Perth Amboy evening news., 1923-03-14
PROBLEMS FOR THE MEAT
PACKERS DEFINED
Daily Letter by Frederic j. HaskiD

With each succeeding iScreaIe in
freight rates. the price of Chicago
meat at distant points had to in
crease correspondinGly. The pack
ers got no more; the additional
cost went to the rairoad. This de-
velopment encouraged persons in
points distant from Chicago to en-
ter the meat packing business. Each
increase in freight rates has mar
rowed the radius in which the pack
ers could undersell a local butcher
who did not have to pay toll to the
railroads.
More Independents Today
The result of this development
has been that whereas ten years ago
there were only about a dozen
struggling independent packers out
side the big Ave. today there are $50
| such packers. They are giving the
| big five at Chicago real confpetitiGn
and constantly are restricting their
sales territory. Feeling this compe-
tition. the packers have reasoned
that the only way they can meet
it is to consolidate their interests
further. 1t is we'll cognized fact
that great centralized organization
can effect economies. 1t cuts out
duplicate staffs of higher officers
: and directors and other applications
1t handles products in such vast
quantities that it effects savings
not possible to the small man.
Therefore, this tendency toward
consolidation which has just been
checked by the government repre-
| sents the last stand of the big
packers against the independents.
1t is recognized by the govern
|
| a service to the nation. The indie
| pendents go into the market and
| buy from day to day to fill their
| orders. At the end of every week
| there develops in the livestock mar-
! ket either a shortage or a surplus.
| The big packers are the ones who
| must bear the brunt of these phe-
nomena- If there is a shortage, the
| big packers lack supplies; If there
| is a surplus the big packers must
absorb it. Thus it becomes their
| province to handle the reserve meat
/ supply of the nation. Not infre-
quently it happens that they take a
heavy surplus off the hands of the
livestock growers over a series OF
weeks and then the price drops
The big packers suffer an inventory
loss of millions. Such risks are moi
| run Dy Cll0 Independents
| 1t is claimed that the price u
livestock would be much steadier Il
the packing industry were more
centralized and controlled. This
| would be an advantage to the far
mer and livestock grower. provided
the combination did not, by its
dominant position. depress the mar
ket to an unremunerative level.
On the other hand. it is claimed
that for the packing business to II
broken up into a Thousand or NOR
small units would result in suci
sharp competition that meat price
would be low to the public and live
stock prices high to the livestocl
grower. The Implications and eS
penses of operating a thousand ser
arate companies would be offset b
the sharp competition. in the opin
ion of some observers, and there
would be no danger Of a siniste,
combination in restraint of trade.
At present the big five do 65 pc
cent of the nation's meat busines
and the Independents do IS pei
cent. 1t is estimated that al
amount about equal to that dor
by the independents is represented
by killing of animals on farms b.
their owners. These slaughtering
do not enter into the commercial
situation very much.
: In such a situation It seems ap
parent that the existing status c
the industry cannot long endure an
that there must be change
: either in one direction or the Other
: The governments decision which
, probably will be handed dow
some time in April will point tn