New-York tribune., 1919-01-22

packers and the price fixing officials OF
the Food Admin stration, although Mr..
Armour declared with positiveness that
no official of Armour & Co. was among
the "dollar-a-year" subordinates Of Mr.
Hoover. He admitted that some had
received their previous training as ex-
perts in the employ OF his company
Disruption of Industry Feared
81 interpret this bill as an effort to
dissolve an alleged monopoly and to
decentralize the meat packing indus
try" Mr. Armour said. at seems to
be constructed in the belief that a
great number of small units engaged
in the purveying of food arc preferable
to few which are organized on a
national scale.
"If the ability Of the packing in-
dustry to function properly is impaired
it will affect the livestock industry,
and it in turn will affect corn prices.
Wheat will then be drawn in and so
will bread and so will labor and SO
will everything that has for it's basis
the wealth produced by agriculture.
"The theories on which pending leg
islation is based are not constructive;
they age not progressive. They are re-
actionary. They would disrupt the
great manufacturing and marketing
machines which half a century of en-
terprisc has evolved. and the results
would be detrimental not alone to
the leading industry of this nation,
but even more to that portion of the
public which produces. and to the en-
tire public which consumes food"
Possibility of government ownership
of stockyards and other adiuncts of the
packing industry drew from Mr.. Armour
reference to "red tape" and contro-
versies over "trivial matters" such as
underground mail chutes.
Increased Cost Predicted
"Ownership by the government he
said, "impl!es red tape and restric
tions which cannot help but add to
the costs of the service costs which
must eventually be borne either by
the producer or the consumer. Gov
ernment ownership implies, too aboli-
tion of the private initiative and en-
terprise which has made it possible
to erect an efficient stockyards al
most overnight when occasion justi-
fed it,
"The government, you know. does
not make up its mind very quickly on
such matters, as is evidenced by the
years old controversies over the build
ing of postotfices, or such comparative
ly trivial matters as to whether or not
cities should have underground mail
chutes. 1t is only because | fear less
efficient operation and the consequent
serious results that | make these COM
ments, but | am entirely willing and
ready at once to relinquish my hold
ings upon being allowed just com
pensation therefor"
Profits made by Armour & Co., Mr..
Armour declared, "were negligible in
so far as either the producer or the
consumer was concerned
"On our total volume of business
he said, "they represent return of
less than two cents on every dollar OF
sales The margin OF profit in the
packing industry is the smallest en-
joyed by any industry of national con-
sequence"
Gross volume of sales by his COM
pany in 1918, the witness said. totalled
1851 ,000,0 900, compared with $S75, 100000
in 1917 but the net income was at the
rate of per cent on the average net
capital invested.
Large Dividends Explained
The 400 per cent stock dividend in
1916 whereby the capital stock was
raised from 100000 900 to 100000, 900,
was said by Mr.. Armour to have been
made possible by reinvestment during
preceding years of II per cent of the
aggregate earnings, so that the increase
| represented not water, but money act
ually spent in development. In this
connection he called attention to the
fact that the firm is almost entirely
owned within his family.
Mr.. Armour in the course of his
statement made detailed answer for
Armour & Co. to tho charge made by
the Federal Trade Commissions report
on its meat packing Investigation. He
declared the high price Of meat was the
real reason why President Wilson or
last four years, he said, the price of
live hogs had increased 245 per cent.
and costs of labor, clerical help and
fuel had doubled.
AS only seventy per cent of hog is
edible, and the remaining thirty per
cent of by-products have not increased
in value as rapidly as the live animal,
Mr. Armour said it would be under
stood why bacon to-day costs three
added that prices of live cattle and
sheep have advanced at a pace with
! that of hogs.
/ Denying the existence of 3 pool of
packers, Mr.. Armour declared there was
keen competition between his firm and
Swift. Morris, Cudahy and Wilson. Per-
centage of purchases by each firm at va
rlouS markets, winch the commission
alleged showed there was an agree
ment for each packer to take only a
certain amount of the livestock offered
for sale, thereby eliminating competi-
ton, was asserted to be dictated by
plant capacity and the experience Of
years.
In denying that there was any COM
bination among the packers to fix
prices. Mr.. Armour declared one in
stance of alleged price fixing pointed
out by the Federal Trade Comm isson
was taken at the request and with the
approval of the food administration.
This was the agreed price of % n cents
pound for lard compound. reached