The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1918-06-29
INORDINATE GREED AND BAREFACED
FRAUD CHARGED TO PROFITEERS
Startling Exposure of fragrant Profteeg Made Report Fed
eral Trade Commission Up Rich Vein of Industrial
Suberfuge in Cost Competition and Accounting

leather business in connection with
| the packers. Evidence of how the
| owners of packing industries manipu-
I lated the leather industry, making
enormous profits in hides, and react
| ing likewise on the retail shoe market,
is shown in copies of various letters
submitted in the report.
| The way in which Swift & Co. pro-
F., ceeds when a government limitation
of profits is expected. the commission
says, is shown by letter in which
Louis f.. Swift writes to his brother,
Ed f. Swift, stating he has learned the
government expects to establish profit
control in the leather industry and sug-
costing the advisability of reapprais-
ing their properties in certain compa-
MES. Edward F. replies: 81 approve.
Leather Profits.
Indication of the earnings of the big
packers in the selling branch of their
leather business is shown in the fol-
lowing letter of Jan. II, 1917, by the
Eastern Leather company, an Armour
selling subsidiary, to f. w. Croll, of
Armour & Co.:
I'VE are inclosing our check on the
National City bank, New York City,
payable to Mr. J. Ogden Armour, for
$915,7S7. same being dividend Of So
per cent. on the 1929 shares of COM
mon stock standing in his name. In
addition to this, and in accordance
with our conversation when in Chi
cago. we have set aside as surplus
$250.000, which represents 10 per cent.
of the common stock. We are also
inclosing a check on the National City
bank for S202,145.62, payable to Mr..
Armour, this being the balance due on
5000 shares of common stock held for
employees"
Enormous Earnings.
Another letter to H. w. Boyd, presi-
dent of the Armour Leather company,
shows that earnings for three months
ended April 28, 1917, were $1,964,945.
The same man writes to Mr.. Armour,
telling him that while the Central
Leather company does four times as
much business as the Armour COM
pany, they made only S1.900,000, and
after deducting for bonds and divi-
bends had only $4,000 left to apply
to their surplus. The writer added:
II think, considering their lumber
business, which is wonderful (the man
ager of the Pennsylvania Lumber
company told me that they never ex-
pected to realize the profits they were
making on hemlock lumber and that
they were doing an enormous bust
ness), that our statement Is great
deal better than theirs"
Three Times Normal Profit.
The report on -four milling shows
that in the face Of the food admins
tration's ruling of a 25-cents-per-
barrel maximum the average profit per
barrel on -four to the milling industry
to March, 1918, was about As cents, or
three times the normal profit per bar
rel The return on investment was
about rs to 80 per cent. The commits
sion says that while the profit received
by iobbers was exorbitant in the first
part of 1917, the food administration
has succeeded in keeping it within
twice the normal rate over earlier
years."
The commissions survey of the pc
troleum industry states that no price
for the public has been fixed by the
government. The profits have in
creased from the prewar average of
Is per cent. to figures ranging as high
as 122 per cent. The reports say that
rumors were circulated that the sup
ply of gasoline was endangered in or
der to keep up the retail price and to
insure heavy profits. The reports
state further that enormous profits are
now made in fuel oil. with the advan-
tage to the refiner that the product
meets popular challenge. In 1917 over
so per cent. of the estimated produc-
ton of petroleum products enjoyed n
profit of more than 20 per cent. on the
investment.
Average Margin on Coal.
The average margin for coal in
twenty-three bituminous coal fields in
Pennsylvania was 20 cents per ton in
1916, compared to 20 cents in 1917.
The highest margin for any of the