New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-03-01
THE WOOLLEN PROBLEM.

The American WoOllen COMPANY makes
more satisfactory statement than many of the
new Industrial corporations. IT Is all the more
impressive and pleasing because 1t does not
SEEK as some other statements do to hide the
fact that the gains last year were In A larpe de.
gree due to the rise in the cost Of the raw ma
terial. The president announced that In eight
and half months the company had done n
gross business of S2GOOOO 600 or at the rate of
s36,oo0.o0O for the year. and that 1t has al
ready SOLD two-thirds of the possible product
of heavy goods for this year" estimating the
years business at from $40. 0G0 O0O TO s45 900 900
and he added: Owing to the favorable purchases
of raw material and the advances In woollen
goods the company is making unusual
profits 1t is credltable that there is no effort
TO make the public suppose that the large profits
thus secured are no more than might have been
with reason expected under ordinary circum-
stances. Apparently there has been in this con
Germ more desire TO get good earnings for stock
holders than to find more stockholders for the
earnings.
The wool for business OF $4,000 900 fudg-
Ing from the last census report Of Massachu-
sets mills, may have cost n little over 40 par
cent OF the selling price OF goods, or $40. 500 900
Since the woollen company went into business.
the same prices having remained until May Is,
has been fully 80 per cent the same one hun
dred qualities which cost in May 1901 cents
now costing 24I0 cents This alone would nc
count for n profit Of about $4,000 coo whereas
the companies In the two years before their
consolidation had averaged earnings of 81 393,-
600 yearly. Until quite recently the prices re-
ceived for goods have not been at all proper
toned to the rise in WOOL but after paying
dividends at the rate Of per cent on $4,000
600 preferred stock outstanding, the company
Is yet able to make a satisfactory addition to
the S10,00o,000 cash on hand with which 1t
started. and is now getting prices which. II the
wool were all on hand nine months ago. would
represent nearly 80 per cent profit. Presumably
much Of it was purchased nj various times dur
Ing the rise of the last year, so that the profits
on sales already made. covering two-thrds Of
business expected to reach $40,0OO.0O0 or more
| this year. will undoubtedly be handsome, but at
a considerably lower rate.
1t may fairly be presumed that other mills
were generally well supplied with wool pur-
chased before the great rise. rs the American
WOoen Company was so that they are now
selling at handsome profits. Nor is there known
any reason to doubt that other works have also
| made contracts covering a good part of this
| years producing capacity. They are In position
| TO make with the profits of good year and a
| half, Improvements which some Of them have
| long needed In order to be better prepared for
| any emergency ~ future. 1t must be expected
| that conditions will not always remain so ex-
| ceptionally favorable they have been of late,
| for foreign competition viii become more seri-
| GUS when prices of wool In other countries yield
again, and the increase of production In this
country is also likely to cause falling instead Of
| rising markets for the material. After every
| season of exceptional prosperity. due to advanc-
| ing prices, industries have to expect some
months years Of decline. But the woollen
| mills have not been obliged to take on great
| stocks OF high priced wool since the November
| RISE 1t Is evident and before they have to pro-
| vide for another season may probably buy from
! the and large clip OF domestic wool Mt
! prices somewhat lower than those recently
| asked.
1t is worthy of notice that the American
Woollen Company has not anything like a
| monopoly in the woollen manufacture the presi-
dents estimate Of its years output covering not
a fifth Of the annual output of ali the woollen
| Mills and 1t has not advanced It's prices more
| than the prices OF other goods have been ad-
vanced by mills having no part in any com
| bination. The rise has been considerable. and
| is frequently mentioned ignorantly or malicious
| ~ as evidence Of the harm done by industrial
| combinations or by the tariff on wool. But the
| rise in wool abroad has been as great without
| duty as it has been here with duties. the de-
| crease In production In Australia affecting other
markets even more than this Americans have
| reason to look for expansion of the domestic
| supply, not merely because there is a temporary
| scarcity abroad, but because protective duties
| give confidence TO growers that they will not be
| ruined and driven out of business by an ava
| lanche Of cheap wool from other countries ms
soon production elsewhere increases For
| them there is secured a reasonable time in
/ which TO prepare for the lower markets which
| increased production here will naturally cause.
and for the manufacturer also there Is the pros
| poet that. after consumers have become accus.