feature if you would tell us something about that. Has that become practical now, and is it economical, and if it is why does it not do away, and why will it not do away, with the milk wagon that goes around the city?

For some time

Mr. MILLER. In a measure that is in its infancy. I think for several years-there has been a method of converting skimmed milk into powder, and later, with the addition of water and butter fat, to reassemble the milk. Very recently one firm, and I think only one, have devised a method which they state permits them to powder the whole milk, leaving the butter fat in it. Heretofore there was no method that could prevent that butter fat from turning rancid and spoiling the product. They claim they have solved that problem.

The CHAIRMAN. If they have solved it, they have settled all this difficulty, haven't they?

Mr. MILLER. If they have solved it, it means that it will be utterly impossible to have any higher prices for city milk than the law of supply and demand fixes upon that same milk for the purpose of its manufacture into butter, cheese, and condensed milk.

The CHAIRMAN. I should think so.

Mr. MILLER. Yes.

The CHAIRMAN. And would it not mean that the cost to the consumer would be very greatly reduced? All these milk wagons that run around the streets in the cities would be out of business, would they not?

Mr. MILLER. I can not say as to that.

The CHAIRMAN. You could go and buy enough milk and carry it home in your overcoat pocket, to run you for six months.

Mr. MILLER. It all depends, of course, upon the price charged for the powder.

The CHAIRMAN. Yes; I am assuming now that they have a practical method of doing that. I have thought about it a great deal, and since you mention it I want to find out.

Mr. MILLER. While we are on this subject, while it is something of a digression, may I say that there is great danger of abuse, for this reason: The laws of most of the States, particularly of the State of New York, are quite strict in regard to requiring that milk shall not be adulterated. No water must be put in and no butter fat taken out; but with this process the mother may be feeding the infant something that is called milk, that looks like milk, that tastes like milk, but that lacks the essential food element of milk; so that it perhaps should be subjected to some form of regulation.

The CHAIRMAN. Yes; it would have to be regulated, but that would not do away with the fact that it would eliminate practically all the cost of distribution, which is greater than the amount which the producer gets for his milk now, isn't it? It would eliminate practically all the cost of distribution, which is a greater item than the amount of money that the producer gets originally for the milk. In other words, it costs us now, under our present system, more to distribute the milk than the producer gets for it?

Mr. MILLER. I am not prepared to state how would be in that form of distributing the milk. saving over the present method. I do not know.

much saving there There might be a

The CHAIRMAN. There would not be any such thing as distributing it, any more than there is in the distributing of chocolate.

Mr. MILLER. How expensive the process is I do not know.
The CHAIRMAN. I thought maybe you could tell us about that.
Mr. MILLER. No; I can not tell you how expensive that process is.
The CHAIRMAN. I wish some man would invent that.

Mr. MILLER. But eliminating the factor we have mentioned, it is still impossible, in my judgment, for organized farmers to fix an oppressively high price to city people for fluid milk. Permit me to take our own territory for example. The territory of all New York State and the adjoining counties of five other States constitute the milk territory tributary to Greater New York. In that territory at present 51 per cent of the milk is manufactured. That goes into butter, cheese, condensed milk, milk powder, and so forth. About 49 per cent of the milk from that territory goes into the city in the fluid state. It costs more to produce milk for the city than for the purposes of manufacture, for technical reasons which I will not take the time of the committee to discuss; but if at any time the price that the farmer receives for milk going into the city is enough more than he receives for the milk for the purposes of manufacture, to cover such increased cost, large quantities of the milk now going into the manufacturing plants will be diverted to the city, producing a surplus which will automatically bring down the price to the former common level, and no power on earth can prevent it.

What is true of that territory is true of the country as a whole. Over half the milk produced in the entire country is manufactured. It can be diverted to the cities, with our present transportation systems all over the territory where the great cities of the land are located. So that, so far as the milk industry is concerned, no matter how much of a desire the farmers may have to establish an oppressive monopoly or oppressive prices, they would be unable to do so.

And then again, farmers have usual business sense. They are anxious to enlarge the markets for their products, just as anxious as any other class of producers or manufacturers. They want all the milk possible consumed in the fluid state. One of the great aims of a farm organization, after getting a fair price for the farmers themselves, is to see that the milk reaches the ultimate consumer at as low a price as possible.

It has been suggested that this bill represents farmers of all classes. Why not? Their needs are also great. Now let us take up the question of the wheat. Could the wheat farmers form an oppressive monopoly? Probably if any class of producers in the United States can form an oppressive monopoly, it would be the wheat growers, for the reason that their product can be preserved indefinitely. They can withhold it from the market indefinitely. But suppose they tried. I will ask Dr. Atkeson if he knows the number of wheat producers in the United States?

Dr. ÅTKESON. I should say about four million, that is 4,000,000 farms that are devoted more or less to the production of wheat.

Mr. MILLER. That leaves somewhere from two million to three million farmers who are not producing wheat. A large part of the wheat now produced is produced on probably less than one million farms in the great wheat belt. Assume that they established a monopoly there. But other classes of farmers are buyers of that

product. Thirty-five or forty million farmers are buyers of all classes of products, and the largest buyers of all classes of products. The dairy farmer must buy the wheat by-products that come from the wheat field. Now if at any time the price of wheat is raised to a point where it is oppressively high, it means that every other farmer in the United States whose farm is adapted to the growing of wheat and the most of them could be adapted to it if the price were high enough-would go right into the business.

