L—lob.

42

HON. STR W. BTTCHANAN.

the Government had commenced to investigate the packers, and subsequent to the enactment of the Sherman anti-trust law, whiiii itself had grown out of the investigation of the packers, as shown by a repent of a Committee of Congress, the three largest; ones —Armour, Swift, and. Morris- conceived the: idea of merging all of the: big packing plants and practically all of the packing plants in the: United State's into erne concern ; and they got the: promise of Jacob Schiff, of Kuhn, Loeb, anel Co., of a backing of £12,000,000 in the way of a loan or floating their bonds." That was to make: the whole: of the. packing interests into one ; and I wemld ask the Committee to consider where the 6ompetition in the United States would have been had the scheme of the " Big Five " been against it. Where would the producers on the one hand and the consumers on the other have been, if the packers had been able to carry through their scheme ? Ido not want to occupy the time' of the Committee unduly, but I woulel like to state here that in this volume evidence is given which shows that, another attempt was made in the same direction —to have the whole packing industry of the United States merged into one huge concern to extinguish competition and complete monopoly. Then, on page 64 Mr. Heney goes em tei show that the big packers proceeded to put the co-operative concerns out of business. He says,- -" Let me illustrate new how this is done, if I may. Here, is Hormel, at Austin, Minn.- that is one of the: largest independent concerns loft in the. United States in the: pork-packing business outside of New England. There is Morrell at Ottumwa, lowa ; and Jacob Dold at Buffalei, who has a plant at Wichita ; anel Hormel at Austin, Minn. Hormel has one of the most moelcrn plants in the. United States —about a million-dollar plant —a beautiful plant. He conducts his business in a modern way. He started as a butcher-boy, driving a wagon, and has grown up with the business. He is located in the centre of one of the finest hog-producing regions in the United States. He adopted tho policy of paying to the farmer who will deliver at his door, either in wagons or by train, the Chicago price: of that morning—of the morning of the day of delivery. That would save the farmer the freight to Chicago and the commissions he would have to pay ; and Hormel grew from practically nothing to this million-dollar plant. His employees are allowed to own stock in the corporation. If the employee quits he must surrender the stock ; but he gets book value for it, so that if it has increased any in value, he gets that increased value, Hormel is producing his hams and bacon as efficiently as any big packing company in the world. He is competing in Chicago with fancy hams and bacon very successfully with the so-called big packers. Before Tom Wilson became president of Sulzberger, Sons, and Co. later Wilson and Co. (Inc.) —Sulzberger, Sons, and Co. wemt twe-nty-fivc miles away from Austin to Albert Lea, where there is a line of railroad, where there was a plant that had gone out of business, and bought it and rehabilitated it—just a small plant— and started buying hogs around Hormel, Cudahy also got a concentration station established 100 miles up the railway the other side of Hormel—the other side coining from Chicago; anel a concentration station means that hogs shipped in from the other side toward Chicago may be unloaded at this station, sorted, graded, and reshipped on the original through freight. We found in the files of Wilsem and Co. correspondence and instructions that their men were instructed to go and buy all around Hormel and as close to him as possible, and even to buy at a loss, anel ship straight to Chicago over the railroad on the other side of Hormel, the object being to force Hormel to go farther away from home to buy his hogs, and to incur the freight cost on his hogs which the big packer incurs in Chicago. I called Mr. Hormel to St. Paul as a witness, subpoenaed him, anel I asked him how far he had to go from Austin now he use'el to get all of his hogs in the, immediate vicinity—and he said he had to go a thousand miles for a considerableportion of them, away out the other side of St. Paul for many of them, by reason of the fact that this buying was taking place around him. After surrounding him and doing this, then they approached him on the proposition of buying him out, and I found the correspondence to that effect. " Another illustration of the menace of the banking control in the packing business —and again I make no charges—l only want to show the situation. Old Jacob Dold's companies 'roll' about 1,000,000 dollars of notes —you know what I mean by ' rolling ' his notes— they keep renewing their notes or paying them as they fall due by putting new notes in some- other banks. They borrow from Peter to pay Paul. This is a common business practice. The notes are usually bought and sold by note-brokers. "Senator Kenyon: Before you get away from the packing situation in Chicago, are there other banks known as Armour banks ? "Mr. Heney: The Continental Bank was founded by Philip Armour, and J. Ogden Armour is the dominating factor in it. The Fort Dearborn National is known as the Swift bank. The Hibernian Bank is a subsidiary of the Continental Commercial, anel, as yem gentlemen all know, it is the practice nowadays for each large bank to have a number of associated banks that are controlled by it, or that are allies at any rate ; and from my study of the banking conditions in Chicago I shoulel say that the National Bank, Continental Commercial, anel the Fort Dearborn Banks, with their subsidiaries, come pretty nearly dominating the financial situation in Chicago. " Senator Wadsworth : Mr. Heney was going to say something about Jacob Dold and Co. I must go in just a minute to attend another meeting, but 1 happen to know something about that company. " Mr. Heney : Jacob Dold and Co. is rolling these neitos. Tho Chase National Bank got 20 per cent, of the stock of Wilson and Co. in this deal by which Wilson and Co. was organized. There: is a committee e>f three bankers, representing Kuhn, Loeb, and Co., the' Chase National, and the Guaranty Trust Company respectively, that have a veto power em Wilson's purchase's, anel Wilson and Co. started out on a campaign of acquiring additional plants and facilities. " Senator Norris : Mr. Heney, did your investigation show anything about a, farmers' cooperative packing establishment that existed, or does exist, at Madison, Wis.? " Mr. Heney : Yes. " Senator Norris : Do you know anything about that ? " Mr. Heney : I think that is the company Mr. May is at the head of, is it not ? " Senator Norris : I do not know. " Mr. Heney : If it is, I have his testimony in regard to how they treated him. " Senator Norris : What diel they do to him ?