Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-05-24
50 PER CENT OF FLOUR
COST WENT TO PROFITS.
Jobbers as Well rs Millers Engaged
In IncXcusablc GOuginC, Says
Consulting Economist.
IBy Associated Press


WASHINGTON. May 23-Am analy
sis Of proftcerinE in -four. filed with
the United States Railroad Labor
Board By w. Jctt Lauck. consulting
economist Of the railroad brother
hoods and unions. and made public
here today. shows wartime profits
absorbed one third of the price paid
by the consumer for Il barrel OF rour
and that 60 per cent OF this huge
margin was chargeable to protitcer-
ing.
The actual cost OF producing a bar
rel of -four In 1917. including inter
est. freight. and other expense oil
tho consumer was forced to pay al
least $3.50 Had the miller. job
ber. wholesaler and retailer beer
content with reasonable margins
this -four might have been available
to the purchaser At Sll.57. However
tho product was saddlcd with 80
from the miller through the va.
rious distributing agencies. that thu
ultimate cost TO the consumer was
more than 50 in excess of reason
able selling price.
Profits and profits" declared MIR
I.auck. are piled up and accumu'
lated until the price paid by the con
sumner seems largely composed oi
Z
Miller. Run Tn Profits.
Prior to tho war the millcrs' profit
Of - = cents a barrel assured q
liberal return Of II per cent on in,
supervision during the war. the
millers were permitted to make al
most double this profit. or 25 cents
a barrel. But. during the year end.
been actually averaging 81 cents &
barrel. while one mill showed re.
turns for a period of six months Of
- barrel.
With respect to the milling com
panics. the survey shows:
Tina, the profits had advanced in
1917 practically 3I5 per cent over
That the cost of operation. which
includes labor cost, advanced only
&c per cent in the same period. oil
with an increase in miller's profits OF
more than i3 cents barrel.
That the excess profits were more
than eight times the increase In
ing TO levy of 81 on each famil.
in the country.
II was also shown that the miller
had little excuse for inrrGa cas- ,he y,
! feed. an important by-product OF tn
| industry scared to such an extern
during the war tha, i, praGticalnS
[ tire cost of converting wheat into
/ flour.
Iny. ChnrEc Against Johbcrs.
AIR. Lauck called attention To th'
| fact that the jobhers also were gull
/ IS Of ineXcusablc proiitecrinE. iii:
report SHOWS that while their cost:
} OF operation increased only IL pei
cent, their profits were nearly Ia
/ per cent greater in 1917 than in 1914
I During these years the jobbers SLICED
/ a potiteering melon Of approximate
Z SlS.u00,000. or tax OF nearly s.
! from every family in the coun
/ try. At the prc-war rates of return
/ he said, jobbcrs were taking NOR,
/ than 20 per cent on their Investment
! SO that their wartime practices were
! actually criminal.
! The margins taken by the whole
! salers and retailers varied so much
i, said Mr.. Lauck. that II was impos
I siblc TO present the precise figure:
as TO prohtccrinE through thcs'
! agencies, but ii was clear that tn
price-Goug1nE was general all tn
way down the line from the mile
to the grocer.
The report recognizes that variou
influences have been at work sine
1917 TO increase production costs
hut not in any degree sufficient t.
warrant tho prices enacted from tn
| consumer. II is obvious. says tn,
/ report. that these Increased cost
have been passed on ITO the consumer
when they should have been absorbc.
| by excessive profits.