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Zurich Herald, 1944-09-21, Page 3CANADA' PACKERS LIMITED REPORT TO SHAREHOLDERS (Continued from previous Page) '.As stated above, the profit of Canada Packers in the period 1927 to 11944, has been .:.. , ,, . 4,4% of Sales Probably for the whole Industry the percentage of profit was less. But suppose it were more. An outside estimate would certainly be , ....-... , , .. , What would the benefit have been to Producers if, over this period, of seventeen years, the Packing Industry had made no profit whatever? The answer to this question is arrived at by a siiiipl;calcuation.. In that seventeen years, total cash sales of live stock were (Dominion Bureau of Statistics) ,., , . $3,403,000,000. • Average per year ........ ,..;.. $200,000,000. If a profit of 2% is assumed, it fol- lows that the profit of the total Pack- ing. Industry has been 2% of 200 million dollars, i.e. $4,000,000. per year So that, If the Packing Industry had made no profit whatever, the maxi mum benefit to Producers would £ ;•b have been v $4,000,000. per .year The number of farms producing and selling live stock is approximately.. 500,000. Therefore, if, in these seventeen . years, the Packing Industry had made no profit whatever, and if all its pro- fit had gone to Producers, the ad- dition to Producers' income would have been $8.00 per farm, per year And if, as is more likely, the profit of the Industry did not exceed 1 %, the advantage to Producers would • have been $4.00 per farm, per year Many Farmers will be astonished by this statement. Over a period of many years, charges have been made from time to time;— (1) that the Packing industry takes a heavy and un- fair toll of profit on the Farmer's live stock. that this is made possible by monopolistic condit- tions and practices. It is not surprising if the effect of these statements has been to Create in the Farmer's mind, a feeling of uneasiness. • in regard to Item 1,—a semblance of support for the charge is found in , the amount of, the - profits of the larger companies. Those of Canada P Q 'lerally the target. In the year t—bei ,....,-revs •..,. � �oxt. of o C da :tEackerrl..w. �, ;,� ltd ._- f _a}� _._ _._ were . ...... .,,.. .. $1,687,000.. To e individual Farmer, who compares it with his own profit, thi ono doubt seemsa stupendous sum. In relation to the total sales, however, it is a very small sum. ' Those sales were $206,000,000. If Sales had been two million instead of two hun- dred million dollars, •the relative profit, at the sante percentage would have been ,$16,870 (2) That would certainly be considered a modest profit on a busi- ness of two million dollars. Yet, in terms of percentage, the two results are 'exactly the same. And, percentage is the only factor in which the Producer is in- terested. As to Item 2,—the charge of monopoly also has its origin in the size of the larger companies. The trend in the Packing ln- fustry has been continuously toward large units. It is not : sur- prising if the Farmer is disposed to listen to this charge. He realizes that competition between those who buy his live stock; is, for him, the most vital consideration of all. And he may fear that a small number of large companies would give less .assurance of competition than a large number of small companies. The, fact is that each large company is not a unit,but a group of units. For instance Canada Packers operates seven . different plants located in widely separated areas (from Montreal to Van- couver). Within each area its local unit competes with many other units. And the further fact is, that in addition to the companies oper- ating multiple plants, (there are three of them) a large number of other companies operate single plants. Many of these single plants do a large and increasing share of the business in their own /ieid. It is entirely misleading to represent the Industry aS dominated by the larger companies. The latest report of the Dominion Bureau of Statistics (1942) shows 148 plants as follows: -- Ontario .. • .. • • • 67 Quebec ... 29 Alberta 13 British Columbia 11 Manitoba 41 84 4 Saskatchewan Nova Scotia New Brunswick ... P. E 148 Nothing in the history of the Industry gives ground for the fear that the development of large units results in lessened competi- tion. From its bginning the Packing Industry has been the most fiercely competitive industry in Canada. And competition be e tween large units is more (not less) keen than that between small units. Two proposals to transform the Industry have been suggested by those who constitute themselves its critics. In principle they are diametrically opposed. The proposals are; (a) that Canadian live stockP, slw number of co-operative plants (b) that the Packing Industry sho Every Packer would welc.oiiie the d plants. Only one .exists at present Packers at. Barrie,. Ontario, It is u at least one in each of -the.; chief liv Such plants would ° be sources of 'in` of the Industry which Farmers'w The existence of a number of bo -.p a greater measure of understain Packers than has ever existed In tit However, the establishment of c necessity be a slow development: competitive nature of the business, ference between profit.andloss -is ac „pound. As Farmers became aware of hand, and of the very low margin of, sire to launch co-operative plants s ,bt p'wcossed in a large Denmark; ilatiotalized. pent of cd -operative ire . First Co-operative orf, to that there is not 'reducing Provinces, regarding the facts pt without question. larlts would lead to Producers and a 'five plants would of eason lies in the highly thefact that the dif ll.