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or Iowa or Illinois, or they may even go on down there and go to somebody that is buying stock cattle and let them run a year or two. There might be still a third movement before they go into the feed lots. Then they go into Chicago as fat cattle. Then the finished product is distributed from Chicago throughout the East.
Senator NORRIS. Have you ever in a particular instance made a computation to show just how much transportation there was in a beefsteak in New York City?
Mr. MOLLIN. No, I haven't, Senator.
Senator NORRIS. There would be more than the ordinary person thinks of, wouldn't there?
Mr. MOLLIN. Yes, sir; it would be very startling. I do know that some of our stockmen who testified in this recent hearing in Denver on sale and transit complained that on shipments to Kansas City the marketing charges last fall were almost a third of the gross. That was on mixed cows.
Senator NORRIS. That beefsteak probably first started away down in southern Texas?
Mr. MOLLIN. Yes.
Senator NORRIS. And from Wyoming it was shipped again to eastern Nebraska, probably?
Mr. MOLLIN. Yes, sir.
Senator NORRIS. And from there it was shipped to Chicago, where it was killed?
Mr. Mollin. Yes.
Mr. MOLLIN. Yes. Then there might be another movement yet before it got to some town in New York.
Senator NORRIS. Exactly. So as a matter of fact while Congress hasn't given it any consideration and the great bulk of men interested in it like your organization and the farmers generally don't appreciate how much transportation there is in these farm products from the time they originate until they reach the consumer
Mr. MOLLIN. Yes, sir; that is true.
Senator NORRIS (continuing). It is one of the important things involved in it?
Mr. Mollin. One of the most important.
Senator NORRIS. But we don't find anybody or very many people at least saying anything about it?
Mr. Mollin. Well, we have petitioned for lower rates and reopened docket 17000 which was just decided recently and now we have just gone back to the Commission and petitioned for a general decrease. I don't think there is any single thing that could be done today that would do more to start the wheels of commerce going than to reduce those freight rates.
Senator NORRIS. I know it will help very materially. You and I may have an exaggerated idea of its importance but it is very important and very material and doesn't receive very much attention.
Senator KENDRICK. Is it not true, Mr. Mollin, that your association has made fruitless efforts to reduce the charges in the yards on the movement of livestock?
Mr. Mollin. The marketing charges?
Mr. Mollin. Well, we haven't gotten any place with yardage charges but the Commission charges have been quite generally reduced in the past 2 years under the operation of Packers and Stockyards Act.
Senator KENDRICK. Are there not also abuses at the present time in the charges for feed and forage and grain in the yards?
Mr. Mollin. Yes. That is a peculiar situation, Senator. Corn has gone down so low that the margin that the packers and the stockyard administration allowed of 40 cents when they made some of these decisions a year or two ago is now out of line. That as a handling charge for corn didn't look so bad when corn was a higher price but now when corn is 10 cents a bushel and the Packers and Stockyards Act allows 40 cents, it is out of line. I think there are greater abuses in outlying feed yards than in the marketing centers. There have been numerous reductions in feed charges.
Senator KENDRICK. May I ask the margin between the cost of forage and hay on the farm nearby the stockyard and the price charged in the stockyards?
Mr. Mollin. The Department is allowing ten to twelve dollars a ton as a margin over the delivered cost. Of course, you know the system there is pretty expensive. People call up and they want hay right then and they have to have men there to deliver it. They allow ten to twelve dollars margin, but there have been three or four reductions on feed charges at most of the markets. However, with this almost valueless condition of farm commodities, they still look high, but most of it is handling charge. In the outlying feed points, railroad operated, the sky is the limit in some places.
Senator CAPPER. Mr. Mollin, you made a very strong statement, particularly from the standpoint of the buying feeders and shippers and those who are engaged in the livestock industry on a large scale. The typical Kansas farmer is one who has a quarter section of land and some steers and cows and a bunch of pigs. I am wondering whether you feel that you speak the wishes also of that man. I don't doubt that you speak for those men engaged in the livestock industry in a larger way. I wonder if you feel that you speak for the small farmer who I say has got just a small herd of cows and steers and some pigs and whether your stand would be to his interest?
