Logan Republican | 1919-08-16 | Page 1 | Shoes! Shoes! Shoes! Will Shoes be Higher?

SHOES! SHOES! SHOES! WILL SHOES BE HIGHER? Hot Air, Camouflage, Propaganda, or Facts. Which? Mr. and Mrs. Shoe Wearer It Is Up To You. Read But Do Not Get Excited. It is claimed that the price of shoes will be from $2 to$5 higher this fall. If such a condition prevails a great hardship will be worked on thepeople, and the shoe men will reap an unjust harvest, if the facts revealed through a recent report of the Federal Trade Commission are at ah reliable. The Salt Lake Tribune recently published an editorial reviewing the report of the Federal Trade Commission Com-mission above referred to and concluded that the "leather manufacturers, shoe manufacturers and retail shoe merchants" mer-chants" were all making "unprecedented profits." This report, as well as the editorial brought forth a letter of exception from Mr. A H.Bronn, in which he attempts to show that the retail shoe merchant isnot guilty of making excessive profits. that the retail shoe man is in the business for the love of the game, andto serve the dear people without profit. The last article referred to has been handed to us for reproduction and comment. In order to be fair to both we are reproducing both articles, the Tribune article and the article of exception by Mr. Bronn, and ask our readers read-ers to carefully read and digest both articles. We invite comment from any of our readers, and shall comment ourselves in a later issue. In the meantime there is no cause for alarm. The people should not be stampeded. Its a long, long time before they will be wearing wooden shoes. The articles follow: " TRIBUNE ARTICLE The high prices charged for shoes are the result of excessive profits all along the line, If the report of the federal trade commission Is to be bo-Keyed. bo-Keyed. The commission has mado an exhaustive Inquiry Into the price of hides, leather and shoes and finds that tho larger packers control the hide supply and have taken excessive exces-sive profits and passed tho Increased cost to subsequent steps In manufacture manufac-ture und distribution; that the tan' ncr has taken exceptional profits; that tho manufacturer of shoes ban taken unusual margins and that tho prices charged by tho retailor aro , not Justifiable each factor In tho Industry In-dustry ndding to tho burdenho had j to boar beforo ho passed it on to tho next. This report treats of conditions condi-tions In the leather tanning Industry Indus-try including tho hldo trado nnd tho boot and shoo Industry, Including tho merchandising of shoes. Tho por-lod por-lod covered by tho Inquiry Is from 1014 to 1918 Inclusive, except In J regard to cortatn financial data. Tho outstanding facts established by tho Inquiry nro as follows: I (1) Between 1914 and 1917 tho prices of hides, tho principal factor In tho cost of producing leather, greatly advanced and tho differential between country hides and packers hides Increased beyond tho usual proportion, pro-portion, duo to the moio marked in-crcaso in-crcaso In tho prlco of packor hides. (2) Though thoro was an Increase In-crease In tho cost of hides to the tanner, the prices of his product, leather, advanced to a point that could not bo Justified by tho cost or producing It. This conclusion Is supported sup-ported by tho high rates of roturn on Investment recoived by tanners. (3) The cost of manufacturing, shoes increased groatly between 1914 and 1.917. but, as evidenced by the high rates of roturn on Investment, not to an extent that warranted tho prices at which manufacturers Hold their product. (4) Tho absoluto margins of profit pro-fit taken by retail shoe merchants por pair of shoes grew wider as their costs of shoes increased because their rate of profit remained substantially without change. '(B) As a result tho public had to pay-.prjc.rs for shoes that could I not bo Justified, not only becnuse rc-Jtall rc-Jtall shoe dealers took too much profit, pro-fit, but becauso tho dealor had to 'pass on to tho consumer the excessive exces-sive profits received by butchers for hides nnd also the excess profits of tanners and shqe manufacturers. Tho shoo Industry Is not exceptional. excep-tional. Exceslvo profits havo been general and tlioy invariably como jwlth war as part of tho ponalty. High prices wero tho lule In civil 'war days nnd they never did return to their former level. Giant combinations combin-ations havo como Into existence since that ora, and tho opportunities for profiteering nt tho present time nro much greator than over bofoio. Tho rank nnd file of tho peoplo nlso havo more money to spend for luxuries as well as necessaries of life. Thoy 'aro spending It llko diunkon sailors. Tlio right of a merchant to charge 'all ho can get for his goods lias never nev-er been questlonod, tho lino being drawn nt combinations nnd agreements agree-ments ns to prices. This much can bo said in Justification of tho retailors. retail-ors. Tho report says of shoo moi-clinndislug: moi-clinndislug: The gioss pioflts of wholesale shoo merchants gonorally rangeri nbovo 20 per cent of tho cost and they were somewhat greater in 1918 than In previous years, There was a heavy Increase In th price of shoes to consumors between tho years 