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HomeMy WebLinkAboutThe Brussels Post, 1948-9-29, Page 7New Cars to Give Greater Gas -Mileage From I t,'ti'Uit conics it ur,1 that about a dozen ,motici rat', will ttp11(81 (hiring the teat tour or tic e months and in every in•latlre eye -appeal tviIl receive as mucic emphasis as mechanical change. The mechanical change., as a 11181111 of fact will be relatively few, Iu 111088 case. the manu- facturers will claim improved gas - aline plileagc. \\'betbc•r the motor- ist gets it w•i11 depend upon a var- iety of factors including type of fuel used, arljn,tuue tr0tnlit- ions of driving. Charles F, Ketterit,g, tawou, :,•n. gilteel•ing consultant 11:1 der utit slrated that all engine can he built giving I8.u'-to-1 but it rec1a1888 a high quality fuel not Iil'b to be available for a long time. Icy the claims of the 11lanuiac- turer, present standard size auto- mobiles yield 1r0tn 11 to more than 2.; miles to a gallon of gaso- line "at reasonable speeds•" '1'o this a lot of car owner: will sal' "1 don't get nine miles to the gal- lon," It probably should be noted the high mileages •claimed by sole car makers are those achieved on trunk line highways with few stop,, Few motorists get more than nine or 10 miles from a gallon of fuel in big city driving with frequent stops and starts. Automotive engineers agree the average motorist gets Icss titan half the potential mileage con- tained in a gallon of gasoline. Much is burned up without yield- inr combustion and a lot of power is blown out through the exhaust pipe. Extensive research by two expert .engineers indicates the average pres- ent clay engine converts only 10 to 08 per cent of the chemical en- ergy of a gallon of gasoline into mechanical energy. Forms Cabinet ---I lend Queuille smiles in Paris after telling reporters he accepted Presi- dent Auriol's request to form a a French coalition Cabinet. A Sports Outrage • And Its Sequel '!'here arc many who will remem- ber the story published in many miners last Fall regarding the six United States "sportsmen" who visited Quebec and killed speckled trout to the extent of at least d"utile the legal' limit; and also the picture for which they posed behind a big rack from which were hung the fish, ranging from s'3 pounds up to 614 pounds. It was an incident which caused considerable indignation, and it is interesting to learit that these "game hogs" got at least part of what was coating to them. In an article published in Rod & Gun in Canada, I, LeChasseur tells just what hap- pened, tis follows: "Several friends sent me clippings of that picture, 1 was fortunate enough to be able to secure a print of the original. f also talked over the phone with one of the six men who was still glowing with pride,. From 411111 I secured all the information I needed except the exact location and the name of the lake, but this was pretty easy to figura out, I turned over this information to Charles Fremont, K.C., Super- intcndcnt of Game and Fisheries for the Province of Quebec, and he and His staff a few weeks an 't rate the final chapter to the suc- ecss story. 11 was inevitable, of course that the six 111111 should rettnp to the scene of so great a triumph. When they arrived in the vicinity of Lake St. Thomas, hear the Rat River its the fishing anis hunting leasehold of Arthur 3t(cKenzie, of Au Rabasca, Crati18 Warden Georges Bonin swooped down upon them with two light amphibian planes Confronted with the facts of the 80.17 'crime, they Paid an aggregate of $7:10.M in '111115 and Costs." . And now we romp to think it over, probably "SEP I•l 1. '11)1 JOLLY WELT, R1 11'4'"- would would have. been a betr;'t head411 for this item than I1te one til` ha' c chosen. C ,t NA ,yl A 1;. ACK gas REPORT TO SHAREHOLDERS The twenty-first fiscal year of Canada Packers Liuiited closed March 31st, 19,18. Dollar Sales, a new high, were $238,454,037 (A) Tonnage, -weight of product sold, -was - 1,447,725,661 lbs, (B) Net Profit, -after Depreciation, Taxes and Inventory Reserve, -(also a new high) $2,182,300 (C) Net Profit in relation to Sales, -(C to A), -is 9/10 of 1 per cent, Net Profit in relation to Tonnage, -(C to B), -is 15c per 100 lbs„ otherwise 1/7c per Ib. The following is a comparison of this year's Profit and Loss Statement with those of the two previous years. 