The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1919-01-24
STORY FROM ARN0URS
LARGE PACK COMPANY HEAD
MAKES STATEMENT coz
What Was Done BY This Cor.
poration During Year 1918:
Figures

j. Ogdea Armour, president of the
Armour company, packers, has issued
The following statement to the share
holders in the corporation which
contains some interesting statements
Tor public consumption:
Record high prices for meat pro-
duced record low profits for the fiscal
year 1913. Though the volume of
business represented a tremendous
increase over 1917 approximately
30 per cent, the abnormally high pric-
es OF all commodities we used, and
consequently of the products we sold,
so impaired commercial conditions
that our profit margins were reduced
almost TO the vanishing point Labor
costs, taxes and other OUTLAWS were
so heavy that in the year of our
greatest commercial activity our prof
It's were less, per dollar of sales,
th&r at any time in our history.
Our gross volume Of sales in this
country, both domestic and for export
was 1851, 100000, compared with S575.
OO0,O5O in 1917. II spite of this in
Crease cur net profit was but one and
eiShl tGrths cents on each dollar of
sales, as compared with ST cents in
1917. Our ret income for the period
th.tY-three weeks was $15,247.S37.-
53, at TIE rate of nine per cent on our
average net capital invested and 14.7
per cent on our common stock cater
provisions for dividends on pre-
f2rred). Two million dollars. or only
TWO per cent has beer paid out in
dividends on the common. stock. we
DeinS compelled to re-inVest the bal
ance, over thirteen million dollars, in
the business TO meet the ever in
creasirg demand for additional facili-
ties; this in addition. to the 60,0OO 900
which we borrowed on our convert
IDLE deoertures.
The Profit Account
Our profit account shows that We,
along with the consumer, have suf-
fered because of high prices. Our
business is rredicated or a rapid turn
over of big tonnage at a small mar
gin of profit. ard high prices are not
conductive to quick turnover. We are
helpless in the matter of reducing
prices. They are high because of the
heights to which live stock and labor
have gone. Our labor costs last year
were $20,000,000 more than the pre-
cediEg year. The same number of
pounds OF live stock cost Us in 1918
One Hundred Million Dollars more
than II: 1917. The United States gov
eminent, through the agency of the
food administration, cOmpes us 10
pay minimum of $3.50 per hundred
pounds, live weight, for hogs, which
carnot, at that figure, produce cheap
bacon, pork and other hog products;
ard cattle at $500 or more per hun
dred pounds on the hoof cannot pro-
duce cheap beef. Stock raisers assert
that such prices are necessary to pay
them for the increased cost of pro-
duction and we realize the need for
prices which will encourage contin-
ued agricultural effort. While the
extraordinary demand from Europe
continues there is little prospect of
lower prices.
The United States government
through the food administration.
formulated or November |, 1917, reg
ulatiCns !nitiE.3 our profits il :
more drastic banner than was rre.
Sclibed fer AIRY other Industry. Thus
our profits were limited 10 25 per
cent on our volume and nine per cent
per annum or the capital invested in
the meat projecting lines. We We're
able to carr o.Ily a very small irac-
tioE Of the amount allowed on vol.
ume, ard only about one half Of the
authorized return on invested capital
Helped Win War.
we are more thar recompcnSad
Tor the greatly lessereG profits by
the satisfaction which comes from the
knowledge that our company was z
factor IN winning the war. Our ability
to meet he tremendous food demands
OF the lighting miiliOns in Europe.
an ability made possible only by the
magnitude, the scope and the effici-
enCy OF our organization, as of ines
unable value to the United States
and to the allies.
Turing the year we delivered to
our government and to its European
associates food products of a value Of
S24l,OOO,OGO from our plants in this
country alone. We sent forth thcus-
ands of tons OF food and got back q
minimum of complaint, and not a
word OF criticism as to the efficiency
OF our service.
Employees Entitled to Credit
Our more thar sixty thousand
employees are entitled to a large
measure Of credit for the accomplish
merits OF the year for without their
loyalty and ungTudging CO operation
it would have been impossible to have
delivered the food which meant vic.
tory.
ITO meet war requirements We
had to greatly increase our invest.
ment. This increase in 1918 amount
ed to approximately 100000, 900, of
which S20,C00,00O was fer additional
plant facilities ard capital assets and
$!O,OOO,GO0 in increased inventories
and outstanding accounts. To finance
this expansion the company in June
sold $6O,O0O,000 of six per cent deb
entures, maturing one sixth each
year. 1919 to 1924 inclusive, and con-
vertible iEto the company's new
seven per cent preferred stock, thus
Offering to the public an opportunity
to participate in the management and
profits of our business. Approx
mately 100000 of debentures have
already been converted and some
24OO additional persons have thus be-
come stockholders in Armour &
cnmDapv