The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-04-04
FACTORS PERMITTING PACKERS
TO EARN RETURNS ON INVESTMENT
BY WILLIAM r. sANeoRN.

BY WILLIAM r. SANBORN.
In the first chapter Of our article
devoted to the packing industry,
printed on Wednesday, we stated that
Armour & Co. earned considerably
less on volume of business" and but
90 per cent. on invested capital of
the profit authorized by the Food AID.
ministration, in its attempt to regu-
late prices and limit net earnings.
This did not show that the company
was charging all the traffic would
bear, or profiteering in any depart
ment of its business. The facts were
to the contrary, as witness Mr.. Ar
mour's statement, which follows:
I'VE are more than recompensed
for the greatly lessened profits by the
satisfaction which comes from the
knowledge that our company was a
factor in winning the war. Our ability
TO meet the tremendous food demands
of the fighting millions in Europe, an
ability made possible only by the
magnitude, the scope and the eff
cheney OF our organization, was Of in
estimable value to the United States
and to the Allies"
MIX In the cocoanut
And herein lies the milk in the CO.
coanut. 1t was the broad scope and
efficiency Of the organization" that
counted, and what has been said for
Armour and Company might also have
been said for the great packers, as a
whole. We have come to realize the
need for organizations of nationwide
and also of worldwide importance.
Armour and Company delivered to our
government and to its European as
sociates, food products to the value of
S241 100000, from its American plants
alone in 1918, and this in addition to
the food supplied to our own people.
1t is understood, of course, that the
principal American packers have large
plants in the Argentines, and branch
houses and auxiliary working plants
in some Of the European cities. They
are, in fact, known throughout the
world for some Of their products,
wherever people appreciate good
things to eat. Just what would have
happened with reference to feeding
our allied armies and peoples, but for
these great organizations is not a
pleasant subject for contemplation.
But 1t is not simply the colossal
size of these plants and the scope of
their operations that Is important
here. What Is to be illustrated to-
day, as briefly as may be, is the in
ception, growth and modern efficiency
of these purveyors Of food to the
world.
Armour and Company employ more
than $4,000 persons. Just reflect on
that statement for moment. With
their families and dependents these
icn off IF OF
600 population and form the center of
vast commerce. To meet war re-
quirements the Armour folks alone
had to increase their investments $780,
100000, for plant engagements, and
for capital assets needed to handle
the business. Sixty millions of dol
lars was sold in the form of six per-
cent convertible debentures, which
every reader Of this paper was invit-
ed to buy. Every other packer was
according to size and circumstance.
The Growth Of Years.
The packing industry Of today has
been fifty years In building. And this
sufficiently explains why new con-
Germs, and smaller plants, find it diff
ficult to enter into broad competition,
full in their own more limited field. In
brief there is room for all, on proper
tionate scale and competition will
doubtless be enlarged from year to
year The smaller man or firm lacks
the tools and capital for the most pro-
ductive and economical accomplish
ment. This Is not, however, to the
discredit of the packing industry more
hA ha Foo hot 10
steel works or rolling mill in Richmond
could not nationally compete with the
great steel mills at Bethlehem and !
Pittsburg. The point is that the
growth Of years and of intelligently |
directed effort to improve and to ex-
pand the service to the public benefit, |
tended to doing everything as cheaply |
as possible so that consumption might |
increase and the business be constant |
ly expanded.
And this, gentlemen, Is exactly what !
has happened; not only as to meats, |
but In the canning and preserving in
dustries and in baking lines. Every |
concentrated effort tends to increased |
output and toward more economical |
production. The demand, be it re-
membered, is also on an over-increas- |
this constantly widening business Is !
certainly laudable ambition. There |
can be no standing still for long |
Business must either grow and eX- !
pand or shrink and die. We recall |
the dying out of the oldest house in !
its line in America some years ago !
in Philadelphia. 1t had stood the |
shocks and changes of full century
and then succumbed. And it was in
the meats trade" be it noted, with
wide distribution and branch house
in Belfast, Ireland. The remnants Of
its trade were taken over by grow
ing and younger house, though the sal
wage was rather unimportant. at the
time.
What is Clearly Apparent.
1t is clearly evident that any legis
lation which hampers or cripples the
industry cannot fail to