THE TRUTH ABOUT AMERICAN MEAT TRUST.

Taranaki Daily News, 17 August 1920, Page 7

THE TRUTH ABOUT AMERICAN MEAT TRUST.

A PLAIN TALK ADDRESSED TO NEW ZEALAND FARMERS. (Article a.) (This is the second of a series of four articles, of which No. 1 appeared yesterday. Read yesterday's article. J . PACKERS'PROFITS. The Regulations of the United States Government prescribed that Packers' Profits must be limited" to 2.5 per cent. on turnover and 9 per cent, per annum on the capital invested in meat producing lines. ~ Armour, and Co., so far from earning the maximum profits prescribed by the Government Regulations, were able to earn only, a small proportion of the amount per cent, allowed on turnover, and only a littles over one-half of the authorised return on invested, capital. The books of Armour and Co., inspected and audited by officers of .the Food Administration, show that the Firm's profits in 1918 were 1.8 per cent, on the total turnover of the year and 5.8 per cent, on invested capital. But 1918, it will 'be said, was an exceptional year. True, the whole period of War was exceptional. We will take an average then over 20 years, starting with the beginning of the century.

OVER THAT PERIOD THE PROFITS OF ARMOUR & CO. HAVE BEEN 3 j PER CENT. ON TURNOVER AND 8 PER CENT. ON CAPITAL! Absolutely their profits were great because the turnover is enormous. But relatively—can anyone suggest such profits are excessive? We ask New Zealand Farmers to compare them with the profits, as revealed by balance sheets, of other Meat Companies doing business in this Dominion. Armour and Co. are not philanthro[pists; they are in the business for proI fits. If they were not content with the ! profits they are making they would go out. It is the "Bigness" of their business that makes it worth while. But there is nothing "baneful" or noxious or detrimental to .the economic interests of the cotnjmunity in a huge distributing concern which charges, relatively, so little for its services to the public.

Armour and C'o.'s turnover in 1918 amounted to the unprecedented figure or £170,000,000. On this they earned a profit of 4d in the £. Is this an excessive price for services rendered to the public in connection with the beast, whether steer, sheep or hog, in its eventful career from the auctioneer's stockyard to the retailer's counter?

I But whether it be deemed excessive or not, it is impossible to reconcile these ifacts, verified by the Inspectors . and Auditors of the United States Governiment, with a suggestion that there is a Trust or Combine or conspiracy in the Meat Trade.

IP !THE CHARGE WERE TRUE IN THE REMOTEST DEGREE THAT "THE BIG FIVE" OR ANY OP THEM ARE ABLE TO DICTATE TO THE FARMER THE PRICE HE SHALL GET FOR HIS STEER, HIS SHEEP, AND HIS HOG, OR TO THE RETAIL BUTCHER THE PRICE HE SHALL CHARGE FOR HIS BEEF, HIS MUTTON, AND HIS BACON, THE ENORMOUS ADVANTAGE OF SUCH A POSITION WOULD INEVITABLY BE REFLECTED IN AN ENORMOUS RATE OF PROFIT. THE FEDERAL TRADE COMMISSION'S REPORT. The statement we have quoted and the facts and figures we have cited in support of our contention ought, in ordinary circumstances, to he convincing, without more. And if they were addressed to people unbiassed hy previous argument on the subject, unprejudiced by prior misstatements, we should be disposed .to leave it here.

But tie people of New Zealand, we fear, are not unbiassed and unprejudiced on this subject. Many of the New Zealand Farmers and Meat Producers to whom our arguments are addressed have already prejudged the matter an ex parte information placed in their hands. Not only have the propaganda of interested middlemen, the fustian of stump orators and the distorted "facts" of halfinformed Politicians been poured into their ears for many years past, but the Government of New Zealand has published and circulated broadcast a pamphlet entitled "Summary of the Report of the Federal Trade Commission of the United States of America on the Meat Packing Industry." This pamphlet is issued with the imprint "Wellington, by Authority. Marcus Marks, Government Printer.'' Naturally, therefore, it carries weight: not only the weight of the authority of the New Zealand Government, but, apparently, the weight of a special commission set up to investigate the conduct of the Meat Packers' Business by the Government of their own country—the United States. i We cannot blame the farmer of New Zealand, therefore, if, after reading the | "Summary," he is bussed and prejudiced, and if on the strength of information supplied to him with such appearance of authority, he has already formed deeply rooted convictions which are difficult to shake. But shake them we shall before we have done, at any rate in the minds of every reader who is not too obtuse to perceive the logic of facts, or too bigoted to be open to considerations of justice. For this report of the Federal Commission is the report of a body of men, called on to exei'cise judicial functions whose idea of justice was to .try the issue, come to a decision, and pronounce judgment without hearing or permitting to be heard one tittle of evidence for tlie defence.

