valuable and economic feeds as Schumaker feed would be prohibited from interstate commerce. The elimination of many of the by-products affected means immense economic loss and higher values on grains and feeds for dairy cows and other live stock. This would unfavorably and seriously affect all farmers and live-stock men. Important this amendment be killed in conference with House with Representatives. Suggest you start action immediately."

The CHAIRMAN. Who sent that?

FALFURRIAS JERSEY DAIRY CO.

Mr. LASATER. The Quaker Oats Co. to the Falfurrias Jersey Dairy Co., which is the dairy end of my business.

The CHAIRMAN. Do you think that telegram states the fact as to this amendment?

'Mr. LASATER. I do not think it states the fact, and they did not expect the facts to be known 2,000 miles away, probably, at this time. The CHAIRMAN. This may explain the flood of telegrams which have been coming in.

The following letter and copy of telegram were directed by the chairman to be inserted at this point, and are here printed in full:

Hon. THOS. P. GORE,

QUAKER OATS Co., Chicago, October 1, 1918.

United States Senate, Washington, D. C. SIR: In response to your request, we are handing you herewith list of those to whom we sent telegrams from our Chicago office regarding the Gore amendment to H. R. 11945.

May I say that the somewhat tardy response to your request is due to the fact that I was confined to my home for a few days directly after my arrival from Washington, and that upon my return to business I found that two of the gentlemen who had had a hand in sending out some of the telegrams were absent from the city, and it was necessary to await their return before the names of those to whom they sent wires could be ascertained?

We are inclosing herewith also copy of a telegram which was sent out, and which differs, I think, somewhat from the telegram read into the record by Mr. Lasater. This copy we are inclosing, pursuant to your further request that we send in copy of any telegram sent out differing from that addressed to Mr. Lasater.

The list follows:

E. C. Lasater, Falfurrias, Tex.

J. B. Watson, secretary Ayrshire Breeders' Association, Brandon, Vt.
Charles L. Hill, Rosendale, Wis.

E. T. Gill, Haddonfield, N. J.

Louis E. P. Merriman, Cockeysville, Md.

Hugh G. Van Pelt, Waterloo, Iowa.

Frank Hoard, Fort Atkinson, Wis.
Walter P. Bliss, Bernardsville, N. J.

H. W. Gossard, Martinsville, Ind.

Dean C. F. Curtis, Ames, Iowa.

Dr. J. A. Armstrong, East Providence, R. I.
Thomas De Witt Cuyler, Philadelphia, Pa.
Stephen Canady, Hillsboro, Ill.

John F. Irwin, Minneapolis, Minn.

F. E. Ransom Hay & Grain Co., Kansas City, Mo.
Cutter & Dickerson, Adrian, Mich.

E. L. Wellman, Grand Rapids, Mich.

Charles A. Krause Milling Co., Milwaukee, Wis.
H. C. Lockabaugh, Watonga, Okla.

E. H. Taylor, jr., Frankfort, Ky.

Frank S. Hastings, Stamford, Tex.

Day & Rothrock, Sprague, Wash.

Tulley T. J. Brooke, Peoples Street, Atlanta, Ga.
H. H. Bradley, Savannah, Ga.

John E. Talmadge, jr., Athens, Ga.
Paul Mustin, Augusta, Ga.

D. D. Adams, Macon, Ga.

Frank D. Jackson, Tampa, Fla.
Henry Winer, Chattanooga, Tenn.
Walter L. Lafew, Richmond, Va.
Wilson W. Mallory, Memphis, Tenn.
Caughey E. Hayes, Little Rock, Ark.

Charles A. Burthe, care of H. T. Cottam, New Orleans, La.
W. D. Hanna, care of Hanna Distributing Co., Jackson, Miss.
Sam Meyer, Meridian, Miss.

W. S. Rogers, Atlanta, Ga.

Yours, very respectfully,

JAMES MARTIN GRAY, Counsel.

[Copy of telegram.]

Senator Gore amendment House bill 11945, prohibiting from interstate commerce certain by-product feeds, means serious crisis for dairy and live-stock industry if accepted in conférence and passed by the House. Immediate action necessary to get conference postponed to permit prominent milling and agricultural men to be heard. With present feed shortage, imperative all sources of animal nutrition be conserved and that nothing be stopped from interstate traffic; otherwise there will be a feed famine, as several million tons, possibly, of good nutritious feeds will be stopped. Will you use all influences at your command, wiring your Representatives at Washington to-day, so that they will insist that this conference be delayed until milling and agricultural men can be given hearing. To-day flour mills are largely selling their entire feed output in local territories. This amendment will stop everything of reasonable price that can be used as a substitute and will cut off supply of mixed feeds so necessary in your territory. Kindly wire your Representative at Washington to insist on postponement of conference on House bill 11945. Kindly wire me, collect, Chicago, what action you take.

