,,the ,,livestock      ,,producer ,,and 
,,armour    ,illustration        ,the   
success of capital lies in ministering  
to the      people1 not in taking       
advantage of them                       
,philip ,d4 ,armour          #aibj      
,,armour ,,and ,,company      ,,chicago 
,illustration3 ,directors of ,armour and
 ,company        ,george ,b4 ,robbins   
,c4 ,h4 ,mac,dowell      ,everett       
,wilson      ,arthur ,meeker      ,frank
 ,w4 ,waddell      ,charles ,w4 ,armour 
,laurance ,h4 ,armour      ,j4 ,ogden   
,armour      ,a4 ,watson ,armour        
,philip ,d4 ,armour      ,f4 ,edson     
,white      ,e4 ,a4 ,valentine          
,frederick ,w4 ,croll      ,robert ,j4  
,dunham          ,foreword      ,,the   
year #aiai1 included as it was in the   
period between the signing of  the      
,armistice and the ratification of      
peace1 was logically a season  of       
uncertainty1 unrest and unsettled       
conditions4 ,and yet ,american          
business1 discounting all this1 entered 

upon and passed through this  period    
with full faith in a favorable outcome4 
,while prosperity was general1 the      
processes of realignment of our         
economic relations hurt or temporarily  
hampered some lines of business4  ,the  
livestock and packing industries did not
 escape entirely unharmed4              
,naturally1 proposed radical            
legislation1 with accompanying          
agitation1  and a slump in ,american    
meat exports1 caused such violent       
disturbance  of the livestock markets   
during the latter half of the year that 
both  producers and packers became      
deeply concerned as to the immediate    
future of the industry4    ,no array of 
proved facts as to the low percentage of
 packer profits1  no pointing out of the
 real factors controlling meat and      
livestock  prices was sufficient to     
convince the disturbed element of the   
public  and certain agents of the       
,government that packers' operations on 
the  existing large scale were          

justifiable4    ,therefore1 by a recent 
understanding with the ,government1     
,armour and  ,company will dispose of   
all their interests in food production1 
not  directly associated with and       
dependent upon the meat packing         
business4  ,in addition1 ,armour and    
other packers agree to relinquish       
interests  in stock yards and railway   
terminal properties at the various      
market  centers4 ,the terms of the      
understanding permit the retention of   
dairy  and poultry products in view of  
the dependence of these on such         
refrigerating and distributive          
facilities as the packers have provided4
    ,both patriotism and enlightened    
self-interest command every citizen  and
 business to make concessions and       
sacrifices in times of crises1  whether 
of war or peace2 and while ,armour and  
,company felt that they  were clearly   
within their rights in their operations 
previous to this  understanding with the
 ,government1 it was plainly in the line

 of public  service to make concessions 
that would clear the way towards public 
confidence in the development of the    
livestock industry4        ,j4 ,ogden   
,armour    ,illustration3 ,running      
against a 8glutted market0 in the 8good 
old  days40 ,today the stockman's market
 is nation-wide4          ,how and ,why 
,livestock ,market ,grew      ,,there   
was a time1 within the memory of men    
still active in the cattle  business1   
when the capacity and demand of the     
local butcher shop  measured the demand 
for fat stock and fixed the price as    
well4    ,on driving his cattle to the  
village1 or negotiating for their sale1 
it was not uncommon for the stockman to 
be met with the news that a  neighbor   
had got ahead of him and glutted the    
market with two or three  or more meat  
animals4 ,no matter how good the        
offerings1 there was no  present market 
at any price4    ,this was the condition
 of the livestock business in the 8good 
old  days0 before the establishing of   

the great packing centers2 before the   
development of economical systems of    
slaughtering1 saving the waste1  and    
distributing dressed beef quickly and   
continuously to the remotest  parts of  
the country4    ,no stockman now        
considers the demand of the local       
butcher as a serious  factor in making  
or breaking the market for his cattle4  
,if he is  feeding a carload or more1 he
 has an approximate date set for the    
finishing of his feed4 ,by keeping in   
close touch with the supply of  cattle  
in the country1 their movement and the  
trend of prices1 he  chooses what       
appears to be the most favorable day and
 ships them to the  market4    ,even if 
he is feeding only a few head1 the      
disposal of them is not  dependent upon 
local demand4 ,he may double-up with his
 neighbors to  make up a car4 ,he may   
belong to a shipping association that   
makes a  business of collecting small   
lots into carloads for direct shipment1 
and although he sells to the local stock

