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Are the Packers P
rofiteers?
Plain Facts About tKe Meat Business
The Federal Trade Commission in its recent report on
war profits stated that the five large meat packers have
been profiteering and that they have a monopoly of the
market.
These conclusions, if fair and just, are matters of serious
concern not only to those engaged in the meat packing
business but to every other citizen of our country.
The figures given on profits are misleading and the
statement that the packers have a monopoly is unsup
ported by the facts.
The packers mentioned in the report stand ready to
prove their profits reasonable and necessary.
The meat business is one of the largest American indus
tries. Any citizen who would familiarize himself with
its details must be prepared for large totals.
The report states that the aggregate profits of four
large packers were $140,000,000 lor the three war
years.
This sum is compared with $19,000,000 as the average
annual profit for the three years before the war, making
it appear 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
apparently has made a mistake in the figures themselves.
The aggregate three-year profit of $140,000,000 was
earned on sales of over four and a halt 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 arc a negligible factor in prices of live
stock and meats. No other large business is conducted
upon such small margins of profit.
Furthermoreand this is very important only a small
portion ot this profit has been paid in dividends. The
balance has been put back into the business. It had to
be, as you realize when you consider the problems the
packers have had to solve and solve quickly during
these war years.
To conduct this business in war times, with higher costs
anJ the necessity of paying two or three times the form
er prices for live stock, has required the use of two or
three times the ordinary amount of working capital.
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 neces
sary by the enormous demands of our army and navy
and the Allies.
If you are a business man you will appreciate the signifi
cance of these facts. If you are unacquainted with business,
talk this matter over with some business acqaintance - with
your banker, say ask him to compare profits of the pack
ing industry with those of any other large industry at the pres
ent time.
No evidence is offered by the Federal Trade Commission
in support of the statement that the large packers have a mo
nopoly. The Commission's own report shows the large num
ber and importance of other packers.
The packers mentioned in the statement stand ready to
prove to any fair minded person that they are in keen compe
tition with each other, and that they have no power to manipu
late prices.
If this were not true they would not dare to make this
positive statement.
Furthermore, government figures show that the 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 sell dressed
beef for less than the cost of the live animal, owing to utiliza
tion of by products, and of the wonderful story of the methods
of distridution throughout this broad land, as well as in other
countries.
The five packers mentioned feel justified in co-operating
with each other to the extent of together presenting this pub
lic statement.
They have been able to do a big job for your govern
ment in its time of need; they have met all war time demands
promptly and completely and they are willing to trust their
case to tlie fairmituledness of the American people with the
facts before them.
Armour and Company
Cudahy Packing Co.
Morris & Company
Swift & Company
Wilson & Company
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