The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1917-12-20
Company Was Organized
To Keep the Yards From
Leaving Chicago
PLAN ADOPTED TO
LEGALIZE REBATES
Federal Trade Commission
Trying To Discover
Real Ownership
(Rv Aasoniated Press.N


Washington, Dec. 20.-Sensationa'
disclosures of high finance" between
the Chicago packers and the stock
yard and terminal railroads there
and promises Of more to come fea-
tured today's session OF the federal
trade commissions investigation to
get at some of the innermost causes
of the high cost OF living.
Backed with an array of facts aIt1
figures gathered by trained inyestiga-
tors working under the new $250,000
fund recently appropriated by con-
gress. Francis ]. Heney, in charge
of the investigation of the committee,
began cracking one sensation after
the other.
Today's session had wholly to do
with a big operation in which a ST.
500 clerk was the medium of form
ing an $S,000,000 corporation which
took the risk of the Chicago stock
yards and terminal railways being
moved further west, and developed
testimony to show how the packers
in return, to use the language OF one
of the participants, got their share
of "the plunder" and took their
spickings".
J. Ogden Armour it was said. got
all the profits over per cent.
The point of the whole transaction
as brought out by today's testimony,
was that the packers were threaten
ing to move away from Chicago;
that a. corporation was formed to
take over the stock yards properties
and assume the risk of their beeom-
ing valueless and that as result
the enormous profits Of the yards
and terminal equipments was divid-
ed with the packers as an induce
ment to them to ceRtinue their busi-
ness in Chicago 40 bot move furth-
NFa spest. fS5 e
While today's testimony dealt only.
with that phase OF the packing indus-
try 1t was said the commission is In
possession OF facts which viii
broaden the investigation to show
whether there Is not gigantic
combination in practical control of
the country's food supply.
The inside story of how the big
transaction came about was laid
hare by the introduction as evidence
of letters passing between the organi-
zers of the holding corporation and
the stockholders Of the companies
which formerly controlled the yards
sand the railways.
With other sensational testimony
to show that the company was or
ganized to keep the plant from being
moved away, a letter from s. i'll.
Fessenden, a Boston broker. who as
sisted in the organization, was read
saying the proceeding was merely
10 legalize rebates to packers so
.4hey might have "a portion of the
plunder'' and might have their
'.pickings."
Efforts of the federal trade COM
mission to discover the real owner
ship Of the Chicago stockyards and
terminal railroads began with an in-
quiry into corporate relations be-
tween the Chicago Stockyards COM
pany, the Union Stockyards and
Transit company, and the Chicago
Junction railways. Frank R. Pegram,
treasurer of the Chicago Stockyards
company, and cashier for +. II.
Prince, of Boston, testified that he
held 1890 shares Of the Chicago
Gtoclxyards company as trustee but
that he had never had them in his
possession. The stock was held, he
said. subject to bearer warrants, but
that he did not know where these
warrants were, though he thought
most Of them were in the safe de-
posit boxes of Mr.. and Mrs. Prince.
where were the others?" asked
Frank ]. Heney, conducting the In
quiry.
"Out west" was the reply.
did he say out west or In Chi-
cago?" asked Mr. Heney.
Il think he said Chicago.
ibid he ever tell you that Armour
had them?"
Never" was the reply.
Certified minutes of the first meet
ing of the Chicago Stockyards COM |
pany on Sept. 27, 1911, were intro
duced to give details Of an agree
ment between Pegram and the COM
pany. The minutes recited that
Pegram had attained the assent or
the holders Of $4,000 shares Of the |
common stock of the Chicago Junc- |
tion railways and Union Stockyards
company to a plan formulated by a
committee headed by Richard Obey
as chairman.
tt was said the ''plan assured to
the Chicago Junction railways and |
Union Stoclxyards company the con-
tfnuance of the business now carried /
on by the packers upon q permanent i
basis and a great increase in profits
and the value of the shares Of /
stocks" Pegram was recorded as
having given the plan and assets and
81 100000 In cash to the company
for $4,000. 900 in common stock.
Pegram, who previously had testi-
fed that his salary was $1,000 a year,
testified that he knew nothing Of the
agreement as set forth in the min-