Are the Packers Profiteers?
Plain Facts About the Meat Business
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The Federal Trade Commission in its recent report on
war profits, stated that the five large meat packers have
b«>en profiteering and that they have a monopoly of lhe
market.
These conclusions, if fair and just, are matters of ser
ious concern not only to those engaged in the meal
packing business but to every other citizen of oùr
country.
The additional profit makes only a fair return on this,
and as has been stated, the larger portion of the profits
earned has been used to finance huge stocks of goods
and to provide additions and improvements made nee*
essary by the enormous demands of our Army and Navy
and the Allies.
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The figures given on profits are misleading and the
statement that lhe packers have a monopoly are un
supported by the facts.
If you are a business man you will appreciate the sig
nificance of these facta
If unacquainted with business
talk this matter over with some business acquaintance,
with your banker, say, ami ask him to compare profits
of th« (tacking industry with thoae of any other large industry at the
present time.
The ¡>ackers mentioned in the report stand ready to
prove their profits reasonable and necessary.
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The meat business is on«' of the largest American in
dustries. Any citizen who would familiarize himself
with its tietails must be propared for large totals.
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No evidence is offered by the federal Trade Commission in support
of the statement that the large packers have a monopoly. The Com
mission’s own report shows the large number and importance of
other packers
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The report states that the aggregate profits of four large
¡»ackers were $110,000,000 for the three war years.
This sum is compared with $19,000,000 as the average
annual profit for the three years before the war, mak
ing it apja-ar that the war profit was $121,000,000
greater than the pre-war profit.
This compares a three year profit with a one-year profit
--a manifestly unfair method of comparison. It is not
only misleading but the Federal Trade Commission ap
parently has made a mistake in the figures themselves.
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The aggregate three-year profit of $140,000,000 was
earned on sales of over four and a half billion dollars.
It means about three cents on each dollar of sales, or a
mere fraction of a cent per pound of product.
Packers’ profits are a negligible factor in prices of live
stock ami meats. No other large business is Conducted
upon such small margins of profit.
The {»ackers menli'>nc<l in the statement stand ready to prove to any
fair minded person that they are In keen competition with each other
and that thev have no power to manipulate prices.
t.
If this were not true they would not dare to make thia positive
statement.
Furthermore, government figures «how that lhe five large packers
mentioned in the report account for only about one third of the meat
business of the country.
They wish it were possible to interest you in the details of their
business. Of how, for instance, they can aell dressed beef for leas
than the c»st of the live animal, owing to utilisation of by-products,
and of the wonderful story of the methods of distribution throughout
this broad land as well as in other countries.
The five packers mentioned feel justified in co-operating with each
other to the eitent of together presenting thia public statement.
Further«»or«--aml thin is very ini|»ortant—only a small
portion of this profit has been paid in dividends. The
balanco has been put back into the bustnesaes. It had
to be, as vou realize when you consider the problems
the ¡lackers have bad to solve, and solve quickly, during
these war years.
To conduct this business in war times, with higher costs
and the necessity of paying two or three times the
former prices for livestock, has required the use of two
or three times the ordinary amount of working capital.
They have been able to do a big job for your Government in its time
of need; they have met all war time demands promptly and com
pletely and thev are willing to trust their case to the fairmindednees
of the American people with the facts before them.
Armour and Company
Cudahy Packing Co.
Morris & Company
Swift & Company
Wilson & Company
rtr.