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Are the Packers Profiteers?
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Plain Facts About the Meat Business
The Federal Trade Commission in its recent report on
war profits, stated that the five large meat packers
have been profiteering and that they have a monopoly
of the market.
These conclusions, if fair and just, are matters of
serious concern not only to those engaged in the meat
packing business but to every other citizen of our
country.
The figures given on profits are misleading and the
statement that the packers have a monopoly is unsup
ported by the facts.
The packers mentioned in the report stand ready to
prove their profits reasonable and necessary.
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The meat business is one of the largest American in
dustries. Any citizen who would familiarize himself
with its details must be prepared for large totals.
The report states that the aggregate profits of four
large packers were $140,000,000 for the three war
years.
This sum is compared with $19,000,000 as the average
annual profit for the three years before the war,
making it appear that the war profit was $121,000,000
greater than the pre-war profit.
This compares a three-year profit with a one-year
profit—a manifestly unfair method of comparison. It
is not only misleading, but the Federal Trade Commis
sion apparently has made a mistake in the figures
themselves.
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The aggregate three-year profit of $140,000,000 was
earned on sales of over four and a half billion dollars.
It means about three cents on each dollar of sales—
or a mere fraction of a cent per pound of product.
Packers’ profits are a negligible factor in prices of live
stock and meats. No other large business is con
ducted upon such small margins of profit.
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Furthermore—and this is very important—only a
small portion of this profit has been paid in dividends.
The balance has been put back into the businesses. It
had to be, as you realize when you consider the prob
lems the packers have had to solve—and solve quickly
—during these war years.
To conduct this business in war times, wfith higher
costs and the necessity of paying two or three times
the former prices for live stock, has required the use
of two or three times the ordinary amount of working
capital. The additional pi*ofit makes only a fair return
on this, and as has been stated, the larger portion of
HENRY COUNTY WEEKLY. McDONOUGH, GEORGIA
the profits earned has been used to finance huge stocks
of goods and to provide additions and improvements
made necessary by the enormous demands of our army
and navy and the Allies.
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If you are a business man you will appreciate the sig
nificance of these facts. If you are unacquainted with
business, talk this matter over with some business ac
quaintance—with your banker, say—and ask him to
compare profits of the packing industry with those of
any other large industry at the present time.
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No evidence is offered by the Federal Trade Commis
sion in support of the statement that the large packers
have a monopoly. The Commission’s own report shows
the large number and importance of other packers.
The packers mentioned in the statement stand ready
to prove to any fair minded person that they are in
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keen competition with each other, and that they have
no power to manipulate prices.
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If this were not true they would not dare to make this
positive statement.
Furthermore, government figures show that the
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five large packers mentioned in the report account for
only about one-third of the meat business of the coun
try.
They wish it were possible to interest you in the de
tails of their business. Of how, for instance, they can
sell dressed beef for less than the cost of the live ani
mal, owdng to utilization of by-products, and of the
wonderful story of the methods of distribution
throughout this broad land, as well as in other coun
tries.
The five packers mentioned feel justified in co-oper
ating with each other to the extent of together pre
senting this public statement.
They have been able to do a big job for your govern
ment in its time of need; they have met all war time
demands promptly and completely and they are will
ing to trust their case to the fairmindedness of the
American people with the facts before them.
Armour & Company
Cudahy Packing Co.
Morris & Company
Swift & Company
Wilson & Company
