Evening star., 1918-06-29
Federal Trade Commission
Says Profiteering Is Going
on in Many Directions.
PACKERS ARE DENOUNCED
AS PREYING ON PUBLIC
Flour Millers Also Taken to Task.
Fixed Prices and Lack of Com
petition Taken Advantage OF.

The commission has reason to know
that profiteering exists.
Much of 1t is due to advantages
taken of the necessities of the times.
as evidenced in the war pressure for
heavy production. Some of 1t Is at
tributable to inordinate greed and
barefaced fraud"
In this fashion the Federal Trade
Commission summarizes its findings
on profiteering in a report TO the Sem
ate today to enable the lawmakers to
deal with the matter through legisla-
tion.
Blame Is Placed.
Outstanding features of the report.
each supported by extensive data. are:
Heavy profit made by the low-cost
concern under government fixed
price for the whole country.
Heavy profit made by meat packers
and allied industries and by -four
millers.
Trade tendency to increase and
maintain prices against forces of COM
petition.
The, report is based on cost find
ings fo7 the War Industries Board. the
food administration, the fuel admin
lstration and other executive depart
ments. on industrial surveys and
through enforcement of law against
unfair methods of competition. The
products investigated and which the
reports cover are steel, copper, zinc.
nickel, sulphur, lumber. coal. petro-
leum and its products, meat. leather
and leather goods. flour, canned milk
and canned salmon. Salaries and
bonus paid high officials also were
the subject of inquiry.
Denunciation of Packers.
The survey Of the meat-packing sit
uation showed. according to the re-
port. that five packers. Armour.
Swift. Morris, Wilson and Cudahy.
and their subsidiary and affiliated
companies. have monopolistic control
of the meat industry and are reach
ing out for like domination in other
products. Their manipulations of the
market embrace every device that is
useful to them without regard to
law
Continuing. the report says that four
eted s14O,oOc.ooO OF profits in 1915.
1916 and 1917.
However. delicate definition is
framed for 'profiteering' the com
mission comments, these packers
haNe P,e- Gu upon the people uncon-
scionably. They are soon to come
under further governmental regula-
tfon approved by executive order"
"A high stimulating fixed price"
s found in the steel, -four and coal
situations. the report says. while
stabilizing an ascending market, pro-
duces an economic situation which is
frauRht with hardship to the con-
suming public and with the ultimate
peril to the high cost companies
through increasing the power of
their low cost competitors
Profits Without Precedent.
Price fixing by the government. the
report says, has tended to prevent the
market from running away. but at
the same time it strengthens the
stronger factors in industry in their
position and enriches them by profits
(which are without precedent"
While the price of -four has been
stabilized by fixing a price for wheat
and a maximum margin of profit for
-four. the report shows that profits
increased from an average of IL per
cent on the investment for that four
years ending June so. 1915. to nearly
3S per cent in the year ending June
80. 1917.
'sThese profits" 1t is stated, "are
indefensible. considering that an av-
erage profit of one mill for six months
barrel"
Many mfllers exceeded the govern
ment maximum for profits and to that
extent the profits were larger and
in general in fact were very great.
Investigation in the coal mining in
dustry reveals, in the opinion OF the
commission, that despite government
price fixing large margins of profit
have been made. Ranges in the cost
of production in field having the
same maximum prices has caused
some operators to make small mar
gins of profit and others large mar
gins, the bulk of the production en-
joying the large margin.
In the oil industry large profts are
now being made in fuel oil. and
gasoline, the industry being one where
the law of supply and demand still
onerates The operation of this law is
held to be in part responsible for the
heavy profits, but portion OF the
blame is laid to the spreading of false
reports regarding supplies.
Big Profit in Steel.
Steel companies made abnormal
profits before the government fixed a
price for the product, ana It Is SHOWN
that some have since made unusual
returns Profits of the United states
Steel Corporation are estimated at
24.9 per cent in 1917, as compared with
1876 per cent in 1916 and So per cent
In 1915.
er industries covered by the report II
is shown unusually heavy proflts have
been made In the last few years Abb
normal salaries are also shown to
have been paid executive officials.
Trade practices contributing in ad-
dition to profits to higher prices to
consumers are noted. as failure to
ship goods on a rising market or re-
fusal to accept goods on falling
market, commercial bribery. and the
tendency of manufacturers to main
tain a resale price.