Mr. BOUTELL. And some four or five years ago I remember seeing, in an alphabetical list of the trusts in the country, covering several pages, and issued under quite distinguished, and I have no doubt. trustworthy, authority, two trusts-the meat trust and the leather trust. So I took it that there was one trust that handled the original raw hides, in the estimation of these compilers, and then another trust that handled the tanned leather. And I wanted to know from a manufacturer, if possible, what the truth was about the leather trust, which would be the trust that would dictate the price that you paid for leather.

Mr. CRADDOCK. Yes. Very probably I can answer that question in such a way as to meet your requirements without being positive. I do not think it is definitely known to what extent the Armour interests are controlling factors in the United States Leather Company. It is known that they are a very large factor in it. The United States Leather Company, while making, say, from 70 to 80 per cent of one class of sole leather and 40 to 50 per cent of another, might not be termed a trust in reality, but, as a matter of fact, they do practically set the price for sole leather in the United States. If trade is a little dull, the independent man comes just a fraction under their umbrella. He just bends his head enough to get under it. But with active trade, such as we have had in leather, for the most part, for the last five years or more, I think the larger manufacturers here, some of whom have had more experience than myself, will agree that the United States Leather Company practically fixes the price of sole leather.

Mr. BOUTELL. This is quite a new truth in this investigation. So that the price of manufacture of leather is fixed by this so-called "leather trust" and not by the meat trust?

Mr. HILL. It is all the same thing.

Mr. CRADDOCK. I do not know that I am in a position to answer that question, Mr. Boutell, further than to say that in a commodity that has been in very active demand, protected by a 25 per cent tariff, the home consumption being right up to the supply and the foreigners relying upon this market for a part of their supply, the United States Leather Company have certainly been in a position to practically not absolutely, but practically-fix the price of their grades of sole leather. They do not go into the oak and belting butts to any great extent, that some of these gentlemen spoke of here, such as Mr. Lees, from Philadelphia, but as to hemlock sole leather, which takes in a wide range of foreign leathers, large lines of union or slaughtered leather made from domestic hides, packers' hides, I should say that they really made the market.

Mr. BOUTELL. And your means of information about these two organizations to which you refer the leather trust and the meat trust-are as accurate in one as in another-that is, you have no fuller information about one than the other?

Mr. CRADDOCK. No, sir; I should not say that I had. I know the facts to exist. It is a matter of public record that the Armours are stockholders and directors in this company, and it is a matter of current belief that they in a large measure control or indicate the policy of the United States Leather Company. I am just stating what is commonly understood.

Mr. CALDERIEAD. You stated that about 80 per cent of the cattle slaughtered are calves and young cattle, did you not?

Mr. CRADDOCK. No, sir; I did not. I beg your pardon. My statement was this: That, in my opinion, among the general run of farıers east of the Mississippi River who were not primarily cattle growers, but were agriculturalists or farmers, the majority, probably 80 per cent, of the cattle that they killed on the farm for home consumption were the small animals, on which this duty does not apply. Mr. CALDERHEAD. There is no duty on their hides?

Mr. CRADDOCK. No, sir.

Mr. CALDERHEAD. Do you know the number of cattle slaughtered in the packing houses of Chicago, Kansas City, and Omaha?

Mr. CRADDOCK. The four or five principal markets, I think, slaughtered 6,400,000 head, or about that, last year. I should say that about 8,000,000 cattle are slaughtered by the packers.

Mr. CALDERHEAD. Those are all heavy cattle, for meat-packing purposes?

Mr. CRADDOCK. As a rule, yes; although they slaughter a great many calves; but in these figures I gave you the calves are not included. They do slaughter a great many calves a year-several hundred thousand.

Mr. CALDERHEAD. These are 3 and 4 year old steers with heavy hides?

Mr. CRADDOCK. The majority of them, I take it, are these native steers. There are half a dozen classifications of steers.

Mr. CALDERHEAD. I understand.

Mr. CRADDOCK. There are Texas, Colorado, butt brands, and so forth, so far as the hide classifications are concerned. Of course, there are something like half a dozen classifications of steers. They count the calves separately. The packers kill a great many calves. They butcher a great many calves. Their numbers run into hundreds of thousands.

Mr. CALDERHEAD. Do they not run into millions?

Mr. CRADDOCK. I think it approximates a million. Could Mr. Vogel say what the slaughter kill of calves was?

Mr. VOGEL. I do not know.

