PACKERS' PROFITS 'PATRIOTISM'--'BENEVOLENCE'
Packers' Profits 'Patriotism,--'Benevolence' THE great value of the investigation now on before the Senate Committee on Agriculture is that the case against the Packers is proven by the records,...
...A young man named Williams lately back from Russia spoke at the meeting about what he had seen in that country...
...That is what I should conclude, yes...
...Mr...
...Well, that was simply for the purpose of determining a rate upon which to base the nine per cent—that is, the 9 per cent on the capital stock, plus surplus, plus borrowed money...
...He did not know it was wrong to tell an American audience about Russia and the kind of government the Russian people are trying to build up...
...and "Whereas, the men of this company have been working at soldier's pay for from ten to twelve hours a day and doing the same character of work and employed alongside of colored civilian labor employed by a contractor who had a contract for building this Toad and who paid this colored civilian labor at the rate of $4.50 and upwards per day of eight hours...
...So shocked and horrified were these Senators, that they declared in effect that anyone who endorsed or approved this meeting ought to be treated as a traitor who was attempting to "overthrow our government...
...The production in this branch is about 3,500 pairs per day...
...Mr...
...Did you ever hear of the Security League, or the Navy League, or any of the high-salaried gentlemen who were "doing war work," ever raising any question about the Packers being "one hundred per cent patriots...
...Discussions in Congress regarding this meeting, based, apparently, upon this article, have proceeded under a misappre-' hension of facts...
...For instance, the shoe department is one of the most important, and shoes and boots are brought in by thousands of pairs...
...and "Whereas, the road work upon which they were employed is completed and there is no reason for the continuance in the service of Company 553 or Company 516 of the Motor Transport service which is similarly situated, has been similarly treated and is under the same command...
...To Members of the Senate and House of Representatives: For your information permit me to state that at the meeting at Poli's Theater Sunday afternoon, at which I presided, there was no advocacy of anarchy or violence, no attack upon the American form of government, and no propaganda that Bolshevism be adopted in this country...
...No protest from those in attendance has reached me...
...Hence the Packers benevolently boosted for the bill to appropriate one hundred million dollars of the taxpayers' money, to aid in buying up their meat products here, shipping them abroad to feed "our friends" over there, and incidentally "stabilize the American market"—that is, keep up the prices on the meat-hungry people in our own country...
...Now did the packers do that before the Food Administration took charge of it...
...He ought to have known that the Post and other truthful papers will tell the people all it is proper for them to know about Russia and its government...
...The Senate Committee on Agriculture determined to give the Packers a "chance to be heard...
...Heney from further access to the correspondence and records of the Packers...
...No army in the world has anything like it, and not a day passes that representatives from some of the Allied Governments do not inspect it and take notes on its operation...
...Well, it allowed them to make a good deal more than 9 per cent on their own money, and a great deal more than 9 per cent on capital stock...
...Whether any attempt was made to verify the truth of the article, I do not know...
...Williams and his meeting, and said that it was an awful thing for Mr...
...I had learned in Boston, Mr...
...Hospital slippers are made from old campaign hats that have often been discarded...
...It was calmly and dispassionately presented, but it was a terrible arraignment...
...Senator Norris...
...And the next day Mr...
...Judson King, well known in Wisconsin and throughout the west, who presided at the meeting which so alarmed some of the United States Senators, addressed the following letter to the members of the two Houses of Congress: 3015 Fourteenth Street NW., Washington, D. C, February 6, 1919...
...In other words, that as far as those regulations were concerned, their profit was unlimited...
...Yes, plus bonds...
...What member of the Food Administration was that...
...Williams to tell what he had seen in Russia and what he thought about it,—and especially to tell it at a public meeting right here in Washington where everybody present could hear it...
...Mr...
...When the war suddenly ended the orders for the foreign governments for packers' products fell off...
...It has saved, not thousands but millions of dollars for our Government...
...There were many policemen there to see that no one was hurt by what was said...
...The uppers are made from old woollen garments thrown aside as quite irreparable...
...Chase...
...Taking in the total, I think you might summarize it by saying they made three times as much on their net worth during the war years as they made before the war...
...Mr...
