Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1919-08-07

Due to Excessive Prof
its by Every Factor

+ srs Boosted Prices of Hides-
/ Tanners Take Big Proits-sis
/ Margin for Manufacturers
washinsten, AUG. &-rhs high psieo
Of shoes II declared to be due to sx-
cessive profits taken by every factes
in the shoe production industry in = rs-
port by the Federal Trade Commissaon
TO Congress made public today. Ths
packers are charged with having be-
gum the pyramiding Of shea prices by
an unwarranted increase IN the price
Of hides. the supply Of which they are
said TO control On top Of this in-
crease. Il b charged. the tanners have
taken exceptional profits. while the
shoe manufacturers have demanded an
unusual margin and the retailers have
charged prices that are not justifabie.
The report. covering the period from
1913 to ISIS. has been In the Presi-
denes hands for some time. and IL -
Understood that urged its speedy
transmittal to Congress In connection
with efforts Of the government TO conn
bat the high cost Of living
To show that he packers during the
last four years have made unwarrant-
ed increases IN the price Of packer
hides, the report points out that the
price differential between their hides
and country hides-hides Of q lower
grade-has increased far beyond the
usual proportion. Charges Of excessive
profits against the tanner and the shoe
manufacturer are said to he supported
by the high rates Of return on invest
ments IN both industries after the price
increases.
The public" says the report, had
to pay prices for shoes that not only
could not b justified because retail
shoe dealers took. too much profits,
but because the dsaisF had 10 pass
On 20 the eonsumer the Successive
prcnts received By butchers Tor hides
and also the excess profits Of tanners
and shoe manufactures"
Some relief from the tntolerable
prices paid by consumers for shoes
may be had" the report says. by:
IA rigid enforcement Of the laws
against monopolistic control Of com.
modities.
--Legislation forbidding produc-
ers Of hides engaging in the tanning
business.
-3-The adoption Of q device IN
the distribution Of shoes that win ac-
quaint the consumer With the SELL
ing prices Of the manufacturer"
While noting that because Of In
creases in the costs Of material DUR
ing the war period prices were bound
to advance considerably even though
no large profits were obtained, the
report says that leather mAnufactur-
ers. shoe manufacturers and retail
shoe merchants all made unprece-
dented profits
Even In 1914 the tanning industry
was prosperous" said the report. lin
perhaps q majority Of cases earnings
being 10 per cent or more. and only
a few suffered losses BY 1916 and
1917 it was rather unusual for q
company to earn less than 10 per
cent A similar comparison for
manufacturers Of shoes shews that
more than twice a. many made
profit Of 20 per cent or more In 1916
and 1877 as did in 1914.
The rate of return on investment
to shoe merchants can not be stat
ed. but it Is evident from the volume
Of business they had and from the
gross margins of profit they secured
per pair Of shoes that their business
was very profitable.
Taking into consideration all the
circumstances. especially the circum-
stance that the United States was
engaged in war, the large profit TAX
en- by slaughterers for hides, by shoe
manufacturers and retail shoe deal
ers cannot be justified and there Is
consequently no justification for
prices that consumers have been
compelled to pay for shoes.