Mr. LASATER. I would like to read into the record a part of the letter from Mr. W. E. Skinner, Secretary of the National Dairy Council, to Mr. W. T. Creasy, who is here present [reading]:

MY DEAR MR. CREASY: I very much appreciate your sending me a copy of House bill 11945 showing the Gore amendment on dairy feeds. The way this bill reads it looks like the only fellow that would object to it would be some feed man that was trying to put over some counterfeit goods.

Gentlemen, I have bought for the dairy part of my business feeds from the Quaker Oats Co. As is well known, the dairy interests for the past four years have been fighting to live. We have no margins of profit. I would like to read some correspondence with the Quaker Oats Co. Their representative is here, and you have heard him today. Under date of March 30, they wrote [reading]:

Answering your letter of the 26th, would say

The CHAIRMAN (interposing). That is this year?

Mr. LASATER. That is this year-March 30, 1918 [reading]:

that, subject to your immediate acceptance and our confirmation, we will offer you one 700-sack car of Schumacher feed at $64.70 per ton, freight and war tax paid to Falfurrias, shipment April 15; 1 duplicate car at same price for shipment April 25.

Trusting we may have your wire acceptance of this order, we remain. Representative LEVER. Is that read into the record to show the exhorbitant price they charged?

Mr. LASATER. If you will just permit me, I will run right through this and you will see why.

This is under date of March 30 [reading]:

We have yours of March 30, quoting us price of $64.70 per ton f. o. b Falfurrias, on Schumacher feed, for shipment April 15. We have just wired you accepting offer on one car.

It seems to us as though your price was getting out of reach for us. While we have had very good results from feeding Schumacher, still we are afraid that we will have to look for something cheaper that we can substitute.

[Laughter.]

you,

because

Just one moment. I am glad I got the laugh out of later the laugh will be the other way. It is your only chance. Under date of May 24 the Quaker Oats Co. wired us [reading]: Letter received. Anxious to keep you supplied Schumacher subject wire acceptance. Will book three cars fifty-three twenty. Wire quick, so can protect. We placed no more orders at that price, so on May 24 they offered three cars at $53.20. We still did not do business, and they wired June 15, 1918 [reading]:

Subject quick wire acceptance and to being unsold, offer three cars Schumacher immediate shipment fifty-fifty. Wire answer.

On same date we wired the Quaker Oats Co. [reading]:

Subject to immediate acceptance, can use two cars Schumacher, immediate shipment, fifty dollars delivered here.

On June 15, same date, they wired us:

Your offer away low, but confirm two cars fifty per ton, Falfurrias, to equalize cost earlier cars.

The reason I read that is this: It shows the margin the gentlemen had. There was no difference in the character of the grain market during this time.

Mr. ABBOTT. We object to that.

Mr. LASATER. It shows it by your quotation. I make the statement that there was no material difference in grain market during this time.

Representative LEVER. Is there anything in this amendment which would give Congress the right to regulate the prices?

Mr. LASATER. No, sir.

Representative LEVER. If so, what you have read into the record is pertinent; if not, is absolutely not pertinent.

Mr. LASATER. No, sir. I would say this

Representative LEVER (interposing). In other words, you are willing to buy this very injurious, unfair, dangerous, poisonous stuff if you can get it at your price?

Mr. LASATER. No, sir. Wait a moment. If you will take Schumacher feed, which is one of the best feeds they put out-I have never attempted to handle any low-grade feeds.

Representative LEVER. What is the purpose of reading that into the record?

Mr. LASATER. The purpose of reading that into the record was to show the way these people have of doing business. As you know, our country was pressed for feeds last spring. These gentlemen, with no material change in the grain market, pushed it up to the limit to see how long we would continue to buy. When they got up to $64.70 we quit buying, and then they put it to $53.20, and then $50.70, which I do not think can be the average they make.

The CHAIRMAN. According to their claim, the price of their material had advanced in the meantime?

Mr. LASATER. There was no change in grain prices during period under consideration to justify the difference of $14.70 per ton.

Representative LEVER. And your remedy is that because they charged you more than you think they ought to charge that you would prohibit interstate shipment?

I

Mr. LASATER. No, gentlemen, that is not what I claim here. claim that this group of feed manufacturers, the American Feed Manufacturers Association, instead of being a benefit to the producers of the country are a leech upon the producing interests of the country.

Representative LEVER. You think they were a benefit when they allowed you to buy this feed at $50 a ton?

