Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1920-07-01
MILLERs Owe THEIR CASE.
Claim That No Undue Profits Have
Been Made.

L
express 1t, uniHfOrmed readers have
been misled into the belief that
there has been much profiteering II
| the industry.
They request that their side OF
the case in the interest Of fair play
be presented In the following article
from the Northwestern Miller. This
article reads as follows:
con May % the representatives
Of the railway brOtherhoOds filed
with the United States railroad la.
Dor board formal statement to the
effect that wartime profits In the
-four trade had absorbed One-third
of the price paid by the cOnsum-
er for barrel Of -four, and that &C
per cent Of this margin was charge
able to prOfiteering. The statement
attacks alike the miller, the jObbei
and the retailer. Coming from such
n source, the charges are likely to
receive wide publicity, and to find
credence throughout a considerable
part Of the country. 1t is therefore
dOubly unfortunate that they should
have been based, not so much on
actual misstatements, as on partial
statistics presented without explain
alton and thus warped from their
true significance.
"The basis of the statement Ia
Of course, the famous report issued
in 1918 by the federal trade com.
mission, which summarized the
costs and profits Of some seventy
five milling companies operating one
hundred and thirty nils in the five
fiscal years from July I, 1912 to
June 80, 1917. As result, moth
ing specific is said regarding costs
and profits during the past three
years, or after the United States
food administration began its work ;
but the implication is made that the
'pr0fiteeering' alleged in 1917 has
continued unchecked. 1t Is unfOrtu
nate that the federal trade commits
sion has not seen fit to issue sup
Elementary report covering at least
the years 1917-1S and 1913 TO-
when, with maximum permissible
profit to the miller of twenty five
cents per barrel. most mills were
doing business on half that margin
"'Prior to the war; the brother
hoods statement says, the miller's
profit Of thirteen and half cents
per barrel assured u liberal return
Of Il per cent on invested capital.
But during the year ending June 30,
1917, the millerS had actually been
averaging fifty-two cents a, barrel
These are the federal trade commits
sion's figures, and are probably not
grossly incorrect. The statement,
however, carefully omits the reason
for these extraordinary apparent
profits in 1867. At the begin
ming of the crop year, the average
farm price Of wheat per bushel was
ninety-th three cents. On June /, 1917
it was $2.49. All the larger mills
had bought wheat heavily In the
summer and fall months of 1915.
and thus, through absolutely no ac-
ton Of their own, but simply
through the unrestrained specula-
ton of foreign government wheat
buying agencies, their wheat stocks
for a short time represented book
profit Of from 400 to 200 per cent.
1.-The federal trade commission
closed its survey with hlne 30, 1917
mt precisely the time whensthese
paper profits were at their highest.
Almost Immediately thereafter
wheat and -four prices dropped
sharply, and wheat stocks, instead
Of representing profit, appeared
as a material loss. Thus the book
profits on wheat were promptly
wiped ont, and the actual milling
margin of profit in 1917, as another
government report conclusively
proves, was materially lower than
in 1916. The brOtherhood's state
ment ignore this fact completely.
Its whole argument is based on the
theory that the exceptional condi-
lions which prevailed in 1916-17
were indicative Of the real course
Of trade.
Fortunately, there is a govern
ment report on the milling industry
which runs through the year 1913,
and which presents figures authOri-
tatively contrOverting the claims
made in the brotherhoods' state
ment. This is the report issued in
1919 by the War Industries board,
showing in detail the course Of
wheat and -four prices in the six
years from 1913 through 1913. An
analysis of the figures therein pre-
scented, which are certainly not open
to the charge Of prejudice in favor
of the milers. shows that the re-
lation Of the wholesale cost of -four
to the price of wheat has been very
nearly constant. In 1913, the aver
age Selling price of standard pat
ents in Minneapolis and Kansas
City was equivalent to the average
market price of four and six-tenths
bushels of No. 1 northern spring and
No. . red winter wheat. In 1914
the -four price represented that OF
Al bushels of wheat; in 1915. 4.S
bushels; in 1915, exactly five BUSH
els; in 1917. 49, bushels again, and
in 1918 it was back to the 1913
level, being equivalent to the cost
Of 40 bushels Of wheat.
These figures are public proper
ty, prepared and published by a
government agency, acting without
bias or prejudice. They are based
not on the inspection by more or