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3. - x, 1 © terested. selling live stock is approximately. . PACKERS LIMITED REPORT TO SHAREHOLDERS (Continued from previous Page) CANADA As stated above, the profit of Canada Packers in the period 1927 to 1944, has been ...... 1.4% of Sales Probably for the whole Industry the percentage of profit was less. : But suppose it were more. . 2% What would the benefit have been to Producers if, over this period of seventeen years, the Packing Industry had made no profit whatever? : 'An outside estimate would certalaly be ............. The answer to this question is arrived at by a simple 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, ie. ..... AITTLY, $4,000,000. per year So that, if the Packing Industry had made no profit whatever, the maxi- mum benefit to Producers would have been ......... TT TIT $4,000,000. per year The number of farms producing and A 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 .............. 0... $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. « PI I ER 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. . N } (2) 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 Packers are generally the target. In the year now being reviewed, the profits of Canada Packers were. bh BoB Bens sha iaey fy $1,687,000. To the individual Farmer, who compares it with his own profit, this no doubt seems a stupendous sum. In relation to the total sales, however, it is a very small sum. Those sales were .......... SS iwaansn tate $206,000,000. DECREE . . DECREE If Sales had been two million instead of two hun- dred million dollars, the relative profit, at the same percentage would have been $16,870 ses ae se eee 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- od / J As to Item 2,--the charge of monopoly also has its origin In the size of the larger companies. The trend in the Packing In- - dustry 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 field. 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 :-- r 2 117 111 RG PI SNIPPET 4 QUEBEC iv ii rarer isiteesnnees 29 FN 17S § EPP vo 13 British Columbia ........ .05. 0 e0eeanaey 1H FL HE IR IE TT FTL TE WWW SASKALCHEWAR ous si vrnr evs Tina sa vvesves 8 i Nova Scotia P.E.L 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- tween large units is more (not less) keen than that between small units. : Two proposals to transform the Industry have beep suggested "by those who constitute themselves its critics. In principle they are diametrically opposed. y 4 Pp New Brunswick over ones vivsinenensas 4 1 The proposals are -- (a) that Canadian live stock should be processed in a large number of co-operative plants, as in-Denmark; (b) that the Packing Industry should be nationalized. Every Packer would welcome the development of co-operative plants. Only one exists at present,--The First Co-operative Packers at Barrie, Ontario. It js unfortunate that 'there is nat at least one in each of the chief livestock producing Provinces. Such plants would be sources of information. regarding the facts of the Industry which Farmers would accept without question, The existence of a number of co-operative plants would lead to a greater measure of understanding between Producers and . Packers than has ever existed in the past. However, the establishment of co-operative plants would of necessily be a slow development. The reason lies in the highly competitive nature of the business, and the fact that the dif- ference between profit'and loss is a small fraction of a cént per pound. As Farmers became aware of the risks of loss on the one hand, and of the very low margin of profit on the other, the de- sire to launch co-operative plants would be less keen. It is worth repeating, however, that no single development would do so much to promote a realization of the common interest of - Producer and: Packer, as the establishment of a number of co- operative plants. As to the second proposal, it is hard to think of an Industry less suited for nationalization. The objection which comes to mind first is the danger of loss from spoilage if a Government organi- zation were handling daily, tens of millions of pounds of perish- able foods. The danger would arise because the chief safeguard would be removed, by reason of which such losses are avoided. That safeguard is competition. The reason such losses are avoided under a system of competi- tion is that the penalty of mot avoiding them is ruin. Under a state-owned system the National Treasury would foot the bill. However, the chief penalty of eliminating competition would -- fall upon the Producer. To him the loss would come as (he re- sult of lowered efficiency. The net profit of the Packing Industry as it exists, probably does not exceed 1 per cent. That is the total price which the Producer pays for the Packer's efficiency. Can anyone doubt thal na- tionalization would result in a loss of efficiency equivalent to several times 1 per cent? The Producer would be the only person to absorb this loss. It would come to hini'in the form of a' lower pay-back out of the sales dollar. ° 0 ° The foregoing has been an attempt to set down the facts of the Packing Industry. It has dealt chiefly with the obligations, and the mutuality of interest, which obtain as between Packer and Producer. The argument has been that the Packer has played a large and constructive part iri the development of the Canadian Live Stock Industry, and that he has done this at a very low percentage of profit on his sales. Buty in a report to Shareholders, it is fitting that some reference should be made to the position and interest 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 gelting 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 and loss is a minute fraction of a cent per pound on the product sold. 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 products of the Packing Industry will be maintained,--perhaps 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 profit sharing policy begun in 1934. For the first time, Bonus distributed to Employees ex- ceeded Dividends to Shareholders. I Dividends were ........0... 0. Lams $800,000 BONUS WAS cu.nvusvussnsnadsnntrrns $937,000 J. S. McLEAN, President. Toronto, September 5th, 1944, Extra copies of this Report are available, and so long as they last will be mailed to anyone requesting them. Address to Canada Packers Limited, Toronto. = HEIRESS CAN PUT BS houl happen to a woman, 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- 1 tured 'with some of the Pekes, keeps and § cares 'for them, she'll receive $100,000 inh § " * monthly installmen A ' 3) Iv a7 ty Prince Bernhard of the Nether- ) oi lands, above, has been appoint- Gen. Dietrich von Choltitz, commander of Nazi forces in Paris IY ed commander of the Nether- dejectedly signs terms for surrender of French capital at desk in 2: lands Forces of the Interior, Montparnasse Station. More than 10,000 German troops were Lh under Gen. Dwight D. Eisen captured when city fell. German general has completely lost Ha) hower. a arrogant air. . 1 ON THE DOTTED LINE » ON °'IKE'S' STAFF we ICME vi --- a _ EXILE ENDS of Bel. returned to fellow members after a four start country of seek - the freedom of Pierlot Premier Hubert gium, above, has Brussels with of his government, year exile He plans to rehabilitation of his once, and King Leopold, a prisoner of the Nazis. sign or telling Pvt. Sanders they have two eggs. Ve " rr a =A on li, CANADIAN PATROL ACTIVITIES IN FRANCE SRE: | | is = as FEhITee mg we ALA tr * iy ---- rR aS Ce -- sey SAL re. a YOR oo a AIR Sy a 1 I " A lr ns gts TE 1 Cor os EA ad TRE dP 5 i A - A : tis Eg ; fc ts vk AYER Lil Ss 1 PRCA | Add a g This series of pictures shows dramatically what happens when Allied patrols moving forwara ona , the heels of retreating Germans run into nests of snipers left behind to hold up their advance, The pictures were made as Canadians entered Falaise in France, At top the Ce A patrol is moving Pats down an outlying street of the town keeping close watch for snipers hidden in the battered Se. housea = Near an intersection German bullets began to whine and the infantrymen called up a tank 8 to help clear the area; centre left shows how a strong point was built with the tank as a shield, One of the Canucks was nicked by a Nazi sniper and at centre right his comrades pick him up and dash out of range so that medical aid can be given, Lower picture supplies the climax; the German pocket has been wiped out but four Canadians are casualties and first aid is given by the remainder of the patrol while 2 jeep ambulance comes up to take away the wounded, This tableau has been repeat time after time as Canadians moved through French towns and villages, driving th- Germans , back, but encountering bitter and often fanatical resistance, : = i ---- --_-- os opm - ----a,