1948 1947 1946 .Dollar Sale3 $238,000,000 $204,000,000 4'19,000,000 Out of each Sales Dollar there was paid:- For aid:For Raw Materials, - chiefly Live Stock and other farm products 81.37c •80.21c 81.330 For Wages plus Salaries 8.48 9.10 8.06 For Services, -General Expenses - , 4.38 4.25 4.13 For Materials and Packages 3.12 4.06 3.76 For Taxes, -Municipal, Provincial, plus Federal 1.08 98 1.48 For Inventory Reserve - 26 - For Depreciation on Fixed Assets .42 .43 .40 99.11c Remainder, -Profit from Operations .89 .97 99.03c Plus Income from Invest- ments, etc. .02 .04 Total Net Profit for the year on each dollar of Sales .91c 1.Olc 99.16c .84 .03 .87c The products handled by the Company fall into four groups - LIVE STOCK PRODUCTS, cont - prising products derived from live aninnals:- Meats,-Beef, Veal, Pork, Lamb and Mutton; By -Products, -Hides, Skins, Tal-' low, Bones, Tankage, etc. Tonnage of this group - 467,879,272 lbs Profit from this group - - - - - $1,049,833 Profit per 100 lbs, - - - 22.4c OTHER FARM PRODUCTS, comprising, - Butter, Eggs, Cheese, Poultry, Fruits, Vegetables, etc. Tonnage of this group - 241,899,777 lbs. Profit from this group - - - - - $644,011 Profit per 100 lbs. - - 26.6c - NON-FARM PRODUCTS, comprising, - Edible Oils, Shortening, Soap, Fish, Fertilizers, Stock Foods, etc. Tointage of this group - 658,548,607 lbs. Profit from this group - - - - - $863,024 Profit per 100 lbs. - - - 13,1e MANUFACTURING, comprising, - Canned Meats, Canned Fruits and Vegetables, and Frosted Foods. • Tonnage of this group - 79,398,005 lbs. Profit from this group - - - $198,046 Profit per 100 lbs. - 249c Profit froin the four groups $2,754916 Profit on Group No. 2 includes an unusual profit on. , Storage Butter, viz. 625,968 This item has been set up in toto as an inventory reserve, Net Profit after setting up this inventory reserve - $2,128,948 Profit from Investments 53,352 Total Net Profit $2,182,300 he outstanding feature of the year was the spectacular advance in the price of all foods, especially live stock and live stock products. The measure of these advances is shown its the following table which sets up average prices of foods in Canada (in each case the average for the month of July) for the following periods: - (1) The six pre-war years, 1934/39 (2) The six war years, 1940/45 131 The three years since the war, -1946, 1947, 1948. Average July price 1934-39 Average Jttly price 1940.45 1946 947 1948 Good Steers, live, Toronto, per lb. - 6.07e 10.70c 13.22c 14.47c 21,01e Hogs, 13-1 dressed, Toronto, per lb, - 13,20 16,65 21.87 22.98 31.88 Lambs, lite, Toronto, per lb. - - - - 9.55 14.84 16.91 1721 22,75 Eggs, 'A' large, Tor- onto, per doz, 23.75 3450 46.00 39.75 52.00 Creamery Butter, Tor- onto, per Ib. - - 21,12 35,60 47.90 50.50 67.37 Cheese, f.o.b, Factory, Ontario, per lb. - 12.60 20,50 26.00 28,00 33.87 Vegetable Oji, refined, Toronto, per lb, 6.90 14.65 16,40 41.,10 30.50 Wheat, No. 1 North- ern, Fort William, per bushel - - 92.75. 97.75 135.00 155.00 155,00 Oats, No. 2 C:.\\'., Fort William, per bushel - - - 42.37 51.12 61.50 65,00 88.25 Barley, No., 1 Feed, Fort William, per bushel - - 46,00 63,75 84,75 93,00 120.50 NOTE: On certain products subsidies have been paid by Gov- • ernments,--1''ederai and Provinciai. The prices appeal- ing above iuclncle all subsidies, except in the case of Wheat which is shown at Board price, The Wheat Board will make a participation payment (the amount of which is not now known) covering the five crop 38588 ending July 1950, , As between July 1939 and July 1948, the live stock products listed in the above table show the following p(rcentttges of advance: -- Steers Hogs Lautbs - - 223% 157% Eggs 62% Creamery Butter - 217% - - 123% Cheese - - - - 151% In contrast to the above, the average advance of all wholesale prices from July 1939 to July 1948 is 110%. It trust be remembered that in 1939 live stock prices were low in relation to other products. It was to be expected that the advance in live stock products would be greater than the aver- age for all products. Nevertheless, the phenomenal advances recorded above inevitably give rise to the following queries: - 1. Is the present level of live stock prices likely to be maintained? NOTE: If the embargo on shipments to the United States is lifted, the immediate prospect is for still higher prices.