The Nonpartisan Leader Newspaper, July 5, 1920, Page 6

" ‘barons that in the first - at unheard-of profits. War Profits of Millers Exposed War a_Go'ld‘Mine‘ : Profits of Millers 25 Per Cent and-Upwai_‘ds, > Report Shows Washington Bureau, Nonpartisan . Leader, - a3 | INNEAPOLIS Chamber of Commerce' 8| interests did pretty well in the calen- dar year 1917, according to Senate tary of the treasury from the income The biggest ‘corporation in the flour, feed and milling business (the names are kept secret by the department) had a capital stock of $5,150,050; and on this capital stock it paid a net income of '34.63 per cent. This corporation claimed a capital in- vestment of $6,076,919. On this investment its net profits, after payment of income and éxcess profits taxes of $262,857, amounted still ‘to 25.02 per cent, or $1,520,725." Without deducting the tax its’in- ~come was 29.35 per cent on the capital investment. The second largest milling corporation had a capital stock of $4,200,000; and claimed an invest- . ment of $4,306,617, Its net income for 1917 was $1,934,939. “The income and excess profits taxes hit the corporation to the extent of $392,882, leay- ing a net income, after deducting the taxes, of $1,642,057. of 46.07 per cent on its. : : capital stock, 44.93 per cent_on the investment, and after paying 'its taxes it still had 36.72 per cent on- the capital RIS stock and 35.81 per cent - RSN on' the capital invest- . [RSSXKN ment. 3 PROFITS GREW DURING 1918 It is significant of the “patriotism” of the Min- - neapolis' .flour milling year that ‘the ' United States was at war this corporation made ‘a net income . on 'its capital stock just:7.75. per-cent: higher than in the pre- ceding ‘year when it was selling flour to the allies Doctor W. Jett Lauck; consulting ‘economist for the railroad brotherhoods and unions, in a ‘special’ study of the official sta- tistics of grain and flour mill ‘profiteering, says: “War-time profits’ ab- : sorbed one-third of the price paid by the consumer for a barrel of flour, and 60 per cent of this huge: margin was chargeable to-profiteering. “The actual cost of producing a barrel of flour in 1917, including interest, freight and other expenses to the miller, - was only $8.60. - For-this the con~ sumer was forced to pay at least $14.50. Had the miller, jobber, wholesaler-and retailer been content with reasonable margins, this flour might have been available to the purchaser at $11.67, However, the product was saddled with so many. éxorbitant prof- - its in passing from ‘the miller through the various distribufing agencies, that the ultimate cost to the consumer was more than $3 in excess of a reason- able selling price.” = ' N oy Going back to the table of profits taken by flour millers—whose names are still concealed by the treasury department, although it has the power to- publish them—we find 'that among 21 corporations ;- listed for a comparison: of their 1916 profits with their 1917 profits,’'the capital investment of only 10 is ‘given. Of these 10, the net irncome on’invest- ment, in- 1917, ranged from 16.31 per. cent to 139.14 per cent. :This last-named concern has $20,000 - capital stock and $30,239 investment, and its met income was $42,075. « After paying all its federal taxes it had left $30,650, or 101.36 per cent on the ynvestment. In otheér words, that flour mill,“after . paying the “burdensome” war taxes, was able to ' hand its owners a dividend of 101 per cent for the Document, 269, prepared by the secre-: tax and excess. profits tax ‘returns. This corporation had a net income 1 WASHINGTON CORRESPONDENCE first year in which America ‘was conscripting her . young men and adding-billions to her debt to main- tain liberty in the world. It would be interesting to -~ know whether the owners of this mill joined in in- citing mobs against the Nonpartisan league for its proposal that the war be paid for by taxing the in- comes of those able to bear the cost. ; whose capital investment ‘was claimed to be $647,- 870. How this capital was piled up—how many . years’ profits it represented—is not told. But this mill paid a net income of $743,768 for the year 1917. Income taxes amounted to $23,459, and the excess’ profits tax (due for only 10 months of 1917 in this case) was $303,897. The net income figured out 991 per cent on the, capital stock, or 114 per cent on the ‘investment, and after: all taxes had been paid the. . company still had 555.21 per cent on' its stock, or. 64.27 per cent on the investment. % 1917 PROFITS INCREASED 375 PER CENT.OVER YEAR 1913 The 11 qorpom‘t’ions"wh&se,investme_nt is not given show net income, after deducting the taxes, for 1917 ranging from 2635 per cent to 2,051.80 per cent. ' This last case i§ one of a company with only $1,000 capital, "which had a net inceme of $26,287 in 1917, as compared with $5,943 net in- come in 1916. ' After payment of war taxes in 1917 it handed to its stockholders a prqfit pf $20,5618. A VOLUNTARY TESTIMONIAL: “Prior to the war,” says Doctor Lauck, “the mil- lers’ profit' of 13% cents a barrel assured a liberal return of 12 per cent on invested capital.. Under - government supervision during the war, the millers “were permitted to make almost double this profit, or: 25 cents a barrel. But during the year ending June 30, 1917; the millers had been actually averag- ing b2 cents a barrel, while one mill showed returns: -“for a period.of six months of $2 a barrel.’" “With respect to the milling companies the sur- - .vey shows: . S : " “'That the profits had advanced in 1917 practically .. 