I.—lob.

66

The parent companies have: availed themselves of the control so acquired by them in the stockyards aforesaid to elect thei officers anel directors of said stockyards and to dominate and control tho policies thereof. They have granted exclusive privileges—-such as the right to purchase deael animals, the right to furnish supplies and facilities, and the location of cattle-banks and cattle loan companies—to concerns and corporations in which they, or some of them, or individuals who are stockholders in said parent companies, holel the controlling stock, all of which has been done witli the: intent and purpose and has had the effect of discouraging and suppressing the establishment of independent packing establishments anil dwarfing the growth of such indepenelent packing companies which might then bo in existence, to enable said parent companies, their subsidiaries, or the individuals who own and control the parent companies and their subsidiaries, to obtain vast profits from the management of the stockyard anel the granting of the privileges appurtenant thereto, which profits are realized not only upon the live-stock purchased by the packers, but upon that purchased by their competitors, and have thus enabled them to enjoy and realize such profits without the same appearing or being disclosed in the profits of the parent companies ; and otherwise to further the attempt of said parent companies to monopolize the meat industry eif the country and artifioally control the ultimate price which the consumer pays for meat and meat products. To cure these evils, the decree about to be rendered perpetually enjoins all of the elefendants anel each of them, either as corporations or as individuals, from owning any capital stock or either interest, either directly or indirectly, in any public stockyard market, stockyard terminal railway, or market paper or journal ; and further provides that within ninety days such of the defendants as have interest in public stockyard markets, stockyarel terminal railways, or market papers or journals shall file in the Court where the elecree is entered, for the Court's approval, a plan for divesting themselves of such interest. It is to be helped that these: stockyarel companies will be acquired uneler the Court's order by either the producers of live-stock or by the public at large, who can impartially aeiininister them. Under an impartial administration most of the evils complained of in the live-stock business can be cured. The decree further provides for an injunction forbidding all unfair practices or combinations in reference to the control of meat or its prices, anel under this clause any of the defendants violating this injunction can be: summarily punished by the: Court. Therefore, such evils in the meat business as are not corrected by the public ownership of the stockyards, stockyarel railroaels, anel stockyarel newspapers can be readily corrected under the supervision of the Court. Fourth Alleged Evil —Cold-storaoe Warehouses. The colel-storage warehouses were in the beginning adopted as an instrument for enabling the parent companies to extend the, volume of their slaughter of live-stock and sale: of dressed meat. In the first instance they were useel for chilling meat in connection with the, packing business. Then they were constructed in connection with branch houses so that they might be usee! for storing and holding the finished meats until they were sold. Later, they were either built or loasoel in the large eastern seaboard cities for long-time storage and for storing for export. As will be more fully set forth hereafter in discussing the control of substitute foods, these storage warehouses were later employed to store non-meat fooel products. Later, control was acquired over public storage warehouses, where surplus space was leased or let to others. Later, control of these public storage warehouses was employed to aid in control of the prices of moat and substitute foods. Under this elecree, the defendants, and all of them, are perpetually enjoined anel restrained from owning, directly or indirectly, any capital stock or other interest whatsoever in any public cold-storage warehouse in the United States, except such as the different companies neeel for the storing of their own meat products, anil they are required to dispose of their present holdings in such warehouses uneler the direction of the Court. Fifth Alleged Evil—Substitutes for Meat. The investigation demonstrated that even with a practical monopoly of the supplies of meat in the country the price could not be controlled by the elefendants without the control of substitute foods ; that if meat prices advanceel out of proportion to those of other substitute fooels, the consuming public manifested a tendency tei turn to such substitutes. To prevent this it is charged that the elefendants sought to control the nation's supply of fish, vegetables, fresh or canned fruits, cereals, milk, poultry, eggs, cheese, and other substitute foods ordinarily handled by wholesale grocers or produce-dealers. To accomplish this purpose ttie elefendants availeel themselves of the advantages at hanel in the auto-trucks, route-cars, branch houses, and storage warehouses