Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1918-06-30
TRADE COMMISSION
FINDS PROF|TEER|NG
Exists on Tremendous Scale in
Almost All Basic Com
modities.
GREED AND BAREFACED FRAUD
Big Concerns Made Reappraise.
ments Of Properties When
Price-Fixing Seems Certain.
GREED AND BAREFACED FRAUD
fBy Associated Press. ]

ing OH tremendous scale In Dracti
cally all the basic commodities OF life,
was reported to the Senate to-day by
the Federal Trade Commission as the
result Of an exhaustive invcstiga ton.
"inordinate greed and barefaced
fraud as well war pressure for
heavy production" the commission re-
ported as the causes.
ACCOMPLISHMENTS OF properties were
made by great concerns when It be-
came evident that the government was
about tn FIX prices on a basis OF re-
turn and Investment, the report says.
and Salaries. allowances and expenses
were in many instances padded to show
Increased costs of conducting business.
The outstanding feature Of its in :
vcstigation. the commission reported.
was the evidence of 4 tendency to In
forces of competition.
MEAT PACKERS AND
MILLERS WORST OFFENDERS
OF all the big profits disclosed by
the investigation. the report says. the
profits of the meat packers and those
allied with them, and by the flour mill
lers stand foremost, despite the fixing
Of prices by the government Man:pu-
lations OF the markets by the five
great meat packers-Armour, Swift,
Morris, Wilson and Cudahy-the com-
mission asserts. embrace every de-
vice that is useful to them without
regard to law"
The report charges that the five
concerns have monopolstic control O.:
the meat industry land are reaching
for like domination in other products"
During 1915. 1916 and 1917. the re-
port says. these companies ''pockcted
sl4o.c00,6oo."
The experience with steel, flour and
coal" says the report, referring to
ice-fxing. shows that q high slim
ulatinG fixed price. while stabilizinE
an ascending market. produces an eco
nomic situation which is fraught with
hardship to the consuming pubic and
with ultimate peril to the htgh-cost
companies through increasing power
of their low-cost competitors"
Where the government has hxed
prices on the basis of fair return on
net investment, the report hints at pad
ded depreciaticns. increased salaries of
officials, new construction charged on
as repairs, fictitious values on raw ma
terials and manipulated inventories.
TREMENDOUS PROFITS ARE
MADE DY STEEL PLANTS
In the steel industry. the report
says. profits increased from Al per cent
in 1912 to more than "a per cent in
1917. One Of the smaller mills showed
a profit of more than 800 per cent.
In the meat industry, the report says.
Morris & Co. realized mere than e63
per cent on 100000 CT capital stock
outstanding. and during 1916 Armour
81 Co raised their capital stock from
500. 900 900 10 SlOO.ooo.oo0 without re-
ceivinE a dollar more cash.
Independent packers. meanwhile. In
1914, 1918 and 1916. earned a higher
rate of profit than the large concerns
SHOE RETAILERS WORSE
THAN THE WHOLESALERS
In the leather industry, the profits
of one concern jumped from s644.ooG in
1917 to ss.5Te.ooa in 1917 The shoe
business meanwhile showed large
profits. and the report says. "it ap-
pears that the retailer has proficd
more. in proportion, than the whole
saler."
To show the manner In which. It is
charged, big concerns reappraised their
appeared imminent. the commission In
cludes in its report a copy OF letter
in which it was proposed by Swift d
Co. to reappraise six tanning COM
panies. in which it owns fifty per cent.
Il approve, IL done quietly ana
promptly" was the memorandum Ed
ward F. Smith placed upon the rec
ommendation. In the -four industry
the report says. the millers for 1917
will show a profit of SO cents barrel,
or nearly 80 per cent on their invest
ment. One mill shows a profit OF 81
barrel. Despite the fact that the
food administration succeeded in re-
ducing profits, they still were twice as
high in 1917 as in previous years.
The report covers many principal
basic industries, and makes much the
same charges as to each.
The Senate directed the commission
to make the investigation and report
it so it could consider legislation to
reach the practices disclosed.