Mr. FRENSDORF. I do not think anything more. That is why I am so proud of these figures. I do not think anyone underbought us

last year.

Mr. FISHER. And how about previous years?

Mr. FRENSDORF. Well, I was not so proud of them always. Sometimes some of them outguessed us.

Mr. MAYER. You never have bought any sisal since you have been connected with the prison, in Yucatan?

Mr. FRENSDORF. No.

Mr. MAYER. Your purchases were all made through Montes or Peabody, in the United States?

Mr. FRENSDORF. Yes, sir.

Mr. FISHER. Did you ever buy from the Mid-State, so far as you can recall?

Mr. FRENSDORF. No, sir.

The CHAIRMAN. Gentlemen, we will have to take a recess at this point, in order that Senator Gronna, Senator Wadsworth, and I may attend in the Senate Chamber on an important matter which is to come up this morning. We will reconvene when that matter has been disposed of.

(The committee thereupon took a recess, from 10.55 o'clock a. m. until 12.45 o'clock p. m., when the hearing was resumed.)

The CHAIRMAN. Mr. Frensdorf, you had a friend, the representative of the Gleaners' Association, whom you wished us to hear?

Mr. FRENSDORF. His name is Grant Slocum, and he is the supreme secretary of the Gleaners' Association.

The CHAIRMAN. We would be very glad to hear from you, Mr. Slocum. Kindly give your name, sir, and residence.

STATEMENT OF GRANT SLOCUM, SUPREME SECRETARY GLEANERS' ASSOCIATION, DETROIT, MICH.

The CHAIRMAN. Are there any points, Mr. Slocum, on which you could enlighten this committee on the subject we have in hand? If so, we would be very glad for you to proceed in your own way.

Mr. SLOCUM. Of course, I am not in a position to enlighten you on the subject. I only come as representing this organization, and I came on a double mission: First, in reference to the interstate shipment of twine, the prison-made product, which is not before this committee, so that part is outside of what I may have to say. But I bring an emphatic protest against any proposition which has for its object the organization of a combination, benevolent or otherwise, which will interfere with the price of binder twine.

You ask why we know that something is happening or has happened. I want to be as brief as I can because I see you have been very patient and taken an immense amount of testimony.

Previous to the year of 1908 binder twine in the State of Michigan was selling from 14 to 16 cents a pound. There was absolutely no telling what the price would be. It was fluctuating all the way from 18 cents, possibly, to 14 cents, never below that. Through our organization we secured an appropriation by the legislature of the State of Michigan of $125,000 to establish a binder twine plant. In that year, to show you that a combination did absolutely exist at that time, when we had the prison factory that made 1,800,000 pounds of twine

the dealers of the State were called-and I was merely invited thereto see what would be done with that product. The dealers would not give the prison factory a price until the International Harvester Co. or the other companies had set their price.

So the prison factory was up against it; no one to sell their twine to until the larger concerns had made their prices. As an upshot of the whole affair, I took the contract to handle 800,000 pounds of twine among our members. It was handled on a cooperative basis absolutely, and the price of twine immediately dropped to $8.20 a hundred. The CHAIRMAN. You mean 8.2 cents a pound?

Mr. SLOCUM. Yes, 8.2 cents a pound. I was speaking by the hundred. In the year 1909 we paid $7.75. The farmer paid that. I know nothing about the dealers. The farmer paid in 1910, $7.50; in 1911, $7.50; in 1913 the same; in 1913, $8.75; in 1914, $8.

Mr. FISHER. When you said "the same," you meant what?
Mr. SLOCUM. $7.50; in 1915 it was $7.50.

Mr. SPENCER. Let us get those figures right. I think you have confused them some. What was it in 1908?

Mr. SLOCUM. $8.20 a hundred pounds.

Mr. SPENCER. I thought you said it went up as high as 14 or16 cents. The CHAIRMAN. Prior to that time it was away up?

Mr. SLOCUM. Prior to that absolutely; that is what we paid in The price at retail was 16 cents-14 or 16 cents. It never had been 12 cents previous to that.

1907.

Mr. MAYER. Never as low?

Mr. SLOCUM. No; 1915 it was $7.50; in 1910 it was $7.50; in 1911 it was $7.50; in 1912 it was $7.50; we had three years the same; in 1913 it was increased to $8.75; in 1914 it was $8; 1915, $7.50. Now, this year, as near as we can figure, the farmer in our State will pay either $9.75 a hundred or $10.

