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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author Trade Commission Title: Food investigation Place: Washington, Date: 1919 .C MASTER NEGATIVE « ,1 r COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD RESTRICTIONS ON USE: ng *■ ^•INKSS U, S. Federal trade commission. Food investigation. Report of the Federal trade commis- sion on canned foods. Canned salmon. December, 1918. Washington, Govt, print, off., 1919. 83 p. Incl. tables. 24i« Running title : Report on canned foods. 1. Salmon. 2. Canning and preserving-Industry and trade.- C^. S I. Tifle. — _ 19—26310 Library of Congress | JHD9330.S33U5 1918 ©opy^. o ia32d3| TECHNICAL MICROFORM DATA RLM SIZE: = 35 rr)f>r\ TRACKING # : REDUCTION RATIO: ay IMAGE PLACEMENT: lA @ IB IIB DATE FILMED: \1- /Q." '^4 INITIALS /MK ^3UflU RLMED BY PRESERVATION RESOURCES, BETHLEHEM, PA. Ai CaJ' 3 3 0) 13 ^ N c/> 00 M (Jl ■■Mr > o m CJl 3 ^ X < N M C^^^ "ah H 0) o o 3 3 o 3 3 III r.% s 3 3 O r"i5i?Ei;iSK m CO k> bo O^ CX> o to ro ro 1.0 mm 1.5 mm 2.0 mm ABCDEFGHIJKLMNOPQRSTUVWXYZ atx:defghi|l tS^ ^^ ko t3 :0 ?# ?P /^A '^. ■^. rV r^ « .<' •?r ^^H^JJ ?d> f^ ^ ■^ o o -om-D X z ? o m ^ O ' "O 30 ^ -A > C u TJ 3" w? 7^ O o» m JO o m -"S ^"'■fiiCU. ir-^l \ rot Ail. C csw^m iS s •■ cnn, n LIBRARY School of Business FOOD INVESTIGATION REPORT OF THE FEDERAL TRADE COMMISSION ON CANNED FOODS CANNED SALMON * i » • • > * .. » .1 ■* • '.-. I t -.1 . • f * • • • DECEMBER, 1918 WASHINGTOW CiOVKKNMENT PRINTING OFKICI:: 1919 ■iiiiiiiii*'!,,. William B. CoiuVer, CWnrnn. JoBN Pranklin Fort. Victor Mumdock •/ liEONiDAs L. Braokbn, Secretary. J) 3,0 I I* LETTER OF TBAVSMITTAL. Federal Trade Commission, Decemler 27, 1918. To the President of the United States. Sir: I have the honor to transmit herewith. the report of the Federal Trade Commission on the production and distribution of canned sahnon. This report presents additional information secured in the course of the general food inquiry which was imdertaken in accordance with the instructions given in your letter of February 7, 1917. Respectfully, William B. Colver, Chairman, ii*i iiiliiiniii* V_ CONTENTS. Summary. ACKirOWIEDGMEirT. ^ In connection with the preparation of this report, the Commission desires especially to mention Mr. Paul D. Converse, who acted as examiner in charge of the canned sahnon inquiry under the super- vision of Mr. Lewis H. Hanev, assistant chief economist. Valuable ^s^stance was rendered by Mr. Kemper Simpson and Mr. Stephen I The growing importance of canned salmon 1> The grades of salmon - * The production and distribution of canned sabnon J Costs ; The marketing of canned sahnon J Prices - :JjJ Margins and profits *JJ The dominant interests in the industry - j" The Sulzer bill and the Alexander bill :-•---• JJ Suggestions for the improvement of conditions in the salmon canning industry. . U Chapter 1.— General Description op the Salmon Canning Industry. Sec. 1. History of the salmon canning industry 13 2. Species of salmon and the runs J* 3. Methods of catching salmon j^ 4. Fish purchased and caught by canners - JJ 5. Difficulty in securing fish «f 6. General method of marketing canned salmon 21 7. Importance of sales agents and brokers 22 8. Business done by the brokers ; V * ; oS 9. Canners' methods of distributing their goods— sales agents and brokers. . 26 10. Labels used on canned salmon 28 Chapter 2.— The Consumption and Production op Canned Salmon. Sec. 1. Consumption and export of canned salmon 31 2. Salmon packs of 1916 and 1917 ^ 32 Chapter 3.— The Cost of Packing and Marketing Canned Salmon. Sec. 1. Items included in cost of production 36 2. Cost of production 1916, 1917 3« 3. Range in the cost of production ^ 4. Cost of canning salmon by grades ^ 5. Cost of canning in the different size cans ^ 6. The costs of large and small companies and large and small plants 46 7 . Expense of marketing canned salmon 47 Chapter 4.— The Price op Canned Salmon. Sec. 1. Meaning and importance of "opening prices" 49 2. Opening prices of 1916-17 - ^ 3. Future sales and prices ^ 4. Spot prices of canned salmon ^ 5. Brokers' prices - ^ 6. Control of prices by brokers *' Chapter 5.— Capitalization, Investment, and Profits in the Salmon . Canning Industry. Sec. 1. Capitalization ^8 2. Investment in the industry ^ 3. Profits of salmon canning companies in 1916-17 61 4. The investment and the profits of the brokers 64 5. Brokers' earnings ^^ 5 ^ OOlTTlirTB. Chapter 6.~Oboanization and Contsol in the Salmon Canning Indus- try. 8««1- Advantages of large companies ^^^g 2. The size of the companies and plants from a social point of view .' .' ' '." * 70 3. The companies that dominate the industry ' 7X 4. Relation with outside interests 74 Chapter 7.— Legislation to Protect the Supply op Salmon 75* Chapter S^SuooiiwiONs for the Improvement op CoNDiTioNS*iN'*THB Salmon Cannino Industry «mnuKB i« the LIST OF TABLES. 2. «j< 4„ 5. If, 10. is] 15. 16. lo> fill. '■■' -Jlf • 23.' 24. 25. 2i. 27. 28. 90 30. •12* iBCTMse in the production of canned salmon (cases) 14 Number of fish canned and purchased ""* inil Valuation of trap sites ''' 18 Number of fish canned and purchased by districts: iVlfiklV.*.'. .1 ' 20 Trade channels used in the marketing of canned salmon. 1916^17 2 V24 . Sales of canned salmon by brokers in 1917 Is Canners' distribution of their salmon packs, 1916-17 . '. 27 - Labels used on canned salmon 99 -""rSl^y^^'l^S^^ exporied fromthe ilnited'siates-during Kelative importance of different species within each district 33 Relative importance of districts in production of each species 34 A verage cost of producing canned salmon (per full case in 1916-17) 37 1916^n °^^*''^^*^® **^ various cost items in production of canned salmon] Number of cases of salmon packed below different coste inigi&^i? 41 Cost of canning different grades of salmon: 1916 40 Cost of canning different grades of salmon: 1917 43 Average cost of canning different grades of salmon 44 i/ost of canning salmon in the different sized cans: 1917 ... 45 C omparison of "nit costs of production of typical plants having' lii^ and small outputs: 1916-17 *- r -^ e «"« Opening prices on canned salmon since 1897 kS Opening pnces in 1916-17, with percentage of companies " ^ki^g' ih^se Dates when opening prices were announced .. -*'-'] si Brokers* prices of canned salmon during 191 7 s? C apitahzation. borrowed funds, and outside investments of salmon (Siiiiie companies on Dec. 31, 1917 wwuuxig Investment in salmon canning companies.* i*9i'6^i7".".'.* '.'.'." aa Net profit of salmon canning companies, 1 916-17 ... gi Profits or losses of canning companies on investment "* m •Sales and profits of salmon canning companies. «? Investments and the earnings of brokers during i916 ' «? Investmenta and the earnings of brokers during 1917 «« Kepresentative salmon brokers' earnings per case §7 SUHMABT. The inquiry upon which this report is based is part of a com- prehensive investigation of food-producing industries undertaken at the special direction of the President of the United States. The Commission has akeady issued a report discussing the canning m- dustry in general and presenting data concerning the costs, pnces, and profits of representative canners of vegetables and fruits.* The following report is confined to the salmon canning industry and is based upon practically complete returns ftom all the sahnon canners in the United States, including Alaska. The material upon which this report is based has been secured in part through schedules which were sent to all salmon canners, and in part by an examination of the books of representative sahnon canners made by the CJommis- sion's accountants. In all, schedules were received from over 100 companies, packing more than 8,000,000 cases of salmon in 1917. Cost statements were compiled by the Commission's accountants from the books of 19 companies, operating 54 plants and packing 52 per cent of the total production in 1916; statements were compiled for 1917 from the books of 20 companies, operating 62 plants and packing 50.5 per cent of the year's total production. THE GBOWINa IMPOBTANOB OF CANNED SALMON. Canned salmon is a most important food product, having a high proportion of protein and fat. The production of canned salmon in the United States has increased faster than the population. Although a part of the increased production has gone into increased exports. the per capita consumption has also increased. The quantity shipped abroad in the fiscal year 1917 was over 117,960,000 pounds. That the United States Government announced that it would take for the Army and Navy approximately 80 per cent of the 1918 pack is indicative of the military importance of this concentrated food. The growth of the sahnon canning industry is roughly mdicated by the statistics of production. The increase in the pack was as foUows: Cases. loiM ' 2,000 loooT.:"::'.:;;'.;*-.'".'." 2,435,002 •^gU 8, 584, 615 The first salmon cannery in Alaska was opened in 1878. During the eighties the industry had a rapid development, and in 1892 there were 31 canneries. While in 1890 a httle over 682,000 cases were packed in Alaska, by 1917 the output was nearly 6,000,000 cases or considerably over three-fifths of the total quantity produced m the United States. Estimates indicate that the per capita consumption in the fiscal year 1900 was 1.2 pounds, and that in 1917 it was 1.8 pounds, indicating a considerable increase in the use of this food. 1 Report of the Federal Trade Commission onJCanned Foods. General Report and Canned Vegetables and Fruits, Washington, May 15. 1918. ¥ BBPOBT OH- OABirSD FOODS. THE OSASBS OP SAIJION. ♦„P"?."f? fi'^e.species of salmon which are of commercial imoor tance: "chmook" or "kinp" "r«l" nr "o«„i,„tr_Vr<< j- "°P"^: ni."««i,„»ii • 1 » jTt^p' ™" *" socKeye, medium red 11 J?^' ■ P^/ and "cEum." (The chinook species is^mfitinTfia caJled "quumat; the red sometimes "blueback" or "^uki^U '^h« inedium red,, "rilve«ide-"the"pii5. ''hum;b;ck:" ^TS'e'i^hC C^±'Z''^±^JP^^1 ^^ «t?«lhead trout! c'ai^H rhi'Jfi-^P*i.I^ ""uiuoii lo inese species, tHe steelhead trout, ^steeIhet7'^«Wn^*5J^'*'*i^'T ""^ ?V^«* Sound, is marketed ^ nvt- . s*™on- The red salmon, whiSi is found from north- ern Cahforma to the Arctic Ocean, is the most importSlt CT^e cmn mercially, though in 1917 more pink sahnon wal^ c^eHfan^; high a pnce as the red salmon because its flesh is paler and leTw THB PKODUOnOW AND DI8TBIBOTION OF CANNED SALMON. .on'^li'^?''^''' .P^^V'^y in n«te, traps, and seines often at considerable distances from the canneries. Near y 70 ner cLit K« "tLn^ '^1^T5 <='^-„„The most important sizes are the 1-pound «S^^c i-pound "flats," and 1-pound "flats." There M-e ine DUIK of the pack is disposed of by the canners through hrokor= or selhng agente-a notable characteristic of Z mS beS^ SS^IofXln*^? ';^^''' ^'''^ '«^*" ^1^0 h^diralforTLge o^tf!« T wis i°**""^ •"■ ™,°''*' tanneries as exclusive agent througS- th. iQ?7 V^^ States or a large part thereof. Eighty per cent of £l compres s^'old fit^?"^^ 't'- "^t"^ ^^ nfarfyCe-hdf of mfssionZtpH hi K t ^"*""« pack in this way. The rate of com- mission charged by brokers and sales agents was 5 per cent in mosf ta^i7. ""'^"^ ^™°' «8 low as 2 per cent to as higrasTs p^rZt The canners sell most of their salmon nt '^nnaninc r^^i^^o n i.- i. are generafly named in Aupst" STfoUe nEfKs'e pri^^"* the cannere generaUy make S. A. P. sales-i. e sfl^ "subi^ff tC ^^^^.^ Pk""*-" ^^ 2P«"i"g prices are naiietTf on this A ^;«ntA;*^^ ^«T ""7 '^°^™^ tJ»« purchase of all or of a part of 'the quantity specified, or he can cancel flie entire contract. P^**^ ^^ OOBTS. onIhltee3"^k%i?rhr tat ZS ''PP^r.''*^!^ ITL^ .^ ^ii- ^ represented an increase of 82 cente rJc^tertotKrifc^o^^ttee^sr^cZ^'^^^^^ ^ 19.7 is presented for'L P^r^^T^v^^rg^erd i^Srol 2?™*^?°*! °- ^V^^ items which ^terlto^Z co^ orcZed saJmon (exclusive of selling expense). camiea BEPOKT OK CANNED TOODS. Cost. • Percaae. Per can. "R&w material . . . ... ................rf. ...-•.......«.........•-.»-..•»•-••»••• IL444 1.133 .TUT 1.160 10.030 PackaGre . ......... ...............................•.•••■••••«•-•••••••..>• .023 Conversion . . ..................................•.•.•.••••••-•••'•• .017 Overhead .. ... .. ... .........................■••••.•••••«.-•••••••• .OM Gross cost of nrodtiction - - -.- - ........•....•.•••.••.•••••»•••••»••••• 1540 .110 .094 Crodit from bv-Droaucts f saH fish, fertilizer, etc.) .................................. .003 Total net cost of nroduction ............................................... 4.430 .002 The range of costs was considerable. Some salmon was packed in 1917 at a cost as low as $1.20 per case, while some was packed at as high as $26.50 per case. These extreme figures, however, were ab- normal. The great bulk of the pack was produced within a rela- tively narrow range of costs. Ninety-two per cent of the 1916 pack was produced at costs less than $5.50 per case, and 91 per cent of the 1917 pack was produced at costs below $7.50 per case. None of these cost-of-production figures include selling expense. The costs of producing canned salmon vary not onhr from plant to plant, but also for the different species, and in the different locahties. The different species are chiefly caught in certain localities so that these two elements in the situation are interrelated. Many can- neries are located in sections where practically all of the fish caught are of one grade,^ and when 90 per cent or more of the output of a plant consisted of one grade of salmon, the Commission took the cost at such a plant as representing that grade. If this method of differ- entiating costs be borne in mind, the following statement will be of value as indicating the approximate variation in the average cost of producing the red and the pink grades of salmon: 1916 Red or eockeye $3,865 Pink 2.923 1917 $4;871 4.228 The chief reason for the difference in cost was the difference in the cost of raw fish. The proportion of waste involved in packing the several species also varied somewhat widely. (See page 39.) THE MABKETING OF CANNED SALMON. Considerable difficulty was experienced in ascertaining the cost of marketing canned salmon. Most salmon canners maintain no sales departments, and do little or no advertising. Their chief marketing expenses, therefore, consist of brokerage or commission. The ordi- nary brokerage rate is 5 per cent. A total of 24 companies, packing approximately 50 per cent of the 1917 production, reported a market- ing cost of 27.2 cents per case, or 3.59 per cent of the net selling price. A more careful analysis was made of 8 large companies, whose records of selling expense were more complete. This analysis showed an average selling expense of 38.2 cents per case. The average selling expense included brokerage, which represented 4.36 per cent of the selling price, and other expenses such as advertising, salesmen, etc., which represented 1.029 per cent of the selling price. I By "grades" are meant "species." 10 BIrOKF O'N OAInJmBD IfOODS. The advance in the New York wholesale spot price of canned salmon during 1916 and in the early part of 1917 was rapid, but no more so than the increase in food prices in general Approximately 90 per cent of all canned salmon is said to be sold at the openingprice (see p, 49). The opening prices reported by the canners to the (Commission indi- cated that me most frequent prices per dozen 1-pound cans for some of the chief grades of salmon of 1916 and 1917 were as follows: 1910 1917 Bad ., , Mwlfam fwS . . , ■ , , , . . tl.50 1.30 .90 .85 12. 3S 2.00 Plnlr., 1.66 drain.... 1.60 The Commission's investigation shows that the average opening price for all grades of canned salmon made in August, 1917, was 18.33 per case (48 pounds). The averag:e price realized by the canner on all sales made during 1917, including a ^art of the 1916 pack sold in 1917, however, was $7.28. MABOZNS AND FBOFITS. The average selling price,* the average cost, and the avera^je profit for 1917 were about as follows: ** ' "^ ^ Average selHug price per case aold * |7. 28 Average cost per case eold ^^ 4.74 .Average groes profit p« caae sold ' 2. 54 Although the increase in the price of canned salmon was compara- ble with the increase in the general level of food prices, the margins and profits of the salmon canners increased largely. The average net profits^ per case sold in 1916 amounted to approximately $0.91 and m 1917 to approximately $2.48, an increase of more than 170 per 'Cent. The Commission's report shows that the average net investment per case of canned salmon produced in 1916 was $4.97, and that in 1917 it was $4.31, the decrease being due chiefly to the larger pack produced in the latter year. On this average net investment the average profit of all salmon canners from whom data were available amounted in 1916 to 22.1 per cent, and in 1917 to 52.7 per cent. THE. BOmnrAMT IWSSBMWSB TM THE INBUSTBY. ' The Commission's incjuiry indicates that a large degree of con- trol over price is exercised by a few dominant interests. It is a general practice in this industry for one or two concerns to annoimce the opening prices, which are followed by the canners producing a great bulk of the pack. Over 53 per cent of the 1917 pack was pro- > Til* snmiiiit of tht total nat sales diTlded by the total number of cases sold. *' Net sales" represented **0m» Bitos*' with dediMittes (or discount, allowances, etc. « Cost per case sold means "cost of sales." See table in section 3 of chap. 5. A part of the selling expense is ImoliidM in cost, bat as all of the canners did not report their selling expenses the actual average price ffiid hf fbe buyers daring 1917 was somewhere above $7.2S > %m footnote on p. 03. BBFOBT OZT GAKNED FOODS. 4uced by five groups of companies, each group bemg subject to a common control. A considerable degree of interrelation between the meat packers and the dominant interests in the salmon canning industry is indicated, but no evidence has been found to show that thi« interrelation has directly affected prices. The control of the valuable trap and net locations by a compara- tively few companies has enabled the dominant interests to develop ^even more rapidly than their efficiency in production would have warranted. Efficiency in production seems to have been more dependent upon the size of the plant than upon the size of the com- pany.^ Canners with desirable trap locations undoubtedly enjoyed a distinct advantage over those who had less valuable sources of raw fish. It seems evident that the dominant interests should not be allowed to obtain monopolistic control of the sources on which the -entire industry depends. , , x x j The report of this Commission on the meat packing mdustry ' stated that the great profits of the packers were not primarily due to excep- tional efficiency in operatmg packing houses and manufacturing plants, but were secured through theu- monopolistic control of the distributive machinery. With the control of the distributive machm- «ry which those salmon canners who are affiliated with the meat packers now possess— added to the relation between the salmon can- ners and the sales agencies who market the bulk of the pack and who control the price— a monopoly of the sources of supply would enable the dominant mterests to exert a control in the mdustry which might even surpass that exerted by the "Big Five" m the meat industry. THB SULZEB. BILL AND THB ALEXANDER BILL. There are two bills in. Congress pending which are intended to protect the Alaskan fisheries. And nearly 70 per cent of the total Ameracan flalmon pack is produced in Alaska. A bill introduced by Renresent- ative Sulzer, of Alaska, which is said to have the approval of the people of Alaska and to be opposed by the salmon canners, proposes to take the administration of the salmon fisheries out of the jurisdic- tion of the Bureau of Fisheries (Department of Commerce) and to . give it to the legislature of Alaska.^ The Alexander bill represents the opinion of the departments and committees of the Federal Gov- ernment and has the approval of many of the salmon canners. There is one fundamental difference in the provisions of the two bills. At present in Alaska the duration of a license to a trap or net location is 1 year; these Ucenses are ordinarily renewed from year to year and the possession of the licensees is almost invariably respected. The Sulzer bill proposes a 5-year tenure of these licenses, while the Alexander bill proposes a 15-year tenure. Disregarding at this place any consideration of the minor differences in the two bills, the Com- mission favors control by the Bureau of Fisheries, as provided in the Alexander bill, but considers the 5-year license term provided in the Sulzer bill preferable to the 15-year term of the Alexander bill. ' See Dace 46 » See Summary of Report of Federal Trade Commission on the Meat- Packing Industry, Washington, July 3, 1918. ^ ^^ , ,^ • Every act of the legislature is subject to the disapproval of Congress. 12 IBPORT ON OAKKED FOODS. m^mmwmxmB fob tbm ocpbovement of conditions in the SAIiVOlf-OANNINa INDITSTIIY. In the concluding chapter of this report the Commission makes certam suggestions for the improvement of conditions found in the production and marketing of canned salmon. These*suggestions may be summarized as follows: 1. That the recommendations contained in the Commission's Re- fort on Canned Foods : General Report and Canned Vegetables and ruits, which apply to conditions obtaining in the salmon industry, should be considered. These recommendations concern economy in boxes, standardization of grades, labels, and unnecessary reselling. 