Packers' Profits

Nearly every two-legged animal in the U. S. eats one four-legged animal every year. To supply meat to 120,000,000 inhabitants, 115,000,000 hogs, cattle, sheep and calves from the plains of Texas to the clover fields of Iowa go annually to market. . . . At the slaughterhouse, in the dim bluish light of the knocking pens, a Negro swings his three-pound hammer. Crack! On the steer's skull midway between the scared eyes the blow falls. Great shackles swing down to lift the limp stunned animal, head down, rump high. The short curved knife bites deep into the bristled neck seeking the throbbing artery. Into great cans oozes the dark red blood, 70 Ib. to the steer. . . . Pigs skewered by the feet to an overhead track circle around the killing room. Stuck pigs upside down do not squeal. A knife flashes. . . .

As the four biggest units in the largest industry in the U. S. in value of cutout Swift, Armour, Wilson and Cudahy account for more than half of all the meat sold each year. But packers' profits are seldom more than a penny or two on every dollar of sales. Within the fortnight three of the big four released earnings for the fiscal year 1934.

Swift. A steel man would be dissatisfied to earn only $11,432,000 net on a gross of $619,000,000. For Swift it was better than the year before and only a few million short of the company's 1926 high of $15,000,000. During the first ten months, said President Gustavus Franklin Swift, U. S. meat-eaters had consumed nearly three pounds more meat and lard than the year before. The forced marketing of drought-stricken animals had led the company at times to operate "at a rate far beyond what it had always regarded as peak capacity."

Cudahy. "Not since the company purchased its first carload of live stock over 47 years ago," declared Chairman Edward Aloysius Cudahy Sr., "has it been confronted with so many entirely new problems as during the past year. The processing tax on the live weight of hogs slaughtered . . . has cost us between nine and ten million dollars for the year. This in part was our contribution to the $101,945,334 which the AAA recently stated was paid to Corn-Hog Farmers up to Oct. 1. In view of the close association of our industry with agriculture ... it is especially gratifying that we could participate so substantially in assisting the farmer." Sales had jumped 22% to $151,000,000. Profits for 1934 were $1,968,000 against $1,813,000 the year before.

Wilson. Long before Wilson & Co. profits were announced last week, financial writers were busy calculating in print how large a dividend Wilson could declare under the recapitalization plan announced last month. With dividend arrears of $26.25 per share on the 7% preferred and $20 per share on the Class A, the board of directors had approved a scheme for substituting 1) 1,4292 shares of new $6 cumulative preferred for each share of 7% preferred and arrears; 2) five shares of new common stock for each share of Class A and arrears; 3) one share of new common stock for each share of old common. By removing the arrearage barrier to fresh dividends, the directors hoped to divide future profits among all classes of stockholders.

Last week the company announced 1934 earnings of $3,833,000, which would be about 90-c- per share under the new plan. The management had already declared that the earnings would justify a dividend after the plan is approved. If so, it will be Wilson's first common dividend in 13 years.

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