What is true as to wheat would be true as to cotton. The dairy farmers are large buyers of the by-products of cotton for cattle feeds. Some of the cotton lands are available for corn, can be adapted to corn raising, and there are vast districts of cotton land as yet undeveloped. Whenever the price reaches a stage that will warrant the production of any commodity, you will see such production as will break down any monopoly that might be established. The economic and industrial conditions under which the farmers operate absolutely prohibit the formation of any oppressive monopoly. The only way that is left may be the method that was suggested by one of the committee, that all of the farmers could combine and raise the price of all of their products oppressively-an organization that would break down of its own weight."

The CHAIRMAN. It is now 12 o'clock, and as it is evident that we. can not finish the hearing to-day, we will adjourn until to-morrow morning at 10.30 o'clock.

(Whereupon, at 12 o'clock noon, the committee adjourned until Wednesday, January 28, 1920, at 10.30 a. m.)

LABOR, AGRICULTURAL, DAIRY, AND HORTICULTURAL

ORGANIZATIONS.

WEDNESDAY, JANUARY 28, 1920.

UNITED STATES SENATE,
COMMITTEE ON THE JUDICIARY,

Washington, D. C.

The subcommittee met, pursuant to adjournment, at 10.30 o'clock a. m., Hon. George W. Norris, presiding.

Present: Senators Norris (chairman) and Brandegee.

STATEMENT OF MR. JOHN D. MILLER-Continued.

The CHAIRMAN. Mr. Miller, you had not finished when we adjourned yesterday.

Mr. MILLER. Mr. Chairman, at the adjournment yesterday we were discussing some reasons why we thought it was hardly possible for farmers to form an oppressive monopoly. I would like to dwell upon that a little further, and will try not to weary your patience. I know you are busy men. Then I will talk very briefly upon one or two other phases of the matter.

I take it that possibly the difficulty in the minds of Congressmen may be the fear of the danger of the formation of an oppressive monopoly if bills of this character are enacted into law. As we have said, the economic conditions under which farmers operate will of themselves prevent that.

First, there is the annual renewal of supplies that no one can stop unless the farmer goes out of business. A labor union can stop work a week, a month, or two months, and when they resume their labor all that they have lost is their wages during the period of cessation; but the farmer must seed in due time or he can not harvest. His is a year's business. Therefore for him or his organization to fix prices oppressively high would mean such a decrease in consumption that there would be a surplus left over, and the succeeding year's crop could be dumped in on top of that surplus, and nothing would prevent it. Further than that, it would be necessary for the farmer producing any one kind of farm product to control every other food that could be used as a substitute for the ones in which they were attempting to fix prices oppressively high.

Senator BRANDEGEE. Will you let me ask you a question there? Mr. MILLER. Certainly.

Senator BRANDEGEE. Of course, nobody claims that the farmers would be extortionate or attempt to establish a monopoly, but the question is, Should a situation be created which leaves it open to anybody to do it legally? As I understand your argument it is that nobody would attempt this thing because it would be inexpedient or impossible?

26

Mr. MILLER. Yes.

Senator BRANDEGEE. But ought the law to authorize a particular class of people, so that they would have the legal right to do it, if they could, while prohibiting others from doing that same thing?

Mr. MILLER. I think, Senator, that possibly the best answer to that is the one made by Gov. Deneen in his argument yesterday, and that is that there is no alternative and no middle ground. Either farmers must have this clear right, or they must for all time accept the prices dictated to them by organized middlemen. As we view it there is no middle ground.

Senator BRANDEGEE. The argument you make that the products of the farms could not be stored up and held, first, because they are to such an extent perishable, and second, that the amount carried over would interfere with the crop of next season, would not apply to cotton, would it?

Mr. MILLER. I am not familiar with the cotton situation.

Senator BRANDEGEE. I mean that cotton differs in this respect, that it is not perishable.

Mr. MILLER. It could be stored almost indefinitely, I take it.
Senator BRANDEGEE. Yes.

Mr. MILLER. Or assume that the price of cotton reaches a certain point where it is highly profitable to produce. There are hundreds of thousands of acres of undeveloped cotton land yet, and no power of organization could prevent other farmers opening up these farms and producing cotton.

Senator BRANDEGEE. I know, but that remedy takes a long time to make it effective. That means that people must go out and buy land and adapt it to cotton raising, and get their labor, and all that sort of thing; and then the thing that they were fighting, the Cotton Trust, lowers prices and puts them out of business.

Mr. MILLER. Assuming that the cotton growers who are now raising cotton go on producing cotton, they must sell it. It is possible that in some one year as to cotton the price might be excessively high, but it would mean the breaking down completely of the organization that raised the price of cotton, because it would invite the opening up of all these other lands, which would mean such an excessive production in cotton that in a very few years the situation would rectify itself.

Senator BRANDEGEE. I am not disputing you there. In fact I am not disputing you anywhere. This is a new subject to me, and I am asking for information.

Mr. MILLER. I concede that, of course.

Senator BRANDEGEE. But as I say, when we exempted labor unions, farmers' organizations, agriculturalists and horticulturalists. I was on the committee that did it, and made that exemption, and it was done for the reason that the laboring men and the farmers said, "The broad, general terms in which you have couched this antimonopoly statute will enable a department of justice which may be hostile to our organization to break up our organizations because they fall within the letter of the statute, and we want to be assured that this statute, designed to protect the public against monopoly, shall not be used to break up our fraternal organizations." And so it was that the exemption was limited to those organizations by farmers' granges, and labor unions, and horticultural associations, which they