¹ U.S. v. Swift & Co. et al., 37623, Equity, Supreme Court of the District of Columbia, February 27, 1920. For our purposes, the precise definition of the meatpacking industry is SIC code 2011.

^* Transcript of Oral Arguments, U.S. v. Swift & Co. et al., Docket No. 58C613, U.S. District Court for the Northern District of Illinois, p. 1.

^** Opinion of the District Judge, U.S. v. Swift & Co. et al., Docket No. 580613, U.S. District Court for the Northern District of Illinois, p. 56.

² See Aduddell, and Cain, , “Public Policy Toward ‘The Greatest Trust in the World,’” Business History Review, 55 (Summer 1981), 217–242.CrossRefGoogle Scholar

³ E. A. Cudahy, Jr., as an individual, requested modification of paragraph five, which would have allowed him to enter any level of the grocery business. Also, the “big five” of 1920 was reduced to the “big four” when a subsidiary of Armour was permitted to acquire Morris in 1923.

⁴ Historical Statistics of the United States, series Q–56 (surfaced roads) and Q–155 (trucks).

⁵ The consent decree discouraged major packer ownership of refrigerator cars. The feasibility of using trucks and the consent decree both worked toward a reduction in the packers' ownership of refrigerator cars, and by 1956 they owned less than 4 per cent of such transport. In 1920, they had owned over 20 per cent of all refrigerator cars and 92 per cent of the refrigerator cars used to ship meat.

⁶ The rapid increase in truck transport as the major mode of shipment was basic. First, the producer of slaughter livestock could ship by truck at lower cost, typically avoiding railroad feeding, watering, bedding, and other fees. Second, the shipper could have more freedom in scheduling his shipment as well as ship smaller lots.

⁷ Nicholls, William H., “Market Sharing in the Meat Packing Idustry,” Journal of Farm Economics, vol. 22 (1940), 225–231CrossRefGoogle Scholar, and the statement of John McNeely in Unfair Trade Practices in the Meat Industry. Hearings Before the Subcommittee on Antitrust and Monopoly, Committee on the Judiciary, U.S. Senate, 84th Congress, 2nd session, vol. 2, Washington, D.C., Government Printing Office, 1956, 181–182. There had been 12 antitrust suits against the major packers in the period 1920–1956. Six dealt with collusive bidding for livestock; however, the packers were never convicted. Of the remaining six, the most celebrated was one that charged the four major packers with an attempt to monopolize the meat industry; the Justice Department sought to break up the four packers into fourteen independent firms, The case was dropped in 1954 when the packers successfully argued that none of their acts or practices prior to the final implementation of the consent decree could be used against them. U.S. v. Armour & Co. et al., 137 F. 2nd 269 (1941); U.S. v. Armour & Co. et al., 43F-Supp. 801(1943); U.S. v. Armour & Co. et al., Civil Action 48C1351, U.S. District Court, Eastern District of' Illinois, dismissed March 17, 1954.

⁸ The growth pattern was not smooth; there was a decline during the war. Unfair Trade Practices in the Meat Industry, U.S. Senate, 85th Congress, 1st session, 1957, 379.

⁹ Wilbur R. Maki, William C. Motes, and Charles Y. Lui, “Effects of Transportation on Plant Location in the Meat Packing Industry,” Ames, Iowa, Iowa Agricultural Experiment Station, discussion paper, 1962.

¹⁰ The consent decree's major contribution to this process was the reduction in major packer involvement with the provision of market news and information.

¹¹ Although it was largely ineffective, it is possible that the Packers and Stockholders Administration also played a role in this process. See Aduddell and Cain, “Public Policy.”

¹² Over this period, Swift reduced the number of its branch houses from 363 to 270; Armour, 521 to 213; Cudahy, 115 to 31; and Wilson, 121 to 29. Food Investigation Report of the Federal Trade Commission on the Meat Industry (hereafter FTC Report) in five volumes, Washington, D.C., Government Printing Office, 1919, part I, 153.

¹³ A.C. Hoffman particularly makes this point repeatedly in his study of Concentration in the Food Industries, Temporary National Economic Committee, Monograph No. 35, Large Scale Organization in the Food Industries, 76th Congress 3rd session, Washington, D.O, Government Prmgint Office, 1940.