375 per cent over 1918 earnings, o : “That the cost of operation, which includes labor “cost, advanced only 26 per cent in the same period, or only 5 cents per barrel, as contrasted with an .increase in the millers’ profits of more than 48 cents a barrel. times the increase in operating and laboreexpense, - ‘amounting ;to 3 levy of :$2 on each family in the =~ < country. : : : : - “It'was also shown that the millers had little ex- cuse for increasing their margins of profit on flour, since 'the price of feed soared to such ‘an extent during the war that it practically compensated the .. millers for the entire cost of milling.” Congress will do nothing to recover this loot from the ‘millers until the organized farmer and. labor : - forces send more representatives to Washington. PAGE SIX _ e There was another mill, with §75,000 capital, and “* . “During the year just closed - —_Drawn expressly for the Leader by W. C. Morris. “That the excess profits were more than. eight'- used for Productive purposes.’” - ~ Alliance Approved Labor and Farmers to Continue Political SRR ‘Co-Operation ~ it e Washington Bureau, Nonpartisan Leader. of organized labor LOSER . affiliation the fortieth annual convention of the ' American. Federation' of Labor, held ~ recently in Montreal. Pledges of co- j 6pe'ri1t'iofi _were made to the farmers in the annual .- report of ‘the executive council.’ ; : sed,” said the council’s report, “there was an increasingly ‘harmonious re- _lation with organized farmers and an increasing un- * derstanding of their mutual interest in the great _problems-confronting the: nation. . There has been 2 keen realization among both farmers and wage- earners of the fact that they suffer alike from the malpractices ‘of the profiteers and' gamblers, and V from maladjustments” of ‘the machinery by ‘which necessities of ‘life are distributed. They also have - " a growing appreciation of the fact that farmers; no - less than wage-earmers, suffer from the incompe- _tence of political representatives, and from the un- willingness of those representatives to carry out in ‘their work the wishes of the great masses’ of 2%, : " /. the people.’ During the year: representatives of " participated © with - the = representatives of organ- - .~ ized wage-earners in con- ferences - dealing = with' ' some of the most wvital - questions of the year;, ‘and with most gratifying’ results. N CO-OPERATE : ; WITH FARMERS: “V.e recommend’ that instructions be given the executive council to con- _ tinue the development of - friendly, harmonious and" co-operative | relations -~ with the great bona fide " "body of organized farm- ers.” : S est An instance of <co-op- eration . between labor and the organized farm- “ets’ movement is found - “ at another point in the report—the section deal- " ing with the “Meat Pack- ing Momnopoly.” = = - Tt recites that - Con B gressman John M. Baer, elected by the League, introduced the bill aimed at this combine, which was drafted by the American Federation of Labor. S e R A North Dakota’s state-owned ‘and state-operated: bank has had an evident influence upon the labor movement’s strategy this year, as is shown by re-. ports - made to. the Montreal convention that the trade unionists: of Seattle are following up their . Successful creation‘of a labor-owned savings bank with the chartering of a labor-owned national bank. /Several of the international -unions announced that they were about to establish banks'of their. ‘own. William H. Johnston, general president. of the In- ternational . Association of Machinists, which has 350,000 members ‘and is ‘now chief owner in ome bank and a heavy stockholder in another, intro- duced a resolution which, after reviewing the evils ~-of banking as a selfish private enterprise and the = - encouragement_given co-operative banking in Eu- rope, provided: i Tt Gk “Resolved, by the American Federation of Labor, in_ conyention -assembled, that the banking and credit agencies of the nation be socialized, so that the collective deposits of the people shall be used for the benefit of the people. Banking, like trans- Dportation, should be impressed with a public trust; it should-be made a public utilitys subject to control . by the national government and by the state, to the end that the credit resources of the nation iy B i with the organized farmers of the United States has been promoted by~ organized farmers have