2. That the Bureau of Fisheries have control of the salmon fishenes of Alaska in the interest of good administration and for the prevention of any possible inonopoly in the future. 3. That licenses to trap locations should not run for more than 5 years, but that renewal thereof should be allowed; and further, that tt trap location should not be allowed to remam in the possession of anyone, unless he makes use of it for at least 3 years durmg such 5- year term. 4. That some agreement be made between the United States and Canada for the regulation of fishing in the Puget Sound, and that this agreement be designed to meet the difficulties relative to the price to be paid for fish. 6. That some department of the Government should furnish infor- mation which would facilitate a mor^ du-ect marketing by salmon canners, so as to limit the payment of sub-brokerage. 6. That the announcement of an opening price is dangerous, and, as at present conducted, should be discontinued. 7. That "S. A. P. sales'' (sales subject to the opening price)"should be restricted. Other suggestions made, concern more uniform can prices, the limi- tation on maintenance of nommally separate sales agents, and the need of better cost accounting. William B. Colver, Chairman^ John Franklin Fort, Victor Murdock, Commissioners. CHAPTER I. OEISTEEAL DESCEIPTIOIT OF THE SAIMOH CABTIfflNG IHDUSTBY. Section 1. History of the salmon canning indnstry. The first salmon cannery in the United States was started in 1864 in Sacramento, Cal., by Wm. Hume, G. W. Hume, and Andrew S. Hapgood, a tinsmith who had previously canned a few salmon on the Bay of Chaleur, Canada. Some salmon have been canned intermit- tently on the Sacramento and San Joaquin rivers ever since this early beginning. However, the larger runs of fish farther north induced these pioneers, in 1866, to start a salmon cannery at Eagle Cliff on the Columbia Kiver. Other canneries were soon built, and 31 were established on the Columbia River by 1881. This river has produced more salmon than any other single stream. The industry grew until 620,000 cases were packed in 1884. Chinese laborers were first employed at the Eagle Cliff cannery in 1872. They proved more reliable and less troublesome than the tjrpe of laborers previously recruited in the cities for the canning season. Soldering machiiies, steam box, and lacquering machines were first used on the Columbia River in 1871. The first cannery on Puget Sound was built in 1877, at Mukilteo, Snohomish County. The development was slow at first, but after 1894 the Puget Sound industry grew rapidly. Pink or humpback salmon were first camied in this section. Every effort was made to induce the public to buy this grade. In spite of these efforts a market for this grade was slow on developing. Sockeye salmon was canned on Puget Sound in the late eighties, but were not labeled ''Sockeye" until 1894-95. Sockeye salmon was not generally sought in the market until the Spanish-American War caused a heavy demand. Salmon had been salted and dried by the Indians, both in the United States and in Alaska, long before the country was settled by the white man. Salt salmon was not only an important food, but was one of the articles shipped from these sections by the early traders. In Alaska a few Russians had been engaged in salting salmon before the United States purchased the Territory. The first salmon cannery in Alaska was opened in 1878, at Klawakan, on the west coast of Prmce of Wales Island, and in the same year another cannery was built near Sitka. During the eighties the industry had a rapid development, and moved north and west. Nearly every year several new canneries were built, and in 1892 there were 31 in existence in Alaska. The development was so rapid that by 1889 the canners felt that there was an overproduction, and got together in order to limit pro- duction. In 1890 the three canneries at Chiguik combined under an operating agi'eement known as the Chignik Bav combination. Two of the canneries were closed, and the profits of the third were divided. The Alaska Packers Association was formed in September, 1891, to dispose of the 363,000 cases of unsold salmon, and expired when the salmon was sold. Early in the foUomng year 25 of the 31 caimeries 18 RBPOIT OK CAKNED FOODS. formed the Alaska Packing Association to reduce the size of the pack nJ^^ V-^oSf ^^^«^l«sed, and the size of the pack reduced nearly one^half in 1892. On February 9, 1893, the Alaska Packers Associa- taon was incorporated, with all but two of the former canneries as members. 1 he canneries received shares of stock for their plants and Had to buv additional shares to furnish working capital. The size of the pack has mcreased steadily since 1893. The growth of the industry is shown by the following table : Tabie 1.-INCKEASE IN THE PRODUCTION OF CANNED SALMON (CASES).i Year. IMI... .1810.. 1180.. IM... liOO.... 1910... ins... 1116... Outside Rivera. Total to date. 3,000 "'83,' 522 72,074 108.611 183, an 180,130 188,077 I0D,M Columbia River. 6,527,937 150,000 530,000 435,774 358,772 301,415 558,534 626,683 554,726 Puget Sound. Alaska. 20,150,239 5,100 8,000 469,450 567,883 1,269,206 691,625 1,946,241 19,823,422 6,539 682,591 1,548,139 2,413,054 4,489,016 4.970,544 5,914,088 British Columbia. Total. 63,617,615 61,849 411,257 606,540 760.830 1,133,381 995,065 1,577,486 23,812,168 ' 2,000 150,000 687,010 1,609,696 3.091,542 4,316,453 7,639,267 7,375,994 10,162,102 132,981,351 k *.S5"'*f ****'"* to and Including 1915 from Bureau of Fkh*»riP«' rAnnrt Tis«,,«» r^- « »* u /^ , ^, in 1816 and 1917 from Paoflc iJerman'a YearbSk "T^Xa aitl*^^^ Figures for British Columbia limits beglmilng to andincluSngSl? ^^'^^^ Totalto date" is the total product of the industry Sectioi 2. Tie spooies of salmoi and the nuts. Salmon are found widely distributed, but the commercial canning of salmon is earned on chieiy along the shores of the North Pacific ffi^^r ^' ^"^^^ ^'^*^^' ^^^^^ ^^^^«^b^^' ^^^ Alaska T^e industry however, is growing rapidly in Siberia and Japan. Five It^'^v ^^•^'''^ "^^r «^°^?^«r<^ia^ importance. These species are: River ^rSn^^ in' Ar^i.'?^^5 ^"^"f^ ^^^?^^^ *>^ the'^Colmnbia Kiver and king m Alaska); red, sockeye, blueback, or quinnalt !!l^^«! coho, medium red, or silverside salmon; humpback or pink wOmon, and the chum keta or dog sabnon. The steelhead trout, which IS canned on the Columbia River, Puget Sound, and a few of the coastal streams, is marketed as steelhead sahnon. The red sahnon 18 the most unportant commercially. It is found telfrif "'*'' ^*t^o™^ ^ ^^ H^^ ^*^«*^- The fiih vary in size, il ^^.^l^eau of Fisheries gives the average weight as five pounds although the average is of tenliigher in Alasfi. Table 2, whictshows the average number of fish per case of 48 pounds (net), indicates that fai!;!^?^^ T^ ""^ eachspecies varies from section to section, as well as from year to year. The number of fish requh-ed to fill a 48-Dound ease vary from about 4 kings to 16 pinks. ^ REPORT ON CANNED FOODS. 15 Table 2.— NUMBER OF FISH CANNED AND PURCHASED; NUMBER OF CABES PACKED AND AVERAGE NUMBER OF FISH PER CASE. 1916 District. We?t Alaska Central Alaska.... Southeast Alaska. Puget Sound Columbia River.. Outside Rivers'.. Totals and averages. Grade offish. West Alaska Central Alaska Southeast Alaska. Puget Sound Columbia River.. Outside Rivers I- . Totals and averages. West Alaska Central Alaska Southeast Alaska. . . Puget Sound Columbia River Outside Rivers 1 Totals and averages. West Alaska Central Alaska Southeast Alaska. Puget Sound Totals and averages. West Alaska Central Alaska Southeast Alaska Puget Sound Columbia River Outside Rivers » Totals and averages. Columbia River Totals and averages. Kings. ...do. ...do. ...do. ...do. ...do. Reds.. do. do.- do. do. do. Medium reds. do do do do do Pinks. do. do. do. Chums. do.. do.. do.. do.. do.. Steelheads. , Num- ber of com- panies report- ing. 7 6 20 15 9 7 64 8 6 29 17 8 1 69 4 6 29 17 10 8 74 3 6 27 8 44 7 6 28 15 8 5 69 Number of fish caimed. 111,381 25,483 148,286 180,580 865,392 60,656 1,391,778 16,564,413 1,387,647 1,609,978 2,593,240 775,382 59,352 22,990,012 394,048 305,246 1,018,014 1,099,374 346,597 349,053 3,512,332 4,153,353 4,102,775 12,266,379 1,800,875 22,323,382 1,144,595 331,423 3,661,176 2,981,678 374,370 110,809 8,604,051 103,774 103,774 Number offish purchased. 27,175 11,602 136,597 80,574 842,127 60,143 1,158,218 1,017,042 547,261 784,503 168,584 439,900 59,352 3,016,642 46,619 131,998 505,937 677,485 310,216 349,348 2,331,819 540,248 1,821,558 4,772,128 607 7,134,541 289,663 160,465 2,29<',478 1,887,278 358,255 106,973 6,099,112 102,117 102,117 Percent- age of fish canned which were pur- chased. 24.39 45.52 92.12 44.62 97.31 99.15 83.66 6.13 39.43 48.70 6.50 56.73 100.00 13.28 11.83 43.22 49.67 61.62 89.50 100.09 66.38 13.00 44.39 38.89 31.99 25.30 48.41 62.72 63.29 95.69 96.53 59.26 98.40 98.40 Number of cases packed. 26,003 5,854 34,344 25,606 265,376 18,607 375,790 1,223,950 118,891 123,767 198,205 67,334 4,645 1,736,792 36,078 37,275 117,422 110,658 42,782 34,937 379, 152 214,482 212,169 879,963 70,979 1,377,583 97,528 37,870 344,213 387,373 62,043 16,896 945,923 16,991 16,991 Ayeiftge number offish percas0. 1 Coastal streams in Washington, Oregon, and California. 4.28 4.35 4. SI 7.05 3.26 3.2S 3.78 13.52 11.67 13.00 13.04 11.52 12.78 13.24 ia92 8.19 8.60 0.93 8.10 9. lltf 9.36 19.36 19.33 13.93 25.37 16.10 11.74 8.75 10.63 7.70 6.34 6.56 9.10 6.10 6.10 16 KBPORT ON CANIOID FOODS. TMm l-NUMBER OF FISH CANNED AND PURCHASED; NUMBER OF CASES PACKED AND AVERAGE NUMBER OF FISH PER CASE-Continued. 1917 DtotiM. Omle offish. Num- ber of com- panies report- Number offish canned. Number offish purchased. Percent- age of fish canned which were pur- chased. Number of cases patked. .\verag© number offish per case. WestAtek* ,, Central Alaska Kings do do do 8 107,590 9 34, 15S m 2^3,643 IS 209,360 10 95'.»,R4fi 9 45,378 18,407 19,872 202,693 105,731 643,063 43,468 17.10 .=18. 19 71.46 00.54 6.99 95.75 21,398 6,675 45,674 53,485 273,291 12,940 5.03 5.11 Southeast .\laskB Pufjet Sound 6.21 3.91 Columbia River Ou'taid© Rivers 1 do , .... Reds do .....do do do 3.51 2.30 Totals and a veragis. 76 1,(539,976 l,a33,234- 63.00 413,463 3.96 West Alaska 9 9 m 27' 7 2 2I,44P,913 2,271,989 1,9()4,9'J3 4,731,8r.l 1,213,887 21,8f.8 1,192,000 974, f>5Z 1,074,6.^8 1,233,489 68S,637 21,868 5.56 42.89 54. 95 2fk00 56.72 100.00 1,433,780 189,921 15X,5y2 372,467 98,076 1,769 14.90 Central .1 laska Booth "ast -V lasl.a ... PuRct Sound Columbia River , . . 11.96 12.03 12.73 12.36 Outside Rivers I do. Medium Reds. do do..., — .do * H» « ■ «' \Jt *iiF ■ #lliilir*SII|i*» do 12.36 Totals and a verat^es. 87 31,064,511 5,185,305 16.40 2,254,595 14. 13 m*est>laska Central .\lasl a : Southeast Alaska Puget Sound Columbia River. Outside Rivers • 3 9 31 27 10 10 145,837 23S572 1,033,3:J9 W3,2fi9 72S,22l StM, 779 18,386 141,424 4h\04fi 501,857 587,879 376,224 12. 60 59.29 40. 55 73.90 SO. 72 95. 29 13,40*^ 30,430 9S,324 91,991 47,861 34,417 10.87 7.84 10.51 S. 84 15.11 11.48 Totaband avwaiges. West Alaska...- 92 3,349,017 2,044,815 61. Ojj 316,429 10.58 I^inks 2 10 33 1 1 3,95S,3nl 5,221, '-87 24,166,834 11,8(«,693 77,081 62,892 1,175,748 2,172,476 10,473,74!' b, 361, KOI 14,635 t.2,892 2-1 70 41.62 43.30 5:^ ^n 1 100. w ?19,50.S 324,230 1,3132,187 85.S,39tj 4,761 4,222 18.03 Central Alaska do 16.11 Southeast Alaska do 17. 26 Puget Sound Columbia River Outside Rivers*. , do do do Chums... do 13.68 16.21 14.89 Totals and averages . 73 45,292,778 20,201,390 44.90 2,773,304 16.29 West Alaska 9 m » 27 8 7 527,982 72>,514 4,0.'<7,578 2,547,457 2'/7,R36 88,736 194,962 41^^,419 2,554,'>«8 1,852,350 123,436 84.413 .36. 92 54.215 9.74 Central Alask a .^7.43 79.208 9.20 Sootheast .Vlask a Poitct Soimd do do 62.49 72.71 44.42 95.12 480,895 249, .390 28,aS5 11,655 8.50 10.22 Columbia River 9. 89 O'utside Rivers •» , . . . do 0' 7.61 Totals and averwes. 119 8,258,103 5,228,548 C3.31 903,448 9.14 Stoelheads..',. do do Puget Sound , . . Columbia River Outside Rivers » 1 10 1 33 138,421 787 33 145,581 787 100.00 105.01 100.00 5 22,234 126 6.60 6.71 6.24 Totals and avenges. 12 139,241 14«,401 106.00 22,365 6.22 HBFOBT OK CANNED FOODS. 17 > CoAstal streams in Washington, Oregon, and California. Til© red salmon run between June and September. In the Puget Sound district this species is called sockeye, and has its largest rim every fourth year, in the year following leap year. In 1917, however, the We ran that wm anticipated failed to materialize. This seasonal run is shown by the fact that in 12 years, from 1902 to 1913, the average pack on Puget Sound was reported as 889,764 cases, but in the three big run years the average pack was reported as 1,778,351 cases. The Fraser River in Britisn Columbia is the greatest sockeye stream. The meat of this species, which is red and firm, is in great demand, and sells for the highest price of any grade of canned salmon except the Columbia River chinook. There is a loss of over 30 per cent m weight in the canning of the red species. (See fiec. 2 of Chap. III.) ^ , . ^ i.# . ^ tit i. The Chinook or king salmon is found from Califorma to Norton Sound, Alaska, and in Asiatic waters as far south as Chma. It is the largest of the sahnon. The Bureau of Fisheries gives tMs specif an average weight of 22 pounds, although in some cases the fash weigli as much as 100 pounds. Table 2 shows that the great bulk of this species is canned on the Columbia River. The average number of fish required to fill a case of 48 pounds was 3.73 m 1916, and 3.96 in 1917, there being a waste of between 40 and 45 per cent m the canning process, 'fiie fish were larger in the Columbia River and m the outside streams, and smaller in the Alaskan waters. The flesh of the chinook sahnon is sometimes white, but generally a deep red. It is highly prized commercially. The Columbia River chinook commands a higher price than the Alaska king salmon. In CaUfornia there are two runs of this species. In the Columbia River there are three runs: January to March; May to the first of July; and late July to the first of October. In Puget Sound and Southeast Alaska they are found the year around, but m Puget Sound they are plentiful only during the spawning season. They are caught in southeast Alaska m May and June, and from August to October. In west Alaska, they run ui May and June. , , ,, ^i. The medium red or coho is found in Cahforma, and to the ^oft*i- Its flesh is not a clear red, and it is less prized than that of the red or chinook, but is more in demand than the pink or chum species. The medium red, weighing on the average 6 pounds, is larger than the red. The average number reqmred to fill a case was 9 26 in 1916 and 10.58 in 1917. There was a waste m canmng of 13.6 per cent in 1916 and 24.4 per cent in 1917. This fish frequently runs alone, and being suspicious of nets is caught m relatively small quantities. This species is relatively unimportant, except m Southeast Alaska, on Puget Sound, and in the Outside Rivers.* The pink is the smallest of American sahnon, with an average weight of 4 poimds. Between 16 and 17 fish are required to fill a case. It is of commercial unportance from Puget Sound north, bemg canned in largest quantities m Southeast Alaska. It runs froin June until late fall. The flesh is pale in color and not as firm as that of the other species. It is not especially prized, and in the past it has been difficult to market. However, from the pomt of view of quantity, pmk salmon is very unportant. More pmk sahnon was canned than any other species in 1917. The waste m canmng this species was about 25 per cent. , , • The chum sahnon is found from San Francisco north, but is most plentiful from Puget Sound to Southeast Alaska. The Bureau of Fisheries reports an average weight of 8 pounds for this species. It requires between 9 and 10 fish to fill a case; the waste m cannmff is about 34 per cent. The bulk of the pack comes from Puget Sound and Southeast Alaska. , . , , i x • The steelhead trout is found as far north as Central Alaska, but is caught principally in the Columbia River. It is sold prmcipally for the fresh and frozen markets, but some is canned on the Columbia River. The ,waste in canning this species is about 22 per cent. » Small coastal streams in Washington, Oregon, and California. 97684—19 2 I 18 BBPOBT OK CANNED FOODS* 3. Xethods of catcMnfif salmon. Sftlinoii, for commercial purpo303, are caught principally in nets, seines, and traps. Traps or pound nets were introauced on the Columbia River in 1879, and have since come to be very widely used. They are especially important in Puget Sound and in Southeast Alaska. The number of good trap locations is Umited. In order to be successful, traps must be placed where fish run more or less wgularly in large numbers, as in the straights or ** narrows" through wmch the fish pass to reach their spawning grounds. As such locations are Hmited in number, they have come to be very valuable; the canner who has several good trap locations has a ^reat advantage over the canner who must purchase his fish, or catch them in poor locations or by more expensive methods. In some sections, notably in the Puget Sound district, this has led to a wide variation in the fish costs of competing canners. Traps have changed hands at prices much above the cost of construction; many canners in Puget Sound and Southeast Alaska carry trap locations on their books as assets at large figures. Table 3.-VALITATI0N OF TRAP SITES-NUMBER OF COMPANIES REPORTING, BY DISTRICTS, FOR 1916 AND 1917. Dlstiicft. .PugBt .Sowicl... BouttMSt Alasloi Centml Alasfca 'ColumUB .Elver.. O'utside RiTera W«rt Ateka Total and aToiage 1916 Number of com- panies report^ ingmt trap Tttlae. 12 6 11 11 9 76 Number of com- panies report- Ingtr^ value. 11 15 2 1 B Per cent of com- panies report- in? trap value. 47.8 25.0 8.8 21.4 29.9 Total trap value reported. 11,605,142.14 773,837.73 160,000.00 31,735.00 4,175.00 2,574,889.87 Average per company reportiniif trap value. 1145,922.01 51.589. 18 80,000.00 81,735.00 l,391.6d 80,465.31 e.|,-it at ill IKfllil. Puget Sound Soutbuasl .Alaska^ Ciiiitn] Alaska. CSolumbia River O'utilde .Rivers W^wt Alaska Total and average 1917 Number of com- panies report- ing no trap value. 21 26 8 14 1« 10 Number of com- panies report- ing trap^ value. 11 15 2 1 S 82 Per cent of com- panies report- in? trap value. 34.3 36.5 20.0 6.6 17.7 i9liif«i'iB' Total trap value reported. 11,546,142.14 l,2l.%337.65 160,000.00 32,0/5.00 2,705.00 2,956,259.79 Average I>er company reporting trap value. 8140, 558. 3a 81,022.51 80,000.00 32,075.00 901.67 92,383.12 Table 3 shows that the total amount of such "valuations" re- ported in 1917 was $2,956,269.79, while $2,574,889.87 was reported im 1916. Of the amount reported in 1917, $1,546,142.14 was reported in Puget Sound and $1,215,337.65 in Southeast Alaska. Trap values BEPORT ON CANNED FOODS. 19 on the books of the Central Alaska, Columbia Kiver, and Outside River canners were relatively small, while none were reported by West Alaska canners. In making up this table the canning companies were placed in the districts in which they packed the lai^est number of cases. While the schedules did not indicate in which section the traps were actually located, it is clear that practically all of such "values" were represented by traps in Puget Sound and Southeast Alaska. Of the companies reporting, 32 carried their trap sites as assets. This was 29.9 per cent of the companies reporting for 1916, and 27.8 per cent for 1917. Evidently the new companies did not have desirable locations, or if they had them, they did not capitalize them. In the Puget Sound district, 11 companies reported valuations for their trap sites— this represented 47.8 per cent of the companies reporting from this district in 1916 and 34.3 per cent in 1917. In Southeast Alaska 15 companies, in Central Alaska 2 companies, in Out- side Rivers 3 companies, and in Columbia River 1 company reported such "values," while in West Alaska no such "value" was reported. Since the licenses paid for these trap locations are nominal, it is extremely doubtful if such sites should be carried as assets. In determining the investment of salmon canning companies for the pur- poses of cdculating profits on investment, book valuations of trap sites were excluded, and only items of actual cost were allowed. In Alaska, fish traps may be operated 300 yards from the mouth of any salmon stream and along the shores of all rivers over 500 feet wide, except the streams emptying into Cook Inlet, the streams on Afognak Island, and Wood Kiver. A clear-water distance of 6Q0 yards laterally and 100 yards endwise must be maintained between all traps. There is no Ihnitation on length of "leads" or depth of water into which piles may be driven. In Washington, licenses for trap sites are good for four years, but in Alaska the first on the ground can build a trap. As the piling has to be piilled at the end of the season in these northern waters, due to the heavy ice, it would appear that all locations would be open each year. However, trap sites once recognized as the prop- erty of an individual are seldom "jumped," as long as he maintains a trap there. Section 4. Fish pnrcliased and canglit by canners. Some salmon canners employ fishermen to catch the fish needed to operate their plants; others buy fish from fishermen operating independently, while still others catch a part of their supply and pm-chase the remainder from fishermen. The older fishing sections have more independent fishermen, and the canners in these sections are more dependent upon purchased fish. Thus, during 1917, the canners located on the "outside rivers" (Klamath, Rogue, Quinnalt, Sacramento, Smith, and other streams emptying directly into the Pacific) purchased all of the reds, medium reds, and chums. The Columbia River, Puget Sound, Southeast and Central Alaska E ackers also buy a large part of the fish canned. In Western Alaska owever, where the population is sparse and canneries are located too far away for the small fisherman to venture, the canners catch most of the fish themselves. The number of fish canned, the number purchased, and the percentage of the total bought are shown by dis- tricts in Table 4. Since these figures were reported by companies 20 KBPOBT OK CAlOflD FOODS. and not by plants, they do not in all cases accurately reflect condi- tions. For instance, a finn having its major operations in West Alaska may also have a plant on Puget Sound; in such a case fish purchased on Puget Sound appear to have been purchased in West Alaska, according to the table. Similarly, a firm having its operations nrincipally on Puget Sound may also have plants in Alaska, where fish are caught by the canning company itself, and yet in this table they appear as being caught in Puget Sound. It is beheved that these errors are only partly compensating. Table 4.