 buyer1 his knowledge of what  his      
cattle are worth at the central markets 
enables him to secure a  fair price4    
,so it has come about that world demand 
determines prices and governs  buying   
activities in every town and village    
where livestock is  purchased4 ,for     
local butchers everywhere are governed  
by prices at the  central markets4 ,the 
truth is that the most successful       
butchers no  longer do their own        
killing1 but buy their beef from        
packers' branch  houses in the larger   
cities and towns or from 8route cars0   
running from  packing plants or branch  
houses into the smaller communities4    
,in doing this they get better beef at  
lower cost than by local  slaughtering1 
and they can serve their customers with 
a safer and more  satisfactory article  
because the animal is killed and the    
meat prepared  under the stringent      
government inspection and sanitary      
regulations  that are practiced only in 
the larger establishments4 ,this insures

  absolute freedom from diseased        
conditions and careless handling4       
,practical butchers1 who are also       
feeders1 have proved by test that they  
can ship their beef cattle hundreds of  
miles to the big packer1 have  them     
slaughtered1 dressed and returned at    
less cost than they can do  their own   
killing4 ,this is possible because the  
utilization of every  scrap of the      
animals in valuable by-products1 and the
 saving in labor  by wholesale          
slaughtering and handling1 pay all      
expenses1 including the  freight both   
ways1 and leave a margin for the butcher
 besides4    ,the local butcher or      
livestock producer can little better    
afford to  kill and prepare his own beef
 than he can afford to tan the hide and 
make his own shoes4 ,there was a time1  
even in ,america1 when the farmer       
himself actually did these things4 ,he  
also sheared his own sheep by  hand1    
while his wife and daughters spun the   
wool into yarn and wove  cloth for the  

family clothing4 ,progress has made such
 methods absurd1  unprofitable and      
impracticable4    ,but the great        
machinery of economical production and  
distribution  was not built in a day1 or
 a year1 or a decade4 ,armour and       
,company's  activities began more than  
fifty years ago4 ,at first the packing  
house was only a butcher shop on an     
enlarged scale1 preparing and  handling 
pork products almost exclusively4       
,cattle were killed for  local          
consumption only1 as there was no such  
thing as cold storage1  refrigerator car
 lines or branch houses for the         
distribution of fresh  meats4    ,in    
those days the offal from the packing   
houses was thrown away or  buried1 as is
 still done to considerable extent by   
the small butcher  at the present time4 
,the by-products industries1 by which   
hundreds  of valuable articles are now  
created from what was once waste1  were 
developed through long years of         
scientific investigation and            

experimentation4    ,the efficiency of  
the ,armour organization of today is the
 result of the  accumulated efforts of  
thousands of trained scientific and     
business  minds1 applied through half a 
century to the solution of the problem  
of  factoring and furnishing food       
supplies for the nation and the world by
  the most direct and efficient means4  
,nothing less than a great and          
thoroughly organized concern could      
effect  the economies that make such    
achievement possible4 ,armour and       
,company's  growth has been1 and is1    
simply the natural expansion of a great 
industry keeping pace with the progress 
of the producer4          ,re-investment
 and ,expansion ,policy      ,,no amount
 of criticism1 investigation1           
misrepresentations or  8exposures0 has  
ever shaken ,armour and ,company's faith
 in the fairness  and final endorsement 
of the great body of ,american livestock
 producers4    ,that the consumer found 
grievance in recent high food prices and

  attributed his troubles to the packer 
or producer1 or both1 was perhaps  not  
to be wondered at1 though his reasoning 
was not sound4 ,that  competing food    
distributors should object to the       
extension of packer  efficiency to      
general food distribution is easily     
understood from these  competitors'     
viewpoint4    ,the retirement of ,armour
 and ,company from all lines of         
production  and distribution not        
directly associated with meats and      
livestock  by-products1 was in response 
to these disturbed elements of public   
opinion4 ,but these restrictions of     
packer activities in no way affect  the 
relations of mutual confidence and      
dependence between ,armour and  ,company
 and the livestock producers4    ,the   
fundamental things remain1 and they are 
these3 ,the livestock  industry must    
continue to exist and expand2 producers 
must be rewarded  with fair profits2    
livestock markets must be maintained and
 made more  convenient2 and the markets 

for meat products must be enlarged and  
extended4    ,to these basic facts      
,armour and ,company have pinned their  
business  faith1 and upon them shaped   
their policy4 ,ninety per cent of the   
profits of the ,company have been       
re-invested in the business and  are    
represented today by great packing      
plants at sixteen market  centers1 and  
many branch houses throughout the       
country1 together with  refrigerator car
 lines connecting the livestock markets 
with the  consuming centers of the      
nation4    ,it requires no argument to  
show the livestock producer that his    
interests and profits are inseparably   
associated with these properties1  and  
it is quite as plain that the           
necessities and conveniences of the     
consuming public are dependent upon and 
served by them4    ,america and the     
world will continue to demand more and  
more meat and  other products from      
livestock4 ,agriculture will not        
successfully  continue without the      

