The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-07
Packers, Tanners, Makers and
Retailers All Took Ad-
vantage of War.
T. S. TRADE BODY REPORTS
Profits All Along the Line
Higher Than Ever Before,
and Unjustified.
s,,eisr pespa,cA to THE Sun.

industry lnqulIlHs espeOia'y hi'o TIE
,rIces OF shoes, to-day made public a
summary Of its report to Congress. 1t is
understood that President Wilson or
dsred the summary printed and made
npblic forthwith. since the complete re-
mort is not available at the present time.
The commission in issuing the sum-
mary announces that the full report will
Ne available within a fortnight.
IN its introduction to the summary the
commission says:
The Federal Trade Commission has
found that the high price of shoes
cannot be justified by underlying eco
nomic conditions. The commission
after exhaustive inquiry into the
price of hides, leather and shoes, Is
reportng to Congress that the larger
hackers control the hide supply and
have taken excessive profits and
uassed increased costs to subsequent
steps in manufacture and distribu-
ton; that the tanner has taken ex-
ceptional profits; that the manufac-
turer of shoes has taken unusual
margins, and the prices charged by
the retailer are not justifiable, each
factor in the industry adding to the
= burden he had to bear before he
passed II OH to the next.
Means for reducing the present high
prlces are recommended by the COM
mission in this paragraph:
Some relief from the intolerable
prices paid by consumers for shoes
may be had by % a rigid enforce
nent of the laws against monopolistic
control of commodities, (2) legislation
iorbidding producers of hides engag-
ing in the tanning business, and (3)
the adoption OF a device in the distri-
,bution of shoes that will acquaint the
consumer with the selling prices of
the manufacturer.
The summary of the report follows:
This report treats of conditions in the
leather tanning industry, including the
hide trade, and the boot and shoe indus
try, including the merchandising OF
shoes. The period covered by the in
curry is from 1914 to 1918. inclusive. ex-
ept in regard to certain financial data.
Outstanding Facts.
THE outstanding facts established by
te inquiry are as follows:
% Between 1914 and 1917 the
price of hides, the principal factor in
the cost Of producing leather, greatly
advanced and the differential between
country hides and packer hides in
creased beyond the usual proportion.
due 10 the more marked increase in
the price Of packer hides.
(2) Though there was an increase
In the cost of hides to the tanner the
prices OF his Observation-Disclosures
yanced to a point that could not be
justified by the cost of producing it.
This conclusion is supported by the
high rates of return on investment
received by tanners.
go The cost of manufacturing
shoes increased greatly between 1914
and 1917, but, as evidenced by the
high rates of return on investment,
not to an extent that warranted the
prices at which manufacturers sold
their product.
90 The absolute margin OF profit
taken by retail shoe merchants per
pair Of shoes grew wider as their
costs OF shoes increased because their
rate Of profit remained substantially
without change.
~ As a result the public had to
pay prices for shoes that could not be
justified. not only because retail shoe
dealers took too much profit, but be-
cause the dealer had to pass on to
he consumer the excessive profits re-
ceiyed by butchers for hides and also
the excess profits of tanners and shoe
manufacturers.
During the progress of the war in Eu-
rope, even before the United States be-
came belligerent, the demand for
leather and leather goods for the allied
nations Of Europe had a marked effect
on prices. The demand was not only for
large quantities of leather and shoes. but
mere was pressure for quick delivery.
Either one Of these factors would tend
10 stimulate prices, and both of them to-
gether brought rapid and marked adj
'ances in the prices of both leather ana
shoes, and also Of hides and skins.
When the United States entered the
war there was immediate demand for
shoes and other equipment made of
leather TO meet the requirements of the
army. The shoes needed by the Govern
ment were required 20 be made of speci-
ned high grade leather. Only the better
grades Of hides could be used in making
such leather, and as a result hides, es-
peclally the better grades, rapidly adj
'anced in price. The situation became
50 acute that in 1918 the War Industries
Board undertook to provide means OF
supplying the tanners with hides at fixed
maximum prices Maximum prices for
leather was also fixed for the shoe man
uiacturers. The demand for labor in
olher industries compelled tanners and
shoe manufacturers to increase wages.
Two Kinds of Hides.
There are two we'll recognized classes
u domestic hides, l. e., packer hides and
,yountry hides. Packer hides include
those taken from cattle in regular
Aaughtering establishments, while coun-
ny hides include all others. such as are
, sSken OF by small butchers and farmers.
me quality Of country hides as a class
generally considered not as good as
packer hides. and there has always been
latter ''S0 40
between 1914 and 1917 there was a
bSSarKaole advance In the prices OF
Ls' From 1914 to 1917 the price OF
eSE native packer COW hides advanced
~ man 6b per cent, while the cor
spohclng grade OF country hides in
,,,sSd less than ~ per cent. The ac-
c1, S, increase In price of packer and
Is1nry COW hides In the two years was
fluent. Hehs and cents a pound respec-
my A comparison of these actual
cr..S ases with the percentage of in
,ws.s indicates that the differential be-
Wa n packer hides and country hides
,Si" beyond the usual proportion.
ana 81 tnan rs per cent of the cattle
Who'll oo per cent, Of the calves killed by
Sta,s. le slaughterers In the United
era , are Killed by five large meat pack
thess ne pest hides are taken on by
a'a the cattle killed by the Ave large
'1ekers are uniformly heavier than thnss
h,v /" the smaller ones. These Ave
'se meat packing concerns thus have a