-XUMBKR OF FISH CANNED AND PURCHASED/ WITH PEHCENTAOBa FUBCHASED BY DISTRICTS: 1916 AND 1917. 1916 1917 Dtotnrt. Number lish canned. Numbor fish purolmsed. Per cent fish pur- ehftfied. Number fish canned. Number fish purchased. Per cent fish pur- chased. West Alaska 22,367,790 a,lfi2,674 18,703,83:1 6, aw, 547 2.465,515 579,870 1,920,747 2,672,884 8.495.fi43 2,814,528 2,052.615 575,816 8.6 43.4 45.4 12.3 83.3 99.3 26,189,713 8.495.120 31,536,3.S7 20.107.673 3, .'195,292 614,440 2,599,502 3,726,844 14.725.113 10,055,351 2,190,231 589,652 9.9 4S.9 ■Cwilial, Alaska 8oii.tlMast Alaska F'Ujjrt Sdimd 46.7 SO 0 CopimWa Riirw OntaldelliTaBs.. 64.fi 96.0 Total 58,925,129 18,532,233 31.5 90.338,625 33,886,693 37.6 1 The number offish sliown m this table Is not the exact numl)er canned or purchased^as a few com panics did not make this distinction in answering this question. However, it is believed that the omissions would not materially affect the percentages of fish purchased. Considering all species of fish, onlv 8.6 per cent of the fish canned by West AlasKa packers in 1916 and 9.9 per cent in 1917 were pur- chased, compared with 99.3 per cent purchased by Outside River can- ners in 1916 and 96 per cent in 1917. Columbia River packers after Outside River packers are next most dependent on commercial fisher- men for their raw fish, purchasing 83.3 per cent of all those canned in 1916 and 64.5 per cent in 1917. The total percentage purchased by all American canners was 31.5 in 1916 and 37.5 in 1917. Table 2 shows that the canners bought more steelheads than were canned in 1917; the surplus was evidently sold in the fresh market. The smallest percentage of any species purchased was 13.3 per cent of reds in 1916 and 16.4 per cent m 1917. The difference in the per- centage of the various species purchased depends not so much on the Mnd of fish as on the section in which the species predominates. Sectim 5. Bifflcmlty in secnriiig fish. Packers with desirable trap locations or situated in sections where fish are both plentiful and easily caught with seines or nets have no difficulty in securing an adequate supply of raw fish in years when the fish run in large numbers. Canners without desirable trap locations and situated in sections where the grounds are overrun with fishermen may experience great difficulty, however, in securing sufficient fish for the economical operation of their plants. This is especially true of the Puget Sound district. Here, within recent years, the demand for fish by the canners and fresh-fish dealers has been so great and the supply lias been so limited that prices have been forced up. Thus the canners in this section who depend upon independent fishermen HBPOBT ON CANNED FOODS. 21 for their supplies must pay the very high market price for the fish. The Puget Soimd prices have recently been much higher than the cost of catching or purchasing fish in Alaska. One company, which is supposed to be typical, reported the following advances in fish prices on Puget Soimd during 1917: Sockeye opened at 50 cents apiece and closed at 75 cents; humpback opened at 5 cents apiece and closed at 28 cents. This has meant a higher cost of production for such canners and has placed them at a serious disadvantage compared with canners more favorably situated. There has also been serious competition for fish between canners located on the Canadian and American sides of Puget Sound, and complaint has been made that fish caught in American waters have gone to Canadian packers who have outbid the American canners. llie canners were asked the following question: ''What difficulties in obtaining salmon have you encountered because of control of salmon groimds by other companies ?" The canneries in West Alaska imiformly reported that no trouble had been experienced in securing fish. In the Central Alaska district very little trouble was reported. In Southeast Alaska, an older canning district which is more thickly settled, competition is keener, and about one-foiu-th of the firms experienced trouble in seciu*ing fish. Their trouble consisted largely of increased prices and competition. Among the canners located on the coastal streams of Oregon, Washington, and California only one-third of those answering the question reported trouble in securing raw fish. Of the 15 Columbia River canners answering the question 4 reported having trouble. Twenty-five of the Puget Sound canners answered this question, of whom 20 reported no diffi- culties, 4 complained of high prices or scarcity of fish, and 1 feared a shortage of labor. Aside from competition and high prices, the difficulties specified were: obstruction of channel (by fresh fish company), theft of fish from traps, trouble with gill netters, controversies with United States Department of Indian Affairs, control of tidal lands by lumber com- panies, and lack of permanence in tenure of trap and net locations. Section 6. The general method of marketing canned salmon. Salmon canners, like fruit and vegetable canners, have not as a rule developed their own sales organizations and are dependent upon brokers or sales agents for the sale of their goods. Due to the small size of the companies and the limited number of products manufac- tured, this method of marketing seems to be more economical than the maintenance of a sales force by each canner. At any rate the canner who has a small output, limited capital, and who is located in a section remote from the large markets (as the salmon canner gen- erally is) is unable to maintain a sales organization and must rely upon others to market his product. Nearly ail canned salmon passes through the hands of brokers or sales agents. Ihe sales agent, as distinguished from the broker, is of greater relative importance in the marketing of salmon than in the other branches of tne canning industr}'. It is shown in section 9 of this chapter that in 1917, 116 companies sold 4,934,974 cases through sales agents and 1,938,947 cases through brokers. Ihe amount sold directly to jobbers or outright to brokers is not shown. The quantity 99 MPOBT ON CANNED FOODS. sold ihrotigh sales agents and brokers, however, was over 80 per cent of the 1917 pack, and was larger than the 1916 pack, in spite of the fact that %ures for several companies were not available. It is evident, therefore, that sales for a relatively small part of the pack were effected directly by the canners. As the reports of the brokers show that they purchased outright a considerable quantity of salmon from the canners, it is apparent that the canners sell a very small amount of salmon directly to the jobbers or wholesalers. Tabk} 5 shows that in 1917, out of 115 companies, 53 sold their entire output through sales agents, 18 sold entirely through brokers, and only 4 reported selling their entire packs directly to either brokers or jobbers. Most of the brokers are located on the Pacific coast, and Seattle has the largest number of them. Very few of them have a selling organi- zation which extends over the country, and consequently they have to sell largely through brokers located m the various cities throughout the country, paying them a sub-brokerage of from 2 to 4 per cent. Tlie ordinary brokerage on canned salmon is 5 per cent, about one-half of which is paid to the sub-brokers. Commissions as high as 13i per cent and as low as 2 J per cent, however, were reported. Several can- ning companies have selling departments which dispose of their output and generally of the output of one or two other afiiliated packers through eastern brok**!^. Th^ only selling expense of these companies in such cases was the sub-brokerage. Sometimes the presi- dent or a member of the firm acts as selling agent for the eale of the pack and accepts the net brokerage (the regSar brokerage less the sub-brokerage) in lieu of a salary or as a part of it. Most of the large salmon brokers own or control directly one or more canning companies, which bring th^m into close touch with the canners and into sjrmpathy with their interests. Some of the brokers, through advances of money, through sales contracts, or in other ways practicall}^ control the output of several canners. Hectioi 7. Tie importance of sales agrents and brokers. In the salmon camiing industry, a sales agent is a broker who has the right to sell all or a specified part of a canner's output, or to dis- Sose of all of it except the portion sold to certain persons or in speci- ed places. Most of the- brokers acted as sales agents for one or more canners, and generally they carried on at Sie same time a large brokerage business for canners for whom they were not sales agents. Most brokers also did some merchandising business. Dur- ing 1917 many sales were made between brokers. Table 5 shows the number of companies whicli sold their packs through the various trade chamiels. Many canners do not distin- guish between sales agents and brokers or between direct sales and orokerage sales. Many consider goods sold at the opening price through brokers or selling agents, upon which a conunission is paid, as an outright or a direct sale. This is probably due to the fact that goods are ** billed ' to the sales agent, who remits for them (less cash discount and brokerage). The broker or sales agent, however, is rot the buyer, but only an agent, and he is obligated to remit all of the sales price less discount; brokerage, and expenses to the can- ner. Such en-ors were corrected when found m the schedules. BEPORT ON CANlfED FOODS. 23 Nevertheless, there is still the possibihty that the table is not cor- rect in every detail. TABLE 6.-TRADE CHANNELS USED IN THE MARKETING OF CANNED SALMON, 1M6 AND 1917. District. Canuers who sold through sales agents. Number of com- panies re- porting. 1916. Southeast Alaska West Alaska Central Alaska Puget Sound Columbia River Outside Rivers Total and average 1917. Southeast Alaska West Alaska Central Alaska Puget Sound Columbia River Outside Rivers Total and average 35 8 7 20 11 10 91 40 9 10 30 13 13 Entire pack. Number com- panies. 19 5 2 12 3 4 115 45 19 5 5 16 2 6 Per cent of total number com- panies. 54.29 60.00 28.57 60.00 27.27 40.00 Part of pack. Number com- panies. 53 49.45 47.50 55.55 60.00 53.34 15.38 46.15 17 Per cent of total number com- panies. 11.43 28.58 20.00 27.27 40.00 None of pack. Number com- panies. 46.08 24 18.68 20.00 11.12 20.00 23.33 38.47 7.69 20.87 12 3 S 4 5 2 29 13 3 3 7 « 0 Percent of total number com- panies. 34.28 40.00 42.85 20.00 45.46 20.00 38 31.87 32.50 33.33 30.00 23.33 4&1S 46.15 33.05 District. Canners who sold through brokers. Number of com- panies re- porting Entire pack. Number com- panies. 1916. Southeast Alaska West Alaska Central Alaska Puget Soimd Columbia River Outside Rivers Total and average 1917. Southeast Alaska West Alaska Central Alaska Puget Sound Columbia River Outside Rivers Total and average 35 8 7 20 11 10 91 40 9 10 30 13 13 10 8 115 Per cent of total number com- panies. 14.28 14.28 20.00 10.98 Part of pack. I Number com- panies. 11 2 3 3 6 5 Percent of total number com- panies. 31.43 25.00 42.86 15.00 54.55 50.00 None of pack. Number com- panies. 30 20.00 10,00 13.33 23.08 15.38 11 3 2 8 5 3 18 15.66 32 32.96 27.60 33.34 20.00 26.67 38.46 23.08 27.82 19 6 3 13 5 5 51 Per cent of total number panies. 54.29 75.00 42.86 65.00 45.45 50.00 56.06 21 ft 7 18 5 8 65 66.66 70.00 60.00 38.46 61.54 56.62 i iilliiliirliiiliiillliillii 24 mPOBT ON CANNED FOODS. Tawm S.-TBADB CHANNBL8 USED IN THE MARKETING OF CANNED SALMON, 191ft AND 1917— Continued. Number of com- panies re- porting. Canners who sold directly to Jobbers or brokers. Entire pack. Part of pack. None of pack. District. Number com- panies. Per cent of total number com- panies. Number com- panies. Per cent of total number com- panies. Number com- panies. Per cent of total number com- panies. line. 84iiit]itt8t Alaska 15 S y 20 11 10 8 2 4 3 7 6 22.85 25.00 57.15 15.00 63.63 50.00 27 6 3 17 3 5 77.15 W«stA,teiki. , CSantral Alaafca 1 1X50 62.50 42.86 FiMBtfldiind 85.00 Columbia River 1 9.10 27 27 Outside Risers 50.00 Total and average 91 2 2.20 29 31.86 60 65.94 1917. Sontlieast Alaska 40 9 10 30 13 13 11 3 4 9 5 3 27. SO 33.33 40.00 30.00 38.46 23.08 30 5 ft 21 7 8 72.60 West Alaska 1 11.11 55 56 Camtral Alaska. 60.00 Pupt Sound 70.00 Cdlumtola River 1 2 7.80 15.38 53 85 Outside Rivers 61.54 Total and average IIS 4 3.47 35 30. 45 70 66.08 In 1916, 45 companies, or 49.5 per cent of those wliich reported, 8old their entire outputs through sales agents; 53 companies or 46.1 per cent of those which reported in 1917 sold their entire output through sales agents. This might indicate a slight tendency to Dreak away from the use of exclusive sales agents, but it ap- pears that this decreased percentage was due to new companies choosing other methods rather than to old companies breaking established connections. Apparently the Puget Sound and West Alaska packers are the most dependent upon sales agents, and the Columbia River packers the least dependent. In 1916 there W'ere 29 companies, or 31.9 per cent of the total number, which in 1916 made no use of sales agents, and there were 17 companies, or 18.7 per cent, which sold a part of their packs through them; while in 1917 there were 38 companies, or 33.1 per cent, who did not use sales agents, and 24 companies, or 20.9 per cent, who sold only a part of their pack through them. The number of companies which reported the sale of their entire packs through brokera increased from 10 companies, representing 11 per cent of the total number in 1916, to 18, representing 15.7 per cent of all the companies, in 1917. The companies which sold their entire outputs through brokers in 1917, but not in 1916, apparently sold a part of their packs in this way in 1916, as very little difference existea in the percentages of companies which made no use of brokers in 1916 and 1917. The preceding table shows that very few of the salmon canners sold their entire outputs directly to the jobbers. Only 4 companies, or 3.5 per cent of the total number of companies, marketed their entire outputs in this way in 1917, and only 2 companies did so in 1916. About two- thirds of the reporting packers made no direct sales and about one-third sold parts of their packs themselves. BBPOBT ON CANNED FOODS. 25 "3^ si 00 CO 0 vT »-i a . to J3 O p* o OQ 55 u O CQ CQ I. « Q QQ eiM i I. CO o I 60 09 2 I— • es CO n I S 9 JS o o 9. i!. PkJi o lO 00 fH »o 00 j5 § *" « SI c ca © s © © CJ , Ki 5^i ■V « eg CO CO « 1-1 00 i © T eo © © C9 »- fc. « 9 © '«a P4P.O ^ ^ 00" SCO §-" »o 3 u It ^ dio o e ©..>• t- © taeie*eo CO i^eoeMOs Sf I^CXJ cTriJ'eo'r-r OON t»<-i esico o ca .OS© OQ z § 00 g e* « I © < Pk s © •a t> C8 g m o 0 %* d t *» 08 09 o a I ■% 1 A 9 I B o CO o M g g ■s I 0 Xi I 4 I tt I 9 5 s i ti UPOBT OH OAinOSD F00I3& KEPORT ON CANNED FOODS. 27 SMtioB 8. Bisimess done by the brokers. The eumber of cases of canned salmon handled by 27 brokers and sales agents, together with the rates of brokerage (or commission) received during 1917 are shown in Table 6. Of these, 18 were salmon brokers located on the Pacific Coast, and 9 were general CfflMied-food brokers located in various cities throughout the eastern liiilf of the United States. The 18 Pacific Coast brokers were exclusive sales agents for 69 canners. The number of cases handled by them on this basis was 4,020,323. The 9 eastern brokers were exclusive agents for 21 can- ners and sold for them 697,971 cases. The number of cases handled by these two groups of brokers as exclusive sales agents was equal to 69.5 per cent of the total number of cases covered by this table. The rate of commission received on these sales was generally 5 per cent, although rates as high as 10 per cent and as low as 2 per cent were reported. The Pacific Coast brokers represented 22 canners as nonexclusive sales agents for whom they sold 564,682 cases. The 9 eastern brokers were nonexclusive sales agents for 14 canners for whom they sold 81,238 cases. The two groups of brokers together sold on this basis 9.5 per cent of the total amount handled. The rate of commission was generally 5 per cent, but in some instances was as low as 1.5 per cent. The Pacific Coast brokers sold 333,321 cases on a straight broker- age basis at rates of commission varying from 1.25 per cent to 5 per cent. The eastern brokers handled 168.344 cases on the same basis, for which they received a commission of from 1.25 per cent to 4 per cent. The number of cases handled on a straight brokerage basis made up over 7.4 per cent of the total amount. The Pacific Coast brokers purchased (outright) 680,457 cases and the eastern brokers purchased 227,982 cases. These figures show that 13.5 ner cent of the total amount of salmon was handled on a mer- chandising or a buy-and-sell basis. The average number of cases handled by the 18 coast brokers was 311,874 per company, as compared with an average of 130,615 per company for the eastern brokers. As the Pacific Coast brokers pur- chased outright an average of 37,803 cases per company and the east- em brokers an average of 25,331 cases, it is evident that the latter did a relatively larger buy-and-sell business in salmon than the Pacific Co.a8t brokers. « Sectioi 9. Tbe oftimers' metbod of distributing tbeir goods— sales agents and brokers. In 1917 the total number of cases packed and purchased by the 116 companies reporting was 8,105,028, while in 1916, 5,700,602 cases were packed by the 91 companies reporting (217,807 cases were reported as purchased by canners for resale in 1917; this information was not procured for 1916). The number of cases sold through sales agents and brokers with rates of commission paid are shown in Table 7. Table 7.-CANNERS' DISTRIBUTION OF THEIR SALMON PACKS IN 1916 AND 1917;- NUMBER OF CASES SOLD THROUGH SALES AGENTS AND BROKERS WITH RATE^ OF COMMISSION PAID. District. 1916 West Alaska Central Alaska.... Southeast Alaska. Pupet Sound Columbia River. . . ■Outside Rivers — Total and averages. West Alaska Central Alaska... Southern Alaska. Pupet Sound Columbia River.. Outside Rivers... 1917 Total and averages. District. 1918 West Alaska Central Alaska — Southeast Alaska. Pugct Sound Columbia River . . Outside Rivers... Total and averages. 1917 West Alaska Central .\laska.... Southeast Alaska. Paget Sound Columbia River.. Outside Rivers... Total and averages. Total number com- panies report- ing. Sold through sales agents. 8 7 35 19 12 10 91 9 10 40 31 13 13 Total number cases. Per cent sold at 5 per cent commis- sion. 1,864,548 i 405,038 1,386,827 I 1,120,042 142,122 31,277 13.9 52.0 «85.2 86.6 47.6 100.0 Per cent sold at 4 per cent commis- sion. 86.1 Per cent sold at 2i per cent com- mission. 0.3 8.9 2.8 Per cent on which rate of commis- sion w% not stated.* 116 4,949,854 1,495,572 478,825 1,809,629 1,012,061 123,047 15,840 4,934,974 55.0 13.0 58.6 *88.7 6 82.7 53.5 100.0 32.4 84.6 60.7 25.7 3.2 S34.1 8.6 3.1 7.1 47.7 5.9 10.6 52.4 9.4 2.4 7.3 2.7 14.2 46.5 ft. 5 Total number com- panies report- ing. Sold through brokers. 8 7 35 19 12 10 91 9 10 40 31 13 13 Total number cases. 122,315 62,051 867,408 256,409 210,103 57,604 116 1,575,890 97,658 48,534 974,374 348,518 438,424 31,439 Per cent sold at 5 per cent conunis- sion. 39.2 1.6 48.9 11.0 24.0 100.0 Per cent sold at 2i per cent com- mission. Per cent on which rate of commis- sion was not stated. 1 38.6 51.9 I- 1 1.2 60.S 98.4 50.0 87.8 76.0 .9 29.9 32.2 65.4 80.4 7.0 4.3 19.6 1,938,947 I 39.5 6a5 48.1 100.0 63.1 63.5 34.6 55.9 1 In most instances only the total commission or brokerage paid was reported; however, this generally amoimted to about 5 percent on sales. » 100,420 cases at 10 per cent commission are mcluded. » 162,049 cases at 3 per cent commission are included. * 110,674 cases at 10 per cent commission are included. 