production of meat animals4 ,so the     
future reveals  no reason why ,armour   
and ,company should not continue the    
policy of  re-investing their earnings  
in the business that gives the most     
direct  and substantial support to the  
basic industry of animal husbandry4     
,illustration3 ,the packer must1 with   
utmost carefulness1 balance his  daily  
purchases against his daily sales4      
,aspects of ,big ,business ,explained   
,,the simple recital of an ordinary     
day's doings of ,armour and ,company's  
beef department will make plain a number
 of things that may appear  mysterious  
to a casual observer4 ,each day1 at the 
opening of the  market1 the manager of  
the beef department must carefully weigh
 the  possibilities of his sales and    
shipments of beef carcasses against the 
receipts of cattle of the quality       
demanded by his trade4 ,and he must  buy
 accordingly4    ,the prevailing idea   
that1 because of cold storage facilities
 at  the packing centers1 unlimited     

numbers of cattle of all grades and     
qualities can be absorbed and           
slaughtered1 is wrong4 ,for even though 
cold storage capacity were unlimited1   
beef cannot be held4 ,each day's  kill  
must find room in chill and storage     
rooms by the shipment of about  an equal
 number of carcasses out of storage to  
,armour's branch houses  located in all 
parts of the country4    ,these branch  
houses must1 in turn1 dispose of each   
shipment promptly to  make room for new 
arrivals4 ,each branch manager receives 
a memorandum  of the cost of the beef1  
and of course is expected to sell it at 
a  profit4 ,but he must sell it within a
 very limited time1 even if he  cannot  
show a profit4    ,local conditions     
determine this4 ,he may meet with       
unforeseen  competition in the kind of  
meats he has ordered1 or the demand for 
meats may have fallen off for one or a  
dozen of reasons1 or for no             
discoverable reason at all4 ,these known
 and unknown influences on the  demand  

govern his market and he has to accept  
the situation1 depending  on evening up 
the score under more favorable          
conditions4    ,of course a decline or  
advance at one or a few branch house    
points1  from merely local causes1 does 
not materially affect the market at the 
packing centers1 but any widespread     
fluctuation from general causes is      
immediately reflected in cattle prices  
at all of the great markets4    ,the    
best way for a producer to learn what   
determines the price he gets  for his   
livestock is to visit the nearest       
,armour branch house and get  first hand
 information on the facts that govern   
meat prices at the  final market4       
,any ,armour branch manager will welcome
 visitors and willingly answer          
questions4 ,he will explain not only the
 factors that influence the  general    
level of prices1 but will point out why 
cuts from certain types  of beef        
carcasses are in constant demand at the 
highest prices1 while  similar cuts from

 other carcasses are neglected and sell 
materially  lower4    ,there is a type  
of beef carcass that is best and        
commands the best  price1 and it costs  
no more to produce than an inferior     
type4 ,the same  is true of mutton and  
pork4 ,any ,armour branch manager will  
show you  what these types are and the  
,armour ,farm ,bureau will furnish1     
without  charge1 information on improved
 methods of producing the sort of       
animals that are most in demand for meat
 purposes4    ,one aspect of the big    
packing business1 the importance of     
which is not  generally appreciated1 is 
refrigeration4 ,it is not too much to   
say that  without ample means of        
refrigeration1 both in storage and in   
transit1  no fit and adequate supply of 
fresh meats and dairy products could be 
supplied to the public4    ,food        
refrigeration originated with the meat  
packing business early in  its history4 
,at first only storage refrigeration was
 practiced for  the purpose of          

conserving and equalizing the supply of 
fresh meats  for local or near-by       
consumption4 ,then came the conception  
of transit  refrigeration1 and the      
refrigerator car was invented1 primarily
 for the  purpose of shipping fresh     
meats from the producing centers of the 
,west  to the consuming centers of the  
,east4    ,from the transportation of   
fresh meats1 the extension of the       
service  to the carrying of fresh       
fruits1 vegetables and dairy products   
was a  natural and easy step1 resulting 
in the development and maintenance of   
the great orchard lands and fruit and   
market garden areas from coast to       
coast1 and the tremendous expansion of  
the indispensable industry of  dairy    
farming all over ,america4    ,to the   
livestock producer refrigeration in     
storage and in transit means            
everything4 ,without it the great       
packing interests could not exist and   
livestock husbandry would revert to the 
primitive and unprofitable  conditions  