1914 nnd 1918. Tho ro-tnlloiH ro-tnlloiH gross profit Is around 50 por cent- sometimes more nnd occcslon-ally occcslon-ally less. In 1914 tho retail merchants mer-chants rato of profit was somowhnt lower than It wnH In 1918. Tho absoluto ab-soluto amount of profit por pair of shoes was very much greater In 1918 than In 1914. A good work shoo for men that cost tho dealer $1.76 In 1914 nnd rotnlled for $2.60, cost him $2.76 In 1918 and retailed for $4. In this inianco tho retailer took a margin mar-gin of 76 cents In 1914, or 42 per cent, nnd In 1918 a margin of $1.25 or 45 por cont, In n group of shoes that cost the retailor from $2 to (Continued on Page Four) SHOES I SHOES! SHOES! WILL SHOES BE HIGHER (Continued from Page One) $2.60 In 1914, a largo proportion of them rotalled for $3.50 with a percentage per-centage of gross profit ranging from 40 to 64 per cent. The same shoes In 1918 cost the retailer from $3. OS to $4.45 a pair and retailed at from about $5 to as high as $7 per pair, with the percentage of profit ranging rang-ing from 39 to 69 per cent. In 1914 the retailer's absolute gross profit for this group averaged more than $1 per pair, while In 1918 It averaged averag-ed more than $1.80 per pair The absolute amount of money neccsary to conduct business In 1917 and 1918 was greater than In 1914 but tho relative cost of doing business busi-ness practically did not chatigo. The percentage of total sales of dealers that was expended for tho conduct of business was approximately the samo In 1917 and 19 1 8 as it wnB in 1914. The volume of business of more than fifty wholesaler"! increased increas-ed 32 per cent In four years, while thctr actual expenses hi dollars and cents Increased only 21 per cent. Tho nctunl oxpenso of fifty-three retailers retail-ers handling a general lino of good shoos was 20 per cent of their sales In 1914, and tho expense of iilxty-ono iilxty-ono dealers In 1917 was the same. Stores handling popular priced shoes had a lower rato of exponse an compared com-pared with sales than the general class of dealers. It Is to be noted, also, theso popular price stores had' a lower rate of expense in 1918 than they had In years prior to that time. Taking Into consideration all the circumstances, the high prices of shoes In 1917 and 1917 cannot be Jus titled. eLathof manufacturers, shoe manlfacturers and retail shoe merchants mer-chants all made unprecedented prof-Its. prof-Its. MR. BRONN'S ARTICLE I read the report ot the federal trade comniiston in the Tuesday morning issue of the Tribune, whtcn gave a very good resume in regard to the high prices being obtained for shoes; charging everyone concerned in the handling ot the product with profiteering, from the tanner to the retailer, but laying particular stress in giving detallod Information regard Ing profits, costs niut, selling prices, together with percentage of profits, obtained by the retailer. Tho report also gave tho average, cost of doing business with the retail shoe merchant, mer-chant, baaed on the selling price. SAY'S HEI'OUT MISLED It Is hore that I believe the report has led the public astray, as the average av-erage layman or consumer will not stop to figure that, in figuring prof-It prof-It on cost of merchandise and figuring figur-ing cost ot doing business on sales, tho report arrives at conclusions that, are positively misleading. As an II-lustration, II-lustration, quoting from the report, . shoes bought for $1.75 retailed at $2.50 per pair, or gross profit of 75. cents, or 42 per cont profit on the cost of thg shoes. But what per cent profit on the selling prlco? Inasmuch as the report quotes the average cost of doing business at 26 per cent on sales, then why not quote per cent of profit on the costT Now, let us see where we stand. Tho shoes sold at $2.50 per pair coat $1.75 per pair or a gross profit of 75 cents, or 30 per cent profit on tho sale. As the report quotes the average cos.t of doing do-ing business as 26 per cent ot sales, Mr. Morohant only ado 4 per cent clear profit or 10c. Do you call that profiteering? Wo will tako anothor Item: Shoes costing $3.05 do not ell for $5, with possible exception and anont un isolated case hero and thcro I do not bollovo It fair to the rotnll-era rotnll-era as a whole to quoto such margins of profit. Wo count ns margins ot profit on shoes costing $3.05 to soil (or no more than $4,50 per pair which Is considered extromo, Figuring Figur-ing on a percentage basis on tho soli-Ing soli-Ing price rolativo to tho cost, wo got 32 per cont, or a gross prQtlt ot $1.45, with tho cost of doing busi-( cess, 26 per cont, leaving a net gain, of 6 per cent, or 27 cents. Io that profiteering? y. .