ADDITIONAL STATEMENT OF SAMUEL G. JACQUES

Mr. JACQUES. Mr. Chairman, there is some information that I want to give the committee.

Dr. Kebler was asked about the price of buttermilk, and he did not know what it sold for. Buttermilk is hog feed, you know, and sells at Frederick at 2 cents a gallon, although it retails here in Washington for 14 cents a quart. You know the People's Drug Store puts on a sale of buttermilk every summer, and they advertise you can have all the buttermilk you can drink for a nickel, and you can drink a gallon, and yet it is retailed at 14 cents a quart, and there is not 14 cents of food value in any milk.

Mr. SCHULTE. And how much do you say it sells for at Frederick? Mr. JACQUES. Two cents a gallon.

Mr. SCHULTE. Two cents, and 14 cents here?

Mr. JACQUES. Wait until the weather gets a little hotter, and then the People's Drug Store will put on a sale and give you all the buttermilk you can drink for 5 cents. Whether you get it from Chevy Chase or Chestnut Farms, it comes from Frederick.

It was brought out in the testimony about 3 or 4 years ago, when they had this same thing up, how there was a director interested in the milk producers who testified that he got $35,000 as a salary. Mr. SCHULTE. Was he a director, general manager, or executive officer?

Mr. JACQUES. It was brought out at the hearing at that time, and it is all in the Congressional Record. My recollection is that he was a director.

Mr. SCHULTE. Do you believe that if this barrier, as renewed that is around this city, and which evidently exists around other cities, too, is removed, that the consumer would get cheaper milk, which would permit milk to come here from everywhere? Do you believe the consumers of Washington would get cheaper milk?

Mr. JACQUES. I do not see any reason why they would not; they would get the competition.

Mr. GROSS. Are you sure you would get competition?

Mr. JACQUES. I do not see why you would not.

Mr. GROSS. Do you not realize that the consumer would get his milk from the same dealers he is getting it from now?

Mr. JACQUES. Well, if the District of Columbia Health Department would not license anybody else

Mr. GROSS. If they did, do you realize that if another firm wanted to come in they would have to build up their trade and take away business from the established dealers and that they could only do it by either cutting the rate, underselling the present distributors, or putting out a higher quality milk, and that milk would flow to the consumer through the same channels through which it now flows? Mr. JACQUES. If there was no change made in the regulations.

Mr. GROSS. What sort of a regulation would you suggest to give the people cheaper milk?

Mr. JACQUES. Well, the only thing I can say, as I mentioned before, is to declare milk a public utility and fix the price. I do not believe the situation will change much until you make it a public utility. Mr. GROSS. The charge is that there is a monopoly existing here.

On whose part does that monopoly exist, the dealers or the producers out in the country?

Mr. JACQUES. Oh, the producers are not getting anything out of it; they do not have a monopoly. They have to meet the stringent health regulations. For instance, an inspector will come along and make them spend anywhere from $1,000 to $1,500 to meet some sort of a regulation. Then that is no more than done when an inspector will come along and say you have got to comply with this or that. or some other thing, and the farmer has to do it. He cannot profit in any way; there is no way that he can profit.

Mr. GROSS. You are not holding yourself down to the question I asked you. Have you any evidence or do you believe that you can get cheaper milk if this barrier is removed?

Mr. SCHULTE. If this barrier is removed one dairy is ready to start tomorrow morning with 12-cent milk, Fairfax Farms. It has been developed in this committee that that particular dairy was refused milk unless they took 100 percent milk from the particular organi

zation.

Mr. GROSS. Probably that is correct.

Mr. SCHULTE. That is right.

Mr. GROSS. But if that condition came about the farmers living near by would lose a lot.

Mr. JACQUES. More than likely; he gets it in the neck all the time. Mr. GROSS. I do not know whether we have any sound basis for this kind of a proposition, but I think we ought to put the blame for the existing conditions on the milk-chiseling dealers, and we ought not establish something that will bankrupt the farmers who are the local producers.

Mr. JACQUES. I am with you there.

Mr. SCHULTE. May I say to my friend, Congressman Gross, that the same thing is occurring in Chicago, and in that city it resulted in 97 indictments being filed, including in the number the health officers. The indictments were brought against 97 people, who are charged with conspiracy in restraint of trade, and it involved both the producer and the distributors to hold up price.

Mr. JACQUES. Congress appropriated $150,000 several years ago and employed a lawyer from Knoxville or Chatanooga, Tenn., and they conducted hearing on this milk situation, and the report is embodied in the congressional report made to Congress, and Congress had it published by the Government Printing Office. Now, that committee went over the whole field and found that the same situation existed everywhere.

Mr. SCHULTE. The testimony that we have received is that today in Chicago milk is selling on the street at 8 and 9 cents and it is delivered at 11 cents a quart. That is the same identical milk that you are buying here for 14 cents a quart the only regrettable part here is that I do not want to see the small honest farmer hurt, but I do not care anything about the investment banker, lawyer, or Congressman who are in the dairy business.

Mr. JACQUES. I am with you there.

Mr. SCHULTE. I am thinking of the little fellow. I am thinking of the man running a small farm that has just a small production a day and I am not thinking at all of the man who has a production of 800 gallons a day or 200 gallons a day.

Mr. JACQUES. Neither am I.

Mr. SCHULTE. I do not care about the man who has daily receipts from his dairy of $150 a day. I do not care for him at all. I am thinking of the little fellow who has a small herd and does all the work himself and I do not want favoritism shown anybody. We want that small producer to get the same deal as any other producer. That is the point that we want to bring out that we do not want any favoritism shown to anyone. I want to see the monopoly taken away from the big producers who have no business in there and I want the business of producing to go to the little fellow who will receive full price for what he produces. We want to help the poor farmer, the man with the small herd.

