The labor journal. [volume] (Everett, Wash.) 1909-1976, 1918-07-05
L G
FL0U..;, MILLS

journals, in it's edition of June %
declares flour mills are profiteering,
and heads a page-one article with
T75Gc Gouged Out By Profiteering
Flour Milers."
The Chronicle has it's flour article
freely sprinkled with such phrases
as "took advantage of the war situa-
ton to wiring profit from the
necessities of the people almost five
times greater than they were able
to make under ordinary conditions"
The article follows:
What 1t Says
"Indisputable evidence of suspect
ed profiteering of flour mills is to be
found in special report of the
federal trade commission, made to
President Wilson, at his direction.
after a period of exhaustive investi-
cation, and now available to the
public.
"This investigation covers costs
and profits of millers and distribut-
ers over a period of five years, and
marketing conditions and practices.
Report does not cover conditions and
practices in retail flour trade.
Certain things have been uncov
cred by the Federal Trade Commits
sion that will come as a shock to the
American people, who are so whole
heartedly doing their part to win the
war, while grooming under the bur
den of living costs for which, as
conclusively shown in this report,
manufacturers of flour are RESPONSE
BILE in so far as this important item
of food is concerned,
Report starts off by saying: "The
commission finds that the net prof
is made by millers increased from
II cents per barrel in the crop year
If 1928 to So cents per barrel in
the crop year 1861
'In other words, flour millers took
advantage of the war situation to
wiring a profit from the necessities
Of the people almost five times
greater than they were able to make
lepitimatelv under normal conditions.
"These findings of the Federal
T!ade Commission are not based on
'hearsay.' or unsupported statements,
or preiudiced allegations from any
source. The damning evidence of
the duplcity of the millers, and their
lack of patriotism, was dug out by
federal Investigators from the very
, books of account and secret records
of tranea actions of the mills.
175Gt Profit
Gwen after allowing for increased
average cost of production, due
mainly to increased cost Of wheat
report recitcs that 'as shown by
their records, operating profits per
barrel increased nearly 1851, and
their rate of profit on investment
increased more than 1907.
"Nor has this profiteering been
stopped by the expedient of govern
mental limitation of net profits to
25 cents per barrel, as was intended
should be the case.
Speculation in any kind of neces
sity, no matter how it may be frown
ed upon in ordinary times, is, in war
times, rightfully regarded as being
downright unpatriotic, if not in
fact pro- German. This applies with
peculiar force to an article of ev-
eryday food, upon which the poor,
especially, are dependent-such as
bread. Yet the report speaks of
Speculative profits and goes on to
say the average margin of profit per
barrel for the first four fiscal years
covered by the investigation was
very remunerative but in the last
year this margin of profit showed
tremendous increase, due in part
to exceptional favorable speculative
opportunities
Covering Their Tracks
"The favorite device of the millers
to cover their tracks-the private
subsidiary concerns the public never
hears offs scathingly referred to,
and described as certain
practices, such as the operation of
controlled companies without identi-
flying them Report also speaks of
methods of inventorying as 'distort-
ing actual results of operations
"There are some 1000 merchant
wheat flour mills in United States.
The business of conducting a flour
mill is described as one of a Sim
Pile process of milling and compare
lively small cost of milling equip
ment.' Again, the cost of wheat
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