Trade Commission clearly indicate existing evils. That there is need for immediate legislation on the subject there seems to be no question. A careful study of the bill will, I believe, convince one that it will, if enacted into law, in a measure give protection to the purchasers of live stock, independent packers, and consumers from abuse and oppression, which are now evident.

AMENDMENTS.

In order to correct typographical errors and to make it clear that there shall be no dual jurisdiction in the bill between the Interstate Commerce Commission and the Secretary, and further to make it clear that the Secretary and the Interstate Commerce Commission. shall have exclusive jurisdiction, the following amendments are suggested:

Page 9, line 13, strike out the word "employer" and insert the word "employee."

Page 11, strike out lines 22, 23, and 34, and lines 1 and 2 on page 12, and insert in lieu thereof the following: "The term 'dealer' means any person engaged in the business of buying or selling in commerce live stock at a stockyard, either on his own account or as the employee or agent of the vendor or purchaser; but does not include a market agency or a packer, or an employee or agent of either." Page 27, line 1, strike out all after the comma down to and including the third comma in line 3, and in line 5 strike out the word "or," and at the end of line 13 add the following: "the act entitled 'An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,' approved September 26, 1914, but upon the enactment of this act the authority of the Federal Trade Commission under section 5 of such act of September 26, 1914 (unless complaint under such section has been served before the enactment of this act), shall be terminated so far as relating to any matter which by this act is subject to the jurisdiction of the Secretary of Agriculture or of the Interstate Commerce Commission: or",

Also one as to pleadings:

Page 5, line 15, strike out the words "specifying the alleged violations" and insert in lieu thereof the following: "stating his charges in that respect," and at the end of line 24 add the following sentence: "At the close of the introduction of evidence on behalf of the Government, or at any time prior thereto, the Secretary may amend the complaint by adding new charges; but in case of such amendment the hearing shall, on the request of the packer, be adjourned for a period not exceeding 15 days.'

The CHAIRMAN. Mr. Anderson, are you ready to proceed now?

STATEMENT OF HON. SYDNEY ANDERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA.

Mr. ANDERSON. Mr. Chairman and gentlemen of the committee, I want at the outset to express my pleasure at again having the privilege of appearing before this committee, with which I have had a somewhat long and certainly a very interesting association.

I also want to express my appreciation to the chairman and the members of the committee for allowing me to appear first on the program. The problems that come before this committee are not only interesting but exceedingly difficult and complex. They offer a very large opportunity for a lot of hard work, as well as the exercise of great constructive ability, and I can find it in my heart to regret that I do not have a closer and more intimate connection with the actual drafting of the legislation of the committee, as I had heretofore. I do not intend to discuss the necessity for this legislation; but I may say that back of it there is a long history of combination, of agreements to apportion markets, to apportion supply, a long history of litigation resulting in the making of restraining orders, enjoining members of the Big Five and others from engaging in combinations and in oppressive practices with respect to competition, which I am sorry to say have more or less characterized the action of the Big Five in the packing business. I should say, to be entirely fair, that some of the things that were done probably were not unlawful at the time they were done, but the facts still remain that there is behind this legislation a long history of combination, apportionment of territory and of markets, as well as the oppression of competitors.

What I want to particularly discuss this morning is not the need of legislation but the character of the legislation which should be enacted and the essential requirements of that legislation if it is to be effective.

There has been a contention before this committee that the forums of law were open, if there were violations of law, and that it would be sufficient if we were to enact into law definite prohibitions to be enforced by the usual legal methods.

In my judgment no such form of execution can be in the slightest degree effective in this instance.

In the first place, the courts are already congested with the trial of cases which have criminal character on one side or civil character on the other. The offenses which are sought to be reached by this legislation are not necessarily essentially criminal. They are offenses against good business; they are offenses against the sound public policy of business.

In order to adequately deal with offenses of this character which, in statement, must of necessity be more or less indefinite, it is essential that an agency should be set up which, through the process of investigation and of trial of causes, can acquire a fund of information, a library of information, if I may put it in that way, as to the movement of the raw materials and the finished products in the channels of trade, the manufacturing processes, so far as those processes are an element in the business practices of those to be regulated by this legislation.

