PACKERS AND STOCKYARDS ADMINISTRATION. 675 



111 addition to the regular information procured tlirougli these 

 audits and reports with reference to business transactions of the 

 agencies involved, various irregularities were disclosed. Instances 

 wherein this occurred have been given special attention in order 

 that the information may be accurate and complete, and such in- 

 formation has been submitted to the division of the Packers and 

 Stockyards Administration directly concerned for such formal or in- 

 formal action as has been deemed essential in the carrying out of the 

 purposes of the packers and stockyards act. In addition to this, 

 the auditing division has cooperated with local organizations of 

 market agencies as well as with stockyard companies by aiding them 

 in dealing with irregularities which appeared to constitute violations 

 of their rules and regulations. This was done when the consent 

 referred to in Regulation No. 6 of the general rules and regulations 

 had previously been given by the agencies concerned. 



In every case such steps as were suitable to the nature of the case 

 have been taken to secure the protection of shippers with whom deal- 

 ings had been or were being conducted. These included not only 

 payments of moneys due or other corrective action, but precaution 

 for the future by way of separate banking accounts or otherwise 

 improved banking methods, better accounting, surety bonds, and 

 increased cash capitalization. One or two illustrations will serve to 

 indicate the protection that is being afforded to shippers and the 

 agencies on the public markets by the work of this division. 



In the case of a commission agency which was solvent and in good 

 standing, it was found by the auditors that there had been defalca- 

 tions on the part of a bookkeeper amounting to over $5,000, approxi- 

 mately $1,000 of which was due the commission agency and approxi- 

 mately $4,000 was due shippers. As a result of this audit, the ship- 

 pers were reimbursed for the entire amount due them. 



In another case it was found that a commission agency was also 

 engaged in buying livestock from otlier commission agencies and, 

 with the assistance of a bank, at the time of the audit had been float- 

 ing large amounts of drafts without livestock security, the amount 

 outstanding at one time having been over $90,000. Through prompt 

 action by the auditor and the supervisor, the amount of outstanding 

 drafts was immediately made good by bank deposits. Subsequently, 

 the concern involved discontinued business without loss to shippers 

 or the other market agencies on the market. 



Action which has gi^own out of these activities of the auditing 

 division in the public livestock markets is covered in a general way 

 in the appropriate places under the work of the other divisions 

 involved. 



The division of audits and accounts requested financial statements 

 for the year 1922 from all concerns which, according to the best 

 information available, are packers within the purview of Title II of 

 the packers and stoclcyards act. Financial statements were received 

 from 443 concerns, divided as follows : 



Group 1. 386 concerns with net worth less than $1,000,000 eacli. 



Group 2. 42 concerns whose net worth ran from $1,000,000 to $4,000,000 each. 



Group 3. 10 concerns whose net worth ran from $4,000,000 to $16,000,000 each. 



Group 4. 5 concerns whose net worth ran above $16,000,000 each. 



There are a large number of small packers who question whether 

 their business is of such a character as to render them subject to the 



