Page images
PDF
EPUB

First
1918 (es-

1913 1914 1915 quo. timated) 1 Atlantic Refining Co-------------------------------------- 16.4 || –3.7 21.7 2 15.0 +30.0 Standard of Indiana--------------------------------------- 36.5 14.5 36.0 2. 21.7 +43.3 Standard of New Jersey- ... 7 7.8 20.6 a 9.1 +18.2 Standard of New York .2 8.1 16.0 a 6.6 13.3 Standard of Ohio.---- ... 4 13.8 23.9 * 14.3 +28.6 Standard of Kansas--- ... 6 1.0 17. 9 * 25.6 +51.3 Magnolia Petroleum Co- .2 16.5 14.2 4.4 17.6 Standard of California------------------------------------- ... 8 12.5 10.6 6.5 +25.9 Continental Refining Co-- .6 -7.8 3.3 1.2 +4.7 Empire Oil Works--------- ... 4 –3. 1 5.6 7.3 +29.2 Penn American Refining C ... 3 13.3 12.3 15.8 +63. 1 Cooden & Co.------------- 30.6 -50.7 5.9 23.5 Muskogee Refining Co---- 6.9 18.8 6.2 +24.8 National Refining Co-------------------------------------- 8.0 20.4 2.3 9, 2 The Texas Co--------------------------------------------- 13.3 12.7 a 13.3 26.7

* Estimates based on figures for last 6 months of 1917 or first quarter of 1918.
*Six months period, July–December 1917.
*Last six months of 1917.

Meat packing
[Source: F. T. C. report, pp. 14–15]

An exposition of the excess profits of four of the big meat packers (Armour, Swift, Morris, Cudahy, omitting Wilson as not comparable) is given in the fact that their aggregate average pre-war profit (1912, 1913, and 1914) was $19,000,000; that in 1915 they earned $17,000,000 excess profits over the pre-war period; in 1916, $36,000,000 more profit than in the pre-war period; and in 1917, $68,000,000 more profit than in the pre-war period. In the three war years from 1915 to 1917 their total profits have reached the astounding figure of $140,000,000, of which $121,000,000 represents excess over their pre-war profits.

These great increases in profits are not due solely to increased volume of business. The sales of these o: in this period increased 150 percent, much of this increase being due to higher prices rather than to increased volume by weight, but the return of profit increased 400 percent, or two and one-half times as much as the sales.

The profit taken by Morris & Co. for the fiscal year ended November 1, 1917, is equal to a rate of 18.6 percent on the net worth of the company (capital and surplus) and 263.7 percent on the three millions of capital stock outstanding. In the case of the other four companies the earned rate on common capital stock is much lower—from 27 percent to 47 percent—but the reason for this is that these companies have from time to time declared stock dividends and in other ways capitalized their growing surpluses. Thus Armour in 1916 raised its capital stock from twenty millions to one hundred millions without receiving a dollar more of cash. If Swift, Wilson, Cudahy, and Armour had followed the practice of Morris in not capitalizing their surpluses (accumulated from excessive profits), they too would now show an enormous rate of profit on their original capital.

“Rates of profit earned by these five companies in war years compared with the war average, based on net worth (capital and surplus) and on common stock, are as follows:

Actual profit on net worth

Armour Swift Morris Wilson Cudahy

Percent Percent Percent Percent Percent Pre-war average, 1912–14------------------- 6.2 8. 3 6.8 l 7

- - - (1)

War average, fois-17---------------------- 14.6 21.0 13.5 (1) 14.1

* 1917---------------------------------- * 16.8 26.7 18.6 23.8 18.7

Rate on common stock, 1917--------------- * 27.1 47.2 263.7 42.5 47.0 ! Figures not available.

*Foreign business, not included, would undoubtedly raise percentages.

"The independent packers, as measured by results compiled for 65 of the - of them, earned during 1914, 1915, and 1916 a rate of profit as high or slightly higher than that earned by the big packers in those years.”

[graphic]
[graphic]
[graphic]
[graphic]
[graphic]
[graphic]

Leather and leather goods
[Source: F. T. C. Report, pp. 15–17]

A number of the larger tanning companies in the United States had net profits in 1916 that were in several instances two, three, four, or even five times as large as the 1915; and the 1915 net profits, in turn, showed increases of from 30 percent to more than 100 percent over those of 1914. One striking instance is a company whose net profits were reported as follows:

1914------------------------------------------ $644, 390. 90
1915------------------------------------------ 945, 051.37
1916------------------------------------------ 3, 576, 544, 27

The tanners took advantage of the enormous demand for leather and took very high prices. During 1917 the prices of hides were advanced very rapidly, notwithstanding that during the period of advance great supplies of hides were withheld from the public.

As an indication of earnings of the big packers in the selling branch of their leather business the following is quoted from a letter of January 17, 1917, by the £on Leather Co., an Armour selling subsidiary, to Mr. F. W. Croll, of Armour

O. :

“We are inclosing our check on the National City Bank, New York City, payable to Mr. J. Ogden Armour, for $915,787, same being a dividend of 53 percent on the 17,279 shares of common stock standing in his name. In addition to this, and in accordance with our conversation when in Chicago, we have set aside as a surplus $250,000, which represents 10 percent on the common stock.