...They are net profits...
...I was asked to preside, and did so on my own responsibility...
...Heney before it to state the case against the Packers...
...Mr...
...No matter how worn the shoes are, there is always a piece of leather left in the uppers large enough to make several pairs of strings.—Scientific American, How France Helps Unemployed BY A LAW recently put into effect in France new rules are established governing the granting of governmental aid to unemployment funds of departments and communes, reports the Monthly Labor Review...
...Yes, and in that connection, the statement made by one of the officials of the Food Administration, is rather interesting...
...Mr...
...Chase gave figures of the aggregate profits of Armour, Swift, Morris, Wilson and Cudahy for each of the years since 1912 as follows: 1912 _$18,715,000 1913------- 20,217,000 1914------- 22,108,000 1915_______ 40,052,000 1916_________ 60,759,000 1917__________ 95,639,000 Mr...
...But enough evidence had been secured before the restraining order was obtained from the Federal Judge by the Packers, to enable the Commission to make a report based on packer-records and packer-testimony so conclusive and so damaging that they were compelled to say something in their own defense...
...Chase...
...I knew the Department of Justice was fully advised as to Mr...
...In considering the packers' profits, Mr...
...At the time that I took charge of those records and accounts under Mr...
...The well-nigh unanimous sentiment of audience and speakers was that American troops be withdrawn and Russia be permitted to settle her own fate in her own way...
...And some of them believed even worse things about the meeting than appeared in the printed account of it...
...Williams' home city, from men who differ with his opinions, of his high character and ability...
...February 8, the Senate placed an amendment to the Good Roads provision of the Post Office Appropriation bill, offered by Senator Freling-buysen, providing: That when any officer or enlisted man in the army, the navy, or the marine corps of the United States shall be or shall have been detailed for labor in the building of roads or in other highway construction or repair work which is or was not exclusively necessary to subserve military purposes, the pay of such officers or enlisted men shall be equalized to conform to the compensation paid to civilian employes in the same or like employment...
...Pre-war average___8.6 War average_______24.5 MORRIS AND COMPANY Percentage Per cent Year of capital of capital & surplus stock 1912 -- $1,813,000 6.8 60.4 1913 -- $1,917,000 6.9 63.9 1914 -- $2,206,000 7.5 73.5 1915 -- $2,321,000 7.5 77.3 1916 -- $4,890,000 15...
...I shall from time to time give to the readers of this magazine such opportunity to become acquainted with the truth about the Packers as the limits of these pages will permit, including the truths they and their own employees have been compelled to tell about themselves...
...I am informed by the secretary of the committee having the meeting in charge that an invitation was mailed to every Member of Congress...
...Stuart Chase, the expert accountant who examined the Packers books for the Federal Trade Commission...
...Well, wouldn't that permit them to make more money in fact, what the chairman has stated, an unlimited amount...
...One of the first and most urgent needs, in our reconstruction program, following this great war, is some windows in the Senate Chamber...
...3) Have the men of either of these companies been from time to time required to perform services other than in the line of military duty...
...Williams to do...
...We will mention the various kinds of work which are carried on in some of the departments of this vast salvage plant...
...I respectfully suggest that, if hearings are held, the committee be empowered to extend an inquiry as to whether there is a conspiracy afoot to prevent the American people from learning the truth about Russia...
...Senator Gronna...
...Senator Gronna...
...Awards of unemployment benefits are made by a commission composed in equal parts of employers and workmen, to be appointed by the local executive...
...and "Whereas, members of this company have filed or attempted to file applications for discharge with the commanding officer, who has refused to consider such applications upon their merits, except in a few instances where Senators and Representatives have after long delay succeeded in obtaining a discharge...
...This letter stated: "The purpose of the meeting is to afford citizens of Washington opportunity to learn what is happening in Russia, not to propagate Bolshevism...
...In fact they are of an excellent quality of felt and no matter how old and worn they are, the felt is utilized in the soles of slippers...
...What do you people who have been paying Hoover-prices for meat during the war period think of this example of profiteering which the Packers have been * permitted to practice on the American public...
...The subsidies are granted only when the population of the commune or group of communes for which the local unemployment fund has been created num- bers at least 5,000...
