The Tomahawk., 1919-03-27
PACKER LOOT EXPOSED
Hoover Credited With Getting
Facts on big Five"
Became Suapioious Of Man He Ap'
pointed in Charge Of Meat Division
Of Food Admlnistration-Asked Fed
eral Trade Commission to Put Ex-
pert on Books Of Meat Trust.

Washington, D. C.-When Food Ad-
ministrator Hoover undertook to get
justice from the big meat packers for
the American people, he placed In
charge of the meat division Of his ad'
ministration q close friend of the
packers. Joseph P. Cotton. Jr.. Of New
York. Cotton's law firm had recently
had charge of reorganizing the Sulz-
berger firm into Wilson & Co. Cotton
was 80 pleased with the news that ho
was to be named, that he let tho
president of Wilson & Co. know about
It 1t once. Tom Wilson Immediately
telegraphed the news to Swift and
Armour. Everyone was pleased.
Everyone, that is, but the Federal
Trade commission and the American
public that keeps watch of the meat
industry. Hoover got an inkling of
this suspicion of his man Cotton, and
he sent word to the Federal Trade
commission that he would take one
of their own expert accountants and
put him on the packers books, to dis
cover how much money they were
making. In order that prices and prof.
its might be kept within reasonable
limits.
Chase Dug Into Books.
The commission lent him Stuart
Chase. and Chase, being a young man
with a fine scientific enthusiasm, dug
into those books with will.
That's how it happened that the
senate committee on agriculture
learned that tho big Five" made Just
about three times as big profits in the
war years 1915, 1916 and 1917, on the
average. ~ they made In the average
Of the years Just before the war.
Chase testified that Armour 4 Co.,
whose profits In 1904 were $3.50, 900.
made $500. 900 In 1912. 9s,16S,000 In
1919. @7.s4o.oo0 In 1914. @11.15e.0oo in
1915. $780, 900 in 1916, and &17.1S7.-
900 in 1918.
The fairsst way to figure their per-
centags OF profit, hs explained. was
to take their capital and surplus 40 .
basis Of true or net worth. Armour
4 Co. made per cent on net worth
In 1913; In 1913. 81 per cent; In 1915,
~ per cent: In 1915, 10.2 per osnt;
IN 1916. 1s.1 per cont: in 1917. 1S.s
psr cent That 10 to say, the average
for the nrst three years was sc per
oont On net worth, and for the last
three years II was 1877 per cent upon
the capita! added to the accumulated
surplue.
Capital Stock Raised.
Now, this meant 2e.b Per cent net
profit on the capital stock In 1912.
and gradually increasing up to 114.2
per cent on the stock in 1916. Then
Armour & Co decided that the public
would not stand forever for that sort
Of patriotism In war time. So they
raised their capital stock from $50.
ooo, 900 to 100000. 0o0--converting
surplus Of 400 per cent into stock for
the company-and % their enormous
profits for 1917 figured out only 27.1
per cent on the stock instead Of 1855
per cent, which was the trus situa-
ton.
Swift & Co. made a profit Of $780,
900 In 1904: in 1912 tie profits were
$S,745, GOO; in 1913, $o.449. 900: In 1914,
t9,e61 900; In 1915, $23,asi 900; in
1916. $24,1s5.oo0; in 1917, $47.236, 600.
Chase made no statement As to the
prents which wero besnI made in
1913 when he was working on the
,actsrs' books, bnt Francis ]. Heney
testfAsA that Swift 4 Co. anE their
two caief subsidiaries actually made
fsS. .ea0, 900, and tie rl.rket value of
1T ~ IN -