prevailing fifty years ago and described
 in the preceding  chapter4    ,these   
facts explain why ,armour and ,company  
have persistently  opposed every attempt
 to deprive them of the exclusive use of
 their  privately-owned refrigerator    
cars and turn them over to the railroad 
companies for general use4 ,to maintain 
the necessary constant movement  of meat
 products ,armour must have an adequate 
supply of these cars  every day in the  
year4 ,extended experience has proven   
that they would  not and could not be   
supplied by any form of railroad        
administration1  either governmental or 
corporate1 yet devised4                 
,declining ,livestock ,prices and the   
,causes      ,,briefly outlined herewith
 is a resum of what are accepted as the 
chief  causes contributing to the sharp 
decline in livestock prices during      
#aiai4    ,the discontinuance of        
,government orders for beef was the     
principal  thing which affected cattle  
prices in the late spring4 ,from being a

  purchaser the ,government became a    
seller in the domestic market4 ,added   
to this1 there has been unusual labor   
unrest1 large supplies1 agitation       
against the high cost of living1 low    
foreign exchange rates1 and the         
,english boycott against high prices4   
,the falling off in hog prices was far  
more serious than in the case of  beef1 
because normal demand for hogs is based 
on the consideration of  large exports1 
while the market for beef is primarily  
and principally  domestic4    ,the great
 demand for ,american pork products     
which was confidently  expected from    
,european countries did not materialize1
 because of the  extraordinary and      
unforeseen development of exchange      
conditions which  made purchases on the 
,american market practically impossible4
    ,the earlier part of #aiai was      
marked by an unprecedented export of    
pork  products1 reaching in the month of
 ,june the high point of over #djj      
million pounds4 ,from this point the    

drop was sharp and continuous1  month by
 month1 the figures for ,october showing
 total exports of less  than #abj       
million pounds--a falling off of #gj in 
four months4 ,these  later exports were 
on orders booked earlier in the year1   
and not on new  business4    ,added to  
these principal factors1 and aggravating
 them1 were attempted  boycotts of meat 
and proposed radical legislation for the
 regulation  and restriction of the     
packing industry1 and the resulting     
condition  of uncertainty up to the very
 closing weeks of #aiai1 when the       
understanding between the packers and   
the ,u4 ,s4 ,department of ,justice  was
 made public4    ,the big question is1  
,what of the year #aibj8 ,while nothing 
positive can  be predicted1 better      
conditions is a practical certainty4    
,the domestic  consumption of beef is   
increasing to a gratifying degree2 the  
arranging  of international credits and 
the opening of foreign markets is a     
matter  of comparatively short time4    

,european need for pork products will be
  urgent and excessive for a            
considerable time1 and this will not    
only  take care of our surplus hogs1 but
 will react favorably upon the market   
for cattle and sheep4          ,standard
 ,breeds of ,beef ,cattle               
,,aberdeen-,,angus    ,early maturing2  
transmits polled character2 high        
dressing percentage2  high proportion   
valuable cuts4    ,illustration3        
,aberdeen-,angus      ,,shorthorn       
,greatest weight for age2 dress out well
 at slaughter2 quiet  disposition2      
strong milking tendencies4              
,illustration3 ,shorthorn               
,,galloway    ,prepotent2 adapted to    
rugged regions2 high carcass value2     
valuable hide4    ,illustration3        
,galloway      ,,polled ,,shorthorn     
,characteristics similar to ,shorthorn  
except polled2 some strains dual        
purpose4    ,illustration3 ,polled      
,shorthorn      ,,hereford    ,best     
grazing breed2 matures early2 fattens   

rapidly2 good weight for age4           
,illustration3 ,hereford      ,,red     
,,polled    ,strictly dual purpose2 fair
 grazers2 early maturing4               
,illustration3 ,red ,polled             
,the ,livestock ,situation      ,,right 
now is a good time to stick to the      
middle of the highway of  common sense4 
,as shown in earlier chapters1 the      
conditions adverse  to the business can 
be only temporary1 and even the losses  
incurred  may be turned to profit in the
 end1 if the livestock men shall learn  
the lesson of economy and efficiency of 
production and more complete            
co-operation among themselves and with  
the packing industry4    ,recent        
experiences will impel some producers to
 curtail or discontinue  their          
operations temporarily1 but others will 
take their places and  quantity of      
production will be maintained while     
quality will be  increased4             
,high-priced land1 grain and labor will 
compel stockmen to grade up  their      

herds1 to discriminate more closely in  
the purchase of feeding  stock1 to      
improve feeding methods and to keep     
exact records of costs4  ,for at the    
higher level of costs and values all    
around1 as compared  with prewar times1 
both the risks and rewards of the       
business will be  greater4    ,as       
co-operative activities are extended    
among producers1 it may be  found       
advisable for livestock associations to 
employ expert buyers  at the various    
markets whose duty shall be the filling 
of orders for  association members1 for 
the choice of feeders cannot be safely  
based  on personal fancy4 ,the only true
 guide is unbiased judgment as to what  
the market demands in the finished      
product and what type of feeding  cattle
 will yield the result4    ,an          
experienced buyer of keen judgment1     
constantly in touch with the  market1   
should prove as valuable to producers as
 the expert buyer of  fat cattle is to  
the packer4    ,such expert selection of