Fundamentally, it seems to me the primary requisite of legislation regulating the packers is the setting up of an agency between the producer and the consumer which can deal more or less informally with all of those who normally will come within its jurisdiction.

Particularly, I am impressed with the fact that there should be! some forum in the stockyards clothed with jurisdiction to deal' with the grievances that arise there on the part of the producers, the shippers, the commission men, the traders, or the buyers, and I think it is fundamental that whatever agency is set up in the stock

yards should have jurisdiction of all of the parties; that is to say, that there should be no division of authority with respect to transactions in the stockyards.

An illustration which I think will justify that conclusion is this: When the railroad companies deliver stock in the unloading chute the liability of the stockyards company for the safety of that stock begins. Once that stock is delivered to the commission man and his gates locked against all comers, the liability of the stockyards company ceases for the moment and the liability of the commission firm commences. Again, when the stock is weighed, the bell is rung, the stock is again delivered to the stockyards company for delivery to the buyer, and so at that point the liability of the commission man ceases and the liability of the stockyards company again begins.

If you do not have a single jurisdiction over all of those who at one time or another may have a liability or a duty with respect to the cattle, your regulation will fall between two stools. If you jurisdiction fails as to the commission man and it is found by the regulating authority that the stockyards company has no liability but that the commission man has a liability, your regulating authority will be without power to enforce its conclusions with respect to and against the commission company. The same thing is true with respect to traders or others in the yards.

One thing which I think is fundamental in that respect is that there should be one single authority dealing with the stockyards and everybody engaged in transactions upon them.

I think it is equally clear that there should be a single tribunal dealing with offenses which may be committed by those whom the bill designates as packers.

The bills that have been introduced differ with respect to the authority which is to be set up for the enforcement of the provisions relating to the packers.

In the bill which I introduced that authority is conferred upon the Federal Trade Commission. In the bill which the chairman has introduced, that authority is conferred upon the Secretary of Agriculture. In the bill which Mr. McLaughlin, of Nebraska, has introduced, if I understand it correctly, the authority is conferred upon a commission created by that act.

Mr. TINCHER. Let me ask a question there. Mr. McLaughlin, is your bill the Kenyon bill which was passed in the Senate?

Mr. MCLAUGHLIN of Nebraska. No; the Gronna bill.

Mr. JONES. Are those the primary and essential differences in the three bills?

Mr. ANDERSON. So far as the bill which Mr. Haugen has introduced and the one which I have introduced, that is the primary difference. With respect to the bill Mr. McLaughlin, of Nebraska, has introduced, there are a number of differences. The whole theory of regulation under the McLaughlin bill, which is the Gronna bill, is different from the theory of regulation which is prescribed in either the bill which Mr. Haugen has introduced or the one which I have introduced.

The CHAIRMAN. Your bill is identical with the bill reported by the subcommittee.

Mr. ANDERSON. Yes, sir.

The CHAIRMAN. The only change is to transfer the control to the Secretary of Agriculture instead of the Federal Trade Commission. Mr. ASWELL. Is the McLaughlin bill the result of the conference report on the bill?

Mr. ANDERSON. No; the McLaughlin bill is the bill which passed the Senate in the last Congress.

Mr. ASWELL. And embodies practically the same bill that was agreed upon in conference.

Mr. ANDERSON. There was not any conference.

Mr. KINCHELOE. Is your bill the same bill that was reported from this committee to the House?

Mr. ANDERSON. Yes; with the exception that the committee adopted an amendment placing the jurisdiction over the packers in the Secretary of Agriculture, whereas my bill puts that jurisdiction in the Federal Trade Commission.

Mr. KINCHELOE. And the bill that passed the Senate provided for a special commission.