6 10,848 cases at 13J per cent commission are included. I I .J. -I— —Ma mm BBPOET OH OASnrBD POODS. M 1917, 4,934,974 cases were sold through sales agents. A com- mission of 5 per cent was paid by the canners on about three-fifths of this amount. On about one-quarter of it (sold by a company in the West Alaska district), a 4 per cent commission was paid. On 7.1 per cent of these sales the rate of commission was 2i per cent, while on 6.5 p«r cent of them the rate of commission was not stated, but was probably 5 per cent in most instances. In 1916 a com- mission of 5 per cent was paid on more than one-half of the total amount sold through sales agents; 4 per cent was paid on nearly one third; 2i per cent was paid on a very small amount (only 3 2 per cent of total). ^ The amount sold on a brokerage basis was 1,938,947 cases in 1917 and 1,575,890 cases in 1916. This represented 275 brokerage trans- actions in 1917 and 295 transactions in 1916. In 1917 a 5 per cent commission was paid on about two-fifths of the amount sold through brokers; on less than one-twentieth of this amount a 2 J per cent com- mission was paid. The brokerage paid on 55.9 per cent of the sales was not stated, but apparently averaged 5 per cent. In 1916 the amount upon which a 5 per cent brokerage was paid was 608,175 cases (nearly two-fifths of the total). The amount upon which 2i per cent was paid was less than 1 per cent of the total, while the rate of brokerage paid on three-fifths of the sales was not stated. This table estabhshed two points clearly: (1) The larger part of the canned salmon passes through the hands of the exclusive sell- ing agents; (2) 5 per cent is the prevailing rate of commission paid both to selling agents and to brokers. Section 10. labels used on canned salmon. The labels or brands under which a canned food is sold are valuable to the consumer as guides to the quahty of the contents and to the seller as an aid m the marketing of his product. If a label is widely and favorably known, it is very valuable to the person who controls Its use. Many canned goods have come to be sold under the broker's or jobber's label, so that the canner is unknown to the consumer and gets no credit for a high quality. The number of cases sold in 1917 under packers' labels, jobbers' labels, brokers' labels, and unlabeled are shown in Table 8. This shows that on the average 70 per cent of the total quantity mar- keted was sold under packers' labels. The largest percentage was m the West Alaska district, where 91 per cent was marketed under the packers' label. This is significant when it is remembered that the larger companies are located in this district. The smallest percentage was in the Puget Sound section, where only 50 per cent of the salmon marketed bore the packers' labels, and '5 per cent was labeled after leaving Backers' hands. The brokers' labels were used on 25.5 per cent of tne total from this district. % D 00 P5 o « Q s pa n o « o < c < V. o ti Pk c ■Jz: -< a S3 u % 1 o < m O < G 2; o ft CO & QQ < 00 H .4 < BEPORT ON CANISTED FOODS. 29 es ■a o m a . go QD ■ C4 O C« t>. lO 00 ■* WtDQCMNQ CO ^ «0 "<*••-• 00 co>-< IB o § o 11 tH CO >0 r-^ >0 u6 S5S « CO 0» »-< N 00 e<5 >-i op D« to S5 ic CO s •g r o s _ © go) 04 r-*f-i*a • ••••> S3 . B w I" t* IC «0 •-< rl t>- 01 r^C* S u o m « 0 p bfi ^OOfHOO S o» r* t- 1- S Is Is e*: »- o iM (N a< •-HOC »oco or o CONQOO'T »0 co«5eo cot^ a g M a> com t^"5 1-H t^ CSI -rt< 10 N (NC^ecmocoo QuftDOOeiSO •"♦©■iO •O'W 0^ p^ ^H to c 3 s « s ■^OSOSNNQO ■c s s I* o o ^ g (M i CO «o IN O »o to 1»* o OS i^ (mt: c+j S *? is 'S 3 ® Cb- »X Op CO 2 eS g. a -a u o Xi •h> O) 09 Oi CO 03 U CO s I f3 01 I CIS 8 g g OS 80 OBT ON CANNED FOODS. Only 11.7 per cent of the caimed salmon was sold under the jobbers' * labels, the highest relative amounts sold under such labels being sold by the Colimabia River and Puget Sound packers. The brokei-s placed their labels on 15.7 per cent of the total. How- ever, 25.5 per cent of the total reported by Puget Sound canners and 21.4 per cent from Southeast Alaska, were sold under brokers' labels. On the other hand, only 3.1 per cent from West Alaska and 5 per cent from Columbia River carried the brokers' brands. This indicates that the brokers' labels are more important in marketing canned salmon than in the sale of canned vegetables.^ Figures for a large Seattle brokerage firm show that 21.9 per cent of the total salmon handled by them in 1916 and 24.2 per cent in 1917 bore their own labels. This table shows that only 174,456 cases, or 2.6 per cent of the total sales in 1917, left the packers' hands unlabeled. These figures, however, may be too small, as this information was not specifically called for m the schedule, and some packers may have failed to state the number of cases shipped unlabeled. Unlabeled goods later bore the brokers' or jobbers' label— presumably the jobbers' label in most instances. I T'^^^^o*^?!^ dealer as distinguished from the broker or commission man. •nd ivJte! wisWni^o^°Sl^^ ^^^^ °° ^^^^^"^ ^°^' ^^"^^^ ^^^**'^' ^""^ ^'^^^ Vegetabl«i. CHAPTER II. THE COirSUMPTION AND PRODTJCTIOIT OF CANNED SALMON. Section 1. Consnmption and export of canned salmon. Canned salmon is a very nutritious food: it is especially high in protein and contains much fat. Various analyses show from 19.3 to 26.5 per cent of protein, the average apparently being about 20 or 21 per cent, and from 3.6 to 15.3 per cent of fat. The per capita consumption of canned salmon has increased in recent years, being about 1.2 pounds in the fiscal year 1900, 1.6 pounds in the fiscal year 1910, 1.7 pounds in the fiscal year 1915, and 1.8 pounds in the fiscal year 1917. These fibres are arrived at by taking the pack reported by the Bureau of Fisheries for the preceding season, subtracting the amount exported during the fiscal year, and dividing by the reported population of the United States. This does not take into consideration the stocks carried over into the next season, but it is evident that consumption has increased faster than the population, and that canned salmon has become an important foodstuff in this country. It was especially important during the war, as it is a concentrated, nonperishable food, and hence suitable as a ration for armed forces. This is shown by the large exports during 1916 and 1917. , , The domestic production of salmon is greater than the domestic consumption and a large export trade has developed, the amount exported increasmg from 27,082,370 pounds in the fiscal year 1900 to 83,446,116 pounds in 1915, 152,943,962 pounds in 1916, and 117,962,807 pounds in 1917. The amount exported has increased faster than the amount packed. The export during a fiscal year is made largely from the pack of the preceding season and seems to bear some relation to the quantity packed, indicating that the surplus was exported after the domestic demand was met. Thus, in the fiscal year 1900, 22.6 per cent of the preceding season's pack was exported. Similar per- centages are 27.3 for 1905, 30.2 for 1910, and 31.4 for 1915, 49 for 1916, and 38.6 for 1917. The high percentages for 1916 and 1917 are explained by the large demand by the warring nations, and by the decreased domestic consumption due to the high price. British Columbia, Canada, is the only serious competitor of the United States in the export trade, although Siberia and Japan may become rivals in the future. The Siberian industry has grown rapidly since its beginning in 1910; over 500,000 cases were packed in 1917. Japan's industry established in 1913 has grown more slowly. The United Kingdom is the largest importer of canned salmon from the United States, taking 62 per cent of our exports in 1900, 74 per cent in 1915, and 64 per cent in 1917. The details of exports are shown in Table 9. 31 3'2 BIPOBT OM CANNED FOODS. Tabm 9.-NUMMR of POUNDS OF CANNED SALMON EXPORTED FROM tw» UNITED STATES DURING FISCAL YEARS I^IOIL ^ ^^* ExjKirtodto— 1900 1906 1910 1915 1916 1917 B'lirope 18, Ml, 109 1.031,818 1,868,226 664,126 3,882,646 684,466 21,071,263 1,666,773 1,708,828 3, W4, 862 6,257,446 1,468,383 44.785.898 2,224,516 3.193,812 1,516,775 11,568.824 510,871 63.760,758 4.328,246 1,301.962 1. 135. 793 12,100,414 818,943 114.163,722 12,322,259 4.563.993 3.336.665 17,659,036 808,287 Hortli Amerloa 111117' 82.758,877 •Sfflutli, America 16, 196, 177 amb : 3.314,969 0«»iiil8 1.326.163 .AWoa. :::::;: 12,037,857 2,328,761 Tolal tur Mat of pwwling season's prtk'ixpOTted. 27,082,370 23.6 35,066,055 27.3 63,446,116 30.2 83,446,116 31.4 152,943.962 49.0 117,962,807 38.6 -♦f ^"^^ "^ °^ *il^ preceding table shows that there has been a W„ 1,-1°''™T "" *•"* ^^?°^i "^ <=»'^«'l ^''^o'l. "id that exports have increased more rapidly than production. The largest quantity f^r.l^'r^'^A^'.l^^.^P''^''''''^ (principally Australia £id tte Phit ipprne Islands) takes the next largest quantity. a*ln^^ if 1 onT**'^ ^T^^^3^ chieif port for the export of canned salmon. In 1?00 only 1,477,232 pounds were exported from Seattle as compared with 21 ,611 ,030 exported from San Fr^cisco. However, sJaltlet 4 rfSsIfr^'*^'' ^'T ^t ^"S^* ^""^ P^'^^ (principaJiy Seattle) 41,064,868 pounds, which was more than the combined exports from San Francisco and New York, the two next most im- portaot ports. Bmtim 2. Ti© iftlmon packs of 1016 and 1017. , The total number of full cases (forty-eight 1-pound cans or ninety- six f-Dound cans) of salmon packed in 1916 was 6,380,925, and in 1917 the number was 8,627,453 Figures for a few small companies, which could not be located or whose reports were unintelligible, were taten from the Pacific Fisherman Yearbook, but these amounted to only 35,863 cases m 1916 and 84,249 ease^ in 1917. The other figures were reported directly to the Commission by the individual companies. "^ Table 10 gives the number of full cases packed within the United States by species and districts during 1916 and 1917. The relative imoortance of each species within each district is shown in Table 11- aad the relative importance of the various districts in the produc' tion of each species is shown in Table 12 KBPOBT OK OAKNED FOODS. 33 TABLE 10.-NUMBER OF FULL CASES OF SALMON CANNED IN lOlS AMD 1917 BY GRADES AND SECTIONS. District. Kings. Reds. Medium reds. Pinks. Chums. Steel- heads. Total. 1916. Western Alaska 26,914 22.045 18,300 38,111 368,021 76,824 1,408,325 582,039 264,233 79,004 6,997 10.356 26,004 55,249 181,009 148. 194 58,916 67, 136 42.962 356,012 1,290,787 1,400 674 6.693 146,489 68,213 482,961 424,771 71,188 41,879 1,649,694 1,063,6SS Southeast Alaska Pueet Sound 2,237,290 143^ 21,««7 190 691,623 Columbia River Outside Rivers 526,683 192, on Total 650,215 2,349,954 526,507 1,697,628 1,234,601 22,2201 16.380,925 1917. Western Alaska 20.041 19,312 29,166 61,139 394.736 67,657 1,671,016 730.755 214.457 410,055 8.611 4,745 5,663 36,069 148,493 123.546 75.587 55,815 3,213 134,622 2,149,835 1,006,989 722i 15,528 51,988 90,756 751,540 344,612 64,576 25,467 1,651,921 1,011,614 Soatheast Alaska 3,293.491 1,946,241 Columbia River Outside Rivers 20,494 348 554,726 169,560 Total 592,051 2,939,639 445, 173 3,310,909i ! 1,318,839 20,842 18,627,453 1 I Includes 3.'>,863 cases taken from Pacific Fisherman Yearbook, 1916. « Includes 84,249 cases taken from Pacific Fisherman Yearbook, 1917. Southeast Alaska was the largest producer, with an output of 2,237,290 cases in 1916, and 3,293,491 cases in 1917. West Alaska came second in 1916, while Puget Sound came second m 1917, due to the large fourth year run. (The expected quantity of sockeyes failed to appear, but the very large number of pmks made up for this failure, so far as quantity was concerned.) Central Alaska was the next most important district, and ranked ahead of Puget Sound in 1916. The Columbia Kiver section has had a very consistent production. About a haK miUion cases of salmon are packed on the Columbia River each year, most of which is chinook. Nearly 67 per cent of the total pack of this high-grade fish was packed on the Columbia River in 1916 and 1917. The various smaller Pacific Coast salmon streams have been important in the history of the industry, but their output makes up a very small part of the total pack at present (3 per cent of total m 1916 and 2 per cent m 1917). Table U.-RELATIVE IMPORTANCE OF DIFFERENT SPECIES WITHIN EACH DISTRICT. (Per cent which each species is of total pack by districts.) District. 1916. West Alaska Central Alaska Southeast Alaska Puget Sound Columbia River Outside Rivers Percent of total 1917. West Alaska Central Alaska Southeast Alaska Puget Sound Columbia River Outside Rivers Per cent of total King or Chinook. 1.6 2.0 .8 5.6 69.9 40.0 8.6 1.2 1.9 .9 3.1 71.2 39.9 6.9 Red or sockeye. 86.4 53.7 11.8 11.4 1.1 5.4 36.8 96.1 72.2 6.6 21.1 1.5 2.8 34.2 Medium red. 1.6 5.1 8.1 21.4 11.2 29.7 8.3 .3 3.6 4.5 6.4 13.6 32.9 5.1 Pinks or hump- back. 2.6 32.9 67.7 .2 .1 3.0 26.6 .3 13.3 65.3 51.7 .1 9.2 38.3 Chum. 8.8 6.3 21.6 61.4 13.5 21.8 19.4 3.2 9.0 22.8 17.7 0.9 15.0 15.3 Steel- head. .1 4.2 .1 .3 3.7 .2 .2 Total, ail grades. 100 100 100 100 100 100 100 100 100 100 100 100 100 100 97684—19 3 M BIPOET ON CAKWED FOODS. TllW I2.-RBLATIVI: IMPORTANCE OF DISTRICTS IN PRODUCTION OF EACH SPECIES. (Pw oont of total amount of each species packed in various districts.) District. Kin^ or Chinook. Red or sockeye. Medium red. Pinks or hump- back. Chum . teel- head. Total, all grades. — 1910 Wirt Alaska , Centmi Alaska SootlMMift Alaska 4.9 4.0 3.3 6.9 66.9 14.0 50.9 24.8 11.2 3.4 .3 .4 4.9 10.5 34.4 28.1 11.2 lao 2.5 21.0 76.0 .1 .1 .3 11.8 5.5 39.1 34.4 5.8 3.4 25.9 17.0 Puflet Sound Cofemlila Riirer .T 98.5 .9 35.1 10.8 Ouliido Rivera 8.2 3.0 Tlital 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1917 West Alaska Central Alaska SMittiMst .Alaska 3.4 3.3 4.9 10.3 66.7 11.4 53.5 24.9 7.2 14.0 .2 .2 1.3 8.2 32.8 28.0 17.1 12.6 .1 4.1 64.6 30.7 .0 .5 4.0 6.9 57.0 26.1 4.1 1.9 19.1 11.8 Pugut Sound.. Columbia River Outside Rivers 98*4' 1.6 38.1 22.6 6.4 2.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 West Alaska is the most important producer of reds, packing 59.9 per cent of aH the reds packed by American canners m 1916, and 53.5 per cent m 1917. Heds made up 85.4 per cent of the total West Alaska pack m 1916 and 95.1 per cent in 1917. Central Alaska was the next largest producer of reds, producing 24.9 per cent of all the reds canned in 1917 In 1917, 72.2 per cent of the total pack in tills district consisted of reds. Southeast Alaska and Puget Sound packed nearly all of the remainder. Southeast Alaska and Puget Sound were the largest packers of medium red salmon; these two sections together packed 60.8 per cent of all of this grade of salmon in 1917. This species, however. IS relativelj most important in the Outside Eivers, making up 32 9 per cent of the total packed on these streams in 1917 and nearly as larce a percentage in 1916. Southeast Alaska was the largest producer of pink or humpback saJmon, producing 76 per cent of total in 1916, and 64.6 per cent in loJL/^'^^^-^'i'J^ produced 1,946,241 cases in 1917, but only §91,623 cases in 1916. The pmk salmon seems to run in these watera in alternate years. Central Alaska was the only other section impor- tant in the production of this species. CHAPTER III. THE COST OF PACKING AND MAEKETIITG CANirED SALMOK. SectioE 1. Items included in cost of production. The fact that there is little uniformity in the accounting systems used by salmon canners makes it difficult to compile uniform state- ments of the costs of production. Cost statements were compiled by the Commission's accountants from the books of 19 companies having 54 plants and packing 52 per cent of the total year's production in 1916, and from the books of 20 companies having 62 plants and packing 50.5 per cent of the total yearns production in 1917. It is upon these statements gathered bv the Commission's accountants that tables 13 and 14 are based. Balance sheets, profit-and-loss statements, and cost figures were sub- mitted to the Commission by practically all the salmon canners. Some of these were incomplete or in poor form. Most of these, how- ever, were used in the tables in sections 2 and 3 of Chapter V, showing the investment and profits in the industry and in the cost figures used in tables 15, 16, 17, and 18, which show the number of cases of salmon produced at various costs. In compiling the costs the items have been grouped under 11 headings as shown in table 13. The cost of raw fish includes the amount paid for fish, the cost of buying, and the cost of transporting the fish from the fishing grounds to the cannery. When the fish were caught by the canning companies the cost of raw fish includes wages of fishermen, cost of Doat operations, maintenance and operation of traps, cost of nets, seines, etc. Salt is the principal item mcluded in "cost of other materials." The cost of cans includes the amount paid when cans are purchased and the cost of materials and expenses of making when the cans are manufactured. Many companies who manufacture their own cans, however, kept poor records of labor or overhead applicable to this work. For this reason the cost of cans in those instances in which the canners manufactured their own cans may be inaccurate. Under *'Shooks, boxes, and labels" are included the costs of labels, boxes, and shooks, and nails when shooks were purchased and nailed up at the cannery. In such cases the cost of labor applicable to the nailing of the boxes was not ordinarily kept separate from other cannery operations, and so can not be shown separately. The item "labor" includes the amount paid for Chinese (or Japanese) and White cannery hands. The mess expense, less any income from the mess, is included in cost of labor. The principal items included in "Other conversion costs" are power, fuel, maintenance, and repairs. "Transportation of men and supplies" includes the cost of trans- porting men to and from the canneries, freight on supplies from the bases of operations to the canneries, and freight on canned salmon from Alaska canneries south to the Pacific coast ports. As many M » flu BBPORT OF CAWNED 700DS. BIPOBT 02Sr CANNED FOODS. 37 companies do not keep separate costs of carrying supplies north and tausHed product south, the cost of bringing canned salmon south had to be mcluded m the cost of transportmgsuppUes. For the sake of uniformity this was done m all cases. When the canner owned his Tessels and earned his own supplies and men, the cost of operating these vessels was included in ''Transportation of men and supplies ^ Canners have no uniform method of charging off depreciation on then- buildings and equipment. Some canners appear to make heavy charges in good years and small charges in poor years. In some instances the amount of depreciation was clearly excessive and had to be reduced. On the other hand, many companies failed to include any charge for depreciation in their costs of production and m their profit-and-Ioss statements. In such instances it was necessary for the Commission to add arbitrary depreciation charges "Factory swells" includes either loss due to the spoihnff of the canned product in the packers' hands or refunds to buyers for goods winch spoiled before the packers' guaranty had expiredf. The itemB included m *^ Plant overheacf" are the salary of factory superintendent, rent actually paid for buildings, machmery, or other equipment, fire insurance, and taxes on property. Income and excess profit taxes are not included in cost. The Items included in ''General expense" are salaries of officers, general office expenses such as salaries, stationery, postage, and mterest on short-term loans (under one year). Long-term loans are considered as a part of investment and interest on such loans IS not mcluded as a part of operating cost. Income from by-products, such as pickled, smoked, or mild-cured sahnon, oil, fertilizer, etc., is deducted. Contingent charges to cost on account of commercial hazard are not induded as apart of cost. No accurate basis for computing such hazard is available. Verv few companies reported any charge for hazard, and those who did apparently guessed at the amoimt. Many canners have no clear idea as to just what risks it should cover. It seems that hazard refers to those unusual risks in an industry which can not be covered by insurance, such as a poor run of fish, and that It should be mcluded m the profit-and-loss account and not included m cost. Whether prices are to be controlled by supply and demand or annually based upon cost of production, there wouM be no justifica- tion for the inclusion of hazard in cost in either case. If supply and demand operate freely, prices rise as a result of short packs and fall when thebacks are large (assuming that demand remains fairly con- stant). The setting aside of a reserve to cover such fluctuations in earnings might facilitate the regular payment of dividends, but such a reserve should be built up out of the profits in good years and should not be included in cost, for this would increase Qie cost of production and m poor years would result ua unjustifiablv high prices or m large losses. If prices were fixed each year on the Ibasis of the cost of pro- duction, these prices could be assumed to be high enough to cover the hazard by allowmg all efficient producers to make a fair profit in every year for which prices were fixed. Bmtim % Cost of Production in 1916 and 1917. Table 13 and table 14 give the most important items in the cost of production (exclusive of selling expense). CO P4 O U 8 9 Q iz; CQ o u 3 OQ u « o OQ Q S5 O 3 g Q O CeS Pi o OQ O Q 1. s s o OQ M to cs m a .a m U o a* I o E-i OQ 9 O W C8 g go 11 O 9 i 05 rt fe _ _ cS R«0 - c h >; 05 .3 ftHS« sis O 9 i OS « §<© SS to Ph5 § 9 9 1 a=2 iH • 9 S oS oj3 ^—9 9 9 bof ^ . ^g|S2 *-E2 9 || 9 O 9 ese<5o>^»oeoo*e5SS(N^t*io ■^rododa ' s> o n .-J « co tr *^ rf CO- "OrH W«„ CO 1-iQ.HN «0'^eo«-f^ooo®oOco'-.r3OC< rHuScoecQOOoec^f )»^asc»t*co ) CO C) i-i 1-^ eococ;i~»eo IN w«o Ol f^ enn SSJ§! 