The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1920-04-09
WHY CLOTHES
COST so MUCH
Wool Trust Profits Show Folly
otPaImer Crusade Against
Retailers.

One Of the thinnest and most absurd
pretcnscs Of big business and Of At.
tOrney General Palmer Is the pretense
that the high prices OF food and clothes
are due largely to excessive profits Of
retail merchants, and can he remedied
by sending a few grocers to Jail for
charging one cent pound profit on
grnnnlatcd sugar. Or by compelling
clothing dealers to mark in plain fig
ures the cost price Of every garment
they sell.
OF course as we often do not know
just who is to be blamed for excessive
prices. and as we cannot very well get
at manufacturers we like to take it out
on the retailer.
Must Go After Trusts.
but there was published few days
ago some facts about the profits Of
tcXtel manufacturers which show very
plainly that prOtiteering where It ex-
lists, is not to be laid solely with the
retail merchants. II we could reach
such trusts as the American Wooden
Co. we would get somewhere in the
fight against prOflteers.
Here follows an abstract from re-
cent press dispatch from New York
city:
The American Wooden Co., is CON-
monty known as the "Woolen trust"
In many respects 1t is to the wooden
trade what the Standard Oil Co. Is to
the oil business. 1t owns 80 mills,
which cover more than 700 acres of
land and have over 100000 feet Of
floor space. No figures on the COM
Inny's annual output Of wooden goods
are Ohtninable.
Secrecy has been one Of the watch.
words Of the company's policy. Stock
holders cannot learn from annual re-
ports the volume Of business handled
annually measured in terms Of dollars.
and unlike most other big corporations
IF the present time, the company does
not make any statement to stockhold-
Frs Of expense Of operation.
Sensational Profits
At any rate, the skeletOnized state
mcnt OF earnings as furnished by the
American Wooden Co. gives convincing
evidence that 1t has not established
record high prices for WOODEN goods
simply for the purpose Of meeting in
creased tax payments or higher pro-
IiuctiOn costs and ut the same time to
give owners and Stockholders fair
return on their investment.
During the war period and more re-
Gently. while the cost of living and in
cidentally of wooden goods has been
soaring. the company has been piling
up profits that are nothing short Of
ScnS;,ti Onal
342 Per Cent Jump.
In 1914. operating income after de-
, Quoting expenses amounted to $2.1SS,-
Coz. by 1916, it had jumped to $S.-
| o1O.7G1. an increase of 1914 per cent.
and operating income for 1918 totaled
$12,324 ,0S4, an increase Of $0,535, 482,
or 342 per cent over 1914.
But that is not all. Before arriving
| Mt the operating profit for 1918. the
company not only took care Of wage
Increases and production costs. but
also took care Of federal income and
excess profit taxes for the year.
In 1915 the company earned $6.40 for
each share Of common stock. after pay
ing Z per cent in dividends on the
preferred stock. In 1916, common
share earnings jumped to 1852 per
share: in 1917. to $4O42 per share, and
in 1918 they amounted to $21.38 per
share. It appears that the only reason
the share earnings in 1918 were not as
large or not larger than in 1917 is that
$5.251 900 was charged against depre-
citation and in other ways surplus A.
nanclal fat was stored away before
arriving at the dividend balance.
Where Your Money Goes.
In 1915. in addition to the usual z
per cent dividend on the preferred
stock. the company paid * per cent
on the common. In 1917 and 1913, 5
per cent was paid. and in 1919 the
company began to distribute a part Of
its huge surplus earnings by giving to
common stockholders extra dividends
In Liberty bonds equal to Is per cent
Of their common share holdings. Later
in the same year the rate Of annual
cash dividends was increased to Z per
cent.
This by no means tells the whole
story. Among other things, 1t might
be pointed out that from 1914 to 1918
the company increased Its net working
capital from $21 $4,000 to $53.s12. 900
and increased Its accumulated surplus
earnings after deducting larger dlvi-
iend payments from $SO24.O00 to $751;
724.OOO.
It certainly appears that the COM
pany can easily and substantially re-
duce the prices Of its products and at
the same time give the stockholders a
handsome return on their investment.
l-Wisconsin Capital Times.
ONTARIO EARMERR