Mr. ANDERSON. Yes; that bill provided for a special commission. I do not know that it is a matter of first importance as to where the jurisdiction over the packing industry rests; but I would like to state the condiderations which led me to the conclusion that that jurisdiction ought to be conferred upon the Federal Trade Commission.

I should say in that connection that I can appreciate the feeling on the part of those who are to be regulated by this legislation, if it is enacted into law, that the Federal Trade Commission as presently constituted and as it has been constituted heretofore, has shown a disposition which they feel is not entirely fair to them; but if the Federal Trade Commission is not so constituted that it can be charged with such duties as Congress thinks ought to be imposed upon it, then the commission ought to be abolished or a new commission selected.

I proceed now to the considerations which led me to the conclusion that the Federal Trade Commission was the proper tribunal upon which to confer this jurisdiction.

We now have on the statute books the act creating the Federal Trade Commission. That act prohibits unfair methods of competition. The pending bills prohibit unfair practices and devices in

commerce.

The

I take it that there are some actions which might be committed by persons regulated under this act which would be both unfair methods of competition and unfair practices in commerce. result of a division of authority, therefore, assuming that the power to regulate the packers is placed with the Secretary of Agriculture, would be that you would have one set of decisions growing out of the enforcement of the unfair methods of competition provision in the Federal Trade Commission Act as to all industries generally with another set of decisions growing up under the Secretary of Agriculture involving somewhat the same acts under the prohibition against the unfair practices in commerce, and it was my judgment that by putting the enforcement of the provisions of these bills applicable to the packers under the Federal Trade Commission it would be possible to secure some degrees of uniformity, at least, in

the decisions with respect to industries generally and with respect to the decisions as applicable to the packers as a class.

In substance, they were the considerations which led me to the conclusion I reached. Now, there may be arguments on the other side which would lead to a contrary conclusion, but in my mind the difficulties arising from conflicts of decisions with respect to the packers as a class and industry generally, through a division of authority, outweighed any other consideration that came to my mind.

There is in both the bill introduced by Mr. Haugen and in the bill which I introduced, a provision which I think is entirely new in Federal legislation. It is the provision on page 2 in the third paragraph which undertakes to define commerce in a somewhat different way than it has heretofore been defined.

The second paragraph on page 2 is the usual definition of commerce and provides that the term commerce as used in the act means commerce among the several States or with foreign nations, etc. The provision to which I have referred provides that:

For the purpose of this act (but not in any wise limiting the foregoing definition) a transaction in respect to any article shall be considered to be in commerce if such article is part of that current of commerce usual in the live-stock and meat-packing industries, whereby live stock, live-stock products, dairy products, poultry, poultry products, or eggs are sent from one State with the expectation that they will end their transit, after purchase, in another; including, in addition to cases within the above general description, all cases where purchase or sale is either for shipment to another State, or for slaughter of live stock within the State and the shipment outside the State of the products resulting from such slaughter. Articles normally in such current of commerce shall not be considered out of such current through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this act. For the purpose of this paragraph the word State included Territory, the District of Columbia, possession of the United States, and foreign nation. This provision resulted from a consideration of the decisions of the Supreme Court with respect to transactions upon live-stock exchanges, notably the Hopkins case, in which it was held, if my recollection serves me correctly, and I have not read the case for some time, that an agreement between commission men with respect to a transaction in stockyards situated wholly within one State was not an agreement in violation of the Sherman antitrust law for the reason that such transactions in the stockyards did not constitute

commerce.

There was, however, in the decision very strong intimation that if the objects and the acts done under the agreement were in effect a burden upon commerce that an entirely different question would have been raised.

Subsequent to the Hopkins decision the Supreme Court rendered a decision in the Swift case which I believe modified the rule which the court laid down in the Hopkins case.

As I recall the facts in that case, the decree prohibited certain acts with respect to transactions which were not in the purview of what we then understood commerce to mean, transactions in interstate commerce, and the decree of the lower court was objected to on that ground.

The court, in considering that question, said:

When cattle are sent for sale from a place in one State, with the expectation they will end their transit for "urchase in another, and when in effect they do so with only