¹⁴ The shares are based on sales data published in Progressive Grocer, October, 1952, 65, for the earlier years and from unpublished data from the FTC for 1954.

¹⁵ Census of Distribution, 1929, vol. I, Part I, 47; Census of Business, Retail Trade, Single Units and Multi-Units, 1963, vol. I, Table 1.

¹⁶ Chains are defined as four or more stores. The 1920 data are contained in the Census of Distribution, 1929, vol. 1, part I, 47 and 71; the 1958 datum is contained in the Census of Business, Retail Trade, Single Units and Multi-Units, 1958, vol. I, table 1.

¹⁷ Regional concentration ratios do not exist before 1954. Estimates within the 218 S MSAs of food retailing are as follows: Organization and Competition in Food Retailing, Technical Study no. 7, National Commission on Food Marketing, Washington, D.C., Government Printing Office, June, 1966, 43.

¹⁸ Census of Business, 1958, Bulletin W–1–1, pp. (1–4)–(1–15). In sales dollars, the growth is even more dramatic. Merchant wholesalers increased from $0.69 billion in 1929 to $3.89 billion in 1958. Manufacturers' sales branches increased from $1.92 billion in 1929 to $2.26 billion in 1958.

¹⁹ Discussions of retailer buying practices appear in the Armour, Cudahy, and Swift affidavits submitted with the 1956 petition for modification of the Consent Decree. These documents are part of the permanent court record, U.S. v. Swift & Co., 58C613.

²⁰ This was the conslusion of both Bain's classification system and that of Kaysen and Turner. Bain, Joe, Industrial Organization (New York, 1968), 112f.Google Scholar, and Kaysen, Carl and Turner, Donald F., Antitrust Policy: An Economic and Legal Analysis (Cambridge, Mass., 1959), 24f.CrossRefGoogle Scholar See also Nelson, Ralph L., Concentration in the Manufacturing Industries of the United States (New Haven, 1963), 108–276.Google Scholar

²¹ The number of commercial slaughtering firms killing more than 200,000 pounds live-weight per year increased from 1,106 in 1921 to 2,646 in 1958. The 1921 figure is a U.S.D.A. estimate; the 1958 figure is from the Census of Manufacturing. The number of plants engaged in commercial slaughter increased over the same period from 1,184 to 2,801; both figures are from the Census of Manufacturing.

²² Outside of cattle, Armour and Swift shares are relatively constant, The declines are due to Cudahy and Wilson.

²³ See Historical Statistics of the United States, series G-881–884.

²⁴ U.S.D.A. grading precluded packer grading or some other product differentiating procedure. During World War II and then Korea, grading was compulsory; in the non-war years it was voluntary. Data from the U.S.D.A. Economic Research Service indicate that in non-war years, a higher percentage of beef was graded than either lamb or veal, the other two meats the U.S.D.A. graded. The U.S.D.A. data are published as Exhibit #13 in the Swift & Co. brief, U.S. v. Swift & Co., 58C613. See also U.S.D.A., The Economic Effects of U.S. Grades for Beef, Research Report No. 298, Washington, 1959. Retailers eagerly accepted federal grading and generally purchased beef on the basis of government grades. This eased entry since a minimum of product differentiating expense was required.

²⁵ The relative increase in demand for beef, the simpler production process, and federal grade standards on beef meant that entry was more rapid in beef packing than pork packing. This was particularly true if a firm could enter beef packing at a small scale without experiencing prohibitive entry costs. The capital barrier to entry was less for beef than pork packing since beef packers did not encounter the need to sell other meat products.

²⁶ After World War II, there was a rapid increase in “shipper type” beef packers that simply slaughter cattle and ship beef as carcass meat. See Schneider, Eliot, The Meat Packing Industry (New York, 1958), 8f.Google Scholar

²⁷ See Aduddell, Robert M., “The Meat Packing Industry and the Consent Decree, 1920–1956” (Ph.D., dissertation, Northwestern University, 1971), 159–167.Google Scholar The major packers' combined return on sales was 1.5 per cent and on net worth, 5.6 percent in 1921. The corresponding figures for 1956 are 0.7 per cent and 5.7 per cent, respectively. The greatest return on sales between 1925 and 1956 was 1.9 per cent, which came in 1933 and 1946; the lowest, −1.0 per cent in 1931. The greatest return on net worth over the same period was 14.6 per cent in 1947; the lowest, −3.0 per cent in 1931.