Mr. LASATER. That was something like the market price, sir. But wait a moment. If we did not have this American Feed Manufacturers Association in control of things, it would be nothing like as difficult to buy. We would buy through brokers as we have always bought prior to this organization.

Representative LEVER. Your proposition is that they constitute a monopoly controlling this business?

Mr. LASATER. Absolutely.

Representative LEVER. Then we ought to have an amendment to cover that proposition.

Mr. LASATER. These gentlemen demanded this hearing. Senator Gore later asked me if we desired to be heard. You know the farm organizations have no such organization as the American Feed Manufacturers Association. I told him we would like to be heard. So, within the week we made the best showing we could. We have not been able to cover the continent, but we will show the efforts of these gentlemen in a near-by State that has something like 11,000,000 of the 100,000,000 of American people in the United States. When you gentlemen become familiar with their practices I think you will see somewhat of the reason that they wanted to stop this hearing at this stage of the game.

Mr. Gray, I think it was, of the Quaker Oats Co., was questioned a few moments ago in regard to the profits of the Quaker Oats Co. The letter I read is pertinent to that extent, along those lines. I have here the Standard Corporation records by the Standard Statistics Co., incorporated, 49 West Street, New York City. That shows the earned dividends of the Quaker Oats Co. for 1917 on preferred stock of 52.29 per cent, and on common stock of 52.65 per cent. The CHAIRMAN. Is that the Quaker Oats Co.?

Mr. LASATER. That is the Quaker Oats Co. For 1916 it was 40.95 on preferred stock and 40.94 on common stock; for 1915 it was 38.12. on preferred stock and 38.54 on common stock.

When you go back to 1908 their earnings were 11.37 on preferred stock and 10.28 on the common stock.

If that is not profiteering, I do not know what would be under this situation.

The CHAIRMAN. Those are the profits of the Quaker Oats Co. ? Mr. LASATER. I gave you the authority, sir. Here it is. [Exhibiting paper to the committee.]

The CHAIRMAN. Was it the Quaker Oats Co. that sent out that telegram you read here?

Mr. LASATER. Yes; it was the Quaker Oats Co. that sent that telegram, and I read the correspondence also I had with the Quaker Oats Co.

The CHAIRMAN. Up to this time the Quaker Oats Co. have manifested a great deal of interest in the hearing. Of course they had a right to do that.

Mr. LASATER. I had understood that Mr. Chapman, who is connected with the Quaker Oats Co. and who for many years was president of this organization that is here

The CHAIRMAN (interposing). The Feed Manufacturers' Association?

Mr. LASATER. Yes, sir-and he had been president. I believe Mr. Gray stated he had not been president.

Mr. GRAY. I did so state.

Mr. LASATER. What was his position? Would you object to so stating?

Mr. GRAY. No; of course I would not. He was the manager of the feed department of the Quaker Oats Co.

The CHAIRMAN. Mr. Lasater, did you mean what position he held with the American Feed Manufacturers' Association?

Mr. LASATER. My understanding is that he was president of that, and I think we will show that very conclusively.

The CHAIRMAN. Representative Carlin, of Virginia, has a gentleman whom he would like us to hear, and if there is no objection we will proceed to hear him.

STATEMENT OF MR. S. C. CROPLEY, MANAGER VIRGINIA FEED & MILLING CORPORATION, ALEXANDRIA, VA.

The CHAIRMAN. Please state your name, the business you are engaged in, and address.

Mr. CROPLEY. My name is S. C. Cropley, and I am manager of the Virginia Feed & Milling Corporation, millers of concentrated feeds, and our plant is situated at Alexandria, Va.

Before I proceed, gentlemen, I would like to say to the whole committee, or committee appointed by the committee, that our plant is within a few miles of the Capitol. We would be very glad to cordially invite you down there at any time that you might want to come. We will show you the raw material that we use. We will carry you through and show you exactly how it is blended. We will take you to the finished product, and we will give you, if you desire, the samples of our feeds and let them be examined by the Department of Agriculture.

We have been through the West. I have visited a great many concentrate mills. They have always cordially invited me to go through their mills. Naturally I accepted, because we all want to learn as much as we possibly can. During that time I state truthfully that I did not see any ingredients going into concentrate feeds that have beeen a disadvantage to the cattle.

Senator Gore, I was at the meeting yesterday morning at 10.30, where you asked the question regarding molasses. Why do we put water into flour? To be able to knead it, to keep down the dust, and to produce a bread that will not be injurious to us. It is not dust that goes into our feeds; it is the flour from alfalfa especially. When you take alfalfa and grind it as we do and as the western men do—in its natural state-it contains 14 per cent of protein. That dust contains 24 per cent. We use alfalfa flour in some of our ingredients.