owned or controlled by them. These facilities, inteneled primarily for the sab of meats, were employed, with comparatively no increase of overhead, in the distribution of the substitute fooels and unrelatoel ceimmodities. The defendants were thereby enabled to reach remote spots. These attempts to monopolize have resulted in complete control in many of the substitute-food linos. They have mado substantial headway in others. The control was extensively and rapidly increasing. Now fields were gradually being invaeied. Yearly great numbers of competitors abandoned the oontest anil quit business or sold out to the parent corporations or their subsidiaries. Unless prevented by this decree, the elefendants would have, within the compass of a few years, controlled the quantity and price of practically every article of food founel on the American table. In the, fifteen years from 1904 to 1919, Swift and Co., Armour and Co., Wilson and Co. (Tne:.), and the Cudahy Packing Co., according to their financial reports, grew from a net worth of approximately $92,000,000 to a net worth of approximately $479,000,000, but in this same period they paid in cash dividends $105,000,000. Only $89,000,000 of their increased worth was represented in capital. Though always asserting a very low rate of profits on sales, the five parent companies havei grown so rapielly that their combineel net profit or 1919 has equalled nearly the: amount eif their total sales in 1904. The sales themselves in fifteen years have increased until, for the fiscal year 1918, they reached the vast sum of $3,200,000,000. This was realized from meats, substitute fooels, and unrelated linos, as hereinabove sot forth. In stating theso figures, account has been taken only of profits and sales to the parent companies and subsidiaries included by them upon their books. No account has been taken of the many corporations which are owned or controlled by tho same family or financial interests as own or control the parent companies. In addition to these profits, there have been either vast profits, difficult of ascertainment, realized by the individuals by virtue of either their personal control of other packing-houses and slaughtering companies or their interests in stockyards, terminal railroaels, rendering companies, cattle loan institutions and banks, and other corporations, all of which corporations have their inception and depenel for their prosperity upon advantages or privileges growing out eif the interlocking control of the stockyards and stockyard appurtenances. The parent companies, or the individual defendants anel their families, maintain and control 574 corporations or concerns, including 131 trade names. They have a significant minority stock interest in 95 others, and an interest of unknown extent in an adelitional 93. Thus the total number of concerns in which they have control or interest is some 762. Practically all of these companies, however, come under the jurisdiction of the Court through the naming of the above-mentioned defendants. In the years that have passed tho parent companies have acquired or organized many other concerns, anel have maintained them so long as they were useful for their purposes. When no longer useful theso concerns so acquired or organized have been dissolved, and their businesses have been merged into that of the parent Companies or into that of other subsidiaries. Such dissolved corporations and concerns are omitted in tho abovei compilation, except in such instance as the name has been e:ontinued as a trade name. The total of 762 above stateel therefore falls far short of representing the number of concerns that corporate anel individual elefendants have acquired or have organized in furtherance of their general scheme and plan of action already explained. It woulel be an enormous undertaking to determine' the degree of control exercised by tho defendants in all of these various interests. Enough lias been ascertained to indicate that the growth has been rapid, and that if permitted to continue unchecked in a matter of a few years the oontrol would be complete. In 1916 the business of Armour anel Co. in canned fish, vegetables, and sundries, canned and dried fruits, fruit preserves, and grape-juice amounteel to $6,396,036 , 73. In 1918, two years later, tho same company's volume of business in these same items was $39,820,000 —over sixfold increase. While part of this increase of business may bo attributed to the increase of population, and the consequent increase of consumption, the greater part thereof was acquired at the expense of competitors. Of the ceirporations which have been acquired by the parent companies in recent years, the large number are concerns manufacturing or selling these substitute foods or unrelatoel commodities. This fact, together with the increased activities of the parent organizations themselves in these lines, indicated a well-defined purpose on their part to secure control of the market for meat-substitute fooels. In addition to the companies in which control has been acquired by outright purchase, the parent companies have in a large number of instances contrae:ted for the exclusive output of many other companies engaged in the production