3 ■.}• O "^ .^OC5«OOOt^CO»--OiOrHOCOC»0'-iCO C»r^ w* S' oooot— ot— eco>ot>-QOC>>»-ioo aJ^r^coaSOT^HOocot^cJNco^ NCOtOrH m lO .-I .I -H fi 5« C* N X „ ■» US'* 0( ;N>nOO-*t^OiOO'*QOO >Sooo<»i-icicO'-'iN<«roC CO- rr 00 "'IS TO TO co^O?u:)Ptoeogh^gg2g O O to t-l t>- O TJ" NCO OOw' toci 00 «* •"J- cc o .. . _ CO O 5P CD»H00«t-lOO"^NO03«0 ooot-«ot-oc>»iooo QC««coag?^soN004 NU3 |8 e*eo .-I -^ <0 « If- o < r-« b- eo O 00 «5 < .k • • * . >00'«»'NO®00(N»-tt- ONf-IOC0.-l d CO t^oooo)'*oc«iC30C>ooo«C'Coco(Ni-Ha>T> w as^ 3 S ea .2 ,o •d a CS aT 9 X o CQ 03 O C O Oooa CQ 9 •1—1 "ft 3 CO •d P3 ol a 9 B en 9 > c O O « +J S © r- C5.2 fet m a> c -M > o »-« 3 b£ (I'd ft3 il ® — '5 -2 go ©"S a> S w g^ CO CO ® ® c o OQOO w' IIPOKT OH CAKKED FOODS. TAIM I4.-RELATIVE MPORT.W« OF J^VRIOTO IN PRODUCTION OF LANNUiD SALMON: 1916 AND 1917. 1916 District. West AJASkS. Cost of raw fish... I ^^''^% Cost of other materials ''\ 'r Cost of cans j 15 g Shocks, boxes, and Ial)«ls .*'."' 4.* 1 Labor. 20 1 Other conversion costs '.'."." ■ 1 ' 7 Transport ition. men and sunplies.. .'.".". IV.l is^g Depreciation .", i 3, | Faclor>- swells ' s " g Plant overhead ^" .*.'.'.'.".""."* * g.* © General expense .'.'*"'' 5.0 Deduct i ncome from by-pi odncts ...'..',: L 2 C3st of proiuction, excluding raw fish. .... I 71. 4 tost of prodnction... ! im.Q Number of cases pwlterl ' 1,411,538 Central Alaska. Per cent. 23.5 .1 lo.o 4.8 19.4 1.5 14.2 Wm if .6 5.4 .4 76.5 100. 0 South Alaska. Per cent. *»!■ "if .2 18.5 5.0 19.4 7.1 4.5 .2 6.7 7.3 .4 711.7 100.0 777,274 1,002,367 FuRet Average Sound. u. s! Per cent. Per cent. 48.8 29.5 .1 .3 ILl 16.5 2.4 4.4 15.6 19.4 4.5 2.1 1.9 ILl 3.9 3.8 .1 .4 7.6 7.6 4.6 5.6 .6 .7 51.2 70.5 100.0 100.0 186,789 3,377,958 1917 District. Cost cf raw fish Cost of other materials ' ' .' Cost of cms , , Shocks,, boxes, and labels., '.'.'.'.'.'.['" Labor Other ct>n version osts [.'".*'.".*."."*'.' Transport tti:>n, men and supplias Zl Deiireci'ition . . ,Fact:>r}- swells Plant overhead , '.'.'.'."'" Gener i! e\pens»> '..'.'.'.'".'" De iuct inome from bv-pr iducts Cost of pro lucti:m, excluding raw fish..".'.!* Cast of production , . . . Nam bar of cases packed » ., , , West Alaska. Per Central Alaska. cerU. Per cent. 29.5 27.5 .3 .1 20.4 21.9 3.7 3.9 17.4 16.6 2.4 1.7 16.7 12.7 3.2 3.4 .4 .3 7.5 8.8 3.5 5.0 5.0 1.9 70.6 72.5 100.0 100.0 South Alaska. 1,428,547 682,314 Percent. 30.2 .1 23.4 • 5.5 15.5 Jfm M, 9.1 3.2 .1 6.0 6.2 L4 69.8 100.0 Puget Sound. Per cent. 48.0 .1 18.3 3.5 13.4 1.8 1.5 2.0 .2 5.6 6.0 .4 52.0 100.0 Average U.S. Per cent. 32.3 .3 21.4 4.2 15.9 2.1 10.9 3.0 .3 6.7 5.4 2.4 67.7 100.0 1,619,480; 60fi,174i 4,33^,515 1 By companies upon whose ieport,s tWs table is based. Tlie largest items in the cost of production are raw fish, containers (MIC uding cans, boxes, and labels), labor, and transportation. llie^cost of raw feb is tbe largest single item in cost. The average cost of raw bsh for 54 plants, packing 3,377,958 cases, in 1916, wis 11.07 compared with $1.43 for 62 plants with an output of 4,336 515 cases in 1917, an increase of $0.36, or 37 per cent. This item made up 29.5 per cent of the total cost of production in 1916, and 32 3 per cent m 1917. The cost of raw fish varied widely as between dis- tricts. The average cost was $0,736 per casein the Central Alaska district m 1916, while in the Puget Sound district the cost was $2 76 per case, or 275 oer cent higher. In 1917, the average cost per ctee in Puget Sound was $2.57,-7.17 per cent less than in the preced- es }^ear, but more than double the average cost of $1.13 in the Central Alaska district in this year. The cost of raw fish varied even more widely as between individual canners. Wlien a canner catches his own fish, the cost per case varies with the size of the catch. The amounts paid as wages to fishermen and for boat opera- BEPOKT ON" CANNED FOODS. 39 tions do not increase or decrease in proportion to tbe size of the catch. When the fish are purchased, the cost is determined by the market price of fish in that particular locality. In the Puget Sound district costs were reported as low as 39 cents and as high as $6.23 per case in 1916, and as low as 25 cents and as high as $8.03 in 1917. There is considerable waste in the canning of salmon. Based on the number of fish canned (partly estimated) and the average weight of each species reported by the United States Bureau of Fisheries, the percentage of the weight of each species wasted m canning was as follows: King or Chinook... Chum Red or sockeye Pink or humpback Medium red Steelhead 1916 1917 Per cent. Per cent. 41.5 44.9 34.1 34.4 37.5 32.1 25.9 26.3 13.6 24.4 21.3 22.8 The average cost of cans did not vary greatly in the difiFerent districts. The average per case was $0,595 in 1916 and $0,946 in 1917. The average cost in none of the various districts varied more than 8 cents from the average for all districts. Cans represented 16.5 per cent of the total cost of production in 1916 and 21.4 per cent in 1917. They increased more than any other single item of cost, — the 1917 cost was 59 per cent more than the cost in the preceding year, while the total cost of production increased only 22.6 per cent. Can costs, however, varied widely as between different canners. As both 1916 and 1917 were years of rising prices, companies carrying over large quantities of cans had a lower cost per case than those which bought their total requirements at current prices. As the preceding section makes clear, companies manufacturing their own cans often kept very poor records of their can costs. This resulted in showing variations in can costs as between canners. Prices of cans reported by the packers varied widely for the same size of can. Prices reported for half-pound cans varied from $12.12 to $15.12 per thousand in 1916, and from $17.51 to $24.14 in 1917. The price of 1-pound flat cans varied from $16.30 to $16.94 in 1916, aJnd from $17.74 to $32.55 in 1917. The price of 1-pound tail cans varied from $13.26 to $20.70 in 1916, and from $20.06 to $43.14 in 1917. These differences are only partly explained by the fact that some cans are lacquered or that different canners use different styles of cans. The prices paid by different canners to a can company for the same size can also often varied considerably during the same season. The contracts for the sale of these cans did not show the reason for this price discrimination. Canners who were forced to buy cans in the open market were often forced to pay prices much in excess of those paid by canners who had long term contracts with one of the large can companies. Labor made up 19.4 per cent of the average total cost of pro- duction in 1916, and 16.1 per cent m 1917. The average cost of cannery labor was $0,701 per case in 1916, and $0,705 per case in BBPORT ON CAHmSD FOODS. 1917, or an increase of 0.6 per cent. The actual increase in wages was about 15 to 20 per cent, but as the 1917 pack was much larger wan that of 1916, the cost per case did not show a similar increase. The number of laborers employed at a cannery does not vary in proportion to the size of the pack. If the pack is small, the labor cost per case is h%h, while if the pack is large, the number of cannery hands is not mcreased proportionately. This results in a low unit cost for labor. This fact causes wide variations in labor costs per case between different plants. In 1917, costs per case as low as 27 cents aJttd as high as $5.94 were reported. The item "Transportation of men and supplies'' in 1916 makes up over 1 1 per cent of the average total cost of production. The average cost amounted to $0.40 per case in 1916, ancl $0.48 in 1917, an increase of 20 per cent. It varied widely between the different districts: It was highest m the West Alaska district and ordinarily amounted to very httle for the plants located outside of Alaska. Some com- panies reported nothing under this heading; apparently all freight was included under the cost of raw materials. Transportation costs varied widely among different plants. Those plants which were located m out-of-the-way sections naturally had higher costs than those located at ports where vessels called regularly. In some eases goods had to be transshipped in smaller boats or contracts lad to be made with a steamship company to have its boats call at the cannery docks. Steamship companies generally required that the canner agree to ship all of his goods by their vessels before they would make such contracts. The rates specified in the different contracts vaned CTeatly. This was especially true of the rates on gasoline and coal. The rates on the different commodities were owever, generaUy somewhere near the pubHshed tariff rates. The average cost of shooks, boxes, and labels was $0,157, or 4.4 per cent of the total cost of production in 1916, and $0,187, or 4.2 per cent of the cost ol production in 1917. Plant overhead averaged $0,276 per case in 1916, and $0,295 in I^^LP^' ^^ increase of 6.9 per cent. General expense averaged 10.204 m 1916, and $0,241 in 1917 or an increase of 13.2 per cent. The expenses under these two headings made up 13.2 per cent of the ivarage total cost of production in 1916 and 12.1 per cent in 1917. •n^? ^*®^ 'Depreciation" averaged S0.138 per case in 1916, and ^.134 per case m 1917. In the Puget Sound district, the deprecia- tion charge averaged $0,222 per case m 1916, while in 1917 it averaged only $0,119. This decrease per case was caused by the greatlv mcreased number of cases packed. & j- The other items included m cost were small and of little importance, makmg up less than 3 per cent of the average total cost of production. Stction 3. Tl« rouge in tie cost of productioa. J. J^® ^^^^^ number of cases of all grades of salmon packed below iifferent costs m 1916 and 1917 are sJhown in Table 15. REPORT ON CANNED FOODS. 41 Tabus 15.— NUMBER OP FULL CABES OP SALMON PACKED BELOW DIFFERENT COSTS: 1916 AND 1917. Cost per full case. Under f 1. 2. 2. 3. 3. 4. 4. 5. 6. 6. 6. 7. 7. 8. 8. 9. 9. 10. 10. II. 11. 12. 12. 13. 13. 14. 14. 15. 15. 10. 16. 17. 17. 18. la 19 26. 50- 00. 50. 00. 50. 00. 50. 00. 60. 00. 50. 00. 50. 00. 50. 00. 50- 00. 60- 00- 50- 00- 50. 00. 60. 00. 50. 00. 50. 00. 50. 00. 50. 00. 50. 00. 50. 1916 Number of full cases. 64,387 467,282il 1,844, 885i 2, G59, 164 3,652,447i 4, 440, 761 4, 818, 031 4,943,604 5,044,374 5,071,384 5,093,675 5,259,979 5,308,409 5, 309, 697 J 5,314,019i 5,314,019^ 5,314,019i 5,314,019i 5,338,643i 5,347,138^ 5,352,980 5,360,840 Percent of total. 49.6 68.1 82.8 89.9 92.2 94.1 98.1 100.0 1917 Number of full cases. 53,965 53,965 53,965 537,431 1,841,846 2,975,739 4,071,554 4,865,712 5,407,123 6, a32, 996 6,339,611 6, 637, 984 7,021,686 7,180,273 7,344,948 7,359,049 7,471,172 7,491,639 7, 624, 797 7,640,155 7, 640, 155 7,667,325 7,671,813 7,678,522 7,680,157 7,680,157 7,680,157 7,680,157 7, 680, 157 7,680,157 7,702,010 7,702,010 7,702,031 7,702,031 7, 704, 520 7,705,913 7,709,487 Percent of total. 52.8 63.1 70.1 78.2 82.2 8&1 91.1 93.1 95.3 96.9 '98.'9 100.0 In 1916 the lowest cost reported was $1.85 per full case and tbe highest was $12.27. The great bulk of the pack was produced at the lower costs. The greater part of the salmon produced at costs between $2.00 and $3.50 per full case was packed in Southeast and Cen- tral Alaska. The bulk of the salmon produced at costs between $3.50 and $4.50 was canned in West Alaska; while smaller quantities at this cost were packed in the Central and Southeast Alaska and Puget Sound sections. The West and Southeast Alaska packers were the largest producers at costs between $4.50 and $5.00. The Puget Sound and Central Alaska districts packed smaller amounts at these costs, which were the maximum costs for any of the Central .Alaska plants. The salmon produced at costs between $5.00 and $6.00 was packed principally by the Puget Sound plants. The Columbia River packers were tne largest producers at costs between $6.00 and $8.00. All the salmon packed at costs above $8.50 was packed in the Puget Sound plants. In 1917 there was a wider range in the cost of production, the lowest cost reported was $1.33 per full case and the highest cost was $26.21. The great bulk of the production was at costs between $2.50 and $7.50. That part of the pack which was produced at costs above $8.50 was packed principally by Puget Sound and Columbia River canneries, although that part produced at the very highest costs was packed in the West Alaska district. The bulk of the IBPOBT ON CANWEB FOODS. salmon canned at costs between 12.50 and 13.50 was packed by the boutHeast and Central Alaska packers. Most of the production at SnSTZ«^^-'^ ^f '^-^^^^ ?^^^^^^ ^ SoutLast Alaska altHouffh lame amounts were packed at these costs in West &nd ^dTl^T'X ^Y ^"'^ ^V^!^^ packers were the most important Broducers of the salmon packed at costs between $4.00 and $5.50. bmaller quantities were packed at these costs by canners in Central and Southeast Alaska and Puget Sound. The Puget Sound packers produced the largest quantities at costs between S5.50 and $8 00 although the quantities produced at these prices by the Southeast Alaska packers were also considerable. Although costs vary considerably between the plants in any one om t?rri i W^J^ i'fiTf exceDtionally high or low costs are dT^tl It ^ clear that the Eulkof^the pack in each district is pro- duced at fau-ly uniform costs. The different sections show marked differences in costs The costs at which the bulk of the pack was produced m each of the sections were as follows: WoatAliiika.. OMtmlAliwia..- Southrast Alaska. Idle Between I3.o0 and 15.00. . . . Between 12.50 and «4.50, . . . oi,taideEi«« :::::::::::! BetZS«:SS^dj5:oS Coimabla Biver '/Between 11.50 and $2.50. Fiiiwt ftmitd " ' ■ llBet ween 15.00 and 18.00 . ruget sound Between $2.00 and 18.00. 1917 Between $3.50 and 15.50. Between $2.50 and $5.00. Between $2.50 and $fi.OO. Between $7.00 and $9.50. Between $3.00 and $4.00. Between $7.00 and $10.00. Between $2.50 and $8.00. *i.??Sf ^^.t°7 *>1 Central Alaska had the lowest costs and that Sontheast Alaska had the next lowest costs. West Alaska had higher costs, hut the cost was more uniform between the various plants. Puget Sound and Columbia Kiver costs varied widelv betweffli different canners. Southeast Alaska costs were more uni- Sicte * ^***'" ^^^^ ^^'^^ *^°«« o^ til* otter two Alaska . Comparing 1917 with 1916 costs of the Outside River • cannera increased most, while the costs of the Alaska canners increased the leasu. Section 4. Tie eoit of emmlMg salmon by grades. The only item of cost that varies appreciably in the canning of the different kinds of salmon is the cost of raw fish. The costs of con- tamere, other materials, labor, and overhead are practicaUy the same reeardless of the species canned. ^ When fish are purchased different prices are paid for the different CTades. The cost of cannmg each grade could, therefore, be obtained from companies which purchased their fish, unless the canners failed to keep records of the amount of money paid for the different grades. Many cAnnera however, claim that it is impossible to ascertam the ^oLnfJ^r -$5.49... $5.50-$5.99..- t6.00-$6.49... $6.50-$6.99..- $7.0a-$7.49... $7.50-$7.99... $8.00-$8.49... $8.50-$8.99... $9.00-$9.49... $9.50-$9.99... $10.00-$10.49. Over $10.50.. Red. 10,972 268,265 367,364 486,634 422,943 202,688 85,717 120,802 20,502 114,082 32,104 27,725 35,666 8,445 33,834 Medium red. 7,864 15,205 4,138 1,640 2,819 11,005 1,932 17,589 10,731 14,711 2,655 7,695 2,724 K'ng or Chinook. 202 78,893 1,197 61 8,827 58 715 1,923 395 21,836 2,746 2,485 11,166 96 24,108 Pink. 202,138 471,066 276,507 54,489 104,640 164,127 204,712 81,542 Chum. Not clas- sified. 8,880 39,200 58,379 110,134 76,815 17,637 34,099 25,588 1,418 22,613 18,680 23,930 35,809 4,838 60 4,507 53,965 203,913 360, 852 407,872 517,596 222,009 146,131 322,306 77,803 241,207 204,143 88,028 75,716 2,935 76,457 17,716 117,018 19,457 Total. 53,965 483,466 1,304,415 1,133,893 1,095,815 794,158 541,411 625,873 306,615 298,373 383,602 158,687 164,675 14,101 112,123 20,467 133,158 84,690 mPOBT OH OAIOTED FOODB. The preceding tables show that in 1917 the bulk of the red sahnon was produced at costs of between $3.00 and $5.50 and the pink at costs from $2.50 to $4.00. The costs of chinook salmon fell chiefly in the two groups, $3.00^$3.50 and $7.00-9.00. The largest quantity of chums in any one price group was between $3.00 and $3.50. The average costs of packmg the various grades in 1916 and 1917 are shown in the foUowing table (Table 18) . This table is based upon the same material as was used in cotnpiUng Tables 16 and 17, but the costs for king, medium red, and chum are based upon too small a percentage of the pack to be taken as typical average costs for the entire pack of these grades. Tabw 18.-AVEBA0B COST OF CANNING DIFFERENT GRADES OF SALMON. Grade, R.«d or sockeye. . KinsT or chinook Medium red Pink Chum,., 1916, per foil case. $3,865 3. 862 4.323 2.923 3.377 1917, per full case. 14.871 5.829 6.014 4.228 4.701 Section 5. Tke Cost of Caaning in tlie Diterent Sized Cans. The cost of canning a |-pound can of salmon is much more than half as large as that of canning a 1-pound can; while the costs of raw fish and of the other materials are just one-half as much for a 1-pound can m for a pound can, the cost of the cans, labels, boxes, and labor for a i-pound can are nearly as great as for the 1-pound can. The prices of the American Can Co. show that a 4-poimd can costs the packer over 80 per cent as much as a l-pouiid can. Labels and boxes (when "halves" are shipped four dozen to the ca«e), cost approximately as much for a dozen i-pound cans as for a dozen pound cans. The work of preparing the fish for the can varies with the quantity of fish handled. The work of filling, closing, and handhng the cans vai-ies with the number of cans packed. From tliese facts it would appear that a i-pound can requires two-thirds or three-fourths as much labor as a 1-pound can. However, when cannery hands are paid a piece rate, this rate is the same regardless *T ^^?i*^ ^^"^ "^®^- ^^'^^ ^^ *^6 packers, who submitted costs for the different sized cans, reported the same labor cost per dozen regardless of the size of the can. For these reasons, in compihng the costs shown in Table 19, the labor cost was distributed among the different sizes on the basis of the number of cans packed. Some of the other expenses must be distributed over the number of cans irrespective of their size, while others must be distributed according to the net weight of the contents. Table 19 shows the cost of packing the different grades of salmon in 1-pound tall and i-pound flat cans in 1917 and the difference between these costs. BBPOBT ON CANNED FOODS. 45 TABI.B 19.-THE COST OF CANNING SALMON IN THE DIFFERENT SIZED CANS, WIT. Num- ber of com- pany. Location. RED OS SOCKETE. Southeast Alaska. Western Alaska. . . Southeast Alaska. KINO OR CHINOOK. Western Alaska... Central Alaska — Southeast Alaska. MEDIUM RED. Southeast Alaska . Central Alaska — Southeast Alaska. do... Cost per case No. 1 tails, 48 cans. PINK. Puget Sound Southeast Alaska. do do Southeast Alaska. do do CHUH. $3,152 4.572 3.564 4.884 6.460 8.164 3.160 6.868 7.316 3.528 6.232 3.160 4.416 3.548 3.160 4.412 4.040 Cost per case No. \ flats, 96 cans. $4,440 6.528 4.968 6.592 8.304 9.872 4.440 8.584 9.024 4.952 7.736 4.440 5.808 4.960 4.424 5.544 5.544 Differential. Per case. $1,288 1.956 1.404 1.708 1.844 1.708 1.280 1.716 1.708 1.424 L504 L280 1.392 1.412 1.264 1.132 Lfi04 Percent. 40.86 42.78 34.97 28.54 20.92 40.51 24.99 23.50 40.36 20.39 40.51 3L52 39.80 40.00 25.66 37.23 This table shows that there is no absolutely fixed difference between the cost of packing a case of salmon in 1-pound tall cans and in i- pound flat cans, but that the cost of "halves" per case is from 20 to 40 per cent more than the cost of the 1-pound ^' tails/' and that this difference in cost is usually nearer the higher per cent. If the cost of a 1-pound taU can of a particular grade of salmon were $0.10, the cost of a half-pound can would be about $0.07. As the small can holds just one-half as much meat as the laj^er can, this shows a marked economy in the use of the larger cans. In recent years the opening prices per dozen of half-pound cans of salmon have generally been 30 to 35 per cent less than the prices of taU cans on the higher-priced grades and from 20 to 25 per cent less on the cheaper grades. This indicates that the prices of the poorer grades of salmon (pink and chum) in half-pound cans have been relatively too high, a condition which may be partly explained by the smaU quantity of these grades packed in the small cans. One-pound flat cans of salmon bring higher prices in the market than 1-pound tall cans. During the last few years this difference in price has been from 10 to 35 cents per dozen; 10 and 15 cents were the most common differentials. The only difference in the cost of packing salmon in 1-pound tall and 1-pound flat cans, so far as the information gathered in this investigation shows, is in the difference in the cost of cans. The 1917 prices of the American Can Co. show that the 1- pound flat cans cost from $0,021 to $0,027 more per dozen than the 1-pound tall cans. It seems reasonably clear that the liigher prices are not determined by a higher cost of production, but are explained for the most part by the different quahty of meat packed in the two styles of cans. It is stated that the best part of the fish is packed in the flat cans, leaving the poorer parts for the tall cans. m I I 46 BIPOBT OH CAFOTBD FOODS. ^^^'^SJL^.