Mr. WILLIAMS. I think you will find them substantially correct. You probably confuse the consumption of all meat with beef. I am quoting beef only. That decreased consumption has been due to about three principal causes:

First. Patent medicine advertising, which caused many people to believe that meat eating caused all their aches and pains. While the purpose of this advertising was not to discourage meat eating but to encourage the use of the particular medicines named, the campaign has, I believe, seriously affected meat consumption. There should be some means of protecting any industry from such unfair business methods.

Second. When the Food Administration inaugurated the "meatless days" during the period of the war, many patriotic persons did not know that baby beef, cow meat, and much of our best meat did not meet the exacting requirements for Army, Navy, and export purposes, and they therefore considered it their patriotic duty to abstain from meat eating. Meanwhile the dairy interests and manufacturers of various so-called meat substitutes took advantage of every opportunity to encourage the use of their products. Their efforts to develop their industries along broad clean lines were legitimate, but some of their campaigns which reflected directly or indirectly upon meat as a healthful and wholesome food were unfair and illegitimate. War campaigns for the substitution of other food products for meat were augmented by bulletins issued by the United States Department of Agriculture. It seems proper, therefore, to suggest at this time that the department should issue such bulletins and other literature as will again make known to the housewives of America the true food value of meats.

Third. One of the most serious factors affecting meat consumption has been our expensive system of distribution-the growing spread between the prices received by live-stock producers and the prices paid by consumers for meats.

Senator CAPPER. What is the cause of that spread?

Mr. WILLIAMS. The butchers claim that high wages to meat cutters, high rents, and other expenses have substantially increased their overhead expenses. While there has been some reduction in retail meat prices within the past few months, the reductions have not been in proportion to the reductions in wholesale meat prices or prices. received by the producers. They made high profits during the period of the war and are not satisfied with prewar rates of profit.

Senator CAPPER. Have you made any inquiry as to the cost of meats to the consumer here in Washington since you have been here?

Mr. WILLIAMS. That is one of the purposes of my visit. I came by Chicago, and after leaving here expect to visit Philadelphia and New York for the purpose of making some inquiry into the wholesale and retail meat trade. We have been waiting about a year for a report of an investigation conducted by the Department of Agriculture; but due to the fact that the report will cover the year 1919, I am afraid the data will be ancient history before it is given out and due to changed conditions will not present the condition of the trade at this time.

Representative TEN EYCK. If you have been looking into the prices charged by the retailers in these different cities you speak of, what

conclusions have you come to? Can you make any statement as to what you found?

Mr. WILLIAMS. I would not care to make a statement at this time on that, because the classes of meat and prices have varied so in the different shops that it would require a lengthy statement to properly present the matter. It might be interesting and of some value to you, but I haven't the data in shape to present it just now. I may be able to do so before the hearings are finished. If I do, I will send it to you.

The CHAIRMAN. We would be very glad to have the data if you can put it in such shape that it can be presented.

Senator CAPPER. You say the price to the consumer is wholly out of relation to the price which the producer receives?

Mr. WILLIAMS. Yes; the reduction that the retailer has made is not in line with the reductions that have been made in the wholesale prices of meats and the prices received by the producers.

The CHAIRMAN. Is that true as to the wholesale price, as compared with the price of the animal?

Mr. WILLIAMS. I don't believe it is. I think the wholesale price has been about in line.

Senator CAPPER. You think a lot of the profiteering, as you call it, is on the part of the retailer rather than the packer?

Mr. WILLIAMS. Yes. A great many have felt that the packers made more money than they claimed in their published statements, but the wholesale prices of meats keep pretty well in line with prices paid the producers. The new "packer regulation" bill will make it possible for the Secretary of Agriculture to keep a line on the whole

sale meat trade.

I don't like to use the word "profiteer " in referring to the retailer. but I will say the spread between wholesale and retail prices is too large. Many newspapers would like to have a story in which a representative of the live-stock producer charged the retailers with being profiteers, but too much publicity of that kind would probably result in one of the periodical "buyers' strikes," which hurt the producers more than they do the wholesalers and retailers of the products.

Representative TEN EYCK. I deduce from what you have said in relation to the number of cattle that are now going on the market, so many less than under ordinary conditions, that ought to raise the price to the producer and the packers' price?