Mr. Mollin. I don't pretend to speak for the small farmer. They don't belong to our association, and I would rather that you took your cue from their own representatives. I have told you what I think about the general application of the bill as a general proposition to meet. We think that cattle and sheep should certainly be eliminated from the bill. What worries us about it is that provision for compensating taxes. If you leave hogs in, are you going to put compensating taxes on beef and lamb? We have got this increased production in cattle and this year and next year we know we have got to eat more beef in this country. It has got to be eaten. So if there is anything done here artificially to tend to retard consumption, we will be in an awful jam.
Senator KENDRICK. I think you have given a wrong impression as to your association. As I size it up, your association is one of many members. Your membership includes how many?
Mr. Mollin. We have all the State organizations west of the Missouri River affiliated with us except the one in Kansas. We work closely with Mr. Mercer but the Kansas association is not officially a member. Of course, there are more farming operations in the West now than used to be.
Senator KENDRICK. Isn't it true that your State associations who are accredited members of the parent association include almost every small producer of cattle and sheep in the State?
Mr. MOLLIN. As a range producer. I took Senator Capper's question to be directed to the farm producer. We don't have so many of those, the man who has a few cows and pigs, we don't have so many of that kind even through our affiliated membership.
Senator KENDRICK. I had much to do with that association a few years ago and I think it is reasonable to say that you include now a thousand small producers?
Mr. MOLLIN. "Oh, we have lots of small ranchers and all these small ranches do farm some but we think of them as ranchers and not farmers. We have fellows that have only a hundred or two cattle, and they naturally conduct farming operations along with their cattle operations in many parts of the West, but we think of them as cattlemen and not as farmers.
Senator CAPPER. Have you mentioned here everything that you believe can be done as far as Congress is concerned that would help to get a better price for livestock?
Mr. MOLLIN. I think I mentioned the principal things; I think the restriction of imports of fats and hides and the reduction of freight rates and the reduction of mortgage interest through the bill that I understand is just about to be introduced. I think those are things that will benefit. I believe Senator Norris yesterday asked Mr. Farr about the loans made by the R.F.C. I think we would have disastrous liquidation of the livestock industry if it hadn't been for those institutions, largely because the banking situation was such that even banks that are good won't carry their people that have been doing business with them for years. I know of ranchmen that have done business with one bank for 20 years and their loans were called, and the bank that called these loans when this crisis came were 85 to 95 percent liqu
Senator NORRIS. I hope you didn't misconceive the point that I had in mind when I was asking that question. He had been talking against the Government going into business. I was wondering whether he objected when the Government went into business in the instances I named.
Mr. Mollin. It is true, as Mr. Farr explained, that the feeder has a better means of credit than the producer. A feeder loan is a liquid loan and you put an animal in the feed lot and he is consuming 20 pounds of grain a day and he is supposed to be getting more valuable every day, and those loans are desired. As bad as conditions have been this fall, banks in Denver and Kansas City have advertised they wanted feed loans. They get a pretty fair rate of interest and it is a short-time loan. Those same banks that finance Mr. Farr and are financing him today wouldn't loan a dollar to a rancher that is just as good security and in just as good shape, because they don't want that kind of loan. We have to have some means of getting long-time loans. The ordinary means has been the Federal intermediate credit banks which is not Government money, but they have been too conservative and haven't done the job they should have done.
Senator CAPPER. And the rates are still too high?
Senator CAPPER. I think you are right about the interest charges being a factor in this and right about the transportation costs and that applies to the small farmer as well as the big cattle producer? Mr. Mollin. Yes, sir.
Senator NORRIS. It applies to the consumer, too; everybody that has anything to do with this product. There is a whole lot of price that the consumer pays that is eaten up with some form of transportation. The illustration that the witness gave doesn't complete it, there are transportation costs in the feed that go in, all the way from the beginning?
Mr. Mollin. Yes. There is a transportation cost in that little clip.
Senator NORRIS. There is nothing from the cradle to the coffin but has transportaton costs in it?
Mr. Mollin. I would like to say that I think the trouble maker in this bill is the compensating tax on other domestic commodities.
Senator NORRIS. Assuming we are going to pass the bill, we have to have it in it somewhere?
