Isidor Jacobs to Joseph P. Tumulty

Creator

Identifier

WWP19329

Description

Isidor Jacobs writes to Joseph Tumulty saying he thinks it short-sighted for the Food Administration to seek representatives only from the larger canneries.

Source

Hoover-Wilson Correspondence, Hoover Institution, Hoover Institution Archives, Stanford, California

Publisher

Woodrow Wilson Presidential Library & Museum

Language

English

Text

En route to San Francisco, Cal.

Dear Mr. Tumulty

In bringing the following subject to your attention I hope you will understand that my only motive is to serve the Administration and aid in preventing all efforts to discredit it.

In my judgment, it is a mistake to have on the committees in the different line of food products coming under Mr. Herbert Hoover, representatives of only the biggest interests. These bigger interests are nothing more or less than trusts. Selecting the personnel of these committees, with the continual rising price in foodstuffs, from these big interests only causes the masses and the independents or smaller interests to distrust the Administration. It is a fact that many of these $1.00 a year volunteer committee men still maintain their official position in their various corporations. They receive big salaries from them. Their viewpoint, naturally, is that of the corporation from which they come. As a result of these selections, particularly by Mr. Hoover, general dissatisfaction prevails and the enemies of the Present and good Government will sieze upon the sinister stories going the rounds of the clubs and hotels to discredit President Wilson’s Administration.

I am particularly familiar with what is taking place in my own line of business - fruit and vegetable packing. Without reflecting on the partriotism of anyone, and believing that the men selected wish to serve their country to the best of their ability, I cannot refrain from stating that the lresults are not working out satisfactorily either for the Government or for the consumers. There are probably more than one hundred canneries in California. Of these, more than per cent are under the control of Armour through Libby, McNeil & Libby. Mr. Hoover assisting him in this particular oindustry representatives from only the Libby, McNeil & Libby concerns. We find in Washington assisting Mr. Hoover and outlining the policy of the tinned goods department for him, a Mr. Heyl, of the Libby, McNeil & Libby firm. Mr. Warmington, who is assisting Mr. Hoover and is serving in the capacity of Co-ordination of Purchase for the Army and Navy and for the Allies, is the manager of a brokerage firm in Cleveland, Ohio that handles only the goods of Libby, McNeil & Libby. Mr. C. H. Bentley, Chariirman of the Tinned goods committee under Mr. Hoover, is the Sales Manager of the California Packers Corporation.

I assume, and it is the feeling of the public, that these advisory committees were to truly represent the various industriees and not represent only the trusts.Most of the sales of canned goods in the country were entered as “futures” before the declaration of war. When it became apparent that war was to be declared by the United States, a combination of circumstances, in which these future sales and the probablye fact that the Government would need great quantities of goods were paramount, forced an abnormal increase in price.Without wishing to go into too many details, the result was that while at the outbrealk of the war two million cases of tomatoes were sold on an average of about 95¢ per dozen, which was a fair price and there was no need too increase the price as there was a sufficient margin of profit at 95¢ per dozen, yet the first act of the commmittee selected by Mr. Hoover from the packers was to fix a minimum price of $1.20 per dozen, not only to the Government but as the price to be paid by the general trade throughout the country. This made approximately a twenty-five per cent increase in the price to the consuming public. On the one vegetable alone you can see that this is a tremendous jump. The pack of California was the heaviest ever known in its history, and yet the trade itself was cut short on its deliveries in order that the packers could take advantage of the new rate fixed for Government delivery. This, of course, had a tendency to further increase the cost to the consumer and put into the packer’s hands the additional profits that were made on goods which were delivered short to the general consuming public.The same applies to other lines of California goods. Take yellow cling peaches for instance. Just prior to and at the outbreak of the war, the bulk of yellow cling peaches were sold at $1.65 for extra standards. Mr. Hoover’s committee, soon after its organization, fixed $2.00 as the price to the Government. This immediately forced a short sale to the public and a hoarding of peaches for purely Government use at a higher price.

I foresaw all this last Summer and laid it before the Federal Trade Commission. The latter has in its possession copy of the original contracts made by the packers with their buyers. The Trade Commission also has sent out accountants throughout the Coast states to ascertain what the actual cost to manufacture was. Although these facts were available, Mr. Hoover’s committees did not utilize them when they boosted the prices of these products to the Government.

I cannot see why the packers should be entitled to any higher price from the Government than the average price obtained from the General contracts made at the beginning of the selling season, particularly as the packers delivered their customers short and diverted the goods to the Government.

