398 IOWA DEPARTMENT OF AGRICULTURE 



get very far. On the other hand, a pretty poor license, if it is adminis- 

 tered as it should be, accomplishes a great deal. In this case, there were 

 defects in the license and very serious defects in the administration of 

 the license, because the people who administered the license had not the 

 facilities, even if they had the desire, to strictly control the packers under 

 the license, and the license itself was so drawn that there were a good 

 many loop-holes. The profits v/ere supposed to be regulated, but it hap- 

 pened that only a part were r.egulated. It was divided into three divisions. 

 Number 1 was regulated on the basis of a 9 per cent profit on the capital 

 invested; Number 2, from 9 to 15 per cent, and Number 3 was unregulated. 

 You can see, where there is no unified system of accounting, it was very 

 easy to transfer charges and in making entries shift the profits or losses 

 from one part of the business to another. In other words, the profits from 

 the regulated field were easily transferred into the unregulated field. 

 On the whole, the license was not by any means a perfect license. It was 

 a beginning in the right direction, however, and on the whole I think we 

 have reason to congratulate ourselves that the license was put into effect. 

 Speaking of the problems being merged into the greater problems of 

 the war, you will remember the restrictions being put on the consumption 

 of meat products by the Food Administration a year ago. The restric- 

 tions on cattle and sheep, both of them were unnecessary and altogether 

 too strict, and as a result of those restrictions the prices went down to a 

 level that put stockmen in a very serious position. Your president, Mr. 

 Sykes, has told you about the efforts made by the representatives of your 

 association. I want to say at that time the Market Committee stood 

 shoulder to shoulder with your representatives in Washington, in trying 

 to bring about better conditions, trying to have those restrictions re- 

 moved, and the opening up of the outlet for our products. One thing 

 we thought should be brought about, and that was the adoption of the 

 National Live Stock policy. Everything seemed to be pretty chaotic at 

 Washington. It seemed to be a question of the Food Administration 

 getting by from day to day in a hand-to-mouth proposition. We thought 

 if representative men could be appointed down there in Washington to 

 map out a national live stock policy, and then notify the producers what 

 they could expect to depend on, things might be better. As a result of 

 the pressure brought to bear at that time, the President did finally ap- 

 point a Cv^mmittee of five — departmental committee, representing the 

 Deparment of Agriculture, one from the Food Administration, one from 

 the Department of Labor, one from the Federal Trade Commission, and 

 one from the Tariff Commission. Those men, after studying the live 

 stock situation very carefully, did make a report along early in the spring, 

 perhaps in May, and as a result of that report they outlined a pretty fair 

 program, and the first thing they said was in regard to the packers: We 

 do not recommend government ownership and operation of the packing 

 houses, except as a last resort. We do, however, recommend the most 

 strenuous kind of regulation, and we do recommend that the license under 

 which the packers are operating will be revised so that there will be a 

 real control instead of only an apparent control. 



They recommended, among other things, a uniform system of account- 

 ing be adopted by the packers, and that fell on the Federal Trade Com- 