-. . CLAIMS DISADVANTAGE I The government in tho past five years has started a great many Investigations In-vestigations and has filed a great many reports, but In tho last analysts analy-sts I find that they Invariably pass the buck (to use an every day expression) ex-pression) to tho retailer. No doubt because Mr. Retailer has failed to organize as other lines of Industry, Including labor, so they find It easier eas-ier to charge it to someone who la not In a position to file an organized protest and who would bo able at an elcctloa to mako his protest felt. I presume that tho new advances In price of shoes this fall, which will bo from $2 to $5 per pair, will finally fin-ally be laid at the door of Mr. Retailer. Re-tailer. Hides and leather In the last ninety nine-ty days havo risen to unprecedented heights. Raw calfskins which sold on tho Chicago hide market a ycor ago for 44 ccntn a pound, are now bringing $1.05 per pound. Light native na-tive cows quoted a year ago at 28 cents per pound now bring 60 cents. Even tho despised country hides havo kept pace, as tho selects aro bringing CO contnbuffs 50 cents and 48 conU for heavy cows. This, In itself, will give you somo Idea of what to expect fn tho shoo and leather mnrkot. Labor La-bor In tho shoe factories has been advanced three times slnco tho armistice armis-tice was signed In November, nnd tho samo holds true In tho tanneries.. WHY SUDDEN INCREASE Tho question Just naturally arises why this sudden and unheard of crease in the price of hides. I would say '.'Ask the packers." E'ifV in the spring when the general KjAr ket conditions were wobbly at least one half ot the shoe manufacturers and others engaged In the leather Industries fully expected that leather and hides would drop. So did a good many tanners; but not the packers. They held firmly to their quoted prices pric-es and every time some tanner became be-came bold and bid on a, quantity; up went tho price a few points; What enabled the packers to maintain and even raise the price of 'hides when the market was quiet? Here lies the whole crux" of the leathor Industry. Indus-try. The packing Industry of tho United Unit-ed States and their allied Interests In other commodities extend to every quarter of the globe. So It Is An easy matter for them to investigate condi-tolns condi-tolns In every country on earth. The reports filter through to -Chicago, and with them reports of the hldo and leather situation, enabling them to know months In advance that there Is a world shortgo of hides and leather and In tho face of a "dull and listless market maintain nnd even raise tho prlco of their hides, -Mntll today we havo a stampede, with ov-l oryone concerned trying to get under un-der coyer. W"h foreign buyers out-' bidding us and paying any price In order to get supplies of hides and leather which are so sorely needed in Europe, no need for the packers to slough off their hides and take any price offered. Have they not unlim ited wealth and storing facilities to hold their hides until the market price suits them? Do you blame the packers? Would you call a farmers a profiteer if he asked $150 for a cow today that he raised expecting (he could market U for' $100. Bo-cause Bo-cause In the meantime, cows have gone up? Do wc expect him to say, Inasmuch as ho only figured that the cow when It was boru was worth $100, that that sum wis enough, and anything abovo tho $100 was profit-coring?" profit-coring?" ItEMEDY IN SlEOISLATION So It idvwlth tho tannors. Tholr query Is "What Is tho roplacomont value of these hides?" Whon leather leath-er comes out of tho tanning vats, they plnco tho selling prlco of tho loathor not on tho basis of what tho hides cost thJm but what tho hides will cost to roplaco tho onos taken out of tho vats. In this manner when hides go up or down, lonther either gooa up or down accordingly. The river, law of supply and demand, governing prices still flows, but huge combinations can and do erect dnniB to check tho flow to suit their own Interests, thereby gaining huje prof- Its. Tho remedy lies In legislation by our government at Washington. f Is it fair to tho people hero in thta country to nllow foreign buyers to t come here nnd outbid us nnd send to Europo hugo quantities of hides and -leathern at tho same tliiio allowing allow-ing them England, for Instance to v place ane'mbargo on our shoes, which i- a has now been raised tp 40 per cent-iiS of tho prewar shipments into thaT ,.; country? What wc need is lfss talk ' In the senate and more action, -with I more ot the spirit ot live and let live I among the people. run- i I NO AX TO GRIND - - I ( I Unorganized labor, such as clerks, '; office men and common day laborers i are bearing the brunt of the high 1 prices today. This, too, no doubt, ' will be adjusted -In tlnte. It Is not t ' to bo expected that, tho war being ' over everything will be adjusted over night. For flvo years Europe wasted everything in sight.' , It Is humanly , '&? impossible to havo conditions as wo . mv had them before tho war. Wo can- f not say, llko a maglInn "presto, jP change," and find tho wordB back to I tho normal prewar stage. Llko a man after being run over by an auto- mobile, ho mn'y bo nllve, and may , not oven havo any broken bones; but ' 'j oh tho bruises and' pain! So tho world today is only commencing to take stock of Itself, each day dlscov orlng new pains which sho did nbt, ' ' even know of yesterday; until time, nr tho healer of all wounds, finally ad- i Justs the world to a normal condition. condi-tion. This will take some years, and In the meantlmelt behooves all of us to sit steady and not rock the boat. In conclusion I wish to state that I am not In the retail business, and In taking up the cudgels' of the retailer re-tailer have no axes of my own to t grind. ' ,-j ,-j A. H. BRONN.