New-York tribune., 1905-03-04

the lowest average margin for the whole period
Tor which reliable record IS obtainabe.
WHEN PRICE OF CATTLE IS HIGH.
It cannot be emphasized too strongly that changes
N the margin between prices OF. cattle and prices
Of beef OF little value as basis for Judging the
movement Of profits This may readily be appre-
cieted from the fact that on the average ony
81 TO 81 per cent OF the live weight Of cattle IS re-
tanned in dressed beef. Although the value Of the
by-pEoducts is important factor It is invariably
In the aggregate. much less than the live cost OF
that part Of the animal from which these by-prod-
Ucts are obtained Consequently. when the price of
cattle Is high, there be a wider margin be-
tween the prices of cattle and those OF beef in
order to make up for the cost Of waste material in
the live animal
IN comparing the margin between prices Of cattle
and prices Of beef exhaustive study was made of
the value Of the by-producrs and since the differ
ence between the maximum and minimum value OF
such products. q head. in the last two or three
years has much exceeded the total profit Of the
packers thls has been most important feature OF
the investigation. Thus, the price of hides the
most important 5yproduct Of cattle after reaching
maximum in 1902 declined sharply IN 1903 and 1904
Inc average price received for all hides sold by
the Armour. Swift and Schwarzschild & SuIzberger
companies from ten packing plants fell lib
cents IN the second half Of 1902 TO 81 cents in the
second half OF 1909 this representing decline in
the net value OF the hide from Sc SO TO s. 70 Prices
OF oleo oil and stearne likewise reached their high
est level in 1902 and fell rapidly in the summer OF
1903 partly as the result OF ELECTROMAGNETIC
legislation, causing loss OF over s. a head In the
value of fat. These are the principal by-products
Of cattle The others together are worth only q
little more than & 90 head, and their values have
not varied sufficiently to offset seriously the margin
between the prices Of cattle and of beef
The error which would rise from considering the
margin between the price of beef and the price Of
cattle as an indication Of profits is well shown by
the fact that the true average margin between the
live cost Of all cattle killed oy the Armour Swift
and Schwarzschild SuIzberger companies at their
leading plants for the year 1SOS-'O4 was cents
a hundred pounds greater than in the preceding
twelve months. g 10 compared with 81 o. As
matter of fact the compu+a tons of the bureau
showed that there was virtually no change in the
profits Of the business between these two periods
the profit being 131 cents hundred pounds of
dressed beef in 19O2-Os and 135 cents in 1909 OF
METHODS OF INQUIRY.
As already stated. the bureau has made It's COM
putations from the records of the companies. The
bureau has had access to all the price records of
the leading packing companies and also all the
accounts and records. excepting car line accounts
which determine the profits of the packers on beef
and its by-products Owing the fact that the
records of Morris & Co.. the Cudahy Packing Com
pany and the National Packing Company did not
adapt themselves the methods followed the
detailed computation Of profits made for three
companies only-Armour & Co. Swift & Co. and
Schwarzschild and Sulzberger Company
The computations made covered ten plants kill
ing upward OF two million cattle and were based
on the total number OF cattle killed the absolute
figures of live weight and the live cost of all
dressed beef cattle. together with moderate num-
Der Of inferior grades The actual cost Of operation
and adrninistra OF the various departments was
nscertained from the bookkeeping records and
actual quantities and values were taken for the
leading by-product items.
The actual quantity OF dressed beef derived was
ascertaned directly from the killing records and
the actual amount received for such beef was also
taken from the books. True averages were then
determined. with the results already indicated. An
examination OF the actual bookkeeping profits was
made for Morris & Co. and the Cudahy Packing
Company, well for the three other companies
specified. Extensive statistics prices of cattle
and beef and other matters also taken from
all five or these packers. and from the Hammond
company well.
tion indicate that the larger packing companies
especially considered not overcapitaIized. Pre-
sunptve evidence in favor OF fair capitalization
found in the very concentrated holdings Of the
stocks of these companies nearly all OF which, with
the exception OF Swift Co. held by the
packers themselves and their families. In the
OF Swift & Co. the entire sS5000G00 capital stock
and 10000 bonds were paid IN in cash and at par
The conclusions OF the report in regard TO the
operations Of private car lines approximate. The
bureau arrives at average cost for refrigerator
car of 81 Goa an average yearly cost of maintenance
Ct sln q car. and net profit. from tbs ullsass