* 2. If, finally, there is to be a recession, will that recession be gradual or 'vertical'? NOTE: Following World War 1, prices continued to advance for a period of eighteen months after Armistice Day (November 1918 to July 1931). That a violent collapse of prices set in, 3, If and when the decline comes, at what (approximate) level are prices likely to be ultimately stabilized? , NOTE: At least one prediction seems safe, viz, that prices of live stock products will not again sink to the levels of the 1930's. This for two reasons: - (a) that50-60c. prices in the 1930's were abnormally low; (b) that the post-war dollar is equivalent to pre-war All three of the above questions are of the utmost importance to live stock producers and processors. But, -except for the inserted notes, no one as yet has the answers. At the present time, complicated and unpredictable political factors seen to count almost as heavily as the purely economic elements of the problem. One fundamental factor at some timewill conte into play. The world's food is produced from year to year, At any one time, whether food supplies are sufficient depends upon the last crop. In a period of short supply, people go hungry. But if a bountiful( crop follows, the hunger does not carry over. After a few days (possibly weeks) of heavy eating, famished appetites are re- duced to normal appetites. Then the increased food supply will tend to bring prices bac! „to normal (that is, normal as esta- blished by the new conditions). The crop now being harvested in the Northern Hemisphere is a bountiful (perhaps a record) ope. This may prove to be the year when mounting food prices will tarn downward. Mention has already been made that net profit was the highest in the Company's history. The record profit of the year is accounted for by the record advance in price (within the year) of most of the products handled by the Company. In addition to the normal operating profit an `inventory' profit accrued from the advancing prices. On January 2nd, 1948, the Canadian Meat Board announced an advance in the contract price of Wiltshire Bacon (to U.K.) of 7c per Ib. This advance was immediately reflected in corres- ponding advances in the price of Hogs and of domestic Pork products. These advances (in domestic Pork products) led to widespread protests from housewives' associations, which in turn led to the -appointment of a Select Committee of the House of Com- mons, enjoined to examine into the causes of the advancing cost of living. The extent to which packinghouse costs, and particularly pack- inghouse profits, enter into these advancing food prices was a natural subject of investigation by this Committee. Packers were asked for voluminous reports covering operations of the Industry over a period of thirteen years. The scope of the present Report does not permit a lengthy analysis of the data submitted, but the essemal facts revealed may be summarized as follows: - 1. That over a period of thirteen years (1936 to 1948, inclu- sive) the average net profit of the Packing Industry was 1/7 o{ lc per lb,, of product sold, 2. That the,liighest profit in any one year was.1/5 of lc per Ib. of product sold. 3. That in the rapidly advancing costs of meat, packinghouse profits have played no part. Within the three-year period 1946 to 1948, the retail price of major Beef cuts advanced approximately 20c per ib., and Pork cuts approximately 19c per lb,, whereas pacicingltous`e profits in the same three years had been respectively 1/12c, 1/7c and 1/7c per -11).1' 4. If the Packing Industry had made no profit whatever, the relief to the consumer could not have been noticed. 