Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-07-16

industries It means bigger businesses
will survive and the smaller businesses
will be extinguished.
This IL typical the case in the
meat packing industry. The Ave large
concerns together kill about 40 per cent
of the animals Of the country. They
will this year produce about. 7,OoO, 0OO.-
900 pounds Of meat products. They are
so regulated as to profits on animal
business Gin fact. on all business ex-
cept foreign holdings and non-food bus
messy that their earnings could not ex-
coed one cent per pound Of meat produ-
ucts produced. Yet II they earned this
amount they would earn 370,000,000 per
annum. am sure the packers them
selves will agree, upon their pre-war ex-
perience, that this would be an inordi-
nate profit. On the other hand, fuR-
Their drastic lowering Of profits would,
in some branches Of the business COW
cred by the packers, drive struggling
competition from the field.
There is one feature in all regula-
ton Of profits-in food trades particu-
larly-that is sometimes overlooked.
These trades are nearly all seasonal,
and they are In the vast majority deal
ing with perishable products. BY taxi
ing few months during the season Of
prime operations, their profits may APP
pear large, but they must face largely
reduced profits or even losses over the
balance of the year. This Is particu-
larly true in the grain and vegetable
handling, and in cereal milling trades.
Regulated margins, while placed at
tot ~ ov$nvffnv, yoY1at
still be high enough to cover risks and
inequalities in earnings and the excess
profits Of the more fortunate operators
can only be further equalized by strong
taxation Of war profits.
Tendency TO 30 Too Marrow.
There is still another feature Of this
work that needs emphasis. In the adj
ministration Of regulatory measures or
the formulation of trade agreements
affecting profits and prices to the pub
lie and to the government, all officials
are under great pressure to keep mar
gins at a very low ebb. The tendency
is to be too narrow in such negotiations
and to endanger production. Further
more, in an effort to prevent profiteer-
Ing and secure the best terms. these ar
rangements are elaborated to cover all
sorts Of conditions and the economic
reactions from this paternalism are
often bad. II there were strong ex-
cess profits tax on war profits, all these
measures could be formulated with
broader hand and a real reduction Of
government Interference.
LAS to the food trade generally. am
convinced that the unreasonable prof
Its. since regulations as to reasonable
margins on various commodity oper-
atoms were established have greatly
diminished. A scientifically worked out
index shows in the margin between the
prices received by the producer and
these received by wholesalers Tor the
prepared foods. reduction Of approx
mately 80 per cent during the last
year.
1T Is always possible that either
certain favorably situated and man
aged concerns will make undue profits
or that unpatriotic men will violate
regulations Of agreements. The latter
can, and will, be reached in the food
trades when sufficient period to per-
nit OF action based on just procedure
has been covered. The abnormal prof
its out Of war conditions of the favor
ably situated producer can only be
reached by taxation. unless. by regula-
ton. we take the risk Of curtailing pro-
duction and the decentralization Of the
economic conditions Of the country.
Furthermore. II such increased taxa
ton were imposed. 1t would enable
regulation to be carried out with a
more liberal hand and less, friction.
I'm summary, my view 10 that broad
regulatory restraints now in force arc
essential in commodity handling In the
face Of shortages. I am equally con-
vinced that large percentage Of extra
normal profits earned out OF war con-
ditions. whether by more fortunately
situated members OF regulated trades
or otherwise. should be appropriated to
the public treasury thru taxation.
your faithfully,
III. C. Hoover.
Hon. F. NJ. Simmons,
Washington, d. C."
United States Senate