- : ducted, it should be noted, by the. same Henry Veeder whom we find acting now as the joint agent of the Big Five in various transactions. From May, 1896, to January, 1897, no regular meetings- were apparently held by the packers; but during the year 1897 Henry Veeder conducted 4 what was known as a statistical bureau, which performed a part of the functions of the original * Veeder pool. In January, 1898, however, a new pool was es- tablished under the management of Veeder, dif- fering from the original pool only in that Schwarz- schild & Sulzberger took the place of the East St. Louis Dressed Beef & Provision company, which had been absorbed by Morris & Co.; the ‘penalties for overshipment were increased, and auditors were result of the investigation then being made by the { = Ss HAT will: congress =————— portation and distribution.”. . - partisan league has always said. The kep the big packers. ‘which ‘exposure -had 'made hazardous. “little the big packers respected .the courts of the department of justice. In May,v190.2., the depart-: , do about. the report of ‘the federal trade . commission? . Nothing, unless the people demand action in.a “loud -voice. The president’s investigators have decided that " the advantage of the Big Five “is obtained through a monopo- listic control of the market places and the means of trans- : That is what :~tl_nle;_1\,hfionall;1§pn- : ment of justice filed sweeping charges of con- _ spiracy and restraint of trade against the big pack- ers and asked for an injunction. The charges were not specifically controverted, and after some delay and slight modifications a permanent injunction was issued by the supreme court of the United States on May 26, 1903. The principal restraints imposed specifically by the injunction were “from entering into, taking part in, or performing any contract, combination, or conspiracy, the purpose or effect of which will be, as_to trade and commerce in fresh meats be- tween the several states and territories and the District of Columbia, a restraint of trade, in vio- lation: of the provisions of the act of congress ap- proved July 2, 1890, entitled “An act to protect trade and commerce against unlawful restraints and monopolies,” either— By directing or requiring their respective agents to refrain from bidding against each other in the . purchase of livestock; Or collusively and by agreement to refrain from A carload of hogs at the Oklahoma City stockyards. The market there is owned by two of - In the words of the federal trade commission, “The price which the producer receives is bound to be the lowest price which will keep the producers raising cattle, hogs and sheep.” bidding against each other at the sales of livestock; Or by combination, conspiracy, or contract rais- ing or lowering prices; Or fixing uniform prices at which the said meats will be sold, either directly or through their re- spective agents; > Or by curtailing the quantity of such meats shipped to ‘such markets and agents; Or by establishing and maintaining rules for the giving of credit to dealers in such meats as charged in the bill, the eifeet of which rules will be to re- strict competition; : ; Or by imposing uniform charges for cartage and- delivery of such meats to dealers and consumers, as charged in the bill, the effect of which will ‘be to restrict competition. : This injunction apparently terminated the ‘pool, A But how nafipn and feared'itgflnw is revealed by the fact, ying to k _ port_from the people. You don’t see any.discussion of the: trade comnris- _ gion’s report in the big city papers. If you want the program of the League- and the federal.trade commission carried out—if you want the government to acquire all cattle. and meat ‘cars; the stockyards, the cold storage plants -} . and branch houses—write your congressman.; Let’s start a backfire that:will ] - .;bring some action as a result of this investigationl: Watch for another sec- tion of the trade commission’s report in the next edition of -the Leader. which has since come to light, that almost coinci- dent with the application for an injunction the three largest—Armour, Swift and Morris—secretly set to work to buy up many of their actual and potential competitors, with the object of forming a gigantic merger, monopolizing almost completely the entire meat industry. Cudahy and Schwarz- schild & Sulzberger became in a minor degree par- ties to the merger plan, which progressed so far that more than a dozen corporations, valued at about $10,000,000, ‘had been purchased, a million- dollar bond to insure good faith had been deposited by Armour, Swift and Morris, and arrangements had been made through Kuhn, Loeb & Co. for a loan of $60,000,000 to finance the merger. All was going well until the head of Kuhn, Loeb & Co., foreseeing the approach of the panic of 1903, re- fused to put through the financial arrangements and advised against the merger at the time. The big packers thereupon decided to merge the properties which they had secretly acquired, and thus it was that the National Packing company came to be formed. Cudahy and Sulzberger were invited to purchase stock in the company, “but declined to assume -these additional obligations, prob- ably for financial reasons. The entire stock of the National Packing company was there- fore held by Armour, Swift and Morris in proportion to the .capital assets of the respective companies; that is to say, Ar- mour & Co., 40.11; Swift & Co., 46.70; Morris & Co., 13.19; " and properties acquired by the National Packing company after its formation in 1903 were jointly paid for by the Armour, Swift and Morris companies in the same pro- portion. THE AMERICAN LIVESTOCK POOL The board of directors of the National Packing company was made up entirely of repre- sentatives ‘of the three. big companies. When these direc- tors met each Tuesday after- noon at 2 o’clock (the same day and hour as the old Veeder pool -meetings) ‘to decide on - policies, prices ‘and buying and shipping plans they were, in fact, acting for all their joint interests, and no further com- munication was necessary. This simple and highly effective plan for interchanging infor- SR mation and fixing joint policies persisted undisturbed until, after the failure of the criminal. suit against several of the big packers in 1911-12, the threat of a civil suit brought about the dissolution of the National Packing company during July and August, 19120 The dissclution consisted in a distribution of the properties of the ' National Packing company among Armour & Co., Swift ‘& Co. and Morris & Co. and left all the strong independents which had been absorbed into the National Packing company still in the hands of the packers.- . ; e : Although Sulzberger and Cudahy were not di- rectly interested in the National Packing company and did not attend the weekly directors’ meetings, \ they were, nevertheless, participants in-the .gen- eral-conspiracy for controlling the meat industry, which had been formed in 1902, after the Veeder pools came under the ban of the temporary in- junction. - This general conspiracy consisted of a | s At Ty A