Mr. CRADDOCK. My recollection is that for a year or two past-that is, for a couple of years ago-it ran up to about 700,000 calves.

Mr. CALDERHEAD. What proof is there that the tariff on this 6,000,000 of cattle slaughtered in the packing houses does not go to the benefit of the farmer that produced the cattle?

Mr. COCKRAN. Do you mean the tariff on the hides?

Mr. CALDERHEAD. Yes; the tariff on the hides.

Mr. CRADDOCK. The operation of it is this, in my opinion: That if (as is the case at present, as I understand it) the packers have an abundant supply of beef they are not going to go into the market and pay a good, full, round price for beef cattle, although at that same time hides may be up a cent or 2 cents a pound. That would not induce the packer to continue to slaughter beef cattle and pile the beef up simply because the hides were higher. And, as Mr. Jones explained this morning, the very time that there is the largest slaughter of beef is the time that the prices are highest for these cattle. The very time when the farmer is reaping his harvest, selling his cattle on the hoof at high prices, is generally the time that hides are lower, because the larger kill of cattle makes a larger sup

ply of hides and depresses the market somewhat. Does not that answer your question?

Mr. CALDERHEAD. The consequence of that is that the farmer gets nothing. The farmer who furnishes the cattle gets no benefit.

Mr. CRADDOCK. You will probably recall that I started out with the statement that I did not announce it as a fact that the ranchman got no benefit from this tariff; but as far as I have investigated the subject (and I have gone into it very carefully and have studied it for years), there is no proof that the farmer gets any higher price for his cattle on the hoof by reason of this 15 per cent tax. We have the market quotations of hides and beef side by side, running over twelve years, and oftener than otherwise when beef cattle are higher hides are lower.

Mr. CALDERHEAD. I think you might as well say the same thing concerning the manufacture of shoes.

Mr. CRADDOCK. We do not ask for any protection. It is very much like it is on cotton.

Mr. CALDERHEAD. It very often happens that when the price of cattle is low the price of shoes is high.

Mr. CRADDOCK. Not when hides are low, though; I beg your pardon. Mr. COCKRAN. Mr. Craddock, just to make clear that matter that Mr. Calderhead has discussed with you, let me ask you this question: As a fact, the price of hides can not enter into the price of cattle, seeing that the major article that the cattle produces is beef; and the price of any article or any commodity is measured by the quantity

Mr. CALDERHEAD. Just a moment, right there. Mr. Craddock, is that a fact or an assumption?

Mr. COCKRAN. It is a fact, I think.

Mr. CRADDOCK. It is a fact, not to be proved by a mathematical demonstration, however.

Mr. CALDERHEAD. Of course.

Mr. CRADDOCK. But a fact that in economics is true.

Mr. COCKRAN. Let me say this, then: As a matter of fact-because we must get down to facts to meet Mr. Calderhead's niceties of expression is there, in all the world (in Chicago, Omaha, Kansas City, or any city of packing activity, or any other civilized or uncivilized community on the face of the earth) a market for hides on the back of an animal? Did you ever know of an animal being sold for its hide?

Mr. CRADDOCK. No, sir.

Mr. COCKRAN. When an animal goes to the market, it does not go there as a source of hides, but as a source of beef. Is not that so? Mr. CALDERHEAD. Just a moment.

Mr. CRADDOCK. Yes; and furthermore, if you will watch the prices of beef

Mr. COCKRAN. I am coming to that.

Mr. CRADDOCK (continuing). You will notice that the shipments of cattle increase simultaneously as the price of beef goes up, regardless of whether hides are up or down.

Mr. COCKRAN. Exactly. In other words, the value of beef is the controlling element in the value of cattle, is it not?

Mr. CRADDOCK. Unquestionably.

Mr. COCKRAN. That is why, except perhaps in Kansas-I do not know what may happen out there-but that is why anywhere else

among civilized human beings the value of cattle is determined by the price of beef? [Laughter.]

Mr. CALDERHEAD. Just a moment, right there. We do not raise any cattle without hides.

Mr. COCKRAN. No, no; but when you come to fix the value of cattle it is the value of the beef that determines it, is it not?

Mr. CALDERHEAD. Oh, surely. That is a very large element, but it is only a part of it.

Mr. COCKRAN. "A very large element, but only a part," might answer a description of 99 per cent.

Mr. CALDERHEAD. Oh, no.

Mr. COCKRAN. As a matter of fact, Mr. Craddock, in the purchase and sale of cattle on the hoof, you state this, if I understand you, that the demand is determined by the demand for beef?