“We are also inclosing a check on the National City Bank for $202,145.62 payable to Mr. Armour, this being the balance due on 6,020 shares of common stock held for employees.” Fl

otur

[Source: F. T. C. Report, p. 17)

Figures from representative mills for the four years ending June 30, 1916, indicate that the flour millers received a profit of 13% cents on each barrel of flour and 12 percent on the capital investment. In the year ending June 30, 1917, these same mills made an average of 52 cents on each barrel of flour sold and nearly 38 percent on their capital investment. For six months of the year one mill showed an average profit of $2 per barrel.

The average net profit of jobbers reporting to the Federal Trade Commission was about 15 cents per barrel for 1913 and 1914, but increased to nearly 50 cents the first half of 1917. These profits include all the pay received by the proprietors of the business for their services.

Salmon canners
[Data and quotation from F. T. C. Report, pp. 18–19]

Ninety percent of the salmon packed in 1917 was produced at a total cost that was less than $7.75. The weighted average of the 1917 opening prices for different grades of salmon was $8.29 per full case, but more salmon was sold above than below this price during the year. This indicates a margin for a high-cost canner of 54 cents per case and larger margins on the bulk of the production. Several canners having costs in the vicinity of $7.25 in 1917 made profits as follows:

Cost Profit

Percent Alaska Salmon Co------------------------------------------------------------------ $7, 12 19. Everett Packing Co----------------------------------------------------------------- 7.43 5. San Juan Packing Co--------------------------------------------------------------- 7.02 24 Cascade Packing Co----- - 7.13 62 Ocean Food Packing Co 7.58 14 Salina Packing Co---------------------------------------------- 7.71 31

These are high-cost companies. The following figures concern the average:

In 1917 the average net profit, on investment of 90 companies, packing 7,426,678 full cases (87 percent of the total year's pack) was $2.28 per case, or 52.8 percent on the net investment in the salmon canning business proper. This

[graphic]
[graphic]
[graphic]

Leather and leather goods

Average of 52.8 percent does not reveal the fact that some of the low-cost com(Source: F. T. C. Report, pp. 15-17)

s, included in the average, made over 200 percent. It is significant that

Bamse of these low-cost companies are those allied with the big meat packers. ger tanning companies in the United States ago veral instances two, three, four, or even 31.7.

Ordnance 15 net profits, in turn, showed increased ni tec:

otse Report on Expenditures in the Ordnance Department, cited above under Copper. Report No. nt over those of 1914. One striking instance and

1400, pp. 37-39; serial 1, vol. 3, pp. 621-623. Quotation from p. 39 (623)] 'eported as follows:

American Brake Shoe & Foundry Co. had several Government contracts for $641.23

kowitzers and the Government furnished $5,572,945 for new buildings and matry equipment in connection with them. The exact plans for the howitzers were apparently

not definitely in hand and according to the company's statement

the Ordnance officers made 30 changes in dimensions and specifications. Conseantage of the enormous demand for leathere 1917 the prices of hides were advances : there were repeated delays in turning out the guns.

As a result of these contracts, in addition to costs of every kind, including mlarien of executive officers, the American Brake Shoe & Foundry Co. received a

peat of $441,364.70. Included in the cost were the labor, materials, salaries, c.

und even taxes, all of which the Government paid, and an additional item of KJ7,500 interest on money which the company had used in this work. The entire amount paid to the company, exclusive of its cost, amounted to, approxisately, $1,000,000."

uring the period of advance great spa arnings of the big packers in the real homens owing is quoted from a letter of January 17.3

Armour selling subsidiary, to Mr. F. W. Cson : ir check on the National City Bank, Verle Armour, for $915,787, same being a disyu : ommon stock standing in his name. Ir addre sur conversation when in Chicago, we love represents 10 percent on the common sunt g a check on the National Citr Bariton this being the balance due on 6,020 seo da

Flour

EXHIBIT No. 1115-A
PRICE PER BARREL OF FUEL OIL F.O.B. REFINERY, OKLAHOMA

AND PRICES OF ALL COMMODITIES

INDEX NUMBERS (1913 - 100 )

FUEL OIL:2-20 gravity in tant com

(Source: F. T. C. Report, p. 17) tative mills for the four years ending 1.. i hillers received a profit of 139 cents as the capital investment. In the rear estaba ade an average of 52 cents on each tarre dhe

their capital investment. For six montás da ge profit of $2 per barrel. of jobbers reporting to the Federal Trade Caen rrel for 1913 and 1914, but increased to sentire se profits include all the pay received by the pro vices.

[merged small][ocr errors]

Salmon canners quotation from F. T. C. Report. pp 2 Imon packed in 1917 was produced at a total reighted average of the 1917 opening prices is per full case, but more salmon was sealt se

This indicates a margin for a b rger margins on the bulk of the producties vicinity of $7.25 in 1917 made produs si faber

[blocks in formation]

year.

anies. The following figures concern that et profit on investment of 90 con praction rent of the total year's pack) was stment in the salmon canning business Partner

[blocks in formation]
[merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][ocr errors]

JAN.

[ocr errors]

JAN.

[ocr errors]

JAN

JULY

JAN.

[blocks in formation]

JULY 1914 1915 1916

1917
1918

1919 NEC

BURLAU OF AGRICULTURAL ECONOMICS

DATA FURNISHED BY BUREAU OF LABOR STATISTICS
EXHIBIT No. 1115-E
PRICE PER POUND OF STEEL SHEETS AT PITTSBURGH DISTRICT MILLS

AND PRICES OF ALL COMMODITIES

INDEX NUMBERS (1913 - 100 )

DATA IVANISMO

No. 1115-C

[merged small][merged small][merged small][merged small][ocr errors][ocr errors][ocr errors][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors]
« PreviousContinue »