The nonpartisan leader. [volume], September 16, 1918, Image 9

About The nonpartisan leader. [volume] (Fargo, N.D.) 1915-1921

Image provided by: State Historical Society of North Dakota

                
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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
at on is it
unanimously reported that
there was an agreement be
tween the then leading packers, namely, Armour
& Co., Swift & Cd., Nelson Morris & Co., Hammond
& Co., to refrain fyom 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 was 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. H.
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
certain'important evidence de
veloped in the present inves
tigation, to note that the rent
for these rooms and other ex
penses connected with these
.meetings were apportioned
among the packers in propor
tion to their shipments of
dressed beef.
3?
A
SECRETLY BOUGHT UP
LITTLE COMPETITORS
A E S E E E IN S
THE TERRITORY WAS DI
VIDED AND THE VOLUME
OP BUSINESS TO BE DONE
BY EACH PACKER WAS
A O I O N E
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
what
waB
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
wMTd & Sulzberger took the place of the East St.
Louiff Dressed Beef & Provision company, which
& had been absorbed by Morris & Co. the penalties
ft for overshipment were increased, and auditors were
siI" employed to verify the statements of the packers,
This pool terminated early in 1^02, probably as a
result of the investigation then being made by the
department of justice. In May, 1902, the depart­
HAT will congress do about, the report of the federal trade
fJM commission? Nothing, unless the people demand action in a
Ll mM loud voice. The president's investigators have decided that
kTiW the advantage of the Big Five "is obtained through a monopo
listic control of the market places and the means of trans
portation and distribution.? That is what the National Non
partisan league has always said. The kept press is trying tp keep this re-.
mmm
mm
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
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
.lationpf 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
•••••••.•the big packers. In the words of the federal trade commission, "The price -v
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 uiiform 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 effect 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,
which exposure had made hazardous. But how
little the big packers respected .the courts of the
ndtion and feared its'.law is revealed by the fact,
PAGE NINE
which has since come to light, that almost coinci
dent with 4he 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 ftbnd 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 f&rmed. 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 ^heir joint
interests, and no further com
munication was necessary. This
simple and highly effective
1 plan for interchanging infor
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, 19121 The dissolution
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.
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
port from the people. You don't see any .dismission of the trade commis
sion's report in the big city papers. If you want the program of the League
awJ the-federal-trade commission carried out—if you want the government
to acquire all cattle and meat cars, the stockyards, the cold storage plants
wnH branch houses—write your congressman. Let's start a backfire that will
bring some action as a result of this investigation! Watch for another sec
tion of the trade commission's report in the next edition of the Leader.
•M
ffl.
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