Authors: Maureen Ogle
A no-doubt statistics-dazed committee finally managed to steer Armour toward what it viewed as the main point. Had he and the other beef packers practiced collusion in order to monopolize the nation’s meat supplies? No, said Armour. There was no monopoly and no collusion. The beef men “combined” for the same reason as railroads and livestock shippers: if they did not, price wars would drive them to ruin. What outsiders regarded as collusion, insisted Armour, was simply smart business. The prices he paid at Kansas City or Chicago were based on the supply at hand, the supply en route, and the type and number of cattle he needed. If someone showed up in Chicago “with a couple of car-loads of steer from Kansas,” and Armour knew that “a thousand more” were “coming in from the West,” he behaved as would any smart businessman: he adjusted his buying price. “We do the best we can to buy cattle as cheap as we can,” he said. “We are here to make money. I wish I could make more. If I knew of any method of making more out of cattle I should certainly do it.” And, he added, had he “not been a little inventive and enterprising,” he wouldn’t have made any money at all. “I know I couldn’t do it in the old fashioned way,” he said.
Armour denied that the dressed-beef men were responsible for driving down prices paid for live cattle. Simple math said otherwise. Between 1880 and 1887, he explained, the nation’s cattle supply had risen 37 percent (thanks mainly to the cattle bonanza), but the human population had increased just 20 percent. Cattle supply outstripped demand, and so prices for live cattle had dropped. Rather than criticize packers, he argued, ranchers and farmers ought to thank them for opening new markets for beef among factory workers, in the Deep South where pork once ruled, and in Europe, where American imports rose annually. Without those markets, cattle producers would be in even worse shape.
Armour also explained that packers weren’t hoarding meat in order to drive up the price paid by consumers; rather, they stored it so they could sell it year-round at a stable price, a point he explained with the example of tenderloins. The packers procured those choice cuts during just two months of the year, when corn-fattened cattle from Iowa and Missouri arrived at the yards. If the packers dumped every tenderloin on the market as fresh meat, prices would fall while the supply lasted, and then soar as it dwindled. So Armour’s employees stored those cuts in freezers, dispensing them as ordered by his customers throughout the year. Nor was he gouging anyone. The choice cuts that Americans demanded constituted only a small portion of a carcass. Inevitably, demand for choice cuts outstripped supplies, and so prices for them were high. Prices of the less desirable cuts, in contrast, remained low because carcasses yielded large quantities of a product that few people wanted.
He dismissed the claim that the packers had plotted to dominate and control the stockyards. Armour explained that without access to the well-organized terminal markets like the stockyards in Chicago and Kansas City, the incorporated ventures that dominated cattle ranching would find it impossible to sell their enormous herds in a timely and efficient manner; those yards guaranteed that the livestock would find buyers. Moreover, those ranchers were dependent on the global marketplace to which Armour served as a conduit. The complex mechanisms of the national and foreign markets, he argued, justified the so-called conspiracy of which he and the others were accused. The “trust” he was charged with operating was simply a means by which he and other big packers managed the domestic and global market for a desirable, perishable good.
Armour’s nuanced argument was lost on the committeemen, who had begun the hearings with their minds made up: the “artificial and abnormal
centralization” of livestock markets, especially at Chicago, they concluded, had spawned a Beef Trust whose members intentionally engaged in actions aimed at robbing cattle ranchers at one end and consumers at the other. But there was little they could or would do about it. In the late 1880s, few Americans, and certainly not members of Congress, understood how to manage the nation’s rambunctious economy, and many weren’t convinced that it should be managed. Despite the ubiquity of trusts and combinations, many people feared that government regulation would destroy the lifeblood of the economy: competition. Nor was it clear that “trusts” were inherently evil: the price of sugar, oil, and meat, for example, had dropped in the hands of alleged trusts. Indeed, economists since have calculated that during the age of robber barons and monopolists, the industries accused of colluding to restrain trade actually increased their output, and prices for their goods fell rather than rose. In the case of the alleged Beef Trust, the Senate investigators failed to grasp the way built-in expenditures, from wages and maintenance to shipping and fuel, drive up the prices of goods in a national economy. Their belief that Armour and other packers earned excessive profits was based entirely on the fact that the prices butchers and wholesalers paid for beef appeared to be high relative to the prices those packers paid for cattle at the stockyards.