...Mr...
...1917 -- $8,012,000 22.6 267.7 Pre-war average___7.2 War average_______15.6 Testifying further with respect to the packers' profits, Mr...
...Plus bonds...
...Chase...
...W." to be used by the German prisoners of war...
...That purpose was adhered to...
...By all the nine gods that must never be permitted...
...Chase...
...These Packers are not only very patriotic, but they are a benevolent bunch...
...Packers' Profits 'Patriotism,--'Benevolence' THE great value of the investigation now on before the Senate Committee on Agriculture is that the case against the Packers is proven by the records, books, letter-files, and testimony of the Packers themselves...
...But without adding these profits which were deducted for the excess profit taxes, Mr...
...So, very soon thereafter, the United States Senate had a session in the Senate Chamber,—that has no windows in it...
...As I understand you, the regulation of the Food Administration, allowing them a certain profit on different classes of business, in reality did not amount to anything...
...Chase...
...Under the masterful cross-examination conducted by Francis J. Heney for the Committee the infamy of the Packers is proven out of their own records and their own mouths...
...Some enlightening figures as to the profits of the big packers were brought out in the testimony of Mr...
...Senator Norris...
...Chase also gave some interesting testimony as to the profits of these companies separately which summarized for three companies is as follows: ARMOUR AND COMPANY Percentage Per cent Year of capital of capital & surplus stock 1904 -- $1,850,000 6 28.5 1912 -- $5,702,000 6.1 30.8 1913 -- $6,158,000 6.1 30.8 1914 -- $7,640,000 7.3 38.2 1915 -- $11,156,000 10.2 55.8 1916 -- $22,849,000 19.2 114.2 1917 -- $27,137,000 19.8 27.1 Pre-war average --- 6.5 War average______16.7 *In 1916 Armour's capital stock was $20,000,000 but in that year they issued a stock dividend of $80,000,000 which accounts for the lower percentage on capital in 1917...
...It will be furnished free to subscribers who send in a request at once...
...Sometimes the Senators hear about what has happened in New York, or San Francisco, or in the City of Washington through a paper call the Post, printed in the Capital City, or some other like paper, They are all very much alike...
...Tater, at the time these regulations were under consideration that they were going to base this percentage—to include borrowed money, because the public effect would be to make the rate appear lower...
...Chase said: "The packers have a way, in reporting their profits to the public in their advertisements and annual statements and elsewhere, of deducting their reserves for excess profit taxes...
...and "Whereas, these men did not and would not make any complaint so long as the country was at war, but cheerfully performed this labor to which they were assigned although it was not the service for which they were trained...
...No inquiry was made of me...
...Senator Norris...
...And thereupon Congress, having appropriated one hundred million dollars as a gratuity to "our friends" in Europe, a few days later decided that it would be advisable to appropriate two hundred million dollars, to be expended—not as a gratuity to the needy here—but in road building throughout the country, so that some of our people might find employment and in the sweat of their faces earn money in the good old American way, to pay packer-profits and feed their hungry ones here at home...
...Williams and what he was saying, and concluded that what would not contaminate Boston, New York, and Philadelphia would not injure Washington...
...The question has often been asked as to what became of these hats...
...And they believed what they read because it was printed in the paper...
...SWIFT & COMPANY Percentage Per cent Year of capital of capital & surplus stock 1904 -- $3,850,000 8.6 11.6 1912 -- $8,745,000 8.6 11.6 1913 -- $9,449,000 8.7 12.6 1914 -- $9,651,000 8.5 12.8 1915 -- $33,387,000 19.8 31.2 1916 -- $34,195,000 19.1 32.2 1917 -- $47,236,000 33.4 63...
...I think it was Mr...
...Dur-and...
...Senator Gronna...
...Cotton's own statement before this committee he said that the packers—he allowed the packers to make a profit—or rather to include their borrowed money as well as capital stock...
...Quick Action FEBRUARY 7th, Senator La Follette in a resolution which was referred to the Committee on Military Affairs, directed the attention of the Senate to the fact that soldiers have been and are now employed in building roads, working along aide of civilian labor paid at the rata of $4.50 and upwards for eight hours work, while the soldiers are required to labor from 10 to 12 hours per day at $30 per month...
