New-York tribune., 1919-09-27

itation applied to the speciality bust
ness and completion Of by-products.
These percentages were computed
upon the total capital used by the
packer in these businesses, including
borrowed money:
"(3) The Trade Commission re-
port advises that the food admins
tration should include all businesses
although this is not legally feas-
ible-and that fiat maximum of
profits should be imposed If per
each 10 per cent increase in volume
of weight of animals killed up to a
maximum of 8 per cent. The pros
pective business during 1913 would
probably allow the packers to realize
the full 8 per cent. The Trade
Commission basis, however, pre-
scribes that borrowed capital should
be excluded from calculations of
earnings.
Essential Figures
"(4) Taking as a basis the tables
accompanying the report of the Trade
Commission and excluding the non
food and foreign business, and COM
bining all of the five great packers,
we find the following essential
figures:
Total investment ........... *s53.219 900
Net worth ................ 1856. 900
Consequently borrowed capt
tai. ... ................ 463.a34,ooo
Total estimates of food-Ad-
minstration M a x | M um
profit ......... ....... s7.443.ooo
Less interest ............... 21,407,O0O
Net earning ................ 66.036.000
"The profits are gross, without de-
duction of taxes, which would amount
to about s16,OOo,O00, leaving about
$50,000,000 net. The trade commits
sion's allowance Of 8 per cent as
applied to the above figures of $780,
$4,000 would give net earning of
$35,089 $50. Whether this is before
or after taxes, we do not know, but
assume from the text that it is net
for dividend purposes.
eve would submit that the esti-
mated interest figure given in the
above table is S2,000,O00 less than
the actual necessary payment on
S per cent basis, and that therefore
the trade commissions recommen-
dation would call for a reduction
in the maximum earned on this class
of business of about $29,O00,O00
without taxes, or about $13,O0O,000
if their figures are net.
"This would imply a reduction of
per cent in the other. And therefore
makes it difficult to understand the
statement that the Food Adminis-
tration regulation allows the earning
to be from two and half to three
times as great as normal. This
probably arises from the assumption
that the Food Administration could
control outside profits, which are es-
timated at $25,0O0,000 year for the
packers.
"5. The combined five packers
will in 1919 probably kill 12,o00,0Oo,-
900 pounds live weight of animals,
resulting in 7000,000,000 pounds of
meat products. A profit of / cent
pound would be $7,0O0,000. There
fore the possible profits under the
food administration limitations are
less than l cent pound, and the
reduction proposed by the Trade
commission will amount to about
onethird of a cent a pound.
Won't Benefit Consumers
at is necessary to emphasize this,
for the producing public may be
misled into the belief that the bare
volume in these hgures-large as
they are = will have actual and
tangible results in reducing the
cost of living The fact of the case
is that one-third of a cent a pound
seldom reflects into realization in
the hands Of the subsequent dis
tributing trades after the meat has
left the packer.
"6 The Trade Commission has
the feeling that there is little or no
risk attached to these enterprises
and therefore their earnings should