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The nonpartisan leader. [volume] (Fargo, N.D.) 1915-1921, December 13, 1920, Image 8

Image and text provided by State Historical Society of North Dakota

Persistent link: https://chroniclingamerica.loc.gov/lccn/sn89074443/1920-12-13/ed-1/seq-8/

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AR years were prosperous ones for
northwestern flour mills, the federal
trade commission shows in a report on
the milling industry, just made public.
During the five years from July 1,
1913, to July 1, 1918, the average an­
nual profit of 10 northwestern mills, taken by the
commission as typical of the industry as a whole,
was 24.4 per cent on their investment. This means
that in the five years the mills had earned 122 per
cent, making the entire costs pf their investment
and 22 per cent more!
The year from July 1, 1917, to July 1, 1918, was
the bumper year for the northwestern flour mills,
the commission's report shows. During this one
year the northwestern mills studied made an av
erage profit of 44.7 per cent, or nearly 50 per cent
on their investment in 12 months!
This was the last year covered by the investiga
tion. What profits the mills have been making since
can only be guessed.
From July 1, 1913, to July 1, 1918, the price of
flour increased 146 per cent, while the price of wheat
was increasing 160 per cent, the commission shows.
Anti-farmer papers all over the Northwest are
quoting this finding, in an effort to show that the
farmers are doing better than the millers. The fact
is, of course, that the farmer's experfses of produc
ing his crop of wheat increased much faster than
the miller's expense of grinding it into flour, which
increased in the same period only 68 per cent. But
the anti-farmer papers for the most part overlook
or omit what the commission says immediately
after this. Here it is:
"The wholesale price of flour has continued
to advance and by the end of 1919 its advance
over the low level of the '90s was relatively
greater than the average advance for all other
commodities. Furthermore the retail price of
flour advanced during 1919 at practically three
times the average rate for other foods."
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Profits of Flour Millers Are Enormous
Northwestern Mills Made Entire Value and 22 Per Gent Besides in Last,
Five Years, Federal Trade Commission Shows
Northwestern flour mills made average
profits of 24.4 per cent a year in the
last five years, the federal trade com
mission reports. But during the last
year of this period they made profits
of 44.7 per cent. At the same time
their business has become so concen
trated that 10 mills can supply more
than half of the flour used in the Unit
ed States. No wonder the millers ob
ject to the state of North Dakota
building a big modern flour
mill to compete with them.
The commission's investigations did not cover
any portion of 1920, during the time when flour was
staying up while wheat was falling 10 cents a day.
At the present time, although flour prices are
slightly down, the reduction does not begin to com
pare with the lowered prices for wheat. If the
millers were making 44.7 per cent profits in 1917
1918 their profits since there has been no attempt
at federal control are undoubtedly greater.
The commission finds that during the bumper
year of 1917-1918, when the profits of flour mills
were more than 200 per cent above normal, the cost
of wheat was only 146 per cent, above normal, the
cost of packages 74 per cent, mill operating costs 68
per cent and selling expenses only 37 per cent.
The commission reports a tremendous "concen
tration" in the milling business, adding:
"This concentration in the wheat flour industry
has already progressed so far that 10 of the larger
milling concerns probably have sufficient capacity
to produce over half of the wheat flour produced in
the United States.
IT SURE DOES MAKE A DIFFERENCE!
BUT THIS
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PAGE EIGHT
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"Its rate of progress in decent years is indicated
by the fact that in the 10 years from 1904 until
1914, according to census statistics, one out of every
three mills having an annual output of 5,000 to
20,000 barrels went out of business, their number
decreasing from 2,123 to 1,377. On the other hand,
the number of mills making over 100,000 barrels
increased from 166 to 218, their output in 1914
amounting to over 60 per cent of the total for the
entire country."
The commission might have added that since 1914
the small mills have continued to be squeezed out
and absorbed by the Washburns, Crosbys, Pillsburys
and their allies and that the 10 big mills that can
produce more than half of the flour in the United
States, working together in the chamber of com
merce, in the directorates of $100,000,000 banks and
in millers' associations, probably can put the re
maining small mills out of business any time it
suits their purpose.
The federal trade commission also reports that
the accounting systems of the mills examined were
in unsatisfactory condition, making it difficult to
determine and separate the profits made in flour
and mill feeds and otter lines.
The 37 companies studied by the federal trade com
mission, 10 in the Northwest, 13 in the Southwest
and 14 in the eastern group, made a profit of $5,512,
163 in the fiscal year 1913-1914 and a profit of $22,
440,858 in the fiscal year 1917-1918. The increase
in profit was thus $16,928,695. Of this the mills
paid $1,297,384, or less than 10 per cent, to the
United States Grain corporation as excess profits.
But what it would be interesting to know is this:
If these 37 mills made profits of $22,440,858 in the
fiscal year 1917-1918, when they were under the
control of the United States Grain corporation, how
much have they made in the last two years when
they have been under no control whatever except
the greed of their owners for more profits?.
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