Carve the Carvers?

Out from Attorney General Tom Clark's office last week went some long-awaited "big news." The news was that the antitrust division of the Department of Justice, with an election-year ear tuned to the static made by high meat prices, was going after the "meat monopoly."

In a suit filed in Chicago, Clark charged that the four big packers, Armour, Cudahy, Wilson and Swift, were monopolizing the trade in federally inspected meat (the only meat that may be shipped across state borders). The Big Four, said the Attorney General, sold 58% of the cattle, 54% of the hogs, 68% of the calves, and 79% of all the sheep slaughtered under federal inspection. He accused them of getting together on buying & selling prices, and setting sales quotas to keep prices up.

What did the Attorney General want the court to do? He asked that the Big Four, which carve up $5,000,000 worth of livestock every weekday, be carved up themselves into 14 separate and competing companies.

Strong Flavor. Packers angrily yelped that Tom Clark was after a political goat for the high meat prices; the packers have repeatedly said that those prices were caused by a shrinking supply and enormous demand. Snapped Swift's President John Holmes: "The suit is an unproved charge, with strong political flavor. I am certain that [the packers] will be completely exonerated when all the facts are presented." The packers thought that Clark would have trouble making his charges stick. Eleven times in 50 years the Government had sued the big packers; it had won only twice. A year ago a federal grand jury in Chicago failed to indict the packers on an antitrust conspiracy after an investigation requested by Clark.

Strong Facts. Federally inspected meat accounts for about 75% of the meat the U.S. housewife buys. But the meat business is difficult to control. Each day the packers through retail stores deal with millions of customers. In the stockyards, even though they are the most powerful bidders, they still deal with thousands of livestock growers whose readiness to market their animals is the most important factor in determining meat prices from day to day. Throughout the U.S. the Big Four get lively local competition from some 3,000 smaller packers. The independents during last spring's meat workers' strike when 67 of the Big Four's plants were shut down, expanded operations, enough in nine weeks to restore 90% of the meat supply.

Despite booming meat sales, the packers' profits have been less than those of other food processors. After paying its first common dividend in ten years in the first quarter of the year, Armour decided not to pay a dividend this summer. Said Armour's Board Chairman George A. Eastwood: "Our earnings on meat last year were at the rate of about one-fifth of a cent a pound. Obviously a profit of one-fifth cent cannot be responsible for the increase which has taken place in meat prices since before the war." Nevertheless, the suit helped drive packing shares on the New York Stock Exchange to their year's low.

After an eight-year court battle with the antitrust division, the American Optical Co. and Bausch & Lomb Optical Co., makers of eyeglasses and frames, and 34 other companies gave in last week. They agreed to stop practices which the Justice Department considered monopolistic and illegal. They also agreed to license their patents to other manufacturers, promised not to enter into any price-fixing agreements, acquire no further wholesale subsidiaries for the next ten years.

This file is automatically generated by a robot program, so reader's discretion is required.