Grainger County news. (Rutledge, Tenn.) 1917-current, 1919-12-18
SENATORS
BEEF COSTS
This May Throw Some Light on
the Price You Pay for
BeefSteak.

beetSteak.
4 Testifying recently before a body OF
senators in Washington. a vice-presi'
dent of one of the large packing con.
Germs If. Edison White of Armour and
Company made the astounding state
lment that so far In their fiscal year
which would cover the past eight or
nine months, his company had made
no money whatever on beef"
This statement is doubtless well
nigh incredible TO the average man.
iYet it was made in full knowledge that
1.-THE senators had access to the com
pany's books.
Recovering from the first shock, this
came average man will say, YES, but
the packers are shfewd; what they do
not make on the beef they more than
make up on the hides"
But even this illusion was destined
t. be shattered. Mr.. White explained
that his statement included everything
that was derived from the steer as
, purchased-the hide, fat, even the in
tesfines which are used largely fol
sausage castings.
Make Money, Nevertheless.
Well the packers make money-how
do they do It? Mr.. White admitted
that they did, quoting figures secured
by auditors of the Food Administra.
ton, to the effect that packers profts
on food commodities of all kind last
year were / 6/10 cents on each dol
lar taken In. These would include
such things as sausage, shortening,
canned meats, etc, In addition to fresh
meats, hams and bacon. On all the
products Of his company, Mr.. White
explained, comprising both foods and
iDedible commodities, the profits dur.
ing the same period We're ] $40 cents
OF each dollar sale.
All Of which would lead many to
say that the packing business is not
well understood. 1t isn't. Yet as one
Of the leading industries of the coun-
try, its workings and, above all, its
profits, should be familiar matters TO
as. 1t is quite useless to crate against
the high cost Of living without digging
into some Of these fundamentals.
H~y-Produets at Market Values.
One of the most enlightening bits Of
MIR. Whites testimony vas his ex.
PLANTATION of the way In which cost
is bought at $4,000 and hides are
bringing $1,000 in the open market,
then $1,000 is credited to the cost of
the steer. II hides are selling at $500
that amount is credited. The visceral
fat, onal and everything else that
comes from the steer r likewise
credited at their prevailing market
values. What remains is taken as the
cost price of the meat. The beef ear
cass is then shipped TO n of the To-
chi distributing branch houses, and
the manager there is given the cost
price with instructions to sell the beef
mt n profit If he can. But in any event,
whether the local market be lively or
dull, he must sell for what he can get,
for the commodity is a perishable one
anG mast be sold.
Manufacturers Profit on By.Products.
However, there is another hitch to
the packing business, quite as little
understood apparently, that goes TO
show how a loss on fresh meats may
be accompanied by a profit on the to-
tai amount of business done. Take,
for example, the banjo strings afore-
mentioned. which are made from the
intestines of sheep. The department
that makes banjo strings (and like
wise surgical ligatures, tennis strings,
etc., buys" the intestines from the
sheep-killing department, paying ex-
actly the same price that these bring
when sold to the outside market. On
this basis the string department manu-
features its strings and sells them,
bringing a profit into the business.
In like manner tie fertilizer depart
ment buys blood az d tankage; NE soap
department hnys Eats; the glue depart
mept buys losfs. horns, bones and
sinews; AMI ~ III through the list of
''by-producls." The fertilizer, the
soap and the glue, just IS the music
strings, bring in a manufacturer:
profit.
In all cases these by-products,
whethc, they be sold to outside man
u~facturers or to one of the manufac'
tnri:g departments in the business Ia;
the same prevailing market price,, are
credited to the cost of the meat por'
ticn of the animals, just as in the in'
stance Of the hides mentioned above
Thus the utilization of by-proGuctS'
system of which we have heard much
an1 the method by which it Is con
dEctcd, show the packers manutactur-
.Gc profit on a great variety OF com
muG!ties ranging all the way from;
pllarmaceuticals TO glue, do, in reality,
bear the burden of fresh meat prices
!Senator Kellogg, of Minnesota, in
discussing maIadministration Of ;