The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-07
GREED BLAMED FOR
HIGH SHOE PRICES
Packers, Tanners, Makers and
-fsptsilers Took AID. 3
Vantage oftwsx.,
U. s. TRADE ROD REPORTS
Profits All Along the line
Higher Than Ever Before,
and Unjustified. ~. >
special pespateA % Tns Sur.


Trade Commission. which recently con-
Quoted an investigation into the leather
industry. inquiring especially into the
prices OF shoes, to-day made public
summary Of its report to Congress. II 70
understood that President Wilson or
dered the summary printed and made
public forthwith, since the complete TO
port 10 not available at the present time.
The commission in issuing the sum-
mary announces that the full report VIII
DO available within . fortnight
In It's introduction to the summary the
commission Gays:
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, N
reporting to Congress that the larger
packers control the hide supply and
have taken excessive profits and
passed increased costs to subsequent
steps in manufacture ,and distribu-'
ton; that the tanner has taken ex-
ceptlonai profits; that the nanufac-
turer Of shoes has taken unusual
margins, and tho prices charged by
the retailer are not justifiable. each
factor in the industry adding to the
burden he had to bear before he
passed 1t on to the next
prices are recommended by the COM
mission in this paragraph
Some relief from the fntolerable
g. ~.
may be had by "a a rigid enforce
ment of the laws against monopolistio
control of compodities, (2) legislation
forbidding producers Of hides engage
ing In the tanning business, and W
the adoption OF device In the distri-
button of shoes that will acQuaint the
consumer with tho 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 oil
shoes. The period covered by the in.
Quiry is from 1914 to 1918. inclusive. ex.
cept in regard to certain financial data
Outstanding Facts.
THE outstanding facts established By
me inquiry are as follows:
"a Between 1914 and 1917 the
price of hides. the principal factor In
the cost Of producing leather. greatly
advanced and the differentiai between
country hides and packer hides in
creased beyond the usual proportion.
due to the more marked increase in
the price of packer hides.
CD Though there was an Increase
IN the cost of hides to the tanner the
prices of his Observation-Disclosures
vanced to a point that could not be-
justified by the cost Of producing 1t.
This conclusion is supported by the
high rates Of return on investment
received by tanners
CD 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. T7"'
60 The absolute margin of proht-
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.
90 As q result ths 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
the consumer the excessive profits re-
ceived 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 O beiligerent. the demand fo
IAnthAr ana IaothAr RNaAa the alltA<
nations of Europe had a marked cffec
on prices. The demand was not only TO
large quantities of leather and shoes, blu
there was pressure for quick delivery
Either one of these factors would tent
to stimulate prices, and both Of them to
gether brought rapid and marked ad
Nances in tho prices Of both leather an,
shoes. and also of hides and skins.
when the United States entered tn
war there was immediate demand TO
SHOES and other equipment made o
leather TO meet the requirements Of tn
army. The shoes needed by the Govern
ment were required 20 be made OF speci
fed high grade leather. Only the bette
grades of hides could be used In makinI
such rather, and as a result hides, es
pecially the. better grades. rapidly ad
yanced In price. The situation becsm
20 acute that in 1918 the War Industries
Board undertook to provide means o
supplying the tanners with hides at IKE,
maximum prices. Maximum prices 70
leather was also fixed for the shoe man
ufacturers. The demand for labor Il
other industries compelled tanners AM
shoe manufacturers to increase wages.
Two Kinds OF Hides.
There are two well recognised CLASSES
of domestic hides. T. g., packer hides anS
country hides. Packer hides includ,
those taken from cattle in rcgula
Strengthening establishments. while cnun
try hides include all others. such - ar,
taken Off by small butchers and farmers
The quality of country hides as n clasl
Is generally considered not as good a.
packer hides. and there has always beef
. dlfferentIal in price in favor of thu
latter.
Between 1914 and 1917 there was ,
remarkable. advance in the prices o.
hides. From 1914 to 1917 the price o.
heavy native packer COW hides advanced
more than IS per cent, while the cor
responding grade of country hides In
creased less than AZ per cent. The nc
tual increase In price OF packer ant
country cow hides In the two years wa
10 cents and cents . pound respec
lively. A comparison OF these actua
increases with the percentage Of I'm
crease indicates that the differential be
tween packer hides and country hide
widened beyond the usual proportion
More than rs per cent. OF the cattI
and IS per cent of tho calves killed b,
wholesale slaughterers In the Unitet
States are killed by Ave large meat pack
ers, The best hides are taken on b,
these Wholesale siaughtering concerns