The Washington times., 1919-01-21

In 1916 the average was $500. In
1917 i, went to $3.50. and in 1918
II was S17.I5 per hundred live weight.
1t is the same and even higher now.
THE increase in the price of the
i've hog during the four years in
question figures 245 per cent.
But that increase is not the sole
reason for high-priced bacon. Hogs
dress on the average about 20 per cent.
That Is 20 per cent is pork and the
remainder by-product material. This
latter did not increase in value as
rapidly as did the live animal and so
the meat portion of the animal-that
is the 20 per cent-had to carry near
ly the whole burden of the increased
price of the live animal. But even
this does not cover all the reasons
for increased prices. The cost of Ia
Dor and clerical help doubled during
the period in question and the same
holds true for fuel. In fact every
item entering into the cost of a pound
of bacon greatly Increased and aug
mented that PAS per cent increase
caused by the mounting price of the
live hog.
"And that. gentlemen, is why bacon
today costs something like three
times what it did four years ago.
What is true of bacon is true of
other meat foods. / will read to you
m yreport which accompanied our
annual financial statement just is
sued on January 18th.
"'Our gross volume of sales in this
country, both domestic and for eX-
port was 1851 900 900, compared with
S575, ,0O0, 900 in 1917. In spite of this
increase our net profit was but is
cents on each dollar of sales. as COM
pared with 81 cents in 1917. Our
net income for the period (ifty-three
weeks) was s15,247, ,S37.53, at the rate
of 8 per cent on our average net cap
ital invested and 14.7 per cent on our
common stock latter provisions for
dividends on preferred). Two million
dollars, or only per cent, has been
paid out in dividends on the common
stock, we being compelled to REIN
vest the balance, over thirteen mil
lion dollars, in the business to meet
the ever-increasing demand for ad-
ditional facilities; this in addition to
the sec, 100000 which we borrowed
on our convertible debentures.
sour profit account shows that we,
along with the consumer, have suf-
fered because OF high prices. Our
business is predicated on a rapid turn
over of a big tonnage at small
margin Of profit, and high prices are
not conductive to- quick turnover.
We are helpless in the matter of re-
ducing prices. They are high because
Of the heights to which live stock
and labor have gone. Our labor
costs last year were 100000 900 more
than the preceding year. The same
number of pounds of live stock cost
US in 1918 one hundred million dol
lars more than in 1917. The United
States Government, through the
agency Of the Food Administration.
lcompels us to pay a minimum of $3.50
per hundred pounds. live weight, for
hogs, which cannot, at that figure,
produce cheap bacon. pork and other
hog products. and cattle at SIG or
more per hundred pounds on the hoof
cannot produce cheap beef. Stock
raisers assert that such prices are
necessary to pay them for the in
creased cost of production and we
realize the need for prices which will
encourage continued agricultural ef-
fort. While the extraordinary de-
mand from Europe continues there Is
little prospect of lower prices.
THE United States Government,
through the Food Administration,
formulated on November I, 1917, reg
ulations limiting our profits in a more
drastic manner than was prescribed
for any other industry. Thus our
profits were limited to 2.5 per cent on
our volume and 0 per cent per annum
on the capital invested in the meat
producing lines. We were able to
earn only a very small fraction of the
amount allowed on volume, and only
about one-half of the authorized re-
turn on invested capital.
I'VE are more than recompensed for
the greatly lessened profits by the
satisfaction which comes from the
knowledge that our company was a
factor in winning the war. Our abil-
ity. to meet the tremendous food de-
mands of the fighting millions in Eu-
rope, an ability made possible only
by the magnitude, the scope and the
efficiency of our organization, was OF
inestima able value to the United States
and to the allies.
During the year we delivered to
our Government and to it's European
associates food products of a value
of S241 100000 from our plants in
this country alone. We sent forth
thousands Of tons of food and got
back minimum of complaint. and
not a word of criticism as to the
efficiency of our service.
Despite the handicaps OF the
year-traffic congestion, fuel and
labor shortage, scarcity of coal, tin,
and other supplementary supplies,
and the difficulties incident to alb
normal forcing of the capacity of our
plants-our company retains it's ef-
fectiveness and complete ability to
perform its economic and industrial
functions. 1t Is of the greatest i'm
portance to the producers and the
consumers of this nation that we ex-
ist as a marketing machine. The
wealth of the soil is valueless until
1t is taken to the consumer in shape
for use. and our company is a ma
chine for the development of markets.
During the past year we have
operated under the rules and regu-
lations prescribed by the United
States Food Administration, and we
have faithfully met their every re-
quirement.'
Nature OF Pending Bill.
"Since l left college at the age Of
nineteen, ] have been connected with
Armour and Company, and my lire's
work has had to do with the problems
incident to the feeding of the nation,