Evening star., 1921-06-11
DECLINE IN PRICES
OF SHOES FORESEEN
Trade Commission Tells
House Leather and Foot
wear Are Going Down.

A further decline in leather and shoe
prices is expected by the Federal
Trade Commission, according to a re-
port it sent to the House Of Repre-
sentatives today in response to a reso-
luton adopted by the House calling
for information concerning condition.
in the leather industry.
The present prices Of hides and
skins" the report says. land the con-
dttions existent In these phases of the
industry. Justify an expectation OF
stiil further declines in the quoted
prices OF leather and shoes"
High prices Of footwear which OBJ
tanned during 1918 and were greatly
increased In 1919 resulted from "ab-
normal conditions Of supply and de-
eirAn6 both economical and. psycholog-
fcat arising out Of the war" the COM
mission finds.
? Incident to these conditions. 1t adds,
were large margins OF profits taken
by tanners, shoe manufacturers.
wholesalers. jobbers and retailers
whose large earnings are declared to
have been "out Of all proportion to
the increase in their unit cost
Buyers Strike Ended Advance.
The so-called buyers strike" in
the spring of 1890. is credited with
price of shoes
Failure Of leather and shoe prices to
decline as extensively as did hide
prices after the buyers STRIKE" Is at
tributed by the commission to a ".ten.
dency to base selling prices on actual
rather than replacement costs, and to
the fact that other prices had not de-
clined as much as had raw materials.
During 1919 prices of shoes. leather
and hides" the report said, "increa sed
more than In any year of the war
period. .1s14-1S18. In 1920 a cor
respondingly rapid decline in prices
OF hides seems to have been accom-
less extensive decline in leather prices.
and by a still smaller decline in retail
prices of shoes.
While average imports of hides and
skins in the fiscal years 1913 and 1914
prior to the war. were 566.633,6 ,6ss
were only 432.615.e93 pounds, and for
the fiscal year 1919 only 4ls,141,726
pounds. Since the greater part of the
hides and skins tanned in the United
States comes from foreign countries
these declines in imports in 1918 and
In available supply. At the same time
there was an increased demand for
hides and skins in 1919 in anticipation
Of large foreign and domestic orders
for leather and shoes. Goatskins and
calfskins in particular were accumu.
lated in large quantities by tanners.
Demand Greater Than supply.
I'm spite of these increases in raw
stocks. tanners increased their leather
production in 1919 only very slightly
and not enough to Offset increased
leather exports, leaving a domestic
supply inadequate to increase in do
mestic demand. That there was not
G.aly an unusually strong domestic
demand for shoes in 1919, but also a
marked shift in demand to the higher
quality grades. in spite Of the great
increase in price, is indicated in re-
ports from the shoe trade.
Another important factor in the in
crease in prices was a general in
crease in costs Of production Wages
supplies and general expenses, in
and distribution. The most important
factor, however, was the increase in
cost Of materials. namely, hides and
skins, for the tanning industry, and
leather for, the shoe industry. In the
shoe manufacturing industry aver
pair in the fall Of 1918 and over the
srring Of 1918 ranged between 1S
per cent and 72 per cent for mems
shoes, between 10 per cent and IS
per cent Tor women'S shoes ana De-
tween per cent and IS per cent Tor
other shoes.
with the short supply, increases In
costs and extremely active demand.
there occurred q rapid advance In
prices during 1919. While the peak
in. hide and leather prices came gen
erally in the summer and fall OF 1913
nrices of shoes continued to increase
until the spring Of 1920
Larxe Profits During War.
Incident to the high prices pre-
vailing in 1918 and 1919 were large
profits earned by tanners, shoe man
ufacturers. wholesalers and retailers.
Earnings of eighty-nine tanners OF
shoe leather, whose production In
1918 was about IS per cent OF total
production as reported to the. COM
mission, were 13.1 per cent on invest
ment Gas represented. by capital
stock and surplus, and borrowed
money! in 1918 and 29.8 per cent in
1918. OF these tanners the. earn
inEs df twenty-five companies tan
nfne Kid with production In
1918 about 70 per cent Of the total
reported kid leather production. were
greatest, averaging 26.S per cent on
Investment In 1918 and 81 per cent
in 1913. Earnings Of 341 sa1oe manu-
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