 feeders would take the guesswork out of
 the  first and most important step in  
feeding4    ,generally speaking1 the    
consumers' demand is constantly for     
better  meats from comparatively young  
animals4 ,taking the situation the      
country over with present prices of feed
 stuffs considered1 it has been  found  
that beef cattle make most money for the
 producer if not held  past the age of  
two years4 ,but there is no             
hard-and-fast rule for the  guidance of 
every individual producer2 the heavy1   
well-finished cattle  always bring high 
prices4 ,only by keeping an accurate    
feeding record  can the producer decide 
for himself what policy is most         
advantageous in  his case1 or determine 
when his steers stop making sufficient  
gains to  compensate him for the feed   
required4          ,armour's #aiai      
,livestock ,purchases      ,,rising     
prices of farm land and feed have       
changed entirely the  character of      
livestock received on the market as     

compared to twenty  years ago4 ,the     
period following the war shows all      
conditions more or  less accentuated1   
and one can trace very definitely the   
tendency to  market animals younger and 
to feed to lesser ripeness than         
prevailed  in the earlier years of the  
last decade4 ,in #aiai ,armour and      
,company  purchased #ab1bce1dea head of 
livestock1 while in #aiah they purchased
  #aa1cih1aca4 ,yet the animals bought  
last year weighed actually fewer        
pounds1 in spite of their greater       
numbers1 than those received the  year  
preceding2 the former weight being      
#c1gdj1cdg1bbc pounds and the  latter   
#c1ici1bgh1ecd pounds4 ,furthermore1 the
 animals of #aiai cost over  nineteen   
million dollars more4 ,the following    
table presents these facts  on a        
percentage basis3        ,increased     
number animals #aiai over #aiah    #g4c 
,decrease in total weight animal        
purchases  #e4j      ,increase in cost  
of animals                #c4g          

,increased price per pound live weight  
#a4b    ,probably the fundamental factor
 in bringing about these conditions1    
which are distinctly unfavorable from a 
quality trade standpoint1 is  the       
feeder's expectation of declining       
prices4 ,this attitude has driven  all  
the animals to market almost as soon as 
they were in merchantable  form4 ,the   
late winter months of #aiai-bj saw an   
opposite tendency among  hog feeders1   
but this was not sufficiently marked to 
check the general  trend4    ,another   
factor in stimulating this hurried      
marketing has been the  belief that more
 money could be made by selling the     
grain crop than by  feeding it4 ,this   
has given short rations to many animals 
that would  have made suitable market   
records if handled properly1 but it has 
enabled farmers to cash in their grain  
and meat crops while prices were        
relatively high4    ,in terms of        
permanent agriculture it would have been
 better to leave  a greater share of    

this cash invested in a further         
development of  livestock1 but the war  
order against feeding wheat placed the  
situation  in some western states beyond
 the control of the average stockman4   
,as a  general practice in production   
this incomplete utilization of livestock
  must be deplored1 although one cannot 
criticize the tendency under the        
special market conditions of #aiai and  
early #aibj4          ,financial        
,aspects of ,livestock ,industry        
,,one of the most significant and       
gratifying gains in the livestock       
business during the decade just past is 
the recognition of its  financial       
soundness4 ,this is reflected in the    
changed attitude of  financiers and     
investors towards cattle paper4 ,while a
 decade ago  bankers in the great       
financial centers looked with suspicion 
upon  such securities1 now bankers and  
business men throughout the country     
purchase approximately #ejj1jjj1jjj of  
cattle paper annually and regard  it as 

among the safest investments4    ,melvin
 ,a4 ,traylor1 ,president of the ,first 
,trust and ,savings ,bank  of ,chicago1 
declares that 8loans on livestock are   
the best of all  investments10 and      
,president ,thos4 ,p4 ,martin1 of the   
,oklahoma ,stock  ,yards ,bank1         
,oklahoma ,city1 agrees with him4 ,this 
latter bank loaned  #de1jjj1jjj in seven
 years to cattle producers in ,oklahoma1
 ,texas and  ,new ,mexico1 only fifty   
dollars of the amount loaned being lost4
 ,it is  doubtful if any other          
industrial securities could make a      
better or even  an equal showing4       
,there is still some difficulty in      
arranging loans in some sections of  the
 country1 where bankers have not yet    
realized the changed conditions  of the 
business and farmers have not given the 
proper emphasis to the  improvement of  
livestock production4 ,but generally    
speaking the cattle  feeder with good   
judgment in the breeding and selection  
of feeders  meets with no obstacles in  

