The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1918-06-29
.anternational News servIce.I

Washington, June 29.-The federal
trade commission laid wide open be-
fore the United States senate this aft
ernoon complete and startling exposure
of the fragrant profteering carried on
by the manufacturing and distributing
concerns and monopolies. The COM
mission directly charged many
of them with inordinate greed and
barefaced fraud. The report covers a
profits of the five big packers, the -four
milling trade, producers of basic met
ais, oils and chemicals, coal and lum-
Der. leather and canning industries,
and is in response to request from
congress which will probably check the
profteers through the enactment of
more effective criminal statutes.
The commission strikes at the indus
tries whose output is price regulated
by the government, showing that heavy
profits are being made by the low-cost
concerns. 1t charges the five big
packers. Armour, Swift, Morris. Will
son and Cudahy. and their subsidiary
companies with manipulations of the
market that embrace every device that
is useful to them without regard to
law" The packers reward, the report
says, is expressed in terms of profit,
revealing that four concerns alone
have pocketed in 1915-1516-1s17 $140,-
100000. most of them excess profits.
The average prewar pront for these
concerns, emitting Wilson & Co, dur
ing the period of 1912-I913 and 1914
was s19.o00000 During the three war
years these firms made an excess of
1921, 100000 over the prewar gains.
Meat Industry.
The commission refers to the meat
industry thus:
However delicate a definition Is
framed for 'profteering these packers
have preyed upon the people uncon-
scionably. They are soon to come I'M
der further governmental regulation
approved by executive order"
While the sales of these companies
during this period increased $50 per
cent, the return of profit increased
400 per cent, the report charges. or
two and one-half times as much as
the sales.
The profit taken by Morris & Co. Is
reported at 1857 per cent. on the 3d.
100000 of capital stock outstanding.
The prewar average was SO per cent.
In the case of the other four packers.
they earned a rate on common stock
that was much lower. the commission
says, reporting 1T as ranging from q
per cent. to AZ per cent. The reason
for this is the frequent announcement
of stock dividends and capitalization
of their growing SURPRISES. Armour
e. Co. raised its $s0,000,000 capital
stock in 1915 to s100,000000 without
receiving a dollar more of cash. This
prevented them. the report says; from
enormous rates of profit on
their original capital. Earnings of in
dependent packers, the reports add
further, are as high or slightly higher
than those of the big five.
Turning Up Rich Vein.
Turning up rich vein of industrial
subterfuges in cost, competition and
accounting, the commission reveals to
the senate faults in the federal regu-
lation of maximum prices, done to
speed up production, but acting often
to harass the smaller concerns and
bring huge profits to the large firms
able to work on big production basis.
The report shows firms paying officers
salaries of more than 100000 annually
to enhance the operating expenses
where the government fixes a definite
above costs. Items of depre-
citation have been padded; interest on
are included in costs; con-
struction work is recorded as repairs,
fictitious values are put on raw mate
rails and inventories have been ma
nipulated; commercial bribery has
been rampant, and resale prices have
been maintained or increased, the re-
port says. In many cases goods were
sold at spot prices which had been
contracted for as futures.
Big Packers.
The big five packers have been re-
motley connected with the salmon
canning industry. and the report de-
votes further investigation to the