The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-03-04
NO BEEF TRUST, SAYS REPORT
PACKING COMPANIES ACQUITTED
ny GIRPIELD'S FINDINGS.
Abnormal Conditions In 1902 Sent Prices
Ip-Nlargin or PrOnt About Per
Ccnt.-IIig Concerns Slaughter Only
as Per Cent, Of the CoBntry's Output.


dent sent the followinEmessage to Congress
to-day:
ITO The Senate and HouscOf Representatives
Il transmit herewith a report from tn
Hecrvtary Of Commerce and Labor upoi
that portion Of the resolution OF the Hous
Of Representatives adopted March 2, 1904
having TO do with the prices Of cattle anc
dressed beef. the margins between sucl
prices, aud the organization, conduct an,
profits of the corporations engaged in th,
beef parlIng industry. In view Of the fact
that the department of Justice is now IN.
gagged upon other matters involved in he
resolution. TIE Secretary Of Commerce and
Labor cannot Mt this time report thereon.
THEODORE ROOSEVELT.
The report shows that six packing com
panies-Armour A Co. Swift 4 Co., Morris
4 Co. the National Packing Company.
the Schwaraschid 4 Sulzberger Company
and the Cudahy Packing Company fire.
uuently designated In the trade "a -the
Big Six slaughtered in the year 1903
5.53 .Ga7 head Of cattle, out Of u total in
dcated slaughter in tine United States Of
II 500 600 head, or about 10 per cent.
That the true average net profit for three
companies the Armour. tile Swift and the
EnCuhdl El>ftl4lAl ~ sNAliH'ffl WIZ ANflNt
months ending June 30. la)7. as shown
by their actual bookkeeping records was
90 cents per head. not including incidental
profits. mentioned below. That the year
OF 1902. instead OF being one OF exorhitant
profits. IA hAs been commonly supposed,
was less profitable than usual. The re-
port says. in fact, during tire months when
prices OF beef were the highest some at
losing money ON eyery'head Of cattle slaugh-.
tered.
MARG1N oF PRoFITsNoT EXCESSIVE.
That the changes in the margin between
the prices Of cattle and the prices OF beef
are In themselves no indication whatever
Of the changes in the profits of the beef
business. That the margin between the
price Of cntile and the price of beef during
the year 1903, instead Of Icing unusually
high. As popularity supposed. was for each
half Of that wear lower than the margin
for any corresponding half year since !
1898. and that the increase in the margin l
for the second half OF 1903 over the first I
half was no greater than the similar change !
In other years.
CONSUMPTION INCREASED ~ 1902.
The conditions in 1902 were abnormal. and I
cattle prices for 1903 and 1904 cannot fairly I
be compared with that year. The great
Of the country from 1899 20 1902 !
u apparently led to a considerable increase J
in the per capita consumption of beef
The practical failure Of the corn crop OF
1901 induced many cattle feeders 10 send I
heir stock 10 market in poor condition.
thus reducins the average weight per head
and the average percentage Of dressed beef
10 live wei ght. A a result. while the total
number OF cattle slaughtered at five leading
Western packing centres during the first
half Of 1907 decreased only bOutl per cent.
Bs comps red with the first half OF 1901
the to(aliyc weight ofthe cattle slaughtered
i computed TO have decreased 81 per cent, !
and the computed dressed weight decreased
more. In this cOnneo tiou the
r. port says.
In the face Of the strong demand the
price of cattle was forced to the highest
level ever known. The high prices of
beef, which caused so much complaint
among consumers az this time. were attrib-
utabie wholly TO these abnormal cnttle !
prices. That in 1903 the price Of cattle |
len very sharply, chiefly because of a large !
Increase in the supply. The number Of
attic killed in five leading Western markets
Turing the first half OF 1903 was more than !
Is per cent. greater than during the first
half OF 1902 and on account of the increased
lize of cattle the quantity Of beef produced |
% per cent. In the second half
Of 1908 the quantity OF beef derived from |
cattle killed at the same markets was about |
10 per cent greater than in the correspond
ing period OF 1902 Under these conditions !
the price OF beef. instead OF remaining at |
he high level of 1902, fell during 1903 by a |
larger absolute amount and by about the
same percentage as the price of cattle"
PERCENTAGE OF PROFIT SMALL
That the percentage OF profit on the gross
volume Of business. including hog and sheep
products and other minor commodities is
small. In the case Of Swift |
4 Co., during the three years 1902. 1903 and |
1904, the profits have in no case exceeded |
, per cent. Of tho total GALES. In the case OF
The Cudahy Packing Company, in 1904 the
net profit was is per cent. of the total sales.
In 1902 II was 2.23 per cent.
That the profit Of private car lines In the
packing in duslry on mileage Is a very liberal
one, approximate computations indicating
a net return OF from IA p4r cent. to about II
per cent. reckoning on the basis Of dressed ,
beef transported. However, this profit
would add but little 10 the cost Of such beef
to the consumer, the net profit from the
mileage OF private cars being computed Mt Z
not more than four cents per 100 pounds OF 3
beef, or, say, twenty-five cents per head of
cattle.
COMPETITION ACTIVE
The statement already made that the six
largo concerns mentioned slaughtered in I
lg03 only about IS per cent of tho total cat I
the existence OF active competition by other /
at least in many PLACES. This ia
Chiefly explained by the operations of a >
large number OF small slauRhtering estab-
shments. Taking the principal slaughter {
nj and distributing centres the proportion
by the Blk companies mentioned :
IS much greater.
For instance, the six principal concerns :
slaughter nearly Of per cent OF all the
,attle killed in the eight leading Western Z
packing centres, namely Chicago. Kansas :
ity. South Omaha. East st. Louis South 7
st. Joseph, Fort Worth, Sioux City and \
South st. Paul. In the same way they /.
control very large percentage Of the trade
n beef in many large cities, particularly
n the East In New York they furnish
'bout rs per cent, in Boston more than
IS per cent, In Philadelphia about 90 per
,ent.. in Pittsburg more than 90 per cent,
n Providence more than % per cent. in
Baltimore about 30 per cent. and in a number
II other important cities their proportion
anges from 80 to 90 per cent. Of the total
,eef supplied.
In order 10 make certain Of the accuracy
n the results the bureau adopted double
method OF ascertaining the profts It first
from the detailed records of the
Iacking companies, exact figures OF the
Quantities. costs and sales Of cattle and all
PRODUCTS derived from them and from these
dement's computed the profit Of each of
he packers separately and OF all together
This computation was confined 10 the Ar
1870.