AUCTION SALES

Dominion, Volume 13, Issue 270, 9 August 1920, Page 8

AUCTION SALES

FORTHOOMINQ FIXTURES, TO-P4X,-Potta Boad, Levin, 1 p.m.—Sale of stock . and implements (Abraham and Williams). TO-MOBHOW. Marton Yards, 12 noon.—Stock sale (N.Z. Farmers' Co-op.). Eeid's Line, Bunnythorpe, 12.30 p.m.—Sale of stock and implements (Dalgety and Co.).- '■ " ' " Town Hall, Bulls, 2 p.m.-Land sale (H. F. M'Neill and Co.). .' ';',.. " : 'WEDNESDAY. Waterloo Quay, 10.30 a.m.— Salo of Unclaimed luggflse (Wilson and : Co.). Dyerville, Martinborougli. 11 a.m.-fiale of stock and imnlea*sta; Ist day (Wright, Stephenson i and Co.). ' Eoad Yards, Ma«terton. .1 p.m.— Stock salo (N.Z. Farmers' 00-op.). •--Shannon Yards. ln.in—Stock sale (Abra..,'ham and Williams). Waiwetu Hoad, Lower Butt, 2 p.m.-6ale ■of land and furniture (H. E. Leishfon). ' Featheretori Street Wellington, 2 p.m.— Sale of E.P. ware. etc. (Bethune and Co.). MEAT TRUSTS' WAR PROFITS

THEIR GAINS QUADRUPLED.

In view of the present controversy in connection with the'Meat-Trusts aud the manner in which their operations affect .this Dominion, the following article from "Cold Storage," of June 17, which, is the leading journal in London in connection with the' frozen meat and packing business, should, be interesting:— "The United States Federal Commission; the Government committee which still-lives in spite of having issued four .incriminating reports on the operations of the American meat trusts, has just reported on the war profits of .the 'Big Jive.' The title of 'Big Five' is justified by the fact that the combined assets of Armour and Co., Swift and Co., Morris and Co., . Wilson ■ and C 0.,. Inc., and the Cudahy Packing Company at the beginning of the fiscal year, 1919, were 1,300,000,000 dollars; total combined net worth (capital, stock, aud surplus), 535,000,000 dollars; and'that the several companies sold 3,200,000,000 dollars worth of "goods' in 1918.

"Of the present. capital stock only about if) per cent, represents direct cn.in contributions on'the part of the stockholders. Oyer. 1,000,(WO dollars was add- - e'd to their surplus account, the Teport says, out of earnings made in the first three years of the war, 1915-17. 'During these years the profits in both dollars and rates on investment doubled, trebled, , and quadrupled,'it declared. "In respect of the profits' announced by packers of 2 to 3 cents per dollar of ■ sales, such a rate on sales in an industry like meat . which rapidly 'turns over'its. product, is the equivalent ■, of a high rate of return ■ on' net worth "(15 per cent, or more). Rate on investment (not the '.' .rate on sales;' nor the head or per pound) furnishes v the correct method whereby the reasonableness of profits may be determined. .-. ■ "The Commission cogently remarks ...that .the whole accounting system of the . .packers must be revised .before depend- •■' able figures can be found showing costs ■ and profits by specific products or even .for the business as a whole.: :

."A table is given showing net profits for-the five companies amounting to 50i,298,000 dollars,' dividends of 163,013,000 dollars having been withdrawn. Dur. ing periods only ]2G,G83,000 dollars of new cash capital has-been subscribed; 183,000,000 dollars surplus! has therefore been converted into capital stock through tho issue of stock dividends. . ' :

"Armour and Co. commenced business in 1868 with; an investment of 160,000 dollars, and'-for fifty years, ending in .1918, the company reported earnings of 179,000,000 dollars.

'.'■ "Swift, and Co., in the twenty-three ' years since- 189G,- reported earnings of '■2U,W,<M "dollars, of which " 130,092,000 : was' reinvested in the business or to pay income tax in 1918 and 1919." An extra ■dividendof 25,000,000 dollars was declared , in 1917, : with which stockholders purchased 25,<WO,000'dollars, common stock, thus • 'eWcting a ' practical stock dividend, '-''; "Total' profits have been found to be ■inaccurate,- in that the.bulk :of inventories are invariably priced on a market ■ basis. ' Profits of subsidiary; companies ■are not uniformly taken up into the accounts of the controlling company; sur'plus- adjustments are often, charged di-■-'Tcctly; to the profit and loss, account of a given year; depreciation has not been systematically accumulated; and, lastly, unjustified 'reserves' have been charged •hgainst'.enrhings from time.to time, particularly, during-the profitable war years. " "In respect of; subsidiary companies, Armour, Swift, and Morris have in the past ■■ two or three years adopted the practice of divorcing their very profitable South American companies from "the North American parent companies ■". through the medium of separate corpora\tiohs controlled- and directed by'the '-eame stockholders.

";'•'■• on specific meat products; such profit'.per lb. of beef, are not "•;v.acourate,',in' ; thiitno sound cos): 6ystem •yUSk been 'developed for the packing - in- ; dustty; : 'nnd the'present method of transproducts .from • one. processing ( -stage to another/based as it is on mar"ket" valuations; instead of ,on .actual ■'"'edstsy precludes; the. possibility of put'"ting 1 reliance upon the ".unit or depart-•-'•'ihental profits now accumulated by tlie ''"packers. ' The packers' lionkc, therefore, ;"do'riot show what they are making per ~Jb. on 'their beef or other meat pro- : ducts.''" .'■':.