Summary of Report of the Federal trade commission on shoe and leather costs and prices by United States. Federal Trade Commission

Author:United States. Federal Trade Commission
Language: eng
Format: epub, pdf
Tags: Shoe industry, Leather industry and trade
Publisher: Washington, Govt. print. off.
Published: 1921-03-25T05:00:00+00:00

or of income and excess profits taxes) of 13.1 per cent on total investment (capital stock, surplus, and borrowed capital) in 1918 and 29.8 per cent in 1919. Earnings of 32 companies tanning sole leathers averaged 9.7 per cent on investment in 1918 and 18.9 per cent in 1919; earnings of 35 companies tanning upper leathers averaged 13 per cent in 1918 and 23.8 per cent in 1919; while by far the largest earnings were those of 22 companies tanning kid leathers, which averaged 26.8 per cent on investment in 1918 and 81 per cent in 1919. The increases in the rates of earnings in 1919 over 1918 resulted from the fact that selling prices increased more than costs. For sole leathers the average total cost per pound increased 5.7 per cent, from 44.2 cents in 1918 to 46.7 cents in 1919, while the average selling price increased 9.4 per cent, from 50.1 cents in 1918 to 54.8 cents in 1919, with the result that the average percentage of profit to cost of product sold increased from 13.3 per cent in 1918 to 17.3 per cent in 1919. For upper leathers (calf, kip, horse, and cattle) the average total cost per square foot increased 31.9 per cent, from 35.7 cents in 1918 to 47.1 cents in 1919, while the average selling price increased 34.1 per cent, from 41.9 cents in 1918 to 56.2 cents in 1919, with the result that the average percentage of profit to cost of product sold increased from 17.4 per cent in 1918 to 19.1 per cent in 1919. For kid leathers the average total cost per square foot increased 20 per cent, from 33.4 cents in 1918 to 40.1 cents in 1919, while the average selling price increased 38 per cent, from 40 cents in 1918 to 55.2 cents in 1919, with the result that the average percentage of profit to cost of product sold increased from 19.8 per cent in 1918 to 37.7 per cent in 1919. The fact that margins of profit per square foot on kid leathers were larger in 1918 and increased more in 1919 than those on any other leathers explains the very large rates of return on investment earned by tanners of kid leathers. The high selling prices which made these earnings possible were influenced in part, no doubt, by the policy of tanners in accumulating large stocks of goatskins in 1919 without appreciably increasing their output of goat leathers.

SHOE MANUFACTURERS.

Earnings (before deduction of interest or of income and excess-profits taxes) of 341 shoe manufacturers, with output in 1919 representing about 62 per cent of the total output shown in the census of 1919, averaged 16.2 per cent on investment (capital stock, surplus, and borrowings) in 1918 and 29.8 per cent in 1919. The increase in rate in 1919 resulted from the fact that selling prices increased more than did costs. Because of the diversity in grades, types, and prices of the shoes studied an estimated average cost and selling price for all shoes per pair is not practicable.

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