5. The advance in treat prices was due entirely to advancing costs of live stock. These advances were brought about by conditions of supply and demand, Packers clo' not and can not influent'e either supply or demand, and therefore have no part in determining the general level of live stock•prices. For instance, during the depression of the early 1930's, packers could do nothing to advance prices. They were able to pay for the live stock only what they were able to get back for the treats (and by-products). Conversely, at the present time packers can do nothing to alleviate the high costs of treats, which are due to a world shortage of all foods, especially live stock, 6. The operations of the Packing Industry, both in buying and selling; are carried on under conditions of keen and constant competition. The live stock which is the packer's raw material is pur- chased upon the various markets throughout Canada. On each market numerous packer buyers compete for the live stock. The producer is represented by a commission ratan. The commission man is an expert judge of live stock, and his job is to get the highest possible price for the animals consigned to him for sale. That be is competent to do this is evidenced by the speed at which prices are forced up when supplies are short of demand. (1?xautple,-Within a period of four weeks, -between May 8th and June 8th, 1948, -the price of Cattle in Canada was forced up 4 to 5 Cents per lb.) After processing the live stock, the packer sells the meats to the retail butcher. Here again the transaction is one in which the keenest competition prevails, Each retailer is called upon each week by many packer salesmen, and the retailer naturaliy trades dowft each salesman against the others. In the enol the retailer divides his order amongst several salesmen, selecting from each those products for which his prices ave lowest, value considered. The fact is not generally realized that there etre no esta- blished prices either for live stock or for meats. Each purchase and each sale is it separate 'bargain', ---in !which the buyer and seller compete, the one to reduce the price . a fraction, and 1410 other to advance it a fraction. It is this keen anti continuous 'bargaining' which explains *The 'report was in tilt prhller's ;aands before the embargo was diced, rrhe figures quoted are' Front the submission of Canada Packers, 8. the small percentage of profit upon which the lotto ,, > carried on, This small percentage upon sales, however, does not mean that the Industry is necessarily uuprofit tl,le. In the year under review, capital was turned over apiuox- iinntely eight, tittles, so that a profit of .91 her cent 1,n sales wielded a return of aproximately 7.3 per cent upon capital, lfowever, the small margin of profit does enforce effici- ency.\\'lrlle a profit of 1 per cent on sales yields au ade- quate return on capital, a loss of 1 per cent, if continued, means ruin. The record of the Packing Industry in Canada is strewn with the wrecks of companies which failed to keep pace with competitors, by this narrow margin, • LABOUR RELATIONS In spite of the fact that a strike, lasting six weeks, occurred within the year under review, Directors are pleased to report that in the main relations with Employees are cordial and co- operative. The Company Officers feel that the strike was the result of an unwise method of negotiation (on the part of the Union) which had been followed for four successive years. That method was the introduction of a strike threat at an early stage each time a new agreement was under negotiation. This comment is made, not by way of recrimination, but solely in the hope that a better method may be permanently established. Dis- cussions with the Union are at point of completion as this Re- port is being written, and there are good reasons to believe that foundations of such a method have been laid. In the discussions, an increase of 9.6% in wage rates has been agreed upon, No absolute standafd has been devised by which to determine just what wage rates should be in any industry. But two criteria are commonly used: - 1. I3ow do increases in wage rates compare with increases in living costs? 