Senator WADSWORTH. Are you speaking of the price of prisonmade goods?

Mr. SLOCUM. Yes; our prison-made goods, and that regulates the price of all twines sold in our State.

Senator GRONNA. You have reference to sisal twine?

Mr. SLOCUM. Yes, I have reference to sisal twine. I do not think farmers use very much of any other kind of twine in our State, or in any of the adjoining States.

Mr. SPENCER. A gentleman testified, by the name of Loring, that the Plymouth Cordage Co. did not follow the prison prices at all; that he made his prices higher or lower and paid no attention to the prison prices.

Mr. SLOCUM. It is very evident that when they make as much twine as they do in Minnesota and Michigan, which produces its 12,000,000 pounds, that they must pay some attention.

Mr. SPENCER. It struck me that way, but he said not.

Mr. SLOCUM. I am going to make this statement, that in 1912 twine sold in the State of Illinois for 5 cents a pound higher than in Michigan. Now, you may ask why that was. I do not know anything about what the dealer pays. Many times I realize that the local dealer in a certain town, realizing that he has not competition, will put up the price. I know that to be true. But we have shipped twine to Iowa and saved the farmer 4 or 5 cents a pound. For the

last three years prices have been quite general-not so much difference between the States.

The CHAIRMAN. Will you not go back and tell us a little more about the prices paid for twine prior to 1908? That is very interesting

to me.

Mr. SLOCUM. I will say this-I do not like to give you anything but what is absolutely facts-and I did not have time to go back. I want to say that it has never been less than 14 cents to the farmer until we had prison-made twine.

The CHAIRMAN. You do not know what the dealers had to pay? Mr. SLOCUM. I do not know, of course-it was as high as 18 cents to the farmer.

The CHAIRMAN. About how many years ago? Do you recall that? Mr. SLOCUM. I will say since 1900.

The CHAIRMAN. To what do you attribute the very great cheapening in price, beginning with 1908?

Mr. SLOCUM. Absolutely to the entrance of the prison factories into this game.

The CHAIRMAN. That was true in your State. They entered in about five or six years ago, but it was testified here

Mr. SLOCUM. Yes.

The CHAIRMAN. But in Minnesota they had been in over 20 years? Mr. SLOCUM. I do not think they were manufacturing any great amount at that time, however.

The CHAIRMAN. Did I understand, Mr. Wolfer, that you were making a considerable amount then?

Mr. WOLFER. We started with one business in 1895, hard fiber, and that was increased from time to time quite rapidly until we got up to 500 spindles.

The CHAIRMAN. And did you not begin to manufacture quite extensively, if I understood you correctly, about 1901?

Mr. WOLFER. Yes, sir; in 1900 we had at least 400 spindles.

The CHAIRMAN. So you were really making a very considerable amount of binder twine long prior to 1908?

Mr. WOLFER. I will say this: We sold binder twine at 19 cents a pound in 1905.

Mr. SLOCUM. Of course, I do not presume a pound of Minnesota twine ever reaches Iowa. It has not to my knowledge. When the farmer wants twine, 100 pounds or 500 pounds, he usually waits until about harvest time.

The CHAIRMAN. You said "Iowa." Did you not mean Michigan? Mr. SLOCUM. I mean Iowa.

The CHAIRMAN. You live in Michigan?

Mr. SLOCUM. But, we have a membership in Iowa. The farmer goes to buy, and when he gets into the harvest field to-morrow the wheat is ready, and ordinarily he did not buy his twine a week before, or two weeks before or a month before, so he pays the price the dealer charges him.

I would much prefer to have you gentlemen ask any questions. The CHAIRMAN. I should like to know a little more about this organization, Mr. Slocum.

Mr. SLOCUM. Our organization was organized 21 years ago. It has two branches, one a fraternal-benevolent branch, the membership of which is farmers, living upon farms.

In 1906 we organized a cooperative branch in connection with it handling absolutely anything that enters into the manufacture of farm products.

The CHAIRMAN. What is the purpose of the organization?

Mr. SLOCUM. To bring the farmers together socially, to help them along educationally, to give them a way so they can standardize their products and get to market with them.

The CHAIRMAN. What do you mean by "get to market with them?"

Mr. SLOCUM. Get to the market.

The CHAIRMAN. Have you a marketing bureau?

Mr. SLOCUM. We have a cooperative marketing bureau.

The CHAIRMAN. Do you find that very beneficial?

Mr. SLOCUM. We do; especially in the standardizing of products; that is a cooperative institution.