Mr. WILLIAMS. Yes; ordinarily that would happen.

Representative TEN EYCK. Do you think the whole reason that is not accomplished under those conditions is due to the spread of this propaganda that you have referred to?

Mr. WILLIAMS. To some extent that is true. High retail prices of meats and forced liquidation by the producers have also been important factors.

Representative TEN EYCK. Your forced liquidation is not keeping the cattle from being put on the market.

Mr. WILLIAMS. The forced liquidation puts on the market a class of meat which is not needed by the trade, and naturally that surplus a surplus of any class of meat, must have a bearing on the price that is paid for all classes.

Representative TEN EYCK. By having poor meat put on the market, or a meat that is not really ready for the market, the result is

a lowering of the prices on that meat, and the other would naturally fall with it?

Mr. WILLIAMS. That is true.

The CHAIRMAN. Mr. Williams, have you made a comparison of the drop in prices of the different grades of cattle?

Mr. WILLIAMS. No, sir; I have not. But I can get some data for you on that subject if you desire it.

The CHAIRMAN. Well, offhand, is it your judgment that the drop in prices of the lower grades of cattle were relatively greater than upon the higher grades?

Mr. WILLIAMS. That is true on what we call sacrifice cattle.

The CHAIRMAN. A canner cow?

Mr. WILLIAMS. A "canner cow" may be an animal poor in flesh but of excellent breeding, that would if kept on the ranch produce a calf that would be worth at this time around $15. Such a cow in thin flesh, reaching the market when the run was heavier than the trade needed, would not net for the owner any more perhaps than the value of a calf. The sacrifice of such cows, that are needed to restock the ranges of Texas and the Northwestern States, is an economic loss to the Nation. When you face the fact that we have a shortage of about 30 per cent of the normal supply of breeding stock in Texas and adjoining States, and that the growth and development of that territory depends largely upon the live-stock industry, you must realize that it is a serious matter.

The CHAIRMAN. Getting back to the credit situation once more, I suspect that is the crux of the situation.

Mr. WILLIAMS. I think it is.

The CHAIRMAN. And perhaps the export situation.

Mr. WILLIAMS. Exports do not enter into the problem so much just now. The foreign demand for meat is being supplied from South America. The quantities of meats in storage in the United States at this time are below storage stocks of this date last year. A better system of finance would stop the shipment of a large per cent of the stock now going to market, and I do not think we would have any large quantities of beef for export.

The CHAIRMAN. Consumption is not normal.

Mr. WILLIAMS. That is true.

The CHAIRMAN. What I was getting at, however, on the credit proposition, is this: I am interested to know whether, in your judgment, the difficulty lies in the fact that the resources of the banks are insufficient to cope with the situation, or, on the other hand, lies in the fact that the banks were unable to rediscount their paper, and consequently to extend themselves as far as they would otherwise? Mr. WILLIAMS. I think in the majority of cases the resources of the banks are not sufficient to extend the credit.

The CHAIRMAN. I think that is the situation, particularly in the cattle sections. The information that we have shows quite clearly that the cattle sections of the country have been the hardest hit by price reductions. It is altogether probable, notwithstanding the fact that the country banks in the cattle sections are more extended than they are anywhere else, that the credit situation has been worse in the cattle sections than in any other part of the country.

Mr. WILLIAMS. What has been said of the difficulty in financing the cattle business is also true of the sheep industry. Many cattle

and sheep-producing sections produce no other commodities to speak of, and when they go down everything in the territory goes down with them.

The CHAIRMAN. That is typical of the whole situation with a onecrop country, whether it is cattle, sheep, or cotton; a one-crop section of the country is very much worse off than a diversified section of the country.

Representative TEN EYCK. Is it your idea that the supply of cattle to-day on the hoof is not large enough to warrant assistance in export trade; that we would be better off if we supplied the necessary funds to retain those cattle at the present time with the present owners rather than endeavor to assist export?

Mr. WILLIAMS. Of course, an export demand would probably stimulates values, but if financial aid was extended stockmen of the southwest and northwestern sections, who need cattle to restock their idle ranges, it would certainly bring about improved conditions. The cattleman with idle pastures is just like a factory without material to manufacture its products. With loans available buyers would soon be at the markets buying the sacrifice cows and immature steers, and there would be an improvement in values.