...Not a scrap of anything is wasted...
...It is sometimes very dark in that Chamber,—so dark that certain of the Senators cannot see anything...
...About 80 per cent of all shoes received are repaired...
...Williams' meeting in the Washington Post...
...Chase...
...provided, that no enlisted man in the army, the navy, or the marine corps of the United States shall be detailed for any such duty except by his own consent...
...now, therefore, be it "Resolved, that the Committee on Military Affairs or a sub-committee of said committee be, and it is hereby directed to investigate the Gum Springs camp and ascertain and report to the Senate at the earliest possible date upon the following questions: "(1) Is there any military necessity for long-er retaining these organizations in the service...
...Chase...
...A few days ago a meeting was held in one of the Washington theatres...
...The total value of the output for one month was $449,599...
...Williams delivered his usual address here, a typewritten copy of which was handed by him to a Post reporter at the meeting, but which was falsified in the report...
...According to Mr...
...Some of the Senators read about Mr...
...Cotton soon after the packers had sent in their first period returns for the months of November and December, 1917, and in that report I made some estimates which since have been substantially carried out by the final year's results, under the Food Administration regulation, as much as they had made in the year 1917, which was the most profitable year in their entire history...
...Senator Gronna...
...Swift & Company in 1917 announced broadcast throughout the country—in fact, made charts showing their profits as $34,000,000, but they had arbitrarily deducted from their true profits a reserve of $10,000,000 to take care of excess profits taxes...
...The meeting did not originate with me...
...Senator La Follette's resolution was as follows: "Whereas, the men composing Company 553 of the Motor Transport corps, now located at Gum Springs, near Alexandria, Virginia, were enlisted in the mechanical course of the University of Wisconsin and the mechanical courses maintained by the government at many other places for the special training of men for services in the Motor Transport corps and, "Whereas, these men received this special training from June 15 to August 15, 1918, at which time they were sent to the aforesaid Gum Springs, Virginia...
...Chase...
...And from the figures you have given us here this afternoon, it indicates that during the war period and during these regulations the packers have made more money than they did before the war...
...Now the law in regard to excess profits is that such taxes shall be paid out of profits as determined...
...Now the true profit is the amount before they make any provision for these excess profits taxes...
...At the time of writing, this branch employed two officers, seven non-commissioned officers, 114 enlisted men, 280 male and 249 female civilians...
...His statement of facts secured, while conducting his investigation for the Federal Trade Commission, occupied the entire time of several sessions of the Committee before it was completed...
...Persons who without valid reason refuse proffered work, those who do not live by their work, and those receiving allowances under the law making grants to families of mobilized men are not given aid from these funds...
...Index Sent You Upon Request La Follette's Magazine has published an index to the 1918 volume...
...Shocked and Horrified' THERE are no windows in the Senate Chamber, and its walls are very thick...
...It was public...
...It is provided that only unemployed workers who have, during a sufficiently long period immediately before their unemployment, worked in a calling from which they drew regular wages are entitled to assistance from these funds...
...Old garments are dyed green and marked "P...
...And several of the Senators at this session made speeches about Mr...
...And all the packers do that...
...and "Whereas, since August 15, 1918, to date this company has not been employed in motor transport work, but has been employed in road building work...
...Senator Gronna...
...Wasn't it more than that...
...and the sum due to each such officer or enlisted man, as herein provided, shall be computed by the Secretary of Agriculture and paid out of the appropriation herein made and deducted from the allotment made to the state wherein such employment was had and such equalized compensation incurred...
...With foreign orders shrinking, there was imminent danger that the surplus meat products would have to be sold to our own people at lower prices...
...The article in Monday's Washington Post, headed "Urge Red America" is an absurd perversion of the truth and a gross violation of journalistic ethics...
...The Committee also called Mr...
...2) Have the officers of these companies discouraged the filing of applications for discharge, neglected and delayed action upon applications filed with them, and refused discharges in cases upon which they have acted, without any just reason therefor, or for the purpose of maintaining their own places while they have been personally seeking new assignments for themselves or for the organizations...