financing his operations4    ,most      
country bankers freely accept cattle    
paper because it is readily             
rediscounted in the country's financial 
centers4 ,but many of them urge  the    
borrowing feeders to keep accounts and  
determine accurately their  profits and 
losses4    ,this is to the interest of  
the feeder and the cattle industry as a 
whole4 ,for if the business is ever to  
be placed on a cost-of-production  basis
 for the reckoning of market prices1 it 
must be done by an  accumulation of     
thousands of actual tests in feeding    
practice4 ,it  is plain that each       
individual feeder could not set or ask a
 certain  percentage of profit1 since a 
poor judge of stock and a careless      
feeder  would demand more for an        
inferior product than the more efficient
  feeder would ask for a better article4
    ,the feasibility of any such scheme 
of regulating prices does not now       
appear1 but it is clear in any case that
 each lot of cattle would have  to be   

appraised at what their production ought
 to cost1 considering  quality1 and not 
what it actually did cost4              
,illustration3 ,bankers now recognize   
cattle loans as good investments1  and  
the skilled stockman has access to      
needed funds4          ,losses on       
,declining ,markets      ,,that the     
packing industry suffers with the       
livestock producers on a  falling market
 was never more clearly emphasized than 
in the year  #aiai4 ,armour and         
,company's losses on dressed beef alone 
amounted1 in  the twelve months1 to     
several million dollars2 and on the sale
 of pork  products the losses were even 
greater4    ,these losses are figured on
 the basis of the primary sales1 which  
include not only the meat but the hides 
and all other by-products  derived from 
the animals4    ,such deficits do not   
mean that the ,armour organization1 as a
 whole1  suffered a net loss for the    
year4 ,but there is no mystery about the
  methods of countering these deficits4 

,they are offset by the profit  made in 
manufacturing by-products into          
merchantable commodities4  ,each        
by-product industry in the ,armour      
organization is placed on its  own      
responsibility4 ,it must pay to the     
beef1 hog1 or sheep killing  department 
the market value for its raw            
materials--the same price it  would pay 
if it purchased on the outside market4  
,for example1 the beef department buys  
its cattle to the best possible         
advantage in competition with other     
buyers1 and sells the beef at the  best 
price obtainable4 ,the hides go to the  
tannery at prices ruling on  the open   
market4 ,if the ,armour tannery cannot  
pay this price the hides  go to outside 
buyers4 ,to sell at less would be       
favoring the tannery at  the expense of 
the beef department1 or robbing ,peter  
to pay ,paul4    ,the same business     
methods are pursued with every scrap of 
the animal1  whether used in making     
glue1 soap1 sand-paper1 drugs1          

fertilizers1 or  any other commodity4   
,while on this basis ,armour and        
,company sustained heavy losses in their
  meat departments1 the by-product      
industries showed profits1 as they      
usually do1 because their products are  
not so perishable and are not so  much  
influenced by market fluctuations4      
,these by-product industries are1 in    
short1 the insurance of the packers     
against crippling losses1 and may be    
likened to the activities of the        
up-to-date livestock farmer1 who        
diversifies his operations by feeding   
cattle and hogs and by keeping fowls1   
sheep and dairy cows1 so that if  he    
loses on cattle or hogs he may offset   
his losses by better prices  for lambs1 
wool1 butter1 eggs1 poultry1 or a money 
crop4          ,why ,prices ,fluctuate  
,,prices for livestock are not          
controlled by packers1 and only to a    
limited extent by the supply of cattle  
in the market4 ,they go up or  down in  
response to the price the consumer is   

willing to pay for meat4    ,note how   
closely the two lines in the chart1     
representing prices of  cattle and      
dressed beef1 follow each other through 
the two and a half  years covered by the
 graph4 ,america's twenty million food  
shoppers  determine the dressed beef    
price1 by their willingness or refusal  
to  accept beef at the price asked in   
competition with other food4 ,and       
naturally dressed beef prices react     
directly and at once on cattle  prices4 
,it is often necessary for the packer to
 take a marginal loss on beef in  order 
to stimulate demand1 but he must at once
 hedge against this loss  by buying     
cattle cheaper4 ,he tries to fit the    
price he pays for cattle  each day to   
the price he is obtaining for beef4     
,only by so doing can he  maintain his  
business on present small margins4      
,large receipts of fish1  poultry1 game1
 eggs1 vegetables or fruit at certain   
seasons also affect  the price the      
public is willing to pay for beef1 and  

