FEDERAL LICENSING OF CORPORATIONS THURSDAY, FEBRUARY 25, 1937 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee reconvened in the Senate caucus room, 318 Senate Office Building, at 10:30 a. m., Senator O'Mahoney presiding. Present: Senators O'Mahoney (chairman), King, McCarran, Hatch, Norris, and Austin. Senator O'MAHONEY. The hearings are resumed this morning, after a suspension owing to circumstances the subcommittee could not control. We have present this morning Mr. C. L. Harlan, of the Department of Agriculture, who is prepared to make a statement to the committee. STATEMENT OF C. L. HARLAN, LIVESTOCK STATISTICIAN, BUREAU OF AGRICULTURAL ECONOMICS, DEPARTMENT OF AGRICULTURE, WASHINGTON, D. C. Senator O'MAHONEY. Mr. Harlan, will you please state your name? Mr. HARLAN. C. L. Harlan. Senator O'MAHONEY. What is your present position? Mr. HARLAN. Livestock statistician of the Bureau of Agricultural Economics. Senator O'MAHONEY. How long have you been with the Bureau of Agricultural Economics? Mr. HARLAN. About 15 years. Senator O'MAHONEY. Are you a civil-service employee? Mr. HARLAN. Yes, sir. Senator O'MAHONEY. You came in by way of civil-service exami nation? Mr. HARLAN. Yes, sir. Senator O'MAHONEY. What was your training before you took the examination? Mr. HARLAN, I was in the farming business in Iowa and the ranching business in Wyoming. Senator O'MAHONEY. What part of Wyoming? Mr. HARLAN. Johnson County. Senator O'MAHONEY. Did you have an educational background also? Mr. HARLAN. Oh, yes. Senator O'MAHONEY. What was that? Mr. HARLAN. High school and the university. Mr. HARLAN. University of Michigan. Senator O'MAHONEY. Have you been studying, as a part of your duties in the Department of Agriculture, the effect of interstate corporate development on the livestock business. Mr. HARLAN. Yes. The situation of corporations in connection with the distribution of livestock products comes to our attention continually. Senator O'MAHONEY. Will you be good enough to make your statement in respect to it? Senator MCCARRAN. Before Mr. Harlan begins his statement, I should like to say that I regret exceedingly that I cannot remain and listen, because I am very much interested in this particular phase. I will have to get it by reading the record. The chairman understands that I am obliged to go to a meeting of the Committee on Appropriations now, and I ask to be excused. I am very sorry to miss this statement, but I will read it in the record. Mr. HARLAN. What I was asked to come over here to discuss was really two phases. One is the interstate character of the movement of livestock, and the other is the movement of livestock products and the situation of certain large corporations in respect to that movement. I thought, as an introduction to that, I might call attention to the importance of livestock in American agriculture. A very large portion of the feed, grain, and hay, and forage raised in this country must be converted into livestock before they have any consuming utility at all, and it is the fact that a large part of the country is dependent almost entirely upon the livestock industry. That is becoming more and more noticeable as the population has moved westward. In respect to agricultural products and forage and range feed. the population has become farther removed from the ordinary centers of population, which means that before these commodities can be utilized they have to be converted into some form by which they can profitably be moved in transportation in order to reach the consumer. That is, many of these products are so bulky that they cannot move any large distance by rail until they have been converted into a more salable product that can be easily and economically moved. In most cases they have to be converted into some type of livestock product. I have a number of charts that illustrate in a way what I have in mind. Senator O'MAHONEY. May I interrupt to say that, as I understand your statement, you intend to convey to us the thought that much of this feedstuff is raised for the express purpose of being converted into some type of live product which can be moved profitably in interstate commerce? Mr. HARLAN. Yes, sir. If it cannot be so converted, it has no value at all. Senator O'MAHONEY. The feedstuff on the western ranges, for example, is valuable largely only because it can be used to fatten the cattle which go to the central markets to be distributed throughout the United States? Mr. HARLAN. Yes, sir. Senator O'MAHONEY. Proceed. Mr. HARLAN. I have some small charts that duplicate these large ones I have here, which can be inserted in the record, if desired. Senator O'MAHONEY. Yes. Mr. HARLAN. The first is a chart, exhibit 1a, showing the distribution of beef cattle on farms and ranges in 1850, which shows that practically all the cattle at that time were located in the area east of the Mississippi, and in a very few States west of the river, and in eastern Texas. This information was taken from the census figures of 1850, which was the first census in which livestock was enumerated. Senator O'MAHONEY. That chart shows the United States in the year 1850 when the so-called Great Plains was still undivided into States. Mr. HARLAN. Yes, sir. Senator O'MAHONEY. The chart shows, for example, that west of the Mississippi cattle were to be found only in Louisiana, Arkansas, and Missouri, with the exception of the eastern part of Iowa and the eastern portion of Texas, and the entire area north of the Texas boundary was practically uninhabited by cattle. Mr. HARLAN. That is correct. Senator O'MAHONEY. Proceed. Mr. HARLAN. The next chart, exhibit 1b, shows the distribution of beef cattle as indicated by the census enumeration in 1930. It shows that the big bulk of the beet-cattle production at the present time is now west of the Mississippi and west of the area where it was located in 1850, which means that while the beef-cattle production has moved westward there has been no corresponding movement of population westward along with that production, so in order to find a market for the cattle they have to be transported to certain markets and then moved to the centers of consumption. Senator O'MAHONEY. You say there has been no corresponding movement of population westward? Mr. HARLAN. I mean relatively. The movement of cattle has been much larger. Senator O'MAHONEY. Do you have figures to show that ratio? Mr. HARLAN. I do not have them with me; but you will find in a number of these States that are agricultural States the population has not increased in anything like the proportion the number of cattle has increased in the last 40 years. Senator O'MAHONEY. You may proceed. Mr. HARLAN. The next chart, exhibit 1c, shows what we have worked out to show the surplus and deficit areas of beef production. That is based on the assumption that the per-capita consumption of beef would be the same in all sections of the United States. On the basis of the number of cattle in the different States we have certain States that produce a good deal more beef than the population could consume, on the basis of that assumption, and another group of States where the production of cattle was greatly deficient. Senator O'MAHONEY. This chart contains a diagram in each State. I notice that some of them are black and some of them are crosshatched. What do the cross-hatched circles mean? Mr. HARLAN. Those are the States where there is a deficiency in beef production, to cover the consumption of beef, assuming a uniform consumption over the United States. Senator O'MAHONEY. This map shows that in the New England States, the Atlantic States, the Southern States east of the Mississippi, Illinois, Michigan, Louisiana, and Arkansas, the consumption requirements of the population are far greater than the local State supply? Mr. HARLAN. Yes, sir. |