...It was that day...
...Preliminary to hearing the Packers this Committee called Mr...
...and "Whereas, many of these men are married with families and parents dependent upon them, many have business interests at home urgently requiring their personal attention, further absence from which will in many cases result in irreparable loss, and many others have lucrative employment awaiting them if they could secure prompt discharge from the army...
...Chase...
...At bottom this is the old question of free speech and as to whether a respectable audience of American citizens can peaceably assemble to ascertain the truth about a public issue without being lied about, villified, and intimidated...
...It would inevitably result in reducing the two hundred and sixty-seven per cent packer-profits on capital stock which they made in 1917, for example...
...Heney for the Federal Trade Commission enabled the Commission to secure much incriminating evidence from the Packers, their records and correspondence before they succeeded in obtaining from a Federal Judge in Chicago an injunction restraining the Commission and Mr...
...I had read his articles in reputable magazines and knew he had given the address proposed to be given here before the American Academy of Political and Social Science and at the City Club in Philadelphia, at Ford Hall and the Economic League in Boston, at the Church of the Holy Trinity in Brooklyn, the Church of the Ascension in New York, and other places...
...Cotton I made a report to Mr...
...Those who preserve their magazines should have it...
...New machinery is being constantly added to this department and when it is completely organized, it is expected that 7,000 pairs of shoes will be turned out daily...
...Mr...
...Plus everything but accounts payable...
...Overseas caps are another specialty made from old uniforms unfit for repair, and brassards are manufactured by the thousands for the various army services...
...The old trench shoes that have already been mended and are now beyond repair, are cut up into shoestrings...
...Mr...
...And they were afraid...
...Mr...
...They ought to be large...
...Plus everything...
...Do you marvel that the Packers were among the most "patriotic" of the "super-patriots," for the war to make Turkey "safe for democracy...
...No, it was not unlimited, but it was way up to the most they had ever made in their previous history...
...Respectfully yours, JUDSON KING...
...Mr...
...Now properly, from an accounting, technical point of view, their real profit was $44,000,000 at least...
...It was not held in the night time, it was held in the day time...
...Stuart Chase, an accountant employed by the Federal Trade Commission, who had examined the books and accounts of the Packers...
...Fortunately the searching investigation prosecuted by Mr...
...Gronna...
...and "Whereas, in the presence of the men the commanding officer has on numerous occasions stated that no discharges will be granted nor will any applications for discharge be favorably recommended by said officer...
...They might borrow a good deal more than their capital stock, and the more money they could borrow the more money they would make...
...You can see yourself, that it was a pretty bad thing for Mr...
...They are first washed and disinfected, sorted, and then given out to be repaired, inspected and packed for shipment again...
...Chase said: of course, I don't feel that the profit regulation of the Food Administration has amounted to anything, so far as regulating the packers' profit is concerned...
...It was not a secret meeting...
...Myself and other nonsocialist citizens of this city will welcome any investigation of this open meeting, with the hope—perhaps vain—that the same publicity be given the truth as was given the distortion...
...So this young man told the people what he had seen and learned about the Soviet government of Russia...
...And they were much more afraid...
...Williams' address and are ready to testify that the sort of publicity given to the meeting is false, disgusting, and an insult to intelligence...
...Then they made the fatal mistake of protesting that they had not been given an opportunity to be fully heard in their own defense by the Commission before it made its report...
...and "Whereas, while they have been thus employed these men have received no military training and no training to make them more efficient in the motor transport service, but have been continuously employed as common laborers...
...many have expressed appreciation of the facts learned from Mr...
...Far from being a meeting of "reds," the gathering was attended by hundreds of cultured men and women of this city, of every political party and every creed and class, including clergymen, who have no sympathy with Bolshevist methods or even with economic principles of socialism...
...Chase...
...He told my assistant, Mr...
...4) The committee is directed to make a like investigation and report as to the Motor Transport service located at Camp Humphrey, and other camps in the vicinity of Washington, D. C." Nothing To Waste A SALVAGE plant for the recovery and proper use of waste material has been organized on a large scale by the Army near one of the large towns of France...
Vol. 11 • February 1919 • No. 2
