New-York tribune., 1917-12-22
Packer Named in Inquiry
Showing How Stocks
Were Juggled
Swift & Co. Refuse
To Give Up Records
Names of Other Beef
Barons in Big Transac-
tions Not Brought Out

WASHINGTON, Dec. 21 }. Ogden
Armour was named at the Federal
Trade Commissions meat investigation
to-day as the packer who aided F. II.
Prince. Of Boston, to obtain control Of
the Chicago Junction Railways and
Union Stock Yards Company, and turn
It over to the Chicago Stock Yards
Company, organized and controlled by
themselves.
Records we're introduced 10 show
that after :he reorganization the stock
yards company, without assets or busi-
ness other than controlling the older
corporation, was able to "cut melon"
Of more than 100000 out of the
Junction Railways surplus and to de-
clare quarterly dividends of 2l2 per
cent on their $8,OOO,0OO capitalization
after the small investors in the june
tion Railways had been given their
guaranteed 9 per cent per annum.
Swift & Co., of Chicago, have re-
fused TO deliver to the Federal Trade
Commission records desired by the
commission in its investigation of the
packing industry, and drastic action
will be taken in court to force their
production, Francis j. Heney an
nounced to-day at the resumption of
the commissions inquiry.
Armour Linked with Deal
Testimony Of W. VI. Walden, former
treasurer Of the stock yards COM
pany, and Frederick W. Croll, treas
urer of Armour & Co., established Mr..
Armour's connection with the deal.
Efforts to prove that other big packers
were interested in the company met
with little success. Non-committal re-
plies were given by the witnesses TO
questions as to what was meant By
"the packers" and "the other Chicago
people" in correspondence concerning
the organization Of the Chicago Stock
Yards Company.
Francis j. Heney, special counsel,
will pursue the matter further in other
sessions of the inquiry and also will
seek to develop the extent of the pack
ers' control Of the marketing of cattle
and the distribution of meat products.
Some idea of the ramifcations of the
inquiry was given to-day in brief ques-
tions concerning ownership Of the yards
at Kansas City and St. Paul. Croll
testified that neither j. Ogden Armour
nor Armour & Co.. of which j. Ogden
Armour owns 10 per cent, had any in
terest in the Kansas City yards.
"Did any of the big packers have
plant at St. Paul before Armour q Co.
began building their plant there y
asked Heney.
"Yes, Swift & Co.." replied Croll.
Bonus More Than 100000
"Did Armour & Co. receive a bonus
for going there?"
"A citizens committee agreed 10 do
something, but | do not know what they
have done nor what the total amount
was TO be-"
"Was it as much as s5OO,OOO?"
81 cannot say"
"Was it more than 100000
81 venture to say il was
In organizing the Chicago Stock
Yards Company J. Ogden Armour be-
came the pOssessor of 1920 shares, ac-
cording 10 testimony, but, like all other
shareholders, his identity was con-
cealed through the use Of share war
rants, payable to bearer. Croll said
Armour now had turned in his stock to
Armour & Co. in order that the eight
other stockholders of that concern, all
of them members OF the Armour fam
lily, might benefit. Ownership of the
stock, however, is Jumped with other
assets.
Details of the methods used by Ar
mour and Prince in obtaining control
of the Junction Railways Company, a
necessary preliminary to the forma-
tiOn of the new concern, were brought
out in letters obtained by the commits
son's Investigators.
Letter Reveals Scheme
In lettqr to Armour Prince wrote:
II propose to have the guarantee
stock listed on the stock exchanges and
the present stock will be stricken from
the list We shall do our best then to
depreciate the value of the outstanding
stock so as to get the small holders 20
come in. Then during the next two or
three months our Office will busy itself
with getting the outstanding stock in,
which in time we should get down TO
minimum. As soon as We have all the
stock in. ard it seems advisable, we
can declare the surplus by dividend
on the old stock"
Armour & Prince. according to the
letters, put up the 100000 which ap-
peared in the records as having been
paid by Frank X. Pegram, bookkeeper
and cashier for Prince. Armour's share
was $4,000, which entitled him TO 1914
per cent of the new stock, he and
Prince having divided the obligation on
a pro rata basis of their ownership of
Junction stock. Later, however. the
money was loaned back to them. Wad-
den insisted that he obtained ample
security for all loans mado while he
was treasurer.
Since the organization. il was shown,
the Chicago Stock Yards Company, con-
trolling the properties belonging 70
the Chicago Junction Railways and
Union Stock Yards Company, has made
enough money 10 pay the Junction
stockholders their 9 Jer cent and the
stockholders in the new concern 10
per cent. Distribution OF Chicago
Stock Yards dividends has been effect
ed By having clerks and bookkeepers
entered on the records as drawing
quarterly checks Of 1880, 200 and
S25,000 cash. These were indorsed IN
blank and deposited in Boston banks
20 90 20 the holders Of share warrants.
Four times a year check for approxi-
mately S3s,O00 was drawn pay to the
order of New York check" which. ac-
cording 70 tho correspondence, Croil
received for Armour.
Prince, Croll and Walden referred
several times in correspondence 20 "the
L.,