New-York tribune., 1917-12-21

packers Got Millions
In Rebates, Is Charge

move 20 Gary. Ind. the Junction Rail
ways Company gave Morris, Swift and
Armour. Mr. Hcncy said, St50,OO0 i'm
stock. besides other inducements. to
sign ffteeu-year contract. ENpira-
ton I'm 1906 led 90 resumption Of
negotiations between committees rep
rcseu.uC both sides. which had not
been concluded iu 1910. when test
case 20 decide whether or not the Ter
miral Railway was subject 20 the In
tcrstste Commerce Commission was
taken 20 the Commerce Court.
Mr. Hency said he would cndeavor
20 show that. anticipating am adverse
decision. Prince devised the scheme OF
forming the new stock yards company.
O. lecaliza the packers rebates and
hide their control OF the yards.
Paid 8 Per Cent. Regularly
Holders of the common stock Of the
Junction Railways were asked 20 sur
render their stock 20 the new company
ana receive therefor guarantee of
@ per cent dividends. or $-ou ln bonds
for each 500 in stock, the bonds bear
ing per cent interest and the return
being lo per cent
Up 10 that time the Junction Rail
ways Company had paid s per cent
regularly and had more shan S}.0O0.ooO
surplus ON "a common stock OF So
suv.u.p.
Asked If they considered The trans
fer fair. both Hart and Thayer said
they did, considering the likelihood of
loss which might be sustained II the
packers should move.
The original plan, according 20 Mr.
HonCy, was TO give S4,400,000 of the
stock yards company stock 20 Armour.
Swift and Morris. but the ownership of
this StOcS remains 10 be established.
Pegr2m said he was trustee FOR 1890
Of the 10000 shares Of stock. He never
got any dividends. however, and be
ieved that the majority Of the stock.
$4,000 shares. was held by Mr.. and Mrs.
Prince. Something more than $4,000
shares has been split up by him at
Princes order and was owned "out
West he believed I'M Chicago. Tracing
the ownership of this block of stock
viii be q task for subsequent hearings.
Control Of the Junction Railways
stock was not obtained without diff
Guilty. Many stockholders protested
that melon was 20 "a cut. Mr..
Heney announced to-day that he pro-
posed to show that the 100000 sur
plus was paid out in dividends after
the new company had gained control
of The old concern which accumulated
the money. He also declared the com
mission was I'M possession OF "A letter
from Prince 20 Armour suggesting that
when they had sufficient stock they
could obtain the remainder by de-
pressing the market through curtall-
ing functions earnings. All Of the
stock was obtained except three shares,
though the new CORPORATION had 10 pay
$4,000 for one block of fifty shares
and $500 a share for another small lot.
All earnings Of the New Jersey com,
pany over the guaranteed dividend
now 90 20 the Chicago Stock Yards
Company.
The Kansas City stockyardS was the
only other cattle market brought into
the testimony to-day. Mr.. Thayer, who
is president of the Kansas City Stock
yards Company, said he owned less
than 100 shares of stock. but appeared
as the owner Of more than G.2OO shares,
which he had indorsed 10 Morris & Co.
Says Packers Control All Yards
Mr. Heney said the packers con-
trolled every stockyard in the country,
but had concealed the ownership by
stock transfers. The method used by
the Chicago Stockyards Company, he
said. was share warrants, payable TO
bearer. declared 10 be a unique feat
ure. seldom seen in American finance.
Demands by the commission for the
names of the real owners evoked only
evasive replies, it was said.
The Commissions investigation is
being conducted under authority OF the
President and by means Of an apprC-
priation OF S25O.O0O. which was voted
after efforts had been blocked for a
Congre ssioual Investigation. Cattle
mems associations have alleged that the
packers dominate the market to such an
extent that the cyontrol the purchase
prices Of livestock and the prices at
which they sell. resulting in continu-
Gus "gouge" Of the producer and the
consumer.