2• How doi present rates compare with present rates in- other industries? The following tables apply these criteria to the rates of Canada Packers: - 1. Comparison with Increased Living Costs Present rates (including the increase of 9.6 per cent) and those of 1939 are as follows Percentage 1939 1948 Increase Average rate, men - 50,8e 1084c 113.8% Average rate, women 32.8 81.2 147.6% Combined average rate 48,1 103.4 115.0% In August 1939, the Dominion Cost of Living Index stood at 100.8. It now stands (July 1948) at 156.9, an increase of 56.1 points, or - - 55.7% The increase in rates is thus more than double the. increase in the Cost of Living. However, this excess percentage (wages over cost oi,living) does not represent an equivalent in- crease in purchasing power. Corrections trust be made for advanced Income Tax rates (modified by Family Allowance payments) and for consid- erably shorter working hours. When all correc- tions are made, the increase in actual purchasing power of all hourly rated employees of the Com- pany works out at an average of at least - 25% 2, Comparison with Rates Paid in Other Industries. Comparison of packinghouse average rates with those of Canadian Industry generally is possible by reference to a report published monthly by the Dominion Bureau of Sta- tistics.* That report includes wages of men and women, up to and including foremen. Besides regular earnings, it includes such additional income as overtime premiums, night work premiums, and incentive bonuses. By this standard Canada Packers' average rate (including the 9.6 per cent increase just granted) compares with others as follows:- Canada ollows:Canada Packers Limited - - $L101 per hour Meat Industry (as a whole) - 954 " " All Manufacturing - - - .906 " " Canada Packers' rate is thus higher than: The Meat Industry (as a whole) by - 15.4% The average of Ail Manufacturing in Canada by 21.1% During the year a plan has been worked out between the Com- pany and Employees whereby through joint contribution, 'com- prehensive protection in time of illness is provided. The pro- tection includes: - Medical attention and medicines; Hospitalization for Employees and their dependents; Surgical expenses up to $200,00; Funeral Benefit of $100.00; Weekly Indemnities in sickness of $21,00 for men ,and $111:00 for women, continuing according to length of service up to 52 weeks. • A Group Life Insurance Plan to which the Company contributes has been in effect since 1940. Each 'Employee irrespective of, age can insure for $2,000 for a premium of $520 per $1,000 per year. For male Employees this Insurance is compulsory, -for females, optional. PROFIT SHARING Canada Packers was formed in 1927. For eight years no dividends were paid on the Common Shares. In 1935, dividends on the Common Shares were begun. In the same year the profit-sharing plan of the Company was initiated. The policy of the Company is to maintain regular salaries and wages at a level equivalent to the highest paid elscw'here in the Industry. If profits permit, a further payment, by tray of bonus, is trade to each Employee at the end of the fiscal year. The profit-sharing plan is not contractual. The sum to be paid in bonuses is determined by the Directors, and is based upon the earnings of the Company for the year. This year, in view of -the record profits, a record sunt was allot- ted,- viz, $1,500,000. Distribution of profits for the year under review has been as follows - Net Profit before bonus was - - - - $3,682,300 Paid to Employees, as bonus - - - 1,500,000 Net Profit available for Shareholders $2,182,300 Reminder: +• This stun is equivalent to 9/10 of 1 per cent of -sales 1/7 cent per lb, of product. sold. Out of this sunt there was paid to Shareholders as dividends - $1,000,000 The remainder was added to Reserves - $1,182,309 ' Since the adoption of the profit-sharing plan (1935), distribution of profits as between Shareholders and Employees ltas `been as follows: - To Employees, as bonuses To Shareholders, as dividends J, S. Toronto, August 12th, 1948, *'"Statistics of Average Hours Worked and Average lTourly Earnings" - $10,410,000 - 10,550,000 McLEAN, ' !.President, NOTE: Extra copies of this report are available and so long as they last will be mailed to enyone requesting tisettt: Address to Canada Packers Limited, Toronto 9.