There has been so much said about Mr. Hoover and the work he is doing and intends to do, that the masses have been and are expecting his office to bering about a condition where the prices of food commodities will not at least be any higher than they were at the outbreak of the war. The masses are beginning to realize that their hopes are not to be realized; they see each day the prices of most of the foodstuff rising higher and higher, and no relief in sight. Mr. Hoover will be held responsible up to a certain point; ultimately the Administration will be held responsible. The representatives of these packing interests controlling the California fruit and velgetable trade will be the direct means of putting in the hands of the people a weapon with which they can discredit President Wilson and his Administration. To this end I wish to say just a few words more:

We are advised in the trade that for 1918 the price of tin plate, from which tin cans are made, will be ten per cent higher than in 1917. The cost of boxes, it is estimated, will be sixty per cent hghigher. The cost of labor, it is estimated, will be thirty-five per cent higher. The producers, co-operating as they are doing, and organizing in many kinds of California products, will demand an increase of over thirty per cent. If the same rules prevail in other lines connected with food products, and I understand that it does, then there will be an increase in price instead of a decrease, and great profiteering will result.

I have given considerable thought to this matter and I know that Mr. Hoover is trying to do his best. He is giving the best of his energy and life to the work. It is up to him to decide what is the best method in the present situation. I am also aware of the great task on his hands. I therefore suggest that these committees should be made more representative. I believe that these committees should be made up of men who represent all classes in the particular lines, and that they should not be selected from merely the big corporate groups. My opinon is that the authority of these committees should be more definitely defined, and that their price suggestions and fixing should be founded upon results of the cost being obtained by the Federal Trade Commission in all lines.Before closing, I wish to mention just one more fact in connection with the manner in which the packers corporation control things. In San Francisco Mr. Wm. Fries, connected with the California Packers Corporation, sits in the Quartermaster’s office in San Francisco in an advisory capacity. To those in the canning trade he is known tnot to be an expert. Mr. Fries has been a reactionary from the start, and is doing and will do everything he can to discredit President Wilson’s Administration. He is related to Mr. John Rothchild, who holds contracts in San Francisco with the Quartermaster’s Department. These contracts run into millions of dollars, and Mr. Rothchild has his own brother-in-law and several other near relatives in the Quartermaster’s Department who have been granted commissions recently. Mr. Rothchild is under indictment by the Federal Grand Jury for conspiracy in connection with sending out supplies to German steamers in the Pacific, thus violating the laws of neutrality. This was before the United States declared war. Mr. Fries is going around with the Quartermaster’s label on him to the different canneries, digging his nose into their business. He holds ndo commission, but it is said he has been appointed to act in an advisory capacity.

Mr. James Armsby, President of the California Packers Corporation, which is one of the two concerns which practically control the industry in California, and which is endeavoring to get hold of the independent concerns, is Chairman of the Advisory Committee which is acting in connection with the Government committees in Washington. Mr. Armsby has been doing and is doing and saying everything that he can to discredit the Administration. People have been put in authority in various lines, and many who have received commissions in the Quartermaster’s Department are men who have done and will do everything possible to bring back politically the old distcreditable regime which the people have worked so hard to oust.

I wish it distinctly understood that I do not set this up as something in my behalf, as there is no position on any of these committees or elsewhere that I am seeking. I am not an office seeker, never have been, and never will be. Annually I give more time and money to the prosecution of work looking to the maintenance of good Government than any of the men whom I have mentioned. I have been doing it for years, and it is nothing new for me to fight them. As a matter of fact, as matters stand and if they proceed along these lines, I will be much better off financially than if these men are ousted and a lower price is fixed for the canned goods of California. As an independent packer I naturally profit more by higher prices.I trust that I am not presuming in presenting these matters to you for consideration. I know that every one who worked hard for Mr. Wilson’s re-election wants to do everything to make his Adminstration a success. I am one of these. Our aims will be defeated, however, if the representatives of these trusts and corporations are allowed to fix prices, because the people in time will rise in rebellion.With best wishes, I am,

Very truly yours,

Isidor Jacobs

Original Format

Letter

Files

http://resources.presidentwilson.org/wp-content/uploads/2018/10/D09336B.pdf

Citation

Jacobs, Isidor, “Isidor Jacobs to Joseph P. Tumulty,” 1918 January 19, WWP19329, Hoover Institute at Stanford University Collection, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.