Mr. CRADDOCK. The price is determined by the demand for beef; yes, sir.

Mr. COCKRAN. Yes. When the price of beef is high the slaughter of cattle is extensive?

Mr. CRADDOCK. Yes.

Mr. COCKRAN. You have stated several times that the price of hides was high and the price of beef low.

Mr. CRADDOCK. Yes, sir.

Mr. COCKRAN. Did you ever know, in your experience, of a demand for cattle being stimulated by a high price of hides and a low price

of beef?

Mr. CRADDOCK. I never have, sir. I do not think it can be shown. Mr. COCKRAN. So that when you say that this tariff rate upon hides can not appreciably affect the value of cattle on the range, you mean because the disproportion of value between the hide and the carcass is so great that what would affect one would be a negligible quantity, while what would affect the other would be a very important factor? That is what you mean to state, is it not?

Mr. CRADDOCK. That is it, sir.

Mr. CALDERHEAD. Mr. Craddock, do you and the other gentlemen mean that the ranchman gets nothing for the hides?

Mr. CRADDOCK. I have never stated that; but if he does, I do not think it can be demonstrated by actual market conditions.

Mr. CALDERHEAD. No.

Mr. CRADDOCK. Nor by economics.

Mr. CALDERHEAD. You mean that he gets about the same thing that he would for the horns and the hoofs and things of that sort?

Mr. CRADDOCK. No. Here is the reason, if you will permit me, that I say that: Not only because it is borne out by the actual market quotations on beef and hides, but, as a matter of fact, when the packer buys that steer on the hoof he really does not know what the hide market is going to be when he sells it. It takes quite a time to salt. and cure that hide. It goes through a curing process. They frequently carry those hides in their cellars six months; and it is not a question of the cost now. The supply is supposed to be low now, but last fall there was an accumulation. Hides did lie in the packers' cellars for six months. Now, how could that man fix his price on the live steer by reference to the market price of hides months in the future?

Mr. CALDERHEAD. But do you suppose the packer buys cattle to-day with reference to the price of meat to-morrow?

Mr. CRADDOCK. Very largely; yes, sir; because the fluctuations are almost daily.

Mr. CALDERHEAD. It is usually six months before he realizes on that meat, is it not?

Mr. COCKRAN. Do you mean that he keeps his meat for six months before he sells it? [Laughter.] This is another revelation. The ACTING CHAIRMAN (Mr. Dalzell). I do not know that Mr. Craddock need be here to settle a dispute between you and Mr. Calderhead. I think that is all.

Mr. CRADDOCK. Thank you.

STATEMENT OF CHARLES KIPER, OF CHICAGO, ILL., REPRESENTING THE WHOLESALE SADDLERY ASSOCIATION OF THE UNITED STATES WHICH WANTS FREE HIDES.

SATURDAY, November 28, 1908.

Mr. KIPER. Mr. Chairman and gentlemen, we appear before you as the representatives of the Wholesale Saddlers of the United States, most respectfully to ask that the hides of cattle be restored to the free list. By "saddlery " I mean harness-harness as well.

Mr. COCKRAN. What duty do you pay on your saddlery?

Mr. KIPER. I beg pardon?

Mr. COCKRAN. Do you not know the rate of duty on saddlery?
Mr. KIPER. On saddlery?

Mr. COCKRAN. Yes.

Mr. KIPER. What do I understand your question to be?

Mr. COCKRAN. What rate of duty is imposed on your finished product?

Mr. KIPER. On our finished product?

Mr. COCKRAN. Yes; on the saddles?

Mr. KIPER. On the goods we make usually the duty cuts no figure at all.

A duty of 15 per cent on cattle hides is not only obnoxious but burdensome to the manufacturers of harness and saddlery goods for the reason that all saddlery leather is manufactured exclusively from "adult" cattle hides, while at the same time the hides of the young critters are admitted duty free through a ruling of the Treasury Department of the National Government.

It is a well-known fact that the hide market of this country is largely controlled by the packers, and that they have become a great factor in the tanning business as well. The removal of the duty would doubtless stimulate the importation of foreign hides, thereby affording the independent tanner a wider field for the purchase of raw material and thus lessen the likelihood of manipulation in the price of hides by the packers.

Statistics will show that the price of hides have advanced about 40 per cent during the past nine months, despite the fact that the demand for leather goods has been much below the normal, which indicates that the price of hides has been manipulated.

The restoring of cattle hides to the free list would not only benefit the leather manufacturing industries of the country, but would also