Mr. GROSS. That is the theory that I have urged for a long time but when I advocated 5-cent bread and 50-cent wheat I got more hell from the poor people than anybody else and yet those same people paid the same prices for bread when wheat was $1.50 a bushel. Mr. JACQUES. That is right.

Mr. GROSS. And if you set the price of milk higher when it is delivered and say 10 cents at the store there would still be a number of the poor people who will want to get it delivered to their door, but not all of them. There are still lots of people who make the dollars go as far as they can. However, they do want service when they are charged for it. It looks like the farmer is still to be the goat and the consumer still the victim.

Mr. SCHULTE. These farmers will not be the goat. They have an organization. I am very much in sympathy with the little fellow. He is in trouble and I have great sympathy for him. I have no sympathies for these hobbies that have been developed.

Are there any further questions?

Do any other witnesses wish to make a statement?

Mr. JOHN R. DAUGHERTY. I would like to answer Congressman Gross that I think if the Fairfax would cut their price to 12 cents the other dairies would immediately follow suit and soon you would eliminate the monopoly or the monopolistic control that you are talking about.

Mr. GROSS. I want to tell you what I have experienced. I have been in the milk game quite a bit. The consumer that buys milk from the driver they are not buying from the Fairfax Dairy or any other dairy but they are buying principally from the man that is driving the truck or the wagon. They are buying just from that man and the experience has been in the past that when a route was sold the purchaser takes it over and thinks he has a well-established business but first thing he knows the driver will come back again on another route or perhaps someone else and within 6 months the purchaser does not have left 10 percent of the business that he purchased and it simply means that the routes follow the men rather than the company.

Mr. DAUGHERTY. As I said, if one dairy marks down the price of milk it will be only a little while until the rest of the dairies will follow suit. They will have to do it or lose their business and eventually the monopoly will be broken up. I believe that and I hope I am not wrong.

Mr. GROSS. I am not so sure about that. People in the main demand service at the door and they do not want to go to the store and buy their milk there.

Mr. SCHULTE. I have here a statement of Elizabeth Lyle, secretary of the Washington committee, National Women's Trade Union League that I have been requested to read in the record. It is as follows:

WASHINGTON COMMITTEE, NATIONAL WOMEN'S TRADE UNION LEAGUE, Washington, D. C., May 25, 1939. It is hereby requested that the following statement of the Women's Trade Union League of the District of Columbia be read into the record of the hearings on the milk situation.

The Women's Trade Union League of the District of Columbia represents 22,000 trade unionists in the District of Columbia, both American Federation of Labor and Congress of Industrial Organization, both Government and nonGovernment union members. A large number of the unionists represented by the league are members of the low-income group and, as such, very much affected by the high price of necessities such as milk.

It seems apparent from evidence already presented that one of the primary causes of the high price of milk is the monopoly situation existing in the District. The league therefore wishes to go on record at this time in favor of a thorough investigation by the Federal Trade Commission into the causes of the high price of milk in the District.

The league feels strongly that the lowering of the price of milk is necessary of the alarmingly high disease and death rate is to be lowered. Lower milk prices are particularly necessary to promote the welfare of children in the District.

As an organization whose aim is to secure a higher standard of living for workers in the District, the league feels that an investigation of the milk situation is imperative.

ELIZABETH LYLE, Secretary.

Mr. SCHULTE. Are there any other witnesses?
Mr. GROSS. May I come in on that?

Mr. SCHULTE. Yes.

Mr. GROSS. I sat in a hearing of the Federal Trade Commission in Philadelphia that had finished up investigating the Boston market, and they had just then finished investigating the Philadelphia market. In those two investigations they had spent well on to a million dollars, and they submitted a report, and in that report they said: "We have only investigated two major markets and are not in a position to make any definite recommendation."

Mr. SCHULTE. Are there any other witnesses?

STATEMENT OF MARY V. GROSS

Miss GROSS. I would like to say that I represent the Ladies Organization of St. Martin's, and we are giving milk to the poor families and many children, and our milk bill runs to from $38 to $40 a month; and we make this money to pay for this milk through giving card parties at the different homes of the members and in our parish hall, and in that way we get money to pay for this milk.

We have a great many families on our list at the present time, and I want something done about the price of milk. We are paying a good sum, and of course our dairies do give us a good price for what we buy, but if the prices were reduced we could buy more milk and help more families.

Dr. KEBLER. I think the Congressman has said what I have talked about many times in regard to cheaper bread. I got more unfavorable action from the poor people than I got from the rich. That is probably true, but if the Congressman had employed the system utilized by our Governor of Texas and when they asked him some of these questions he said, "Patty, pass the biscuits," and he would have gotten all of the fellows. I think it is up to Congress pure and simple to break up this racket in the District of Columbia; and Congress should do it, and I believe they can do it.

Someone said that the mayor of the city should break up a monopoly. That is probably true, but you Congressmen are our representatives, our council, our mayor-and we look up to you. The gentleman spoke a little while ago about the Federal Trade Commission investigating this situation. The Federal Trade Commission cannot do anything. The Federal Trade Commission can only make a report. I think it is proven that the monopoly which I believe is there. I think it is up to the Attorney General, Mr. Murphy, to get busy and take a stand in that direction.

Mrs. BOYLE. On behalf of the consumers of the District of Columbia, Mr. Chairman, I wish to thank you and the committee for the work you have done for the consumers.

You have been most kind to us, and we appreciate very much all of your efforts.

Mr. SCHULTE. Thank you very much. It is very unusual the occasions on which we are praised.

(Thereupon, at 10: 15 p. m., the hearing was concluded.)