The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-12-21
BARES SCHEME
OF FPACKERSTO
CONTROL FOOD
Francis J. Heney Tells Of
$23,OOO.OOO Pool at Wash.
ingtOn Inquiry.
SCOPE WAS NATIONWIDE
Federal Trade Commission Is
Told Of Trusts Chi
cago Project.
SCOPE WAS NATIONWIDE


WASHINGTON. Dec. c0.--A tale Of high
finance that made members Of the Fed
eral Trade Commission scowl and grin
by turns was unfolded to-day at the
first days hearing Of the Investigation
Of the meat packers.
as an inquisitor. Letters and witnesses
told how n scheme had been engineered
by Frederick n. Prince Of Boston. who
said he was acting for Armour q Co..
led by the nte Richard Olney. e. v. r.
Thaycr, president Of the Chase National
Bank Of New York. and host Of astute
financiers to surrender control Of the
Chicago stock yards and railroad lines.
Mr.. Heney said he would provo that
tho packers control the Chicago stock
yards. dictate the buying and selling
prices OF meat in Americas markets and
are eager to extend their power of mo-
nopoly to other food products. His chief
witness tomorrow will be F. w. Croll,
treasurer Of Armour Co. and the
financial adviser Of J. Ogden Armour.
Mr. Honey said the packers controlled
every stockyard in the country but had
concealed the ownership by stock trans
fers. The method used by the Chicago
Stock Yards Company. ne said. was
share warrants. payable to bearer. de-
clared to be feature seldom seen In
American finance. Deman nds BY the COM
mission for the names OF the real own
ers evoked only evasive replies, II was
a,id.
Worked On Case Five Months.
The testimony and documents which
went into the record at to-day's hearing
laid the groundwork for the case which
Mr.. Heney and corps Of assistants
have been working on for I'VE months.
But % clearly defined apparently were
the majority Of the points scored by the
commissions agents that spectators at
the close OF the session ssriousiy dis
cussed possible criminal actions or other
Government moves which may follow the
complete presentation OF. the case.
For the most part the facts unsarthed
bysthe Federal agents will be substsn-
tlated BY documentary evidence. 1t ID
understood To-day's witnesses dSd little
but identity the documents as thoss
taken from their files or safety deposit
vaults. For the most part they suffered
from loss Of memory and In some In
stances contradicted testimony given q
few weeks ago before Federal agents.
Five witnesses were heard. Frank r.
Peyrap. treasurer Of the Chicago Stock
Yardy Company. which. II Is held. con.
trolls terminal railroad lines and 10 said
! to be controlled by the packers. said
he was merely dummy official Of the
company. that he always signed without
question any papers placed before him
by Mr.. Prince that he had never met
nor knew nothing about tho Johr
Dougherty. named as president Of tn
company. and that his only return from
the company was an annual salary oi
$500. The company is capitalized a
$1,000 900.
F. r. Hart, vice chairman OF the Ok
Colony Trust Company Of Boston. which
acted as agent for the Stock Yards Com
pany. could remember little until hi
memory was refreshed by letters ant
papers taken from thsDhles Of his -bs uk
w. NJ. Walden, formerly treasurer o
the Stock Yards Company, could give fev
facts not shown in the papers.
8. H. Fessenden Of F. g. Moseley 1
Co.. brokers. told of the part his hrn
played in persuading stockholders to ac
cept the statements OF Mr.. Prince. Hi
evidence was based largely upon letters
e. v. R Thayer. president OF tn
Chase National Bank of New York. en-
dured a perspirfng hour at the hand
of Mr.. Heney. He admitted having dis
cuseed the case yesterday with Bradie,
Palmer. attorney for Prince, and faile
to remember any concrete facts bearin
upon the deal by which the packer
bludgeoned stock from the hands Of in
vestors.
The story OF the moves for the con
troll Of Chicago's great market place. a
| revealed by the documents presented Z
the commission. had the high lights O
humor.
story Began Back In 1895.
The story began back In 1855, whom
Illinois corporation known as the Unio
Stock Yards and Transit Company va
organized, 1t entered the stock yard
and connected with about so per cen
! OF the railroad lines entering Chicax,
It's properly continues to carry pract
caliy in live stock and products shippe
into the Chicago stockyards.
In 1890 Prince. financed by q mes
|
large purchases In this country. forme
the Chicago Junction Railroad an
Union Stock Yards Company. II VI
organized under the laws Of New Jerse
: and is known In the hearing as II
!. New Jersey Corporation. This compan
! leased all property Of the Union stoc
Yards and Transit Company for mn
years, issued sS.5oo.ooo in preferrs
stock. es.600.000 In common stock ar
, 100000 in bonds. Prince and h
partner received 3i.So0,oo0 In stock {,
.. their pains. This company proceeded
buy up the stock Of the Onion stot
! Yards and Transit Company. thereby. II
surinE permanent control.
At this point the ChicaRo packe
awoke to the fact that II their industi
paved the way for . service company
, offer 43s.0oo.o0o In securities. the indu
. try could raise hob by threatsning
: move away from the property Of the -
!. vice company They organised Il
|. Toiisston Cooperation. gave Il son
1000 acres Of land near what 10 no
! Gary, Ind.. and prepared TO move the
. plants. TO show that they meant bua
. ness the Tollsston Corporation issu
4 %, 600, 900 worth Of bonds
The New Jersey corporation oaw not
1 -