The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1917-11-08
ARMOUR 8 Co. EXPLAIN
PACKING HOUSE PROFIT.
SAYS INFORMATION IS WRONG
AND THEREFORE coNcLU.
SiONS ARE ALSO WRONG.

| An editorial in The Miner of Octo-
Der 4, in which attention was called
to the enormous war profits OF the
great packing companies of the coun-
try, among which was mentioned Ar
mour & Co., and aiming to show that
they, like the Du Pont and other large
powder companies, were not carrying
their just share of the burdens of war
has drawn a reply from Armour & Co.,
which The Miner gladly publishes
herewith. The reference to the pack
ing companies was taken from a
speech by Senator Borah. 1t was GER
tainly not the desire Of this paper any
more than it was of the senator, to
misrepresent the business of the meat
packers. The point was that the fig
ures showing the profits being accept
ed as correct, 1t was up to the govern
ment to see that either the packing
companies be required to pay larger
proportion of their earnings to meet
the costs of war. or that they reduce
their prices in the interest Of the con-
sumner, who--would then be in better
position to pay the heavy taxes now
Imposed upon him.
Profits Explained.
1t appears that the figures showing
the profits of Armour & Co. are mis-
leading to the layman, to whom "divi-
dends is dividends" whether paid in
cash or in stock of the company. To
the Armour company, however, there
is wide difference, as will be seen
from the accompanying letter The
stock dividend of $s0,000,OO0 repre-
sented the surplus accumulated in %
years which had been reinvested in
buildings, machinery etc, and was
merely bookkeeping transaction,
raising the capital stock of the COM
pany from $20,OOO,O0O to 500, 900, 900.
Possibly the company had some ad-
vance information on the tax to be
levied on excess profits The actual
profit of s2O,O00,O0O during the year
1916, it is pointed out. is only cents
on every dollars worth of business
transacted and only 1-3 cents on the
meat business. The earnings on the
meat food products industry, it is
commended was but 3-5 per cent on
the capital invested.
| Letter From Armour G. Co.
Chicago, ILL.,, October 90 1917
Editor The Miner, Wallace, Idaho:
Dear Sir-Our attention has been
called to an editorial in recent issue
of your paper headed War Profits of
the Big Packing Companies" We be-
leve it calls for an explanation, see
ing that the information on which it
is based is entirely wrong and that
therefore, your conclusions are wrong.
! Senator Borahs speeches relative to
packers profits, show plainly that he
is not fully informed on the subject
whereof he speaks.
| He would have you believe that Ar
mour & Co.'S profits of $40 1000, 900 last
year and the $SO,O00,OO0 stock divi-
dends which was declared were war
The $S0,0O0,OOO stock dividend was
simply bookkeeping transaction
which changed the sum In question
! from the surplus column, where it had
accumulated during the twenty-five
years preceding 1913 This sum did
not represent cash; it was re invested
money and it represented buildings,
machinery, etc. 1t was as truly
$20,000,000 for which we originally in
corporated. Due to the fact that we
had over hundred million dollars in
vested, it was considered advisable to
.re-incorporate for $1O0,OOO,0OO. THIS
was accomplished by declaring a stock
dividend which did not change the In
vestment of the company one penny
nor did it increase the actual amount
of the dividends, in any degree, what
ever.
AS to our profit of $20,000,O00 for the
year 1916; That is the sum that was
earned on the $525.000,0 900 worth of
mess for the year 1915 showed a
considerable enlargement over the
business done in 1915, and, in the main, !
this accounts for the increase in our
earnings. To the public, the import
ant fact is this:
Armour & Co.'S net earning, includ-
ing all the lines in which the COM
pany is engaged, was less than cents
on each dollars worth of business
done during the year and the profit on
each dollars worth of business done |
In the meat food products industry in |
this country was but 1-3 cents. The
net earnings on our actual investment
in the meat food products industry
were S-5 per cent which, we believe,
you will admit does not justify Sena-
tor Borah's charge.
Hoping that you will give your
readers this view of the situation, we
are
Yours very truly,