In 1890, the packer hearings and the outburst of antimonopoly fever resulted in the passage of the Sherman Antitrust Act, which banned any activity that restrained trade. But the law proved a milquetoast piece of legislation that appealed to voters and eased politicians’ consciences and did little to stanch corporate power. It oozed loopholes, and in the decade after its passage, mergers, syndicates, and holding companies proliferated as corporate managers sought ways to create efficiency and earn profits. More to the point, however, it also left the dressed-beef packers free to expand their empires, and that, in turn, saddled them with a reputation for playing foul with the nation’s stomachs and placed them on a collision course with a president and a novelist.
3
The (High) Price of Success
I
N
1902,
A MYSTERIOUS
and short-lived “beef famine” drove meat prices into the stratosphere.
“BEEF TRUST SQUEEZES POOR FOR
$100,000,000” announced a headline in the
New York Herald
in March 1902. The
Herald
reporter told readers that a “Beef Trust” “dominat[ed]” the nation’s food supplies by using “despotic and aggressive” tactics that had “killed” competition. Readers who stayed with the story—and who could resist?—learned that the trust controlled 75 percent of the nation’s egg and poultry supply. Swift executives had “secretly”
stashed 43 million eggs in cold storage and planned to release or hold the cache “as suits their convenience in manipulating the market.” The trust (whose membership numbered either four, five, or six firms, depending on the whim and knowledge of reporters) practiced collusion through a hired hand who maintained a secret office somewhere on Madison Avenue in New York City. The trust controlled the stockyards, cheated livestock producers, fixed prices for steak, and woe be to anyone or anything that tried to stop it. Americans’ only hope of escaping the trust’s “grip,”
concluded one reporter, was by becoming “rigid vegetarians.”
Cooler heads tried to explain that the “famine,” which was less a famine than a temporary shortage of preferred cuts like tenderloin, had more to do with weather conditions and tight cattle supplies than the evil machinations of corporate tycoons. Agriculture Secretary James Wilson, himself an Iowa farmer and livestock producer, blamed high meat prices on a bad corn crop. “Cattle and meat,”
he explained, “like all other commodities, have to follow the laws of supply and demand”; supplies of corn and cattle were low and prices of meat high. “Corn is the corner-stone
of the livestock industry,” explained the author of an essay in
Century
magazine. When the corn crop was “off,” beef prices rose. He added that farmers could not bring cattle or hogs to market weight fast enough to keep pace with consumer demand caused in part by an increase in national population; meat prices would remain high until cattle and hog herds increased.
Logic and facts be damned. The
Herald
’s exposé, which was reprinted in hundreds of newspapers and read into the
Congressional Record
, ran long on supposition and rumor and short on substance and facts. Many of its most dramatic revelations came from anonymous sources alleged to be former employees of one or another of the packinghouses. But its accuracy, or lack thereof, mattered not a whit to readers predisposed to believe the worst of corporations in general and the meatpackers in particular, and who were increasingly suspicious about foodstuffs that came from factories, especially their meat. Although the meatpackers did not yet know it in 1902, the famine uproar would land them in the crossfire of a then-unknown novelist named Upton Sinclair.
The standard version of the passage of the Pure Food and Drug Act, signed into law in 1906, goes like this: In that year, Upton Sinclair published
The Jungle
and exposed horrific sanitary conditions in American meatpacking plants. Outraged citizens demanded that Congress do something. Congress complied and passed legislation aimed at safeguarding the nation’s food supply. As is often the case with historical events, however, that account bears little resemblance to the facts. The Pure Food and Drug Act had little to do with meat, and
The Jungle
was a last straw, not a first blow. By the time Sinclair’s book appeared, Americans had been fretting about food safety and debating food and drug regulation for more than fifty years. Back in the 1880s, for example, when the dressed-beef men first threatened the power of the railroad-stockyard-abattoir stronghold, their enemies lobbed accusations of tainted meat precisely because they knew such charges would resonate with consumers already wary about their food supply system. Opponents accused the meatpackers of processing diseased cattle and dousing their beef with ammonia and other toxins. The author of one widely disseminated story denounced Chicago beef as “wholly unfit
to be eaten. It can only feed fever and foster disease.”