Such a statement of the position must sound incredible in British ears; yet it is I the -plain truth. For over a year the Commission "investigated." It had a free hand, access to the offices of the Meat Packers, and opportunities for inspecting their hooks and correspondence. It called only witnesses of its own selection, and selected only men who might [be expected to have a grievance against the Packers. Under British and American law it is a rudimentary principle, never questioned, that the humblest criminal has the right to be present at his own trial, to cross-examine the witnesses called against him, and to call all relevant evidence in his own favor. He is presumed innocent till proved guilty, he has the light to receive, and happily ha usually

does receive, an impartial and unbiassed hearing.

But the Federal Trade Commission was not a judicial Tribunal, and it did not act on elementary principles of justice, either American or British. It was a political board, nothing more; a Bench, not of Judges, but of Partisans. Instead of being an impartial Committee of Investigation, it constituted itself a prosecutor. •

In substantiation of the above, we quote statements of Mr. William Colver, Chairman of the Federal Trade Commission, made by him subsequent to the issue of the report, before the Committee on Inter-State and Foreign Commerce of the House of Representatives, and found on pages 18 and 19 of the hearings, as printed in the Government Printing Office: Mr. Colver: "I mean I do not want this record to appear that I am trying to avoid the question that these gentlemen were not permitted to call witnesses nor to examine the witnesses who were called. ffHAT IS A FACT. They were aot allowed to do that." Mr. DeWalt (Member of Congress): "Then we have the definite statement by you, as I understand it, that these five concerns, concerning which complaint is made did not have the opportunity to call witnesses on their behalf, nor did they have the opportunity to cross-examine the witnesses that were heard before you?" Mr. Colver: "That is an exact statement."

Tliroughout the so-called investigation, of the Commission the Packers never once allowed to state their case. Some general questions were addressed to them at the outset of the inquiry, and these were duly answered, but not one of the heads of the big Packing Firms, not one of the members of the alleged "Trust" or any person representing them, was ever summoned or permitted to give evidence. It was not that the Packers omitted or neglected any opportunity of putting their case before the Commission. They were simply refused a hearing.

The witnesses called to give evidence against them were uncontradicted. They were not cross-examined, the Paolcers were flatly denied all chance to crossexamine them, to challenge alleged statements of fact, or to correct mistaken inferences or misunderstandings. From first to last it was clear the Commission was there, not to try, but to sentence the Packers. And this Bench of party politicians stopped at nothing. They flagrantly violated every principle of ordinary judicial procedure and fair dealing in their inflexible determination to condemn the Packers-'-guilty or no. The Report presented by such a tribunal is only what might be anticipated. And this is the Report, a "Summary" of which the Government of New Zealand has, unfortunately, doubtless in ignorance, published "By Authority." It is about as fair as would be the conduct of a newspaper which should publish a verbatim report of the whole of the evidence for the prosecution in a criminal trial and then "shut down" without printing a line of evidence for the defence, or a single sentence of counsel's address for the prisoner.

THE FARRAGO OF DISTORTIONS WHICH CONSTITUTES iTHIS REPORT HAS BEEN FULLY ANSWERED IN THE UNITED STATES. As already noted, on January 21st, 1010—six months after the publication of the report—Mr. J. Ogden Armour had the opportunity, of which he fully availed himself, of answering the report in the evidence he gave before "The Committee on Interstate and Foreign Commerce" of the House of Representatives. More recently, before "The Senate Committee on Agriculture and Forestry" (August 18th to September 3rd, 1B19) the Packers have put their case before Congress and the public, We hope our readers 1 are now fully satisfied this notorious "Report," which has worked so much injustice, is the report of a "trial" at which the prosecution alone was heard, at which the Judges themselves acted as prosebuting 'counsel, and in which the "accused" were not allowed to open their mouths. Such a proceeding is so utterly repugnant to British as well as to American notions of justice that we do not intend to dwell upon it further.

We quote in conclusion, however, *Mr. J. Ogden -Armour's own comment upon the Report. "The Report that was ultimately presented was precisely the sort of document one would expect. . .It is entitled to even less credit than would be a report on the British Coal Industry compounded by the miners' representatives after they had agreed among themselves that no testimony on behalf of or in favor of the coalowners was to be permitted to prejudice their minds. The gentlemen who represented the Federal Trade Commission knew nothing about the packing industry, were almost fantastically ignorant of the problems and operations of modern business and had no reputation of any kind to lose. Their Report is simply a tissue of sensational statements written in the vilest style of yellow journalism, and concocted oUr of hearsay and uncorroborated gossip, letters torn from their context, and infantile assumptions, suppressions, and misinterpretations that would have been impossible to men searching for the truth. Happily, we Packers have at last an opportunity in the Law Courts of bringing this farrago of distortion and prejudice to the cold test of facts."