this is reflected  in the price the     
packer can afford to pay for the live   
animal4    ,it is plain that the packer 
cannot determine retail meat prices1    
simply  because he cannot say to the    
consumer at the butcher's counter1 8,you
  must buy meat and you must pay such   
and such a price40 ,because he  cannot  
do this he cannot control the prices of 
livestock4    ,illustration3 ,,what     
,,makes ,,the ,,price ,,of ,,cattle     
,,this ,,chart ,,shows ,,that ,,demand  
,,by ,,consumers ,,is ,,the ,,big       
,,factor          ,what ,efficient      
,distribution ,means      ,,livestock   
producers are1 of course1 engaged in an 
absolutely  indispensable industry4 ,of 
scarcely less importance is the packing 
business4 ,for upon food production and 
preparation depend all other  industries
 and activities4    ,but it is          
profitable and enlightening to ask1 of  
what use would be  production and       
preparation without means for delivering
 the food to the  consumer8 ,the mere   

asking brings realization of the prime  
importance  of ample and uninterrupted  
transportation and distribution of      
packing  house products to consumers    
through the retailers of the country4   
,and this1 in turn1 brings us to the    
consideration of the packers'  salesmen 
in the hundreds of cities and towns     
throughout ,america1 which  as a whole  
make up the final market for the        
producer's livestock4    ,with the sale 
of his meat animals by the commission   
man at the primary  market1 the owner   
seems to witness the end of the         
transaction as far as  he is concerned4 
,but does he8    ,could the commission  
man sell and the packer buy the         
livestock if it  were not for another   
salesman and another buyer out at the   
farthest end  of the market system      
transacting business with each other in 
the retail  market8    ,again the       
question answers itself4 ,for the       
packer's salesman is  literally the     
salesman of the livestock producer at   

the final market1  upon which all other 
markets depend4 ,the advertising and    
educational  activities conducted by the
 packer continuously broaden and        
intensify  the ultimate market for the  
products which the livestock man        
produces4  ,it devolves upon these      
agencies to keep the meat products      
moving  towards final consumption1 just 
as the man at the measuring spout of    
the old-fashioned threshing machine had 
to keep the grain out of the  way and   
prevent congestion4    ,there are two   
distinct divisions of the process of    
turning livestock  into available meat  
supplies4 ,first1 the production1       
shipment and sale  of livestock4        
,second1 the preparation1 transportation
 and distribution  of meat products to  
retailers4 ,the two are interrelated and
 absolutely  dependent one upon the     
other4    ,the opportunity for organized
 producers to take complete possession  
of their end of the process by assuming 
control of the stockyards1 is  offered  

in the passing of that control from the 
packing industries by  virtue of the    
recent understanding with the ,u4 ,s4   
,government4    ,illustration3 ,the     
packer's salesman is literally the      
farmer's salesman  in the thousands of  
8final markets0 throughout the land4    
,farming as a ,business      ,,all      
business undertakings are ventures4     
,under the best of conditions  there are
 fat and lean years1 and the possibility
 of failure1 due to  poor management1   
lack of capital1 or adversity1 is always
 present4    ,farming is no exception4  
,it is in essence a business            
proposition1 and  should be so regarded4
    ,a knowledge of crops1 of soils and 
tillage1 of livestock breeding  and     
feeding and other purely agricultural   
subjects constitutes but  one side of   
the farming industry4 ,on top of this   
come the important  matters of business 
management--the buying of seeds1        
fertilizers1 feed  stuffs1 livestock and
 general equipment and supplies2 the    

erecting  and maintenance of buildings2 
the arrangements for necessary credit2  
keeping in touch with market conditions 
and prices2 the hiring of  help1 and    
finally the establishing and operation  
of an accurate  cost-accounting system4 
,yet when all is said and done1 records 
indicate that farming offers  more      
chances of success than almost any other
 line of business  endeavor4 ,a retail  
merchant1 according to statistics1 has  
from two  to four chances in ten to     
conduct his business successfully for   
fifteen years2 a manufacturer has from  
two to seven chances to do the  same4   
,farming is conspicuous for its small   
percentage of out-and-out  failures4    
,living is practically assured1 which   
gives the farmer a  distinct working    
advantage to begin with4 ,he enjoys a   
cash market and  is not called upon to  
suffer bad debt losses4 ,he is in an    
industry that  is absolutely essential1 
which cannot be destroyed by any        
shifting of  circumstances4    ,the     