^^^ '''**** ^ ^^^ "^^ ^°'*" companies and large and small Table 20 gives the costs of the large and small plants. TAa« «»~C0MPAEI80H OF UNIT COOTS OF PRODUCTION OF TYPICAL PLANTS ITAVTNr LAROE AND SMALL OUTPUTS: 1916 AND 1917 ^^^^*^ ^^^^*NG Mgniber of plants ItOnibor of cases packed ...*.*.'.**" Coit of raw fisli * Coit of containers .'".'." '• Labor costs... , ;:;::: OtJier ttpenses cwt of production, exdudine »w fisli: :::::::::: Tutal cost of producaoiii eicfudliig selling expense " " 1916 1917 plants.i Small plants.! 17 1,818,387 11.077 .618 1414 3.491 52 1,364,303 SI. 456 .865 .750 L040 2.655 4.111 Lai^e plants.i 40 4,046,639 SI. 494 1.153 .&I8 1.007 2.808 4.302 Small plants.! 41 1,175,874 S2.024 1.345. .996^ 1.316 3.657 5.681 > Lirge plint. were tli«« packing ow 50,000 cases and small plants those packing under 50,000 cases. From this table it is seen that the plants with large outout^ in IQia mm small outputs, and in 1917 at an average of $1.38 oer case less than the small output plants. The larger pfants packKeir goods 15 per cent cheaper than the smaller plants^in 1916, ^d 24 Ter c^t [mSn? if''- ?'• ^'''^'' P^r ^^ ^^^ ^ lower av^rTge cosfforTl iw! w r^ '^?T ^^^^^"?g "^^^ the cost of production, but the rela! tively lower labor cost is especially noteworthy ■ A comparison of the costs of production of the companies which T.WL8 2L~COMPARISON OF UNIT COSTS OF PRrtnTrr-rrnxr oxr m^r,,v. HAVING LABgHnD SMliL^OUTFU^TS.m^^^ COMPANIES Items. 1916 1917 Ni]tm,ber of rompaales Mmii,ber of plants ".* .Number of cases packed Cost of raw (ish Cost of containers "'.'. ' " Labor cost ' OtiMiraipanaes,..., llllllll". ' Coit of production excluding raw fish * " Total cost of production. .T!! . . . . * * ' Large companies. Small I Large companies, companies. 8 41 2,691,066 SI. as7 .745 .703 list 2.602 3.689 Small companies; 21 7 21 40 719,274 3,291,118 SI. 140 SI. 312 .833 1.107 .583 .729 .8^1 1.366 2.370 3.202 3.510 4.514 30 31 1,288,512 S2.064 L314 .707 .958 2.979 5.04a This table shows the average costs for 7 of the comnanip<^ h^xrn^ar ^tu^t^^.Z^'^'^AT'^ '' "^ '^% complies havT/trsile! aver^gf cost o? ss.siTo/z :^J'Z^i^''^T^::i:^it':t KEPORT ON CANNED FOODSi 47 the smaller companies was $0.18 under the average cost of the large companies. In 1917, however, the large companies had an average cost of $4.51, compared with an average cost of $5.04 by the smaller companies. That is, the average cost of the smaller companies was $0.53 above the average c6st of the larger companies. The large-output companies had in both years lower container costs, probably due in part to the fact that they manufactured most of their cans, (See sec. 1 of Chap. III.) On the other hand, the large companies showed a higher cost of labor and other manufactur- ing expenses than the small companies. This shows clearly that the raw fish cost was the determining factor. In 1916 the small-output companies had a cost of $1.14 for raw fish, which was $0.05 above the cost of this item for the large companies. In 1917 the cost of raw fish to the smaller companies ($2.06) was $0.75 above the cost of this item for the large companies. The greater increase in the cost of raw fish to the smaller canners was due to the fact that most of them purchased their fish, whereas most of the large companies caught their own fish. The market price of fish increased between 1916 and 1917 much more than the wages of the fishermen. This increase in the cost of raw material placed the small-output com- panies at a serious disadvantage in comparison with their large com- petitors in 1917. In both years the small-output companies had a lower cost of pro- duction, excluding raw fish and containers than did the large-output companies. It will be interesting, therefore, to observe how the local fixing of the prices of certain grades of fish in 1918 will affect the cost of production of the smaller companies, which purchase their fish, as compared to the cost of production of the large companies, which catch their fish, and which had to give substantial wage increases to their fishmg crews. Section 7. The expense of marketing canned salmon. The cannei's' methods of marketing canned salmon have been ex- plained fully in Chapter I. Most salmon canners maintain no sales departments, do little or no advertising, and have few marketing expenses except brokerage or commission. (Salmon is sold f. o. b. Pacific coast, and as freight south from Alaska was included in cost of production no allowance for freight is required in expense of marketing.) The ordinary brokerage is 5 per cent. If to this amount an allowance of 1 .5 per cent is made to cover cash discount, a result is obtained which is equivalent to a deduction of 6.475 per cent from the selling price. Many canners have no other items which might be considered as marketing expenses. A great many companies con- sidered brokerage, cash discount, and prepaid freight as deductions from sales, and reported no selling expenses whatever. The average selling expenses reported by 20 companies, packing 50 per cent of the production in 1917, was $0,272 per case, or 3.59 per cent of the average net selling price. Some of these companies, however, did not analyze selling expense satisfactorily. For this rea- son the selling expenses of 8 large companies, all of which reported the amount of brokerage paid, were analyzed. The average amount of brokerage paid by these companies was 4.36 per cent of the average net selling price. The average of the other selling expenses, such as 48 BBFOBT OK CANNED FOODS. the cost of advertising, the expense of maintaining sales departments, etc., was 1.029 percent of this figure. This made a total selling ex- pense of $0,382 per case, or 5.389 per cent. With the addition of 1.5 per cent cash discount, not included in selling expense, the total differ- ence, exclusive of profit, between cost of production and the quoted Srice is 6.8 per cent. As many canners have no expenses for selling epartments or advertising, this difference is slightly too great for the trade as a whole. CHAPTEK IV. THE PEICE OF CANNED SALMON. Section 1. The meaning and importance of ''opening prices." The custom has grown up among the salmon canners of naming, in the late summer ''opening prices" at which they have decided to sell their newly packed goods. These prices are generally named late in August, when the canning season is well advanced, and when the size of the pack is known approximately. The stocks carried over from the previous year (in Seattle, New York, Liverpool, and in the hands of canners) and the estimated demand are also taken into consideration. Of recent years (since 1905) there has been great uniformity in the opening prices, and nearly all canners in quoting opening prices have followed the prices of one or two of the larger companies. The Alaska Packers' Association has for several years taken the lead in making the opening prices on all grades, except sockeye, and its prices have been followed by nearly all other canners in quoting opening prices. The opening price on Puget Sound sockeye salmon has been made, during the past few years, by Deming & Gould, who are especially interested in the Puget Sound product, and who are regarded as best representing the interests of the Puget Sound packers. The Alaska Packers Association is primarily interested in the Alsaka product; and as the cost of production is higher in the Puget Sound district, it is said that the packers there would often like to see higher opening prices than those made by the Alaska Packers Association. For this reason Deming & Gould opened prices on all grades in 1917. The President of the Alaska Packers Association was in favor of somewhat lower prices (e. g. $2.25, instead of $2.35 on Alaska reds) but accepted those named by the Puget Sound firm in order not to demorahze the market. All canners do not follow these opening prices. Prices made by the Puget Sound brokers are sometimes slightly higher than those named in San Francisco (for Alaska canners). The trade estimates that about 90 per cent of the total pack is sold at the opening prices. Whether cooperation or agreement exists among leading packers and brokers in fixing these opening prices has not been determined. It seems that the leading men in the trade discuss market conditions with each other from time to time, but it does not appear that pre- arranged meetings are held for this purpose. It was stated by the president of one of the leading brokerage firms that many packers write letters, inquiring when the opening price will be made, and sometimes ask if an approximation of such prices could be given in advance. This suggests an implied agreement to fix or maintain prices. 97684—19- 49 ♦1 ■• 4 'I .1*. 50 BIPOBT Oir OANmSD FOODa Tliefonomng table, taken from the Pacific Fisherman for January. W17, gives the openmg pnces of canned salmon during past 21 yeara: Tmm 22.-OPENINa PRICES ON CANNED SALMON SINCE 1897. 1807. Columbia River chlnook. PpgBl Sound sockeye- . . . .Atalaiwd... Alaakai^iik Cdnmbla River efalnook. . PwptSomiiliockey« Alaska pink Columbia River oUnook. Pupt Sound sockeye. . . . AiaBkared. Alaska pink Columbia River cMnook. Ppeul Sound sockeye. . . . Alaska red Alaska pink Columbia River chlnook. Pu8«t Sound sockeye.. . . Alaska red... Alaska pink Columbia River diinook.. -PugBt Sound sockeye Alaska fed Alaska pink 1808. llfvtfi 1000. 1001. looa. 1003. Columbia River chlnook. PuffJt Sound sockeye.... Alaska red Alaska pink 1004. diambia River chlnook. Puget Sound sockeye....; Alaska red pink 1006. Columbia River ohjnook.. Pjifit Sound aockey« Alaska red Alaska pink 1906. Columbia River chlnook. Pilget Sound sookeye . . . . Alaska red Alaska pink 1007. Columbia River chlnook.. Puget Sound sockeye Alaska red. ......,,...,. Alaska pink... Tails Flats (per doz.) (per doz.) $1.05 .80 .90 .65 1.05 .80 1.00 .65 1.25 1.10 1.00 .67} 1.60 1.10 1.10 • 75 1.50 .06 1.25 .75 1.36 1.00 .95 .65 1.35 1.50 L30 .50 1.16 1.66 1.30 .70 1.45 1.36 1.00 .70 1.50 1.45 .95 .75 1.65 1.65 1.15 .80 Halves (per doz.y fl.45 1.60 S0.85> .00 1.15 1.66 00 .95 1.65 1.50 .90 4.00 1.60 1.60 1.00 1.00 1.75 1.76 1.06 1.10 KEPORT ON CANNED FOODS. Table 22.— OPENING PRICES ON CANNED SALMON SINCE 1897-Continued. 51 1908. Columbia River chinook Puget Sound sockeye '..'.'.'.. Puget Sound pink Puget Soimd echo Alaska king Alaska coho Alaska pmk Alaska chum Columbia River Chinook, fancy '. Puget Sound sockeye Aiaslca red... ............................................. Alaska king Alaska coho Alaska pink 1910. Columbia River chinook, fancy Puget Sound sockeye Alaska red Alaska king A laska pink Alaska chum Medium red and coho 1911. Columbia River chinook, fancy Puget Sound sockeye A 1 aska red Alaska medium red Alaska king Pink Chum Talis (per doz.) 1912. ouvK-uyt?. -••>■>••■■•••••••>••••••«•.<••••. *•.••••■«•••,••*•«•■«••««. ««*«.«,. Alaska red Alaska medium red Alaska king Pink Chum 1913. Chinook Sockeye • *■ IufSKo I Uvl «■>. . ■•••■■••■■•-•••••••••••••••••••••••••■•••••■■•••••■••■a,**** Alaska medium red Alaska king Pink Chum 1914. A-iasica reQ ............................................................. Medium red Alaska kmg Pink Keta, or chum 1915. Chinook Sockeye Alaska red Medium red Pink 1 The San Frandseo opening price was S0.65. SI. 65 1.60 .75 1.06 1.15 1.05 1.00 .70 .70 1.65 1.35 1.15 1.10 1.05 .60 .67i 1.75 1.65 1.36 1.35 .80 .77i 1.25 1.95 1.95 1.60 1.45 1.80 1.00 .95 1.95 1.95 1.40 1.15 1.40 .65 .62 J 1.95 1.50 1.15 .85 1.00 .65 .55 1.95 1.95 1.45 1.15 1.40 .90 1.90 1.95 1.50 1.15 1.25 .75 1.70 Flats Halves (per doz.) (per doz.) $1.75 1.75 .80 1.15 1.75 1.50 1.35 ■i.'26 1.90 1.80 1.50 1.40 2.00 2.00 1.75 1.65 2.00 1.15 1.05 2.00 2.00 1.40 1.25 1.60 .65 2.00 1.65 1.35 1.00 1.15 .80 .70 2.10 2.15 1.80 1.35 1.00 .95 2.00 2.15 1.85 1.30 '"."85* .80 $1.05 1.05 .76 1.05 1.00 .85 "."to* 1.10 1.10 1.00 .80 1.30 1.30 1.12J 1.00 1.121 .80 .75 1.25 1.30 1.15 .80 1.15 .55 .50 1.25 1.05 .05 .70 .90 .56 .50 1.25 1.35 1.10 .82 J 1.10 .70 .65 1.25 1.35 1.15 .75 ".*67i t I 52 RBPORT ON CANNED FOODS. TAiw a.-OPENINO PRICES ON CANNED SALMON SINCE 1897-Continued. 1916. > CUiwolc. S'OCkeye. Alaska reel . . Medium rod. Alaska king. li.iAil..|lh *■><■■• M •• . Chum Red Medium red. Pink Chum Number of com- panies makinR (ipening price. 33 37 33 42 frequent price. #.1» «!ltl 1.30 .90 Per cent of com- panies making this price. 7.5.8 73.0 97-0 81.0 Second most frequent price. $1.60 1.35 .95 .90 Per cent of com- panies making this price. 18.2 16.2 3.0 14.3 Per cent of com- panies nammg other prices. 6.0 10.8 4.7 1917. S2.50 20.5 10.3 2.25 29.7 16.2 1.60 2.4 7.1 1.65 8.5 4.3 Of the 93 companies reporting, 33, or 36.6 per cent, named open- mg prices on reds in 1916, while 39, or 39 per cent of the 100 com- panies reporting, named opening prices on reds in 1917. On the other grades or Jdnds of salmon, the number of companies quoting opening prices varied slightly. These facts show that most of the companies did not announce opening prices. This is especially true of the canners on Puget Sound and the Outside Rivers. About two-tlurds of all the Alaska cannere announced opening prices. The camiers, who do not announce openmg prices, often have contracts BBPORT ON CANNED FOODS. 53 with certain brokers, who act as their sales agents, and who dispose of their entire product. In such a case the canner need not go through the formality of announcing a set of prices, and is generally satisfied if his agent does not sell below the opening prices fixed by well-known brokers or packers. Several companies reported that they received no record from their agents as to what the opening prices were. An examination of this table (Table 23) shows a very great uniform- ity in the prices announced by the different companies, a uniformity that has greater significance than the number of companies indicates, as the companies included contain the largest producers. Of the companies making opening prices on reds in 1916, 75.8 per cent named the same price ($1.50), while 18.2 per cent named a higher price ($1.60), and 6 per cent named lower prices. In 1917, 69.2 per cent named a uniform price on red salmon ($2.35), while 20.5 per cent named a higher price ($2.50). The other quotations showed no uniformity. The majority of canners who made opening prices in 1916 and 1917, and who did not announce the common price, named higher prices. The same was true of the prices on other grades. Of the companies who announced opening prices for medium reds in 1916, 73 per cent made the same price ($1.30). In 1917, 54.1 named a uniform price for this grade ($2). In 1916, 16.2 per cent named a price ($1.35) — just 5 cents above the most common pricfe; in 1917, 29.7 per cent named a price ($2.25) — 25 cents above the most common price. In 1916, 97 per cent of canners, who announced opening prices on pinks, named a uniform price ($0.90), and in 1917, 90.5 per cent named the same price ($1.65). In 1916, 81 per cent made a price of $0.85 for chums, and in 1917, 87.2 per cent made a price of $1.60. Thus the practice of following a uniform opening price is much more pronounced in the case of pinks and chums than in case of reds and medium reds. There was a greater uniformity in opening prices in 1916 than in 1917. This is probably explained by tne great difference in the cost of production in 1917, and by the large demand, which enabled can- ners to obtain almost any price they asked. The foregoing percentages do not prove that 90 per cent of all the salmon canning companies announced uniform prices, as the figures do not cover companies which announced no opening price. However, the larger companies named the same prices, and many of the smaller companies who did not announce opening prices sold at these prices. I| ill I 54 BIPOBT OF CANNED FOODS. TlBi.1 ai.--DATK8 WHEN OPENING PKICES WERE ANNOUNCED. 1916 Qrado. Week of opening price. Per cent of com- panies whicJi named price in this VWfLjQLiQL Ap Bad... Mediiinirwl*. Pink.* ••••«.. Cliiini. '.'. ....do Aug. W-a4 -...do ... 69.7 70.6 80,7 73.0 Per cent of com- panies which named opening prices between Aug. 15 and Sept. 15. 1917 87.9 91.2 93.5 94.6 Week of opening prices. Aug. 24-31 — do — do ....do Per cent of com- panies which named price in this week. 73.2 69.4 71.4 66.8 Per cent of com- panies which named opening prices between Aug. 15 and Sept. 15. 95.1 94.4 95.2 95.6 celttom^Zlf^t ^^^^ ^*"^- ^^ ***^ *^»t ^ 1916 from 69 per iW nrio«, fnr 1.?= ^ ^^ companies reporting amiounced their open- Fmm's^^Qrj™'^*'"'/.^*'^"™^ *>»™ig the week August 16-24. AuZ,f ,f an/l' T^u^ *^f companies named their prices between ™nf^f in^ September 15, m 1916. In 1917 from 66 to 73 per ^^st T^rXuT'"'^ ^^r ?Pr^^ P™«« i° ^^ ^««k between August 24-31 , while 95 per cent of the opening prices were announond between August 15 an/ September 15.^ T^few prkes rZ^ Is it^.^'t^ T^?u "/ ^*«" "^"y ■^'>* l'*^^ ^'^^ t™e opeu^^g prices L^H^^T";^^*' '^*.* *^« Percentage of companies announcilg open: Sin Tlgit^"^" ^^^ ^^ """^ September 15 was greater Si fglV It appears that the reason for the uniformity in the date of iha announcement is due to the fact that most canners and brokere wait for one of the two leading factors m the trade to amiolcrite prices t^?.!,^^" "^r^ t""^ ^"""^ *«y *'« ** O'^ce Siven to the trade and the other packers then announce their own prices, which are if not Sr;rtmYnST'a:>uV'^«- '^''"^^ ^^ *^« ^-'^'^ ^-^^- ^- Section 3. Fitire sales and prices. fl,f^*^%^"''^ "? i ^f^ importance in the canned salmon market Alfhni 1 w.Lf ''^ ^'''* ?''''^'^ vegetables and canned fruits. AltHouffh many canners make so-caUed future contracts, these are generally made on the "S. A. P." basis (subject to approval of price). IJiese S. A. P. contracts are really options under which the buyer can either confirm the purchase of alf or of a part of the specified number of cases when the seller notifies him of his nrices or can refuse to confirm the contract entirely. During the latter C^eliTnlrn^^rtl^^l t September, after opining prices Mave been announced, the S. A. P. sales become binding contracts J^ntt^tTr'^'^'" Tt"!r^. ^^ the buyers. It is obvbuf that such wkJktde ^ overbuying or speculative buying by BBFOBT OH OAJSnSTED FOODS. 55 Some few packers sell under binding future contracts at firm or specified prices. Such contracts are an aid to the canners in nego- tiating loans from their banks, as the sale and price of his pack are assured. When such contracts are made before the pacldng season, the canner assumes the risk of a possible short pack and a possible increase in prices, but is protected against a later decline in prices. However, very few sucn contracts are made, and most of the salmon is sold on S. A. P. contracts, confirmed when opening prices are announced, or on spot contracts. In case of a short pack, pro rata deliveries are generally made to buyers just as is done by canners of other commodities under their future contracts.^ Section 4. Spot prices of canned salmon. The spot prices of canned salmon on the New York market rose from early in 1916 to May, 1917, rising with especial rapidity dur- ing March and April, 1917. After May, the spot price fluctuated, but did not go above the high point reached in early May, and on the whole was somewhat lower. The price of canned salmon rose at a slightly more rapid rate than the general average of food prices during the winter of 1916- 1917. In the early summer of 1917, the advances both in the gen- eral average of food prices, and in the prices of canned salmon were checked and shght declines followed. Salmon prices declined some- what more than the general average of food prices, although both have been subject to Sequent fluctuations. The canners do not draw any definite distinction between future and spot sales. Many sales made or confirmed at the opening prices are reported as spot sales. On the other hand, many canners reported only sales made throughout the year at various prices as spot sales. For this reason it was impossible to ascertain satis- factorily the relative importance of spot and future sales made by the canners. It was also impossible to compare canners spot prices either with their future prices, or with spot prices in the eastern mar- kets, or with prices received by brokers. It seems that canners should make a clear distinction between spot and future sales, and that this distinction should be strictly ooserved in keeping their records. Section 5. Broker's prices. Table 25 shows the average of the high and low monthly prices received by brokers on both brokerage and merchandising sales for red, medium red, pink, and chum grades during 1917. 1 See Federal Trade Conunission Report on Canned Foods: Oeneral Beport, and Canned Vegetables and Fruits, p. 62, Washington, 1918. 41 i ^A^^weifhted average" allowing for different quantities of each grade packed, to be sold at different 5€ IteOBT OH CACHED FOODS. ""^£^1^^^^ HIGH AND LOW MMflH. Pacific coast. Ifwdi..... April UMtt...,,. Brokerage sales price per case. Merchan- dising sales price per case. Rest of United States. Brokerage sales price per case. Jttiy August atptwnber.. October NoTifmi,lwr. - Btoeiaber... ATOnig®forWiii0iitiis Erasas of merchandising over brokerage prices. SS.I8 5. 