Great Falls daily tribune., 1919-03-10

TOR In fact, two articles costing the
same amount will be marked to sell at
different prices for the reason that one
appears to be more stylish rhan the
other. To your committee. this seems
TO the consumer, who is not able or ey-
perienced to judge of grade and quality
of the goods offered.
Your committee examined Food Ad
minlstrator Atkinson, and from his testi-
mony were unable to ascertain any
authority claimed or exercised by him IN
the determination of prices. The only
testimony of any Importance given by
the food administrator was to the eff
feet the government authorized the use
Of the so-called Harvard system in the
determination of the selling price. This
SYSTEM then used has the result of
deceiving the public as to the amount
of gross profit.
How Deceptive Profits Varies.
Your committee find from the testi
mony that the average gross profit
varies at different places of business
and on various articles, approximately
as follows: on shoes, 50 to 100 per cent;
mems hats. 30 to 75 per cent; men
overcoats, 30 to 50 per cent; pants, 80
to 10 per cent; mens underwear, 90 to
100 per cent; mems shirts. 30 to 100
per cent. Children's clothing, 80 to =
per cent Ladies' suits, 80 to 125 per
cent Ladies' shoes. 30 TO 100 per cent.
Staples in dry goods % to 30 per cent.
Those percentages of gross profit are
the deductions supported by the tesu-
mony introduced. In determing the selling
price of many articles of higher grade,
it was stated by witnesses that articles
which are luxuries were entitled to and
did carry higher margins of profit than
the so-called staple articles
Your committee do not deem It prop
er to attempt to give any percentages OF
profit as to food products commonly car
ried in the grocery line, owing to the
fluctuating and at present declining mar
ket The per cent profit could only be
determined after a more full and com
plete investigation than the time allotted
your committee would permit.
Extortionate Profit in Beef.
The per cent Of profit on fresh meats
are an average of 60 per cent gross pro-
fit, and - to 10 per cent gross profit
for cured meats. The difference be-
tween the price paid the producer tor
cattle on foot and the amount realized
by the retailer is best portrayed by the
following illustrations: The price paid tor
a cow 1900 pounds live weight, at top
prices is 500, and the amount realized
after the animal has been butchered and
sold at retail is approximately Sl65.
These figures do not take into consid-
Grafton the value of the offal used IN
producing fertilizer and other by prod
ucts. This is "a gross profit of $.3 for
each Thousand pounds of COW beef live
weight and when it is considered that
this amount of money can be turned at
least once Il month, the profit becomes
an amount equalling that which may be
properly termed extortlonate.
Produce Profits Too High.
The investigation Of the committee
into the prices of what is commonly
termed produce and which is handled by
commission firms was of such character
that rs to conyincingly prove that the
profits realized were greater than III
reason they were entitled to. 1t IS true
that TIE produce commissionsmen handle
perishable products, but it is also true
that for the money invested they reap
richer reward when it is considered the
number Of times per year that the cap
ital invested can be turned and re-
turned.
The net profit realized based on the
amount Of stock and capital invested va
ries materially, due to the difference in
mana cement and ability to conduct bus
mess enterprise. The business of mer-
chandising, other than the grocery mer-
chant. according to the testimony. en-
joys a net profit of from II to 80 per
cent on the amount of capital invested
In the grocery line of business, the prof
il ranged from & loss to what the com
mittec deemed to be. and what might
properly be termed excessive profits.
incorrect Basis of Profit
In considering the margin of profit,
the person engaged in the mercantile
business, figures his margin based on
the volume Of business transacted, which
in the opinion of your committee, is in
correct and unwarranted. The amount
of return upon capital invested, which
person is entitled to. should he fair
and legitimate profit based upon eff
cheney and capability. 1t was apparent
to your committee that the business
management of mercantile institutions
with the greatest efficiency was estab-
fishing prices high enough to cover the
cost of doing business by the least eff
cicnt. 1t must be conceded as 4 fact that
he who utiiizes his ability to produce
cheaper or to manage his business for
the purpose of extracting from the public
as high a price for his product as may
be necessary for the less efficient busi-
ness man, is undoubtedly a menace
rather than benefit to society at
large.
Subterfuge Loss Items.
In the matter Of items charged to cx-
pense as the cost of doing business. the |
while not attempting to
analyzc in detail the financial statements
Of those engaged in the mercantile bus
mess were able to conclude as to some |
items which seemed unfair to the com
mittee As worthy of mention. items /
charged to expense, as: Incorporating I
explained rs anticipated
losses" farm losses" mining stock
ventures" excessive salaries" and 'ex-
orbitant rents should not be allowed |
and il permitted only result in the in |
creased cost to the consumer.
The testimony shows that trade asso-
Citations exist, composed of merchants Of /
the wholesale and retail business re-
spectiveiy. Some wholesale merchants
claimed the retailers would not permit |
them to sell to restaurants and hotels,
while the retail merchants insisted they
were not able to purchase in many in
stances save thru the wholesale agencies
and brokers'.
Rr0ker Mere fifth Whooj'