The CHAIRMAN. That marketing bureau, I suppose, not only sells your product, but buys what you need, does it not; for instance, like binding twine, things of that kind?

Mr. SLOCUM. I might explain that in connection with binder twine, we regard that as a State institution, and they name the price on binder twine. When they name the price it is about as cheap as it can be manufactured, and all being taxpayers we take that price. That price has been on some occasions 25 cents a hundred pounds above the price charged by the regular manufacturers, but the farmers have stood by the proposition absolutely. They are all given time, the bills are paid in October, and the State of Michigan never lost a penny in connection with the proposition.

The CHAIRMAN. How extensive is your organization?

Mr. SLOCUM. We have a membership of about 84,000. Michigan is thoroughly organized, every county and every township. Then, in the northern part of Indiana we are organizing; in Illinois the north and northwestern section.

The CHAIRMAN. Do you mean central stores?

Mr. SLOCUM. No, sir; we do not go into the mercantile business at all.

The CHAIRMAN. What is your system of selling?

Mr. SLOCUM. Farm products?

The CHAIRMAN. The sale of farm products; yes.

Mr. SLOCUM. Well, we have a central selling agency. If there is a combination in a town, and they are not paying what oats are worth, if they are not paying what any commodity that the farmer has to sell is worth, if we can get a better price for the farmer in New York or Boston, they ship direct through us.

The CHAIRMAN. Your organization, then, is for the purpose of getting proper prices?

Mr. SLOCUM. Proper prices.

The CHAIRMAN. Unless you do not get the proper prices, have you any system of holding the goods?

Mr. SLOCUM. No; we have not.

The CHAIRMAN. No system by which you could loan the farmer money on his products and hold them?

Mr. SLOCUM. No, sir; we have not.

Senator WADSWORTH. Do you buy supplies wholesale?
Mr. SLOCUM. By wholesale.

Senator WADSWORTH. Do you buy supplies wholesale for the farmers?

Mr. SLOCUM. Yes, sir; binder twine and fertilizer. We take the position that the farmer is a manufacturer and that anything necessary in the manufacture of farm products he is entitled to handle at wholesale prices.

The CHAIRMAN. Then you have these selling and purchasing agencies in different places where they seem to be needed?

Mr. SLOCUM. Yes, sir; we attempt to organize what we call a "local" clearing house in each community. That may be merely a shipping station; it may be an elevator-we are organizing elevators slowly.

In that shipping station, if, for instance, the local dealer there pays the price, for beans, we will say, which are a principal product in our State, which produces about 70 per cent of all the white beans-we know what the price is, because of the marketing bureau.

Senator WADSWORTH. You got a pretty good price this year, did you not?

Mr. SLOCUM. Yes; although the crop was poor.

The CHAIRMAN. What is the system of paying the expenses of carrying this on-is it a membership fee or do you charge a commission on handling the goods?

Mr. SLOCUM. We have a capital stock of $40,000, and it is organized on absolutely a cooperative basis. We aim to pay 6 per cent to those who have money invested, and the profits, if any, are distributed back.

The CHAIRMAN. Suppose a farmer sells 10,000 bushels of wheat or oats, does he pay some commission to the agency which gets the proper prices for that?

Mr. SLOCUM. Yes; in going into any market, for instance, we have to pay usually a little less than the individual farmer, but we have to pay the commission charged by the terminal markets. We can not get around that; but we endeavor to have our shipper try to get to the market by cutting out all between.

Mr. SPENCER. Cutting out the middle man?

Mr. SLOCUM. Yes; as far as we can on what the farmer has to sell. The CHAIRMAN. Both in the selling of the by-products and of the buying of fertilizer and binder twine? You do not attempt to buy any other products?

Mr. SLOCUM. Yes; we buy in carload lots.

Senator WADSWORTH. Do you buy any lime?

Mr. SLOCUM. Yes; not so extensively, however. We have not handled very much lime, but our aim is to handle anything they use in large lots. Of course, here is my position: Unfortunately, I presume, there is a thousand men around Michigan passing petitions, and they will come in here, will do the same, but it is too late. I look at it in this way: Possibly this company that has been organized is all right this year, but we feel that we have fights enough in this country with combinations. Never yet have I known of a benevolent combination of any kind, and it seems to me that these figures show we have been able to go into the market. I think it was in 1912 Gov. Warner called a committee from the prison and bought most of the twine that year direct; and it seems to me that it cost all the