The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-02-19

months ago, In order to establish the
real position OF Hoover and the 1000
administration on the control OF inc
lChicago packing Industries. In TINS
report Mr.. Hoover again reiterated MS
former 2dvice OF the national danger
from this growing domination of the
nations food. and strongl, recon-
Imended constructive legislation at the
hands Of congress, rather than the
doubtful stretch of temporary war
powers OF the government as being
the only method by which perma~
uent solution can be obtained.l
BY HERBERT HOOVER
September ii. 1913.
Dear Mr.. President;
/ In response TO your request, BEG
to set out my observations on the rec
concentrations of the federal trade
Econ1inM sion with regard to tho five
! large packing firms
J a~celv need repeat the views that
/ | expressed to you nearly year ago,
that there IS here IA growing and dan
gerous domination Of tho handling or
The nations foodstuffs.
! I DO not fee that appreciation OF
this domination Of necessity implies
| ~rougdoing on the part of the pro-
prietors, but Is the natural outGrowth
Of various n ctors which need correc-
luon. In an objective understanding
1T this stu ton It Is necessary TO re-
view the underlying economics of It's
growth.
AZ orc TIM cur food animals were
wholly slaughtered and distributed
locally, The ingenious turning to
account ~ the y-prcducts from
ielaurhterirg when dealt with on n
large scale gave the foundation FOR
consolidation Of elaurhtering IN tho
larger ceatcrs. From this grew the
necessity for special cars for 1.-Two stock
transport and the large stockyards at
terminals. The creation Of those ia
cilitics were largely stimulated and to
4 considerable extent owned by the
packers Added 10 this was the ap-
tplfcation Of refrigeration processes
for the praeervation p meat, which
a. once ext nied the period OF rreser-
> vatior and the radius of distribution
r from the slaughter nters. enabled
larger slAughtcrtng nearer the great
Western producing area and further
contributed to the Capitalization OF
The industry.
. This enlarged Gcopc particularly
. The refrigeratiou operations. require
not only The expensive urinary equip
mpnt, hut a network OF refrigerator
cars, icing stations and cold storage
=, al distribution points. This ercc !al
| ture 10 the Pullman service: it must
travt rse ~ailroad lines irdep" ndent
81 ownership. and, moreover, 1t Is sea
eonal ana Vari g regionallY in differ
/ lent seasons. Fer each railway &c
have foreaeeu and " have provided
Y Sufficient Of this highly specialized
= equipment Is asking the impossible
and, In any event. no particular rail
q way could he expected to pr3vide suf
o ficient Of those cars to answer The
shifting Ut seasonal aud regional de
u mards outside its own lines,
= Thus, the provision If iarre part
of TIE stock yards and car services
Il has naturally fallen in considerable
y degree 30 the larger and more wealthy
packers. who have used their ndvan-
81 tiges as in effect a special and largely
- exclusive railway privilege with whrct
TO b. a u their own business
Q From the stage of esta biishmeUt Of
8 a multiplicity of marketing facilities
- such ds cola storage, warehouses;
!; hr2ncN Offices, etc, grew direct deal.
= inFa with retail dealers, and 6naii,
- resulted in large elimination of the
i Wholesale traders.
privilege, the numerous branch cs
a Establishments. the elimination o
=. wholesale INTERN rdiarios ana will
4" larger banking alliances his grouI
j. have found themselves In position no
tonly to dominate the distr button o
3 interstate animal products but 10 sue
h cessfuiiy invade many other lines O
food and other commodity prepare
d ton and distribution Their excel
Ia lence OF organization, the landing n
their brands, and control IF facilitie
now threaten even further inroa6
against independent manufactures
and wholesalers of other food pro
| ducts. They now vend scores of dit
terent articles md this CONSTANT
i increasing list now pproaGia - q dom
.in2tng proportion Of the interstat
business in several different food line;
J. Question Of Competition.
1t Is a matter of great co0tCrtiu
,r as to whether these five Arms com
pete amongst them selves, and n" ret
II ords OF our courts and public nodie
are monuments TO this contention
Entirely aside from any question q
:. cons piracy to eliminate com etitio
ID amongst Themselves and against out
= sidere. 1t appears to me that thea
five firms, closely paral,eline cac
Is sother's business aa they DO, with thei
vide knowledge Of business condition
, IN every section. must ut least fouo'
cotncident lines OF action aud mus
y naturally refraSr from persisten
sharp, competitive action toward
n such com pet ion TO considerable OK
tent. Their hold on the meat an
% many other trades has become e
large through the vast equipment O
d lughter houses, cars and dis rthu
funS branches. and banking alliance
y which each of the FIVE controls. tina
"a IT Is practically ineenc@ipabie siia
any new firms can rise to their class
,, and tn any event even shaTp competi
J., ton between the few can only tend I
reduce the number OF five and no
g increase il.
or equal public importance is tn
fact that their strategic advantage Il
-, mark citing equipment, capital and or
eanizGtion must tend to further In
| crease the area Of their invasion int
| trades outside OF animal products
- Furthermore AS these few firms ar
IS the final reservoir for all classes O
animals. when the few yards wher
they buy become erraticaliy oversup
n piled with more animals than thei
=. absolute requirements, It remains i
- their hands to fuctuate prices b
ir mere refusal to buy. and not necee
sarily by any conspiracy
In other words, the narrow numbe
ly of buyers undoubtedly produces a