•fraction of "a cent per risks of loss on the one Eit on theother, the de - 'd be' less keen. r,.; wt; it is worth repeating, however, that nlelsigle development would do so;; mudli to promote a realizationif the common interest of Producer and Packer, as the esta.blis:inent of a number of co- operativeplants_. ' Aft As to`.thes�econd proposal, it is hard t;1 think.of an Industry less suited for nationalization.; The object10n which comes to mind;r' first is the danger of lose turn spoilagel if a Governirzet►t or(ani zation were handling clailsttene of able 'foods. The danger would`ariseste use the chief -safeguard Would. be removed,'by .reason of wh;6 such losses are avoided. That safeguard is competition. The `reason such' losses are avoided slider a system of competi- tion is that the penalty of not avoid ag. them is ruin.'.Under a state-owned system the National,:Treieury would foot the bill. However, the chief penalty of :elirniaating 'competition would fall upon the Producer. To him the loss would come as the re- suit of lowered efficiency. �,, The net profit of the Packing Industy,ass-it exists, probably does not exceed 1 per cent. That is the total prrc�eyhich the Producer pays for the Packer's efficiency. Can anyone doubt that:. na- tionalization would result in a loss of efficiency equivalent to several times 1 per cent? l The Producer would be the only Jerson to absorb this -loss. It would come to him in the form oft a lower pay -back out of the sales dollar. e The foregoing has been an attempt to set down the facts of the Packing Industry. It has dealt chiefly%�.vith the obligations, and the mutuality of interest, which obta:lras' between Packer and Producer. . The argument has been that the Fackler has played a large and constructive part in the development df the Canadian Live Stock Industry, and that he has done this at very low percentage of profit on his sales. But, in a repoi,t to S,hareholders, it is. i ting that some reference slipid ben d, eposition ap oma, stt of the investor. The Capital Investment in the Packing Industry in .Canada is $96,000,000 (Dominion Bureau of Statistics, 1942). Those who supplied this Capital did so with the hope of getting a re- turn on their investment. And for this no apology need be made. The attraction of the Industry from the Investor's viewpoint Is that turnover is rapid. Capital is turned over many times in a single year, so that a small percentage of profit on turnover pro- duces a satisfactory yield on capital. In the case of the success- ful companies, the investment has been profitable. These facts have been sufficient to attract adequate funds to the Industry, in spite of the further fact that large sums have also been lost. The hazard of the Industry lies in the fact that the difference between profit:4aiid loss is a minute fraction of a cent per pound on the prodalk"'old. By reason of the great increase in live stock deliveries, the plant of the Industry has been under constant strain. This has involved a corresponding strain upon Employees of 'all ranks. The loss of experienced men, and their replacement by inexperiencd men, has brought an inevitable decline in plant efficiency. In contrast with war industries, demand for the produ'ets of the Packing Lndustiry, will be maintained,—per-haps increased,- fol- lowing the close of the war. It will be a happy day for both Company and Employees when experienced men return, and the large volume can be maintained without the severe physical strains of the past year. The Company has maintained its prefit sharing :policy begun in 1934.. For tile first time, Bonus distributed to Employees ex- ceeded Dividends to Shareholders, Dividends were . Bonus was • • + • . Toront, September 5th, 1944. Extra—copies of this Report are a last will, be mailed to anyone requestm Packers Limited, Toronto. $800,000 $937,000 L J. S. `McEAN,'President. ailable, and so long as they r • them, Address to Canada HEIRESS CAN PUT ON THE DOG TI•i'.T ...i 1:n•C' E:s.�.v...:Cl".i` S."v.i'C JW `v�,h. `� h •` :r.4 t shouldn't happen to a woman, but rs. Ita McGuire, of Mineola, N: Y., inherited 'five Pekingese dogs from Mrs. May Mar- ;guerite Shaw, of Long Beach, N, Y. But the silver lining is that if Mrs. McGuire, pic- tured with some of the Pekes,keeps and cares for them, she'll receive $100,000 in monthly installments r -Mit( if yisse .=,s Awa ON THE DOTTED LINE Gen. - Dietrich von Choltitz, commander of Nazi forces in Paris dejectedly signs terms 'for surrender of French capital at desk in Montparnasse Station. More than 10,000 German troops were captured when city fell. German general has completely lost arrogant air. SIGN LANGUAGE Unable to speak French an Allied soldier uses his ingenuity when foraging along French roads by displaying a sign printed in "French which says: "Have you any eggs?" It's hard to tell from mademoiselles' gestures whether they're giving "V" for victory sign or telling Pvt. Sanders they have two eggs. "IMPREGNABLE" DEFENSES NOW RUBBLE A The West Wall at Dieppe, before which so many Canadians lost their- liveswhen they attacked from the sea two years ago, is shown above, shattered beyond recognition by Allied artillery fire as Canadian forces took the Nazi -held French town from the rear. FRENCH' BEAUTY GREETS LIBERATORS When Canadian units rolled into the city of Rouen, this beautiful French girl, Mlle Gilberte Pore, greeted Lieut, 3. M. Dassault, of Montreal, with. flowers and a happy smile, The civilian popu- lation of Rouen, one of France's largest cities, went wild 'with joy when Allied troops entered They had been under Nazi rule nrtore than four years.