Mr. MOLLIN. I don't know. In the case of hogs, supposing the thing worked, you could raise the price of hogs $2 a hundred and still, according to the figures given, they wouldn't any more than be on a pre-war parity with cattle and sheep then.
Senator NORRIS. You can get the hogs produced from the beginning much quicker than you can cattle?
Mr. MOLLIN. Yes.
Senator Norris. Probably the hog industry doesn't present the same difficulty that yours does right now. It wouldn't take very long to change it if they went to raising hogs?
Mr. Mollin. Yes, of course the diminished outlet for lard would keep them from doing that. They used to export so much more lard.
Senator FRAZIER. If hogs were left in the bill and cattle and sheep taken out and there was increase in the meat products of pork, that would tend to increase use of beef and mutton. Wouldn't a compensating tax be necessary if they were going to continue in the hog business without hindering them?
Mr. Mollin. The way the Secretary explained the matter, until at least you had reached the parity I don't see why there would. As I understand it, roughly, there is about $2 on cattle and $2 on sheep and $4 on hogs below the pre-war parity.
Senator FRAZIER. The theory is that if the people are used to buying pork chops at a certain price and they are ruised, they will look for something else. On this freight-rate question, I you that freight rates should be reduced by all means. However, up across the border in Canada they have cheaper rates Are their stockmen any better ofi?
Mr. Mollin. I don't know that they are, for the reason that they haven't got the consuming market that we have got. They are producing a surplus and having to export it to England since we put up our tariff bars. We are on a domestic basis on cattle and they are not.
Senator FRAZIER. Yes; that makes some difference. But, of course, more than freight rates has to come in here to clear up this situation.
Senator Murphy. Have you made any computation in dollars of the benefits to cattle industry and hog industry from putting a duty on competing vegetable oils, those that compete with our animal fats?
Mr. Mollin. No; I haven't. But I do know that the total imports are over a billion pounds, and that is one of the reasons that we are. having this bad situation with lard. You know lard sold as cheap as 5 cents a pound or less. Senator MURPHY. I realize that. I wondered if
could express in dollars
Mr. Mollin. No; I don't think I could, Senator. It is a pretty involved subject.
Senator Murphy. It is a very formidable competitor?
Mr. MOLLIN. Yes, it is, and it is reponsible in some measure for the condition of lard, I think.
Senator FRAZIER. Mr. Chairman, I have a telegram this morning from Charles A. Ewing, president of the National Live Stock Marketing Association. The tenor of his telegram is so contrary to what Mr. Mollin says that I would like to place it in the record. He says:
We strongly endorse this bill and urge its enactment into law. and
To leave livestock out of farm relief is unthinkable.
(Senator Smith had returned to the committee room during the examination of Mr. Mollin and had resumed the chair.)
The CHAIRMAN. Without objection, it may be placed in the record. The telegram referred to is as follows:
Chicago, ILL., March 27, 1933, LYNN J. FRAZIER,
Senate Committee on Agriculture, Washington, D.C. Livestock graze two thirds of the United States, consume 70 percent of crops raised; its products approximate half in value of our whole agricultural output; it is the most important factor in agriculture, occupies more land, employs more people, and its surplus is small compared to wheat or cotton. Livestock prices are far below the cost of production and the producer gets only 25 to 35 cents of the consumers' dollar. Nothing will aid the recovery of agriculture more than better prices for livestock.
The National Live Stock Marketing Association is producer owned and controlled, its members market the stock of some 300,000 stockmen throughout the country; our markets extend from Baltimore to San Francisco.
We were consulted by the Secretary of Agriculture on the proposed legislation. Its objective to raise livestock prices to a pre-war parity is necessary to save further damage to the industry and compatible with public interest. The pending bill is a great improvement over previous proposals; it provides several methods which may be used under varying conditions as required; it invites cooperation between producer and processor in its accomplishment. We strongly endorse its enactment into law. To leave livestock out of farm relief is unthinkable.
CHARLES A. EWING, President National Live Stock Marketing Association, The CHAIRMAN. I must insist that the witnesses be as brief as can be with clarity, because we want to close these hearings today, and we will now hear from Mr. Streeter, who is a producer of hogs.
Mr. Streeter, please give your full name, address, and occupation to the stenographer.