Why did Americans wait so long to act on food safety? One reason is that in the United States, the legislative machine grinds slowly, and food producers resisted efforts to regulate and constrain their businesses. Consider, briefly, the (not-at-all-brief) conflict in the 1880s over the manufacture and sale of oleomargarine, the butter substitute that meatpackers manufactured from beef byproducts. Oleo found a ready market both in the United States and abroad because it was cheaper than real butter and appealed to consumers trying to stretch meager food budgets. But dairy farmers, whose incomes depended in part on butter sales, denounced oleo as a dangerous product sold by greedy capitalists for the purpose of driving honest farmers like themselves to the poorhouse. They asked Congress to tax its manufacture and sale, hoping to price oleo out of the market. The dairymen’s chief supporter, Robert M. La Follette of Wisconsin, then in his first term in the House, denounced margarine as a fraud. “It is made to look
like something it is not; to taste and smell like something it is not; to sell like something it is not, and so deceive the purchaser.” Nonsense, replied oleo’s supporters. Margarine was an improvement over butter and evidence of the march of commercial and scientific progress. Then why, queried a real-butter advocate, was “oleomargarine sacred?
Why may we tax manufactured whiskey and not tax manufactured butter?” In the end, Congress passed and President Grover Cleveland signed a watered-down version of the original proposal, one strong enough to make the point, but not enough to tax margarine out of existence.
Competing interests like these stalled the food safety debate, but so did legitimate and complex questions of constitutionality. Since the colonial era, Americans had relied on local governments, primarily municipal authority, to legislate matters relating to food: municipal ordinances mandated weights and measures, for example, and banned the sale of putrid or poisonous foodstuffs. Given that long-standing local tradition, many people were justifiably wary of using either state or federal authority to dictate the ingredients that manufacturers could and could not use in making, say, mustard or coffee. If the federal government imposed food standards, argued a member of the House during one of dozens of debates over the issue, “how long will it be
before he will say what kind of clothing we shall wear in summer or in winter, what kind of horse [we] shall drive” or how a man ought to “run [his] farm[?]” Another congressman feared that the enforcement of food safety laws would require “a pestilential lot
of spies, meddlers, and informers” whose actions would render the government itself “a great deal more impure than any food or drink.” (A few years later, anti-Prohibitionists made that same argument against the amendment to ban alcohol.)
In the late nineteenth and early twentieth centuries, these long-standing arguments lost much of their clout. The germ theory and other then-new medical and scientific tools and ideas, including the growing use of the microscope, altered Americans’ understanding of the way disease functioned and spread, and challenged the notion that local control of the public’s health was either possible or desirable. But as more Americans exchanged country for city, and plow and hoe for typewriter and assembly line, their relationship with food itself changed, and that, too, forced many people to ponder what an earlier generation would have found unthinkable. “We are no longer
a nation of farmers living in sight of our food supply,” a writer reminded the readers of a women’s magazine. “The journey between us and [our] food supply, once only as long as from our own field and garden to our back door, has been lengthening year by year.” In modern America, food traveled “through the hands of more and more middlemen. It is time we found out what happens to it along this journey.” No wonder Americans fretted about their food supply and wrangled over how to monitor it. When families set their tables with foods that were shipped halfway across the country, local governance alone no longer made sense. But who should decide what could or should go into a can of tomatoes? The states? Congress? Were Americans doomed to eat mystery foods prepared at the whim of giant corporations? Were Americans’ stomachs the servants of private interests and corporate profits?