Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-09-16
SHOE PROFITS HIGH,
SENATORS ARE TOLD
From 80 to so Per Cent Made
on investments Is To-
days Testimony.
10 TO IS ON THEIR SALES

10 TO IS ON THEIR SALES
Retail shoe dealers in Washington
have made large profits since the war
began. according to the testimony
presented to the Senate District sub
committee investigating profiteerinS
today by T. NJ. Robertson of the Fed
eral Trade Commission. and also ac-
cording to the testimony given by
several of the shoe merchants them
selves.
1t was shown that some dealers
here have made from 80 to so per cent
and more on their Investment, and
from 10 to Is per cent on their sales
Risks" Dealers Excuse.
The retailers made the plea to the
committee that large risks must be
faced by shoe dealers, and that there
fore they are entitled to, and must
figure on, large increases in the SELL
ing price over the cost price.
They insisted also that the people
of Washington are demanding luxuries
in the line of shoes. that they are not
content to purchase conservative shoes
at lower prices. Until the people are
educated up to the advisability of
using standard grade shoes at lower
prices they will find the price of shoes
forming considerable item in the high
cost of living, it was testified.
Dealer Testifies.
Arthur Burt. one of the shoe dealers
who testified today, told the commit
no
with the War Industries Board and
other government agencies for the
purpose of establishing regulations
dealing with the sale of shoes, and
that it was decided at that conference
that 40 per cent on the selling price
was reasonable profit to the retail
dealer and 10 per cent a reasonable
profit on the sale. In the regulations.
which he said never were put into
effect because of the signing of the
armistice, these percentages were
used.
Expects Favorable Legislation.
At the conclusion of the hearing to-
day, Senator Ball, chairman of the
committee, announced that the hear
ings on profiteering in the District
were closed and that the committee
would make its, report as soon as
f1dent that the committee would make
for legislation which
would be designed to aid the situation
here.
The other witnesses heard today
were Herbert Rich of B. Rich's Sons
Company; Newman G. Little of Sny-
der Little, and s. NJ. Meyer.
Mr.. Robertson put into the record
many of the figures from the report
of the Federal Trade Commission on
shoes. recently made public. He told
the committee that the figures gath
cred by the commission showed that
the expenses of producing and selling
shoes did not anywhere near keep
pace with the increases in the prices
of shoes. He said that he was con-
WINGED that the profits made by the
tanners, the manufacturers, the
wholesalers and the retailers of shoes
had all been excessive since 1917. He
spoke particularly of the sale of mill
tary shoes to officers and others at
tending the Army training camps and
charged that prices had been out
rageously high"
Retailers Made Money Since War.
THE retailers" he said, have made
more money since the war than ever
before"
He said that committee of shoe
merchants had told the commission
that good retail shoe merchant
turned over his stock from two and
one-half to fou rumes a year. Mr..
Robertson said that since the retailers
maintained the same margin of profit
on their sales as before the price of
shoes jumped from so to 100 per cent,
1t must follow that their profits had
greatly increased.
We have complained" he said, "be-
cause large industrial concerns have
made big net profits and paid big div
1dends. For my part ! do not see
why the retail shoe dealer should be
allowed to make these very large
profits any more than the Industrial
concerns
Mr.. Robertson said. too, that the
public could itself remedy the situa-
ton greatly If it refused to buy the
high-price shoes offered.
Profits in 1917 and 1918.
Mr. Burt testified that his invested
capital in 1917 was approximately
100000 and in 1913 about the same
$4,000 and in 1918 $231,OOO His
gross profits were $4,000 in 1917 and
in 1918 $4,000. His net profits in 1917.
he said, were $4,000 and in 1918
$4,000. He said that the net profits
were figured after the taxes had been
paid
Must Have 40 Per Cent Profit.
Mr.. Burt told the committee that
shoe dealers must have as much as 40
per cent gross profit on their sales
to make as much as a bricklayer He
congratulated the Federal Trade Com
mission on having started it's inves-
tigation of the shoe business. He
said that it would clear the atmos-
phere if the people are informed as
to the risks and costs of the shoe
business.
He declared that in his opinion there
had been no profiteering, generally
speaking, in the retail shoe business
in Washington. although he admitted
that there may have been cases here
and there.
Herbert Rich. manager for B. Rich S
Sons told the committee that the cap
ital invested by his company in 1914
was $1,000; in 1917. $4,000. and in
1918. $111,000. He said that the gross
sales in 1914 amounted to $4,000;
in 1917, to $259,000. and in 1918 to
s422.000. The gross profits in 1914.
$4,000; in 1917. $4,000. and in 1918,
$4,000. He said that the net profits
in 1914 were $4,000; in 1917, $4,000,
and in 1918. $4,000.
He testified that the company is