2S 5.32 6.05 7.57 7.30 7.47 7.45 7.78 7.93 8.05 7.98 6.»5 15.73 5.85 e.3i 6.43 7.21 7.52 7.46 7.38 7.56 8.08 a04 7.19 15.10 5.80 5.96 7.12 8.12 6.84 7.41 7.73 8.09 8.56 9.21 9.05 Merchant dising sales price per case. 7.06 7.42 .11 15.17 6.42 6.72 7.39 10.80 6.40 6.88 8.21 8.04 8.53 8.75 8.84 r.6« .2$ throughout the cenrrll'rd\im;:;iioToMheVrtr '^ table shows that higher prices vereCeTved by UC^n tSr buy-and-seU, or merr?.andi^ing, business than on tLirTtrf^Hv hrnkl age business, the difference bpin> Wflit AJasfciL C«ati«l. Alaska. South- eest Alaska. Puget Sound. Columbia Outside River. Rivers. Total. » Nnmt^r of cases, packed. Lobs: Over 30 1 1 3 6 5 8 8 6 6 8 3 3 5 4 2 1 2 1 1 3 29.9-25 •> ««»*ai**i>i#i« 3 2 1 6 3 1,279 59,950 288,010 97,040 469.310 394, 837 386,224 1,758,317 532, 138 4.9-0 2 1 3 1 1 1 1 Proit: ^O-iJ.... S-iJ 10-14.9 1 t 1 1 4 2 4 5 2 1 2 2 1 1 15-19.9 2 20-34.9 1 2M9.9 1 1 JO^.9.. 1 u-m.9 1 1 137, 352 210,670 40-44.9 1 • 1 1 2 W-54.9 1 184,263 223,939 217,012 137,481 104,809 55-59.9... ti&-69.9., 1 70-74.9 1 1 1 75-79.9 80-84.9 1 2 28,220 100,420 87,804 Over 100 1 Total 9 6 32 19 5 5 76 5,418,075 Range of penent- ajSes, profit, or loss. 1917 West Alaska. Central Alaska. South- east Alaska. Puget Sound. Columbia River. Outside Rivers. Total. Number of cases, packed. horn: Over 30... 1 1 2 3 2 1 2 4 7 2 3 3 3 2 7 4 4 7 4 5 4 5 1 1 4 1 11 40,232 29.720 M.9-m 19.9-15 1 9.9-5. "* 2" 1 1 1 8,743 31,582 122,330 188,437 38.077 4.9-0 Profit: WJ i". 1 . i" 3 3 1 3 §-».» 1(K14.9 1 1 1 1 5 1 1W9.9 1 1 87,348 126,923 83.975 74,336 344,680 ao-M.9 1 25-29,9 1 3(M4.9. 1 1 1 . 40-44.9 i ' 1 1 . 2 . i*. 2' 1 i' . 1 . 1 . 3 139,388 229.529- 1,909.244 556,626 724,005 339.319 668.767 87.73? 149, 193 691,619 45-49.9 4 2 3 , 1 3 ::::::::: ::"--i S0-W.9 .55-59.9 1 - 7. 8. 9. 10. 11. 12. 13. Total Average per company... General canned- food brokers in other sections: 1 2 8 4 5 ft 7 Invest- ment.! «171,399.85 385,377.34 7, 305. 81 48,316.70 257,3(54.24 100,000.00 t»,9(0.31 2,832.69 15,297.23 17, 189. 08 4:3,370.59 228,350.82 124,215.10 1,461,C85.82 112,459.00 79,1 10. r5 32, m\. 79 4(>, 146. 74 t8, 139. eo 5, COO. 28 48,713.34 9,210.27 24,354.36 Gross earnings. $222, 699. 19 188,095.09 43,389.84 45,352.37 254,280.32 (.2,145.11 28, 194. 78 9,886.37 11,(05 85 30,371.41 55, 208. 10 47,962.61 23, 273. 24 Net earn- ings from operations. 1,022,464.28 78,65L09 Total 313. 977. a3 Average per company ... 39, 247. 13 126,445.54 48,328.22 72,8.30.12 54,400.10 28, 187. 41 27, 553. 82 51,5.W.82 79,370.02 $136, 595. 49 56,930.32 38,081.58 9,217.14 63,396.11 845. 86 10,960.31 2,5(7.43 ■,892.22 16, 555. 70 44, 100. 70 22,351.18 10,269.46 415, 769. 60 31, 982. 28 Total net profit. $136, 595. 49 5(1,936.32 38,081.58 9,217.14 78,889.25 2 56,951.31 10, 9( 0. 31 2,5(7.--!3 3,892.22 16,555.70 44,(84.00 (3,538.34 10,2(i9.46 415,235.93 31,94L23 62,371.74 26, 376. 80 46,807.23 «7,111.77 15,469.89 18, 269. 76 18, 851. 44 24, 674. 97 488,669.05 205,650.06 61,083.63 25,706.26 84,565.69 26,376.80 46, 807. 23 «7,1U.77 15,409.89 21, 187. 20 19,693.23 24,674.97 Salaries. 151,335.00 25,811.56 1,021.88 5, 533. 50 34,449.00 27,907.25 11,899.60 3, (00. 00 2, 100. 00 8,887.50 7, 424. 55 23,055.00 6,942.19 Net earn- ings plus salaries. 1187,930.49 82, 747. 88 39,103.46 14,750.64 97,845.11 28, 753. 21 22,859.91 6,U7.43 5, 992. 22 25, 443. 20 51, 525. 25 45, 400. 18 17,21Lf5 209,967.03 16,15L31 31,837.57 16, 108. 03 5,000.00 11, 200. 00 7,559.14 6, 156. 67 35, 132. 74 231,603.24 &,950.41 112,994.15 14, 124. 27 625,736.63 48, 132. 80 94,209.31 42,484.83 51,807.23 4,088.23 15,409.89 25,828.90 2.5,008.11 59,807.71 318,644.21 39,830.53 » See discussion on pp. 64, 66-67. il7(i84-I9 5- ' Loss. Per cent 01 net earnings plus sal- aries on invest- ment.! 109.6 21. 4& 534.41 30.52 38.01 28.75 37.49 217.72 39.17 148. 01 118.80 19.88 13.85 42. so- ng. 07 129.97 114. 4.3 5.99 274.86 53.02 271.52 24.57 101.48 f I ■ Sit 66 BEPOET ON CANNED FOODS. T.%BI.« 32.-INVB8TMENTS AMD BARN1N08 OF CANNED-FOOD BROKERS WHO HANDLED CONSIDERABLE QUANTITIES OP CANNED SALMON DURIN(} 1917. MmmbfT of ^ma.' pmy. I!< Invest- mfint.) •287,995.34 272, 388. 95 7. .305. 81 M. 122. 22 30ti,253.49 100.000.00 «»,9(?0.31 4.f44.(il 1«, 189. 45 21.744.78 52,f>08.25 238, 7.80. If. I2(>,718.57 OroiR mmlngs. »401,6fi4.78 2*B,ft8-1.29 8fi. .iCHi. 00 104, 808. .55 3(12,401.42 102.35.5.82 l(H,n52.f.7 18. 452. 82 35, (123. 59 24..8.33.r.l 801 42«^. 03 45, 7(13. 25 39,999.49 Ni»t wni- Ings from operations. Total net profit. SalariDi. Net earn- ings plus salaries. I*er cent of net enrrlnps plus sal- irie.s on Invest- ment.' Facifle (*(ia9t Miraon. brokers: 1 2 3. 4 Sl(«, }.V2. .'■>4 .W, H.2. 09 34,672.97 41,449.61 77,293.47 1.55.09 72, .328. 42 1,88.8.83 11,189.67 I0,«vt8. 15 45,478.05 19, 289. m 15, 163. 87 SllCi. 452. rA 58, 1«'2. 99 34, (572. 97 41,449.61 79, .301. .'W 8.386.60 72, .328 42 1,.88S 83 11. 989. .57 10,r4.'i. 15 46, 187. .84 36, 105. 90 15, 163. 87 IaS.OOO.OO 34,604.60 21,788.12 7, 2.S9. ,50 35, 195. 00 44,242.20 17. 0.88. 00 6.000.00 4.980.00 9, (00. 00 19, 909. 00 'li, 02:i 00 7. 'liA. 35 1221, 452. iW 92, 767. 59 56,461.09 48,739.11 112,488.47 44. 187. 11 8'^ 416. 42 7, 888. m 16,169.57 20,248.15 (15; 387. 05 42.312. (^^ 22, 728. 22 76.89 34. 05 772. 82 90.05 36. 73 44.18 146.67 169. 84 99.87 93.11 124. 29 17.72 17. 93 5 li 7 , 8 , 9, , 10, 11 12 13, Total ATCTaipe per company... 1,549,711.94 119,208.61 1,(107,812.32 123,677.88 550,903.07 42,381.77 379, 738. 83 44,595.29 289,283.77 22, 232. CO 840,246.84 64,684.37 54.21 General canned- food brokers in oll»r iwjtions: 1 i 100,622.72 32. (m. 79 49,425.30 75,2;>1..37 5,l«MiL28 4K,713.&I 9,210.07 28, 7;J4. 02 208, 4'<4ri 78,(i74..'.,3 110,207.08 89,762.05 .•58,343.58 34, 87.5. .32 71,417.44 94, ti05. 63 103, lU. 85 45,371.17 59,304.14 6,8('5.85 36,575.56 1 19, 615. 44 37, 894. 01 30, i«». m 132,3r,8.14 45,371.17 59, m. 14 6,865.85 36, 57.5. .56 21,772.90 40,016.26 30, 166. m 71.482.82 27.095.45 5.000.00 11,372.74 9.9('0.00 42, 405. 84 174.637.67 72,4(Mi.62 m, Wl. 14 18,238.59 36, .575. 56 32, 472. 10 47.854.01 72,572.52 173.5.5 221.70 130. 10 24.23 652.40 66.45 519. 58 2.52.56 t 1 r.:::::::::::: 5... ?:::;;;;::;;::J 8, Total Average 'per eom:peiiiy... 350,249.89 43,781.24 746,370.24 93,296.28 338,947.70 42,3(B,46 372,430.70 46,563.81 180, 173. 51 22,521.69 519,121.21 61,890.15 14^21 «• Sm disfuasion on pp. 64, 66-67. ' Los.s. Includes only eight months. These tables show that tlie average investnient for the brokera on the Pacific Coast was $112,459 in 1916, and $119,208.61 for 1917. The largest investment in 1917 was $306,253.49 and the smallest was $4,644.61. * The largest investment in 1916 was $385,377.34 and the smallest was $2,832.69. Some companies took out most or all of the net profits as officers' salaries. In most mstances, to get figures which correctly repre- sented the actual net profits, officers' salaries had to be added to earnings, and for the sake of uniformity this was done m all cases. The average percentage of net earnings (including salaries) on invest- ment was 54.21 per cent for the 13 Pacific Coast companies in 1917, as compared with 42.80 per cent for the same companies in 1916. The highest percentage earned in 1916 was 534 and the lowest was 10.9. Of the 13 companies, 4 made over 100 per cent, 3 made between 10 and 20 per cent, and the other 6 macfe between 20 and 60 per cent. The highest percentage in 1917 was 772.8, and the lowest was 17.7. Four of the companies made over 100 per cent; 2 made between 15 Mid 20 per cent: 3 between 30 and 50 per cent; Mid 4 made between 50 and 100 per cent. It should be noted mgiiin that investment in a brokerage business is relatively unim- BBPOBT ON CANNED FOODS. 67 portant as compared with a manufacturing business, and conse- quently that a large percentage of return on investment is not necessarily an excessive one. These tables show that the eight general canned-food brokers in the Eastern States had an average investment of $43,781.24 in 1917, compared with $39,247.13 in 1916. The largest investment in 1917 was $100,622.72, and the lowest was $5,606.28. The average relation of net earnings (including salaries) on investment was 101.57 per cent in 1916 and 148 per cent in 1917. Five of the eight companies made over 100 per cent in 1916. Six of them made over 100 per cent, and four of them made Over 200 per cent in 1917. The average net earnings (including salaries) was $64,890.15 per company in 1917 and $39,830.53 in 1916. The ordinary brokerage company has only one or two officers, and their salaries have been added to the earnings. If six per cent were allowed on the invest- ment for interest, the remainder would amount to $62,263.28 per company for 1917 and $37,475.70 for 1916. If this is taken as a reward for personal services, it is evident that the brokerage business paid handsomely in both years, especially as the largest firms were not included. The average earnings (including salaries) for the 13 brokers on the Pacific Coast was $64,634.37 in 1917 and $48,132.80 in 1916. When 6 per cent interest on investment is deducted, $57,481.85 per company was left for the owners and managers in 1917 and $41,385.26 was left in 1916. The eastern brokers had a smaller average investment, and made a lower average profit per company, but showed a higher percentage of profit. Tms was apparently due, at least in part, to the fact that they financed few canners. Section 5. Brokers* earnings. The earnings and net profits made hy three representative Seattle brokers on brokerage and merchandising sales during 1916 and 1917 are shown in Table 33. TABtB 33.— REPRESENTATIVE SALMON BROKERS' EARNINGS PER CASE; AVERAGE BROKERAGE AND MERCHANDISING INCOME AND PROFITS PER CASE MADE BY TYPICAL CANNED SALMON BROKERS; 1916 AND 1917. Com- pany. Location. Year. Kind of sale. Aver- age broker- age received per case. Sub- broker- age. paid. Net broker- age. Oper- ating ex- pense. Net profit. Aver- age s^le value. Per cent net profit on value. I 1 1 1 Seattle Seattle Seattle Seattle Seattle Seattle Seattle Seattle Seattle 1916 1916 1917 1917 1910 1917 1916 1917 1917 Brokerage Merchandising.. Brokerage Merchandising-- Brokerage Brokerage BroVerage Brokerage Merchandising.. to. 223 .254 .398 .123 .1.52 .316 .208 .296 .946 •0. 112 ■■:i87" $0. Ill '"."269* $0,051 .051 .096 .096 .057 .043 .016 .111 .122 $0,060 .203 .113 .027 .0401 .092 .052 .019 .842 $4.45 3.77 6.92 7.46 3.88 6.55 4.26 6.42 7.54 L3 5.4 1.6 4 2 2 3 3 3 .0,549 ' .0971 .181 ' . 135 .140 .068 .166 .130 1 LO L4 1.2 .3 11. 1 1 The average brokerage per case was 19.4 cents in 1916 and 33.7 cents in 1917. About one-half of this was paid to sub-brokers, so that the net brokeraore amounted to 9.2 cents in 1916 and 15.8 cents ll m I I I m %i} 66 BEPORT ON CANNED FOODS. Tablk 32.-INVESTMEHT8 AND EARNINGS OF CANNED-FOOD BROKERS WHO HANDLED CONSIDERABLE QUANTITIES OF CANNED SALMON DURINd 1917. Number of com- pany. Facifie coiwt salmon brokers: 2- 1 ""-'"''- - " 3-.. ,... 4--. 5 II.,. , 7 8.. § 10 11-.., ,... 13 Total ,.-. AYerajre 'per company . . . General canned- food bro^PTs in, other .sections: 1 ,2*''*'-'"'-"'',;^ Z^ 4 5'."'. , fi , . . 7 , 8 Invest- ment.* $237,995.34 272,3a1,122.22 30«v2.«.49 100.000.00 tM.WiO.ai 4.(H4.6I If., 1S9. 45 21,744,78 .52,TO8.25 2;W, 7S0. IB 120,718.57 1,&WJ11.M 11!»,2W.61, 100,622.72 32, mi 79 49,42S.;« 75,251.37 .5, (MM. 28 48,713.34 28,7:14.02 Total ,..-! 350,249.89 Average per company.,, 43, 781. M Gross i>ii,ming8. .»W1,6M.78 208,984.29 8fi,50«i.00 104,808.55 362,401.42 102.:iVi.82 101, (152 67 18,452.82 35,tJ23.5l» 24,8.tJ.(il 80,426.03 45,70:i25 39,999.49 Npt earn- ings from operations. $IU% 452 54 m, 162. 99 34,672 97 41,440.61 77, sax 47 S55.09 72,328.42 1 • rWj»"l* Kit 11,189.57 10, 648. 15 45, 478. 05 19, 289. 60 15, 163. 87 1,«)7,S12.32 123,677.88 208,484.61 78,674..^i3 110, 207. OS 89, 762. 05 ,58, 343. 58 .34,875.:« 71,417.44 94,605.63 746,370.24 !IS,2»6.28 550,963.07 42,381.77 Total net profit. |1(J3, 58, 34, 41, 79, 8. 72. i; 11, 10, 46, 36, 15, 452. 54 1|!2. 99 672. 97 449.61 .301. '4 386. tiO 32K 42 888 S.3 989. 57 (48. 15 187. 84 105. W 163.87 Salaries. «iiS,000.00 34, 604. ♦'O 21.7.88.12 7, 2SJ. .50 .35, 195. 00 44,242 20 17,aS8.00 6,000.00 4.980.(1) 9, 6O0. 00 19, 909. 00 2:J,023 00 7, 5»". 9. 9(X». 00 42, 405. 84 180,173.51 22,521.69 1221,452.54 92. 767. .59 56,461.09 48.739.11 112,488.47 44,187.11 8^416.42 7, 888 83 16. 169. .57 20, 248. 15 6.5, .3.S7. 05 42.312 69 22,728.22 840, 246. 84 64,tm.37 174.637.67 72,466.62 64,304.14 18. 238. 59 36. 575. .52 .519,121.21 64,890.15 Per cent of net earrlnps plus sal- aries on invest- ment.' 76. 89 .34. 05 772. 82 90. 05 36.73 44.18 14(v67 1(^9. Si 99.87 93.11 124.29 17.72 17. 93 54.21 173. 5S 221.70 130. 10 24.23 ()52. 40 «i6. 45 5 19. .58 2.52.56 148.21 '*' See dimusion on pp. M, 60-67. • JUOfWI* looludes only eight months. These tables show that the average investment for the brokers on the Pacific Coast was $112,459 in 1916, and $119,208.61 for 1917. The largest investment in 1917 was 1306,253.49 and the smallest was $4,644.61. * The largest investment in 1916 was $385,377.34 and the smallest was $2,832.69. Some companies took out most or all of the net profits as officers' salaries. In most instances, to get figures which correctly repre- sented the actual net profits, officers' salaries had to be added to earnings, and for the sake of imiformity this was done in all cases. The average percentage of net earnings (including salaries) on invest- ment was 54.21 per cent for the 13 Pacific Coast companies in 1917, as compared with 42.80 per cent for the same companies in 1916, The liiofhest percentage earned in 1916 was 534 and the lowest was 10.9. Of the 13 companies, 4 made over 100 per cent, 3 made between 10 and 20 per cent, and the other 6 made between 20 and 50 per cent. The highest percentage in 1917 was 772.8, and the lowest was 17.7. Four of the companies made over 100 per cent; 2 made between 15 wid 20 per cent: 3 between 30 and 50 per cent; and 4 made between 50 and 100 per cent. It should bo noted again that investment in a brokerage business is relatively unim- BBPORT OK CAJOTED FOODS. 67 portant as compared with a manufacturing business, and conse- quently that a large percentage of return on investmerU is not necessarily an excessive one. These tables show that the eight general canned-food brokers in the Eastern States had an average investment of $43,781.24 in 1917, compared with $39,247.13 in 1916. The largest investment in 1917 was $100,622.72, and the lowest was $5,606.28. The average relation of net earnings (including salaries) on investment was 101.57 per cent in 1916 and 148 per cent in 1917. Five of the eight companies made over 100 per cent in 1916. Six of them made over 100 per cent, and four of them made over 200 per cent in 1917. The average net earnings (including salaries) was $64,890.15 per company in 1917 and $39,830.53 in 1916. The ordinary brokerage company has only one or two officers, and their salaries have been added to the earnings. If six per cent were allowed on the invest- ment for interest, the remainder would amount to $62,263.28 per company for 1917 and $37,475.70 for 1916. If this is taken as a reward for personal services, it is evident that the brokerage business paid handsomely in both years, especially as the largest firms were not included. The average earnings (including salaries) for the 13 brokers on the Pacific Coast was $64,634.37 in 1917 and $48,132.80 in 1916. When 6 per cent interest on investment is deducted, $57,481.85 per company was left for the owners and managers in 1917 and $41,385.26 was left in 1916. The eastern brokers had a smaller average investment, and made a lower average profit per company, but showed a higher percentage of profit. This was apparently due, at least in part, to the fact that they financed few canners. Section 5. Brokers' earnings. The earnings and net profits made by three representative Seattle brokers on brokerage and merchandising sales during 1916 and 1917 are shown in Table 33. Tablk 33.— REPRESENTATIVE SALMON BROKERS' EARNINGS PER CASE; AVERAGE BROKERAGE AND MERCHANDISING INCOME AND PROFITS PER CASE MADE BY TYPICAL CANNED SALMON BROKERS; 1916 AND 1917. Com- pany. Location. Year. Seattle 1916 Seattle 1916 Seattle 1917 Seattle 1917 Seattle 1916 Seattle 1917 Seattle 1916 Seattle 1917 Seattle 1917 Kind of sale. Aver- age broker- age received per case. Brokerage 1 SO. 223 Merchandising . . I . 254 Brokerage ! .398 Merchandising . . i .123 Brokerage .152 Brokerage 316 BroVertige 208 Brokerage ' .296 Merchandising . . ! . 946 Sub- Net Oper- broker- broker- ating Net age. age. ex- profit. paid. pense. $0. 112 $0. Ill $0,051 fO.060 .051 .096 .203 .113 .i87 .209 .096 .057 .027 .0401 .0.549 .0971 .181 .135 .043 .092 .140 .068 .016 .052 . 166 .1.30 .111 .oig .122 .842 Aver- age sMe value. $4.45 3.77 6.92 7.46 3.88 6.55 4.26 6.42 7.54 Per cent net profit on value. L3 5.4 1.6 .4 LO 1.4 1.2 .3 11.1 The average brokerage per case was 19.4 cents in 1916 and 33.7 cents in 1917. About one-half of this was paid to sub-brokers, so that the net brokerage amounted to 9.2 cents in 1916 and 15.8 cents I* \ f ' IP' 68 IIPOET ON CANNED FOODS. in 1917, an increase of 72 per cent. This increase was due princi- pally to tlie increased prices of salmon in the latter year. When the operating expenses were deducted from the net brokerage, there remained an average net profit of 5 cents per case in 1916 and 7.5 cents per case in 1917. This represents an increase of 50 per cent, and shows that only a part of the increased brokerage was taken up by increased operating expenses. However, none of these three companies kept records whicii made it possible to make an entirely satisfactory distribution of operating expenses between their brokerage business and their merchandising business. In distributing these expenses, it was necessary to prorate between the two kinds of business on the basis of sales. This probably placed too heavy a burden on the brokerage department, and consequently the net profits on brokerage sales were probably larger than shown in the table. Figures for earnings on the merchandising or buy-and-sell business are shown for only one company in 1916 and for two companies in 1917. The gross profits were larger than on the brokerage business in two out of the three instances, and as no sub-brokerage was paid, the net profit was relatively even larger. If a proper distribution of operating expenses could have been made, these figures might have been somewhat reduced, but would still have shown a greater profit than the brokerage business except for one company in 1917. Two out of three of the average sales values in merchandising transactions were higher than the sales values shown in the broker- nge business, and the lower value shown was due to a lower grade of fish. CHAPTER VI. OEGAKIZATION AND COITTROL IIT THE SALMON CAITirnrG INDUSTRY. Section 1. Advantages of large companies. From a business point of view there are several advantages in large- scale production and also in large business units controlling several salmon canneries. Among these are reduction of local hazard, better credit facilities, ability to own a fleet, and ability to secure and to utilize the best trap locations. A company with several canneries is able to equalize or absorb local losses without incurring a deficit for the season. The salmon run varies from year to year, not only from district to district, but within any one district. A large company may have a small run in one locaHty, thus depletmg the supply of raw fish for one cannery, but it is not hkely to have a small run m every locality. For instance, a company with six plants in 1917 lost $115,000 at one plant and yet made a net profit on canning operations of over $1,000,000. A canner with only one plant, however, especially if in a location where fish run irregularly, may have very uncertain profits. One year his profits mayl)e very large and the next year he may have a heavy loss. A large amouiit of seasonal capital is needed, and in getting neces- sary banking support, the packer who can show great stabihty over a period of years has the advantage A packer should also show considerable surplus, so as to be able to withstand a poor season. The large canner has a distinct advantage over the small canner, speaking generally, in the seasonal borrowing of capital. The la^e companies, with their large output and with capital or credit suffi- cient to carry the bulk of their pack for several months, also have an advantage in the marketing of their product. In recent years the Puget Sound canners have experienced more credit difficulties than the Alaska canners who have offices in San Francisco. These largo Alaska companies have been able to build up strong banking con- nections. A large canner is able to own his own fleet and this is another advantage, for it gives him greater certainty of getting his supplies and enables him to move materials and labor from one plant to another as necessitated by the size of the salmon run in various localities. The large canner is also able to spend more money for exploration or search for new trap locations, or to buy desirable locations from others. The control of such desirable locations gives such canners a decided advantage. 