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 abnormalcentralization” 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
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 abnormalcentralization” 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
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