("Sperling's Journal," Oct., 1919, p. 43.) "BIG" BUSINESS. "But," we bean our readers say, "even if you have proved to our satisfaction that the Big Five compete against each other and are not a conspiracy in restraint of trade, is not each of the Big Five in itself, apart from combination with the others, so big as to be in itself a menace?"' " This implies a not unnatural confusion of ideas. It does not matter to the community how "Big" a business is, provided there are others as big to compete against it. _ But the word ''Trust" is loosely used, as though one Big Business dould in itself constitute an evil. And the very word "Trust." has in itself a bad taste in the mouths of Farmers. We now address ourselves, therefore, to this question of BIG BUSINESS, and we setout, as promised, in an earlier paragraph, to deal with this aspect of the question, and to demonstrate, we hope, convincingly:— That BIG BUSINESS is in itself a benefit to producer, to consumer, and to the whole community. That BIG BUSINESS in foodstuffs especially is a necessary and natural outcome of modem conditions, that it renders an inestimable service to the [public, and that, above all, it I-ENS FOOD.

Mr. W. R. Sinclair, of Kingan and Company, of Indianapolis, a Britishowned concern, which did a business of 63,000,000 dollars in 1918, gave somq evidence before the Committee of the House of Representatives, has a bearing on the question of domination. Mr. Sinclair said:"We have never had any difficulty in buying what stock we wanted on any market, providing the price was right, and we were willing to pay it." He was also questioned as to the methods of competition of the five big packers: Q.: "You are regarded as what is known as an independent Corporation, your Packing Houses?" A.: "Yes Sir."

Q.: "As such, do you feel in the conduct of your business any pressure of what you would call an undesirable or illegitimate character from any combination of Packers or any Packer in this country?" A.: "We do not." Q.: "You are quite willing to paddle your own canoe, and are glad to do it?" A.: "We are." That the citizens of the great State of Minnesota had no fear of domination by the Armour organisation is evidenced in the following:—The City of St. Paul, Minnesota, had stock yards and large packing plants, but were so desirous of having Armour and Company establish a plant that they offered it 800,000 dollars in cash and a further 50,0,000 dollars in securities if it would erect a first-class plant within its limits. As a result of this offer, Armour and Company, within the next few months, began the operation of a new plant, recently completed, at St. Paul. And at the outset of this branch of our argument we call to our aid the words of that precious "Trade Commission Report," the "Summary" of which "Published by Authority" has so impressed and prejudiced the mkids of our readers.

In the course of the Report the Commissioners say:— • "THE COMMISSIONER HAS NO OBJECTION TO MERE SIZE OF AN INDUSTRY, BUT WHEN A BIG CO.NCERN RAMIFIES INTO OTHER FIELDS TO THE DETRIMENT OF LEGITIMATE BUSINESS, IT IS TIME TO CALL A HALT." In these words the Commission lets the cat out of the bag. The Commission was set up, not at the instance of stock-breeders in America, nor yet at the instance of Consumers, but at the instigation of Rival Middlemen who thought the Big Five were poaching on their preserves—"queering their pitch"; and interfering with their free hand in despoiling the consumer.

Especially was the Commission called into existence and inspired by American mercantile firms and department stores, who resented the invasion of their "legitimate business" when Armours and others, who ought to have been butchers, began to supply the markets with an infinite variety of By-products, from Potash to Perfume, from Fertiliser to Fiddle-strings, from ShoMeatfter to Sausage-casings. Most significant is this naive admission by Mr. Colver, the Chief Commissioner, that lie disclaims, opposition to "the mere size of an industry," that he had no quarrel with the Packers because they were successful or highly efficient—but that his only ground of objection was that they "ramified"—in other words, trod on the toes of their commercial rivals!

Once our readers get behind the scenes and understand the true inwardness of Mr. Colver's admission, we have nothing further to fear from any influence the Report may have left. We remind our readers of the saying:— "THE GREATEST BENEFACTOR IS HE THAT CAN MAKE \TWO BLADES OF GRASS GROW WHERE ONE GREW BEFORE." We amplify it witli another— AS GREAT A BENEFACTOR IS HE THAT CAN MAKE ONE MIDDLEMAN DO WHERE TWO DID BEFORE! And that statement is a complete justification for Big -Business. ARMOUR & CO. IS "BIG." We do not deny that; on the contrary, that is the pride and glory of the House. The House was founded in 1863 by Mr Philip D. Armour. To-day Mr. J. Ogden Armour, Philip D. Armour's son; is President of a firm which employs 82,000 hands, has sixteen killing plants and 400 branch houses. In the face of these figures it would be idle to deny that Armour and Co. spells "Big Business." But its Bigness is the result of natural evolution, combined, we venture to say, with indomitable energy, scientific method, and the very highest standard 9>f efficiency.