²⁸ FTC Report, part IV, 23–25.

²⁹ Technical Appendix D, Table 4, Packer Shipments of Non-Meat Foods, Meat Products, and Other Products. Prepared for the Committee Hearings on Unfair Trade Practices in the Meat Industry, 1957, 8–10.

³⁰ The Structure of Food Manufacturing, Technical Study No. 8, National Commission on Food Marketing, Washington, D.C., Government Printing Office, 231.

³¹ In 1971 the packers petitioned the court for modification. Judge Hoffman once again presided. On January 17, 1975 the court allowed some revisions in paragraph 13 that allowed the firms to trade in 33 theretofore banned products such as cement and nails.

³² Appendix to the Jurisdictional Statement, Swift & Co. et al. v. U.S., Chicago, The Twentieth Century Press, April, 1961, 42.

³³ Ibid.

³⁴ Swift & Co. v. U.S., 286 US 106 (1932) quoted by Hoffman in Appendix to the Jurisdictional Statement, 40.

³⁵ The packers found this useful in blocking the Attorney General's efforts to gather evidence for use against them in the 1948 divestiture suit.

³⁶ This argument apparently came from Judge Cardozo who stated that, “size carries with it an opportunity for abuse that is not to be ignored when the opportunity is proved to have been utilized in the past,” Swift & Co. et al. v. U.S., 286 US 106 (1932).

³⁷ In fact, all of the following had filed friends of the court statements at one time or another: Livestock Breeders Association supporting the govememt (1920), National Canners Association (1928) supporting the government, California Canners Association (1932) supporting the packers, and Retail Grocers Association (1956) supporting the government, The only case that needs explanation is the California Canners who were tied closely to Armour.

³⁸ Dewey, Donald, Monopoly in Economics and Law (Chicago, 1959), 190f.Google Scholar

³⁹ In both the Swift and Armour exhibits, Swift & Co. v. U.S., 58C613, it was alleged that the branch houses the packers continued to operate after 1920 were not well suited to the distribution of non-meat foods.

⁴⁰ By firm, Armour had 68 acquisitions; Cudahy, 4; Swift, 147; and Wilson, 8. Cudahy and Wilson only acquired other packers. Armour acquired 22 meatpacking firms, 10 dairy firms, plus 36 others operating in processing animal by-products, meat wholesaling, biochemical production, poultry processing and fertilizers. Swift acquired 29 meat packers, 68 poultry and dairy firms, plus 50 others operating in fertilizers, peanut shelling, cotton ginning, cottonseed oil pressing, and soap production. Unfair Trade Practices in the Meat Industry, 1957, 280–287.

⁴¹ The Structure of Food Manufacturing, 256, and Organization and Competition in Food Retailing, Technical Study No. 7, National Commission on Food Marketing, Washington, D.C., Government Printing Office, 1966, 104.

⁴² Livestock and Meat Industry, Technical Study No. 1, National Commission on Food Marketing, Washington, D.C., Government Printing Office, 1966, 10.

⁴³ Of thirty-one grocery chains possessing sufficient locally concentrated sales to support a plant slaugh tering and processing beef and pork, only four had done so. See Moore, John R. and Walsh, Richard C., eds., Market Structure in the Agricultural Industries, chapter 1, “Grocery Retailing” (Ames, Iowa, 1966), 17, 29.Google Scholar

⁴⁴ Ibid., 19.

⁴⁵ Livestock and Meat Industry, 48.

⁴⁶ No food manufacturer had entered meatpacking, while the largest of them tended to be heavily involved in four or more four-digit SIC code food industries. The Structure of Food Manufacturing, 40–50.

⁴⁷ Clearly we would attribute less effect to the consent decree than others. See Arnould, Richard J., “Changing Patterns of Concentration in American Meat Packing, 1880–1963,” Business History Review, 45 (Spring 1971), 18–34.CrossRefGoogle Scholar

⁴⁸ See Scherer, Frederic M., Industrial Market Structure and Economic Performance (Chicago, 1970), 464–465.Google Scholar

⁴⁹ A provision for review was included in the IBM decree, among others; several proposals requiring an economic impact statement be filed with all consent decrees have been suggested in Congress.

⁵⁰ See Aduddell and Cain, “Public Policy.”