greatest need is doubtless for          
cost-accounting systems which will      
serve as a guide1 not only to prevent   
unwise purchases1 but to indicate  wise 
expenditures in improvements that will  
bring a good return on  investment1 and 
to show definitely the amount of profit 
obtained on  each transaction4 ,next to 
this in importance is perhaps the need  
for a thorough understanding of crop    
rotation and the principle of           
diversified farming as a means of       
offsetting losses in one line with      
gains in another4 ,the securing of      
credit to enable expansion1 and the     
adoption of labor-saving devices are    
also essential4    ,profits and losses  
in farming must be reckoned1 as in all  
other  businesses1 on averages over a   
term of years4 ,but the future  offers  
better assurance than ever before to the
 man who is a good  agriculturist and at
 the same time a skillful business      
manager4          ,we ,stand or ,fall   
,together      ,,with some elements of  

the ,american public there seems to     
persist the  conviction that the great  
packing concerns are seeking the injury 
of  livestock producers to their own    
enrichment4 ,how such an idea can be    
seriously harbored by thinking men is   
hard to understand4 ,for the  packing   
industry to plan for the farmer anything
 but prosperity is to  endanger or      
destroy the source of supply of the raw 
material by which  it lives and grows4  
,it should be perfectly plain that the  
packers are selfishly interested  in    
encouraging the producer4 ,their selling
 efforts are directed towards  disposing
 of the largest possible volume of meat 
products1 at the best  price obtainable 
in competition with other foods1 in     
order that they  may maintain large     
volume of livestock purchases at prices 
that will  encourage both quantity and  
quality of production4    ,between the  
producer and the consumer1 between the  
buying and the  selling price1 the      
packers operate upon a smaller margin of

 profit than  any other large industry4 
,on invested capital they have realized 
an  average of about #i per cent over a 
term of years1 on volume of sales  about
 #b per cent1 and on each pound of meat 
less than one-half of a  cent4    ,at   
the same time the risks of the business 
are greater than in other  lines1 both  
on account of the perishable nature of  
the product and the  violent            
fluctuations of food prices1 the causes 
for which cannot always  be foreseen4   
,the comparative low prices of hogs and 
pork products at the end of #aiai  is a 
case in point4 ,the packing business    
entered upon the year in the  belief    
that the world shortage of food would   
maintain pork prices at  high levels for
 a number of years2 that ,european      
demand would absorb  even a larger      
surplus of ,american hogs than the      
pre-war period4 ,the  earlier months of 
#aiai confirmed this belief4 ,the       
foreign demand was  very brisk1 exports 
reached unprecedented volume and prices 

were  maintained4    ,then came the     
unlooked-for event4 ,foreign exchange   
rates fell to so low  a point that      
,europeans could no longer afford to buy
 ,american meats4  ,the packers extended
 credit for a time1 but the limit of    
safety was  soon reached1 and when the  
year closed very little ,american pork  
was  being exported and no new contracts
 were being made4    ,the result was    
great loss to both producers and        
packers4 ,armour and  ,company alone    
packed millions of pounds of pork during
 the period of  high prices1 much of    
which was still in the course of curing 
when the  slump in the market came4     
,but the conditions that caused this    
decline and loss are exceptional  and   
only temporary4 ,the great foreign need 
for ,american meats still  exists--the  
greatest need in the world's history4   
,the ability of ,europe  to buy will be 
restored with the full restoration of   
peace and the  arrangement of           
international credits4 ,the result will 

be a return of  profits and prosperity  
to both producers and packers of pork4  
,the facts to keep in mind are these3   
,first1 there must finally be a         
realignment of prices on all livestock  
and meats1 to levels below the          
prevailing high war prices4 ,a fair     
balance must be struck between the      
interests of the consumer and those  of 
the producer4 ,prices for meat must be  
sufficiently attractive to  consumers to
 insure an adequate volume of sales2 on 
the other hand  prices for livestock    
must be sufficiently high to encourage  
production4  ,only on this basis can the
 industry thrive4    ,second1 the utmost
 care must be taken in breeding and     
buying of feeding  stock and the most   
exacting economy practiced in feeding   
methods4    ,third1 the producer must   
realize that the packer is his natural  
ally  in maintaining the prosperity of  
the two inseparable branches of the     
livestock industry--production and      
packing4    ,it is a reassuring sign    

that producers and packers are already  
getting  together on a platform of      
better understanding of their mutual    
interests1 both for protection against  
disturbing agitation and  legislation   
and for the correction of whatever      
inequalities or abuses  may exist in the
 shipping and marketing of livestock4   
,armour and ,company's ,farm ,bureau was
 established three years ago as a  point
 of contact with livestock men1 through 
which better methods of  breeding1      
feeding1 shipping and marketing could be
 promoted4    ,being in constant touch  
with the requirements of the markets1   
,armour  and ,company know the types of 
meat animals which are most demanded    
and which bring the largest profit to   
the stockman4 ,the ,farm ,bureau  has   
available many facts regarding the      
economical production of these  types1  
and these facts can be had by addressing
 the ,bureau1 care of  ,armour and      
,company1 ,chicago4