Representative TEN EYCK. I am talking from an economic standpoint, whether or not it would be better to assist the owner to hold his cattle and let the natural consumption take up the surplus and thereby raise the price, rather than to stimulate the price from the other side by giving credit to them for export, and thereby get the cattle raiser to sacrifice his cattle?

Mr. WILLIAMS. It would be better, I think, for the cattle raisers. and for the Nation, to furnish them such financial relief as will enable them to conserve their breeding herds.

Representative TEN EYCK. That is what I wanted to bring out as regards your impression.

The CHAIRMAN. Is there anything further, Mr. Williams?

Mr. WILLIAMS. Another factor is the need of a reasonable tariff on live stock, meats, and hides. A great many cattlemen who would otherwise remain in the business are selling their herds because they believe this country is on the verge of being flooded with meats from foreign countries, where unquestionably cattle and sheep can be produced cheaper than in this country, because of their low-priced lands, peon labor, low tax rates, low transportation costs, and low living standards.

Substantial importations of meats and enormous quantities of hides have entered our markets during the past year, seriously affecting live-stock prices. Figures prepared by one of the largest packing companies indicate that the value of a hide represents about 15 per cent of the value of the animal. The packers take the value of the hide into consideration when buying an animal. Due to excessive importations of hides the American hide market has been demoralized for several months. A steer hide that was worth around $25 to $30 a little more than a year ago is now worth about $4 or $5. There has not been a corresponding reduction in shoes, leather goods.

etc.

A prominent cattleman told me of this experience recently. He called at the shoe store in his home town to price a pair of shoes of

a well-known brand. The price was $12, which he considered too high. The next day he went to his ranch. Soon after arrival he told the ranch hands to kill a nice calf for beef and to be very careful not to damage the hide. He called the hide dealer at a near-by town and learned the best price he could get for this good calf hide was 75 cents. Now, that cattleman would have to sell about 17 good calf hides to receive enough money to buy a pair of good calfskin shoes and pay the war tax on them. Less than one-fourth a hide and very little workmanship were required to make this brief case, but that case cost a few days ago $15-or about the amount a cattle raiser would receive to-day for 20 calf hides. I can not agree that there should be a tariff on leather, shoes, etc., if a tariff is placed on hides. It is quite evident that the cost of hides is a small item in connection with the cost of shoes, leather goods, etc.

Representative TEN EYCK. The question is: Why are hides so low, when shoes and bridles made of the leather that comes from those hides are as high as they are?

Mr. WILLIAMS. I think some interesting things could be developed along that line, which the people are entitled to know. I would like to see this committee look into that matter.

Summarizing, it seems to me the principal needs of the live-stock industry at this time are:

First. A better system of financing which will provide a method of making loans on breeding stock for from one to three years' time, on the basis of reasonable values, and at just rates of interest. Under present financing systems the producers are called upon to pay increased interest rates at times when they can least afford to pay same. Quite often the increase of 2 to 4 per cent in the interest rate changes a small profit to a loss.

Second. A substantial reduction in railroad freight rates. I know no good reason why the railroad companies should be protected from the process of deflation to which all agricultural, commercial, and industrial enterprises have been subjected. It is my opinion that with capable and economical management a lower scale of freight rates would produce a fair return on the invested capital or true valuation of the railroads. Reductions in rates should revive many enterprises which have been throttled by excessive rates and greatly increase the volume of railroad traffic. A continuation of present rates must result in decentralization of the meat-packing business and numerous other great industries.

Third. Reductions in marketing costs. The legislation recently enacted will give the Secretary of Agriculture authority to investigate the reasonableness of most of the charges at the central markets, and to order such reductions as he may consider proper.

Fourth. A better system of distribution, which will bring about a reduction in the spread between the prices received by live-stock producers and the prices consumers must pay for meats and other live-stock products. The recent legislation gives the Secretary of Agriculture authority to supervise the business practices of the wholesale meat trade. Frequent investigations of the retail meat trade, judicious publicity and bulletins designed to encourage better business methods would no doubt help to correct many exist