69 70 KEPORT OF CAK2^ED FOODS. Section 2. Tlie size of tlie companies and plants from a social point of view. In the salmon canning industry centralization of control had reached such a point in 1917 that five companies, or groups of com- panies, with a unified control, in 1917, packed 53.4 per cent of the total output. The advantages enumerated on the preceding page — and not a lower cost of production—seem to have led to the growth of these large comoanies. The figures presented in Table 21, of Chapter III, gave the costs of production at typical plants having large and small outouts, located in Southeast Alaska, West Alaska, and the Puget Sound districts, and prove that the cost of production varied with the size of the pack in each plant rather than with the size of the company which controlled the plant. The reasons for this fact were mentioned in section 2 of Chapter III. It seems reasonably clear, then, that the large companies have shown no exceptional efficiency and that their size has redounded to their own advantage rather than to that of the public. In this in- dustry large and efficient plants rather than large companies, perhaps resulting from the consolidation of a number of small plants, would be socially desirable. A further centralization of control, therefore, could offer no economies which would balance the dangers of monopoly in the industry. Ill Section 3. The companies tiat dominate the industry. The Alaska Packers Association ^ is the largest single producer of salmon and packed 1,346,292 ctises in 1917. This corporation is con- trolled by the California Packing Corporation, through the owner- ship of 79 per cent of its stock. All the product sold in the United States (783,413 cases in 1917) is marketed through the California Packing Corporation on a commission basis. The California Packing Corporation was sales agent for the MacLeay Estate Co., the Warren Packing Co., and the Columbia River Packers Association. This latter company packed 217,581 cases in 1917, but less than 2| per cent of this pack was handled by the California Packing Corporation. In 1917 theCahfornia Packing Corporation also handled 61 ,575 cases for other companies. The Alaska PacJanies. Among tlie stock- holdera of the Pacific American Fisheries appear the names of members of the Cudahy family, of the Cudahy Brothers Co., The Western Grocer Co., of Chicago, is a stockholder, and its president, Mr. F. C. Letts, is both a stockholder and a director in ttie Pacific American Fisheries Co. The Booth Fisheries Co. was reorganized in 19, and the reorganization committee was composed of 1<. C. Letts 1 P. A. Valentine, of Armour & Co. Mr. Letts was the first presi- dent of the reorganized Booth Fisheries Co. These facts show that the Booth Fisheries Co. formerly, at least, w^as closely connected with both tlie Pacific American Fisheries Co . and Armour & Co . Two of the stockholders of the Pacific American Fisheries Co. are conru^cted with two of the large Chicago wholesale grocery firms, S. B. Steele is president of the Steele, Wedeles Co., and €'. E. Wilcox is head of the canned goods department and a director of Sprague, Warner & Co» Evidence shows that the California Packing Corporation (Alaska Packei*s Association) works in harmony with Armour & Co., of Chi- cago, keeping the Chicago firm advised as to market conditions, etc., fornia Packing Corporation. CoAPTEIv VII. LEGISLATIOH TO PEOTECT THE SUPPLY OF SAIMON. Fears have long been expressed that the supply of salmon would soon become seriously depleted. As far back as 1889 Congress passed a law against barricading and fencing streams in Alaska. Th© Secretary of the Treasury, in 1900, ordered that all Alaska salmon canners construct and operate private hatcheries. This seems to have been an impossible requirement so far as the small packers were conceiiied, and was rescinded in 1906. Some of the large com- E allies, however, operate hatcheries. In 1917 there were four salmon atcheries operated by American companies in Alaska. In the same year the United States Bureau of Fisheries operated 22 salmon hatch- eries, of which 2 were in Alaska; 46 hatcheries were operated by the Pacific Coast States; 11 w^ere operated by Canada; and 1 was oper- ated by the Province of British Columbia. These hatcheries con- serve the supply of fish by protecting the eggs from being devoured by fish or from being destroyed in other ways. In addition, some hatcheries rear the young fish untO they are partially grown. Most of the young fish are released when in the ''fry" stage or w^hen about 30 days old. However, in recent years many fish have been reared in nursery ponds until therefore large enough to have an even better chance for their lives than if released in the fry stage. Such fish are known as fingerlings or yearlings. The output of the salmon hatcheries increased until, in addition to eggs, a total of 535,401,818 fry and 18,245,575 fingerlinp, yearlings, or adults were distributed in the streams of the Pacific Coast of North America in 1915. In addition, a large number of eggs and fry were shipped to other sections. Wood River, which empties into Nushagak Bay, in West Alaska, has been set aside as a breeding preserve for salmon. A rack has been constructed across the entrance, and the fish are counted as they pass though a tunnel in this rack. The number of salmon that have passed into the Wood River has decreased, as is shown by the following figures: 1908, 2,600,655; 1909, 893,244; 1915, 259,341; 1916, 551,956. (Figures from Bureau of Fisheries.) Besides the inroads made upon the salmon supply by fishing oper- ations and natural enemies, the pollution of the streams, the con- struction of dams without adequate fishwa3"s, and the failure to place screens at the head of all irrigation ditches connecting with the streams on the Pacific Coast also present grave dangers. Two bills for the protection of the salmon and the regulation of the fishing industry in Alaska have been introduced and are now (July, 1918) pending' before Congress. One of these bills, known as the Sulzer bill (H. R. 9092), is said to be indorsed by the people of Alaska and is opposed by the salmon canners. The other biU, knowm as the Alexander bill (H. R. 1753), is based upon data gathered by Govern- ment committees, and is indorsed by tlie canners and the Bureau of Fisheries. 75 I 76 RBPOBT OH CANNED FOODS. The Sulzer bill, in order to protect the salmon, abolishes the weekly closed day (Sunday) and in lieu thereof provides that all salmon fishing and canning operations shall close in Bering Sea on August 1, in the Gulf of Alaska on August 15, and in southeast Alaska on September 1. The cimners object to this provision for two reasons: First, they claim that it would necessitate fishing on Sunday, to which they say the fishermen are opposed; second, they claim that the abolition of the weekly closed period would lead to an exhaustion of the supply of salmon. The Alexander bill retains the present weekly closed day. Both bills include regulations prescrioing the size of streams in which commercial fishing may be carried on, the size of nets, seines, and traps which may be used, the size of passageways which must be left between Exod fishing apphances. The provisions of this kind in the two bills are similar, but those in the Sulzer bill appear to be designed to restrict operations somewhat more closely than those in the Alexander bill. Some canners oppose certain details in each bil as being impracticable or as being unfair to the canners in certain localities. The bills differ materially with regard to the rights of the canners to maintain trap and net locations. At present, leases for such locations in Alaska are only good for one year. Theoretically, all such locations are open to the first comer each season. Practically, however, the canners and fishermen observe "squatter sovereignty" and the canner who occupijes a trap or net location every year seldom has it "jumped. " Canners with desirable trap locations undoubtedly enjoy a distinct advantage over those who have less desirable sources of raw fish. The canners would like to have a greater security in their rights to such locations, and would like to hold locations which are not fished every year. The Sulzer bill provides for five-year leases which may be renewed at the end of each five-year period. The Alexander bill pro- vides for a 15-year lease, at the end of which period the location reverts to the United States and may be leased to any applicant. Fears have been expresssed that under a system of long leases the good locations, which are limited in number, would all pass into the possession of a few large canners, and that this would prevent new companies from entering the industrv. (See Chapter VI.) The small canners, however, lave expressea no fear to the Commission that the long leases provided for by the .Vlexander bill would lead to monopoly. The Sulzer bill provider elaborate machinery for its enforcement, which the canners say would entail unnecessary expense. The Alexander biU leaves the enforcement of the law to the Secretary of Commerce, The Sulzer biE levies a tax of 10.01 for each salmon caught. The canners say this tax is altogether too high. The Alexander bill pro- vides license fees for the operation o^ nets, traps, wheels, etc., and a production tax for each case packed as follows: $0.06 for red and kinoj, $0.05 for medium red and steelhead, $0.04 for pink and chum. The Sulzer bill gives the Territory of Alaska the right to levy addi- tional taxes or to appeal, alter, or amend the law in any respect. The canners are opposed to giving the Territory of Alaska any authority to regulate the industry, and favor leaving all control with the United States Government, as the Alexander bill provides; while many of the people of Alaska beheve that the Alexander biU would unduly deprive RIPORT ON CANNED FOODS. 77 that Territory of control over its salmon resources and tend to dehver those resources into the hands of a few large corporations. The Alexander bill provides, in section 6, the following: That any person occupying, or desiring to occupy, any location where it may be lawful to construct a pound net in the waters of Alaska shall cause such location to be accurately surveyed by a competent engineer, unless the survey thereof has already been made, in which event such existing survey may be used, and shall cause three maps to be made of such location from the actual survey thereof, which shall contain a plat and description of said fishing location for its ascertainment and identification on the premises. Said maps shall also contain a certificate by the claimant, or by his agent or attorney, stating that he claims the fishing location shown thereon, 8pecif>dng the date and number of the license under which the same is held, or the fact that appli- cation has been made therefor. Such maps, with the certificate thereon, shall be filed in the ofllce of the commissioner of records in the districts wherein the location is situated, which commissioner shall indorse thereon the hour and date of filing, and shall forward one of these maps to the Secretary of Commerce and another to the Pacific Coast office of the Bureau of Fisheries. From and after the date of filing in the oflSce of the commissioner of records, such maps shall constitute full and complete notice that the locator has complied with all the provisions of this act and that such location is owned, held, occupied, and claimed by the person designated thereon as the claimant. From and after the filing of such maps the claimant of the fishing location shown thereon, his heirs, administrators, executors, successors, and assigns shall have the right to hold, occupy, fish in such location, to renew the license there- for, and to mortgage, sell, and transfer the same during the time that he or they in otiier respects shall comply with the law pertaining thereto: Provided, That it shall not be necessary to file any map or plat of any fishing location before January first of the calendar year next after this act takes effect. ► It shall not be necessary to file any map or plat of any fishing location in any case where any map or plat has heretofore been filed with the Secretary of Commerce and the commissioner of records in the district in which the location is situated. All the pound net or other fishing locations lawfully occupied during the calendar year next f)receding the passage of this act shall continue valid: Provided, That if any owner or ocator shall fail to construct and operate his appliance in a bona fide manner for the three consecutive years covered by his license, the location shall be deemed abandoned. Clearly the trend of such a measure would be to place securely in the hands of the present occupiers the pound-net locations now operated, and would facihtate the acquisition of long-time rights in new locations. While a reasonable securitjr of tenure is desirable, it is doubtful if sufficient limitations are contained in the Alexander bill or similar measures. In the first place, no right should be granted to hold a net location unused for more than a snort period; and, in the second place, the maximum period for which a location should be held by a given interest, whether operated or not, should not be so long as 15 years. It would seem reasonable, and appears to be in accord with the ideas of those who, while famihar with the problem, are unbiased, that the maximum period for which a location may be held should be limited to about five years, and that the holder be required to operate the location at least as often as every other year and three years out of the five. r CHAPTER Vni. 8¥OG1STIO¥S FOl THE IMPIOVEMEFT OF COMITIOW S HI THE iilfJi.UJN l/AiNJNlJHlJ iJlilUoXAl. OBly a part of the roconimenclations made by the Commission in ite general report on Canned Foods* have any application to [\w salmon canning industry. t.h(^ nature of which is in manv respects different from the other" l)ranc]ies of the canning^ industry. ^ ^ innfral reemn'memlat^ - . — Tlie rccoinmendations in the Commis- sion's general canned-foods report on (1) economy in boxes, (2) the further standardization of grad(^s, (2) the regulation of the use of labels,, and (4} the restriction of unntM-'cssary r(\selling, however, should be ^considered in any regulation of the salmon industry. Prevcptfoii offnfnre num^opohi bff thf dftminaM inl/-7wfe. — ^^Fhe recom- mendations^ in, the generarreport , which deal with the control- over price and with^the tendencies toward ,m,onopoly, are of special interest m. this connection. In the canning of fruits ancl ve^etiil)l(*s, on account of the absence of concentration * hi, any one lociility and the small amount of capital recpiired to start a new undertaking, competition naturally tends to be froci. Prices have been ,maintained by the associations and not hy the consolidation of companies and by the centralization of control, lliis is not true of the salmon industry. In this industry the limited number of valuable locations and the large amount of capital needed for an undertaking have led to an important degree of centrahzation of control. Pending before Congreas at present are two bills for the regulation of salmon fishing in Alaska. These bills are the Alexander bill and the Sulzer bill. The principal i)oint at issue between the advocates of the two bills concerns the administrative autliority. Both of these bills contain many excellent provisions. The Sulzer bill gives the Territory of iUaska tlu^ liglit to alter or amend the law in any way, while th*e Alexander hill vests the administration of the fisheries m the hands of the United States „,Bureau of ,Fisheries. It would seem to be in the interest of good administration that the United States Bureau of Fisheries sliould have the same control over Alaskan fisheries that it has elsewhere in the United States. Aside from the question as to who would best administer a law regulating the industiT, however, it is the Commission's judgment that no one should be allowed to hold for any unreasonable period the right to locations which are unused, for tliis might easily lead to speculation and to monopoly. It seems clear tliat the title to any location left un- fislied for two successive years slio uld be forfeited . It also seems that all parties should ,have t,l,ie same op|)ortui,iity to secure the rights to such, locations. ,Les3ees should not- l)e allowed to renew their leases ,for successive j)eriotls in such a way as to keep all others out, or so as to be able to uion,opolize sucli locations. Newcomers sho^uld have the chance to secure such, locations l,>y competitive bidding or in other 1 Geneml Report Cuuied Focm1,s: Fedom,! Trade Commission, Washington, D. C, May, 1915. 78 EEPORT OF CANNED FOODS. 70 ways. The 15-year tenure of licenses, provided for in the Alexander bill represent probably too long and too complete a control of the valual)le trap locations. Additional legislation to protect tlie supply of salmon. — The need for additional protection for the salmon fishing industry appears urgent. In this respect the provisions of the Sulzer and Alexander bills seem to be satisfactory. Agreement hetween Canadian and American iishfrmen.—TheTe is a need for an agreement with the Dominion of Canada for a joint regulation of fishing in Puget Sound. During the war an agreement fixing iHiiform prices to be paid for the various species of salmon caught in Puget Sound seemed to be advisable. Limit dion on mmntenance of nominally separate sales ageneirs, — The second recommendation in the Commission's general report on th© canning industrj', which is of particular interest in this connection, is the *' limitation on maintenance of nominall}^ separate sales agencies." It reads as follows : It is common m the canned-foods business, and notably so in the case of canned lish, to have the entire pack of canneries handled by exclusive sales aj^ente, their exclusive field covering either a given,locality or the whole market. I n many cases the packers or stockholders in the canning companies are interested in the selling agency. In some cases the two organizations are identical. In such cases the costs oithe selling agent should be added to the cost of the canning company, and the profits made bv tlie selling agent should be regarded as intercompany profits and not included in the" can- ning companies' costs. A commission of 5 per cent, which is often received bv sales a|encies, has yielded a very large profit to such agencies, and where they are virtually identical with the manufacturing company, such profits are not proper! v included in cost." In the salmon-canning industry, it seems that the ordinary broker- age of 5 per cent could be greatly reduced by the canners forming direct connections with eastern brokers and paying them only the ordinary brokerage of 2^ per cent. The Pacific Coast brokers, who receive the 5 per cent commission, pay half of it in many cases as sub- brokerage to eastern brokers, as very few of the Pacific Coast brokers have sales organizations extending over the country. Many can- ners have a firm member act as sales agen*, and so pay only'2J per cent or 3 per cent brokerage to outsiders. It does not seem to be economical for the ordinary salmon canner to maintain an expensive sales department and to sell directly to the wholesale grocers, but it does seem practical for the medium and large sized canners to establish connections with eastern brokers and to reduce their marketing ex- pense almost by half. Such a practice should lead to lower prices to the consumer. Announcement of opening prices. — One of two men usually sets the opening price of canned salmon. The highest figure set ordmanly prevails. Inasmuch as selling prices should generally main tarn "a reasonably close relation to cost, the advisabilitv of the announce- ment of any opening price should he Questioned'. In anv case, the present custom of allowing one or two leading interests to dominate the price situation is fraught with danger to the consumer. S, A. P. Sal€s.=-~lt seems very douotful if the S. A. P. (subject approval of price) sales, so coiuinon m the trade, reallv sei-ve any good purpose. They may easily lead to speculative buVing on the part of the jobbers, and they do not protect the canner, as he is not sure of his sales untd these contracts or options are confuted or closed 80 EEPORT ON CANNED FOODS. in the late summer. It seems that such sales could be greatly limited without any injury being done the canners and with much Benefit to others. Prices of cans, — The prices paid for cans by different canners varied considerably. While this was due m part to the fact that some made their own cans, it was partly due to differences in prices charged by the large manufacturers. No reason was found which justified the can manufacturers in charging such different prices for the same size of can to different canners, except as such differences arose out of differences in the times at which contracts were made. The exclusive long term contracts exacted from the canners by the large can com- panies bind the canners to buy all of their cans from the can companv making the contracts duiing a period of years (generally 5). Sucn contracts are likel^y to be abused and should be discontinued. Umform accounting. — The salmon canners greatly need instruction in accounting; in the li^ht of the reports siibmitted by tlie salmon packers it is clear that better cost accounting methods should be mstalled. In this connection, attention is called to Keport ^ of the Federal Trade Commission on Canned Foods, in which it is stated "that while it is clearly desirable that each producer should accu- rately know his own costs, it is very doubtful if any public interest is served by the producers having meetings to discuss each other's ®osts." > Oovemmeat Printing Office, Washington, 1918. INDEX. Pag«. Alaska io .iq in Alaska Packers Association 13, 4y, 7li Alexander bill Hi "^^J^ Armour & Co co 11 Bonds ^' ^? Booth Fisheries Co i ^ o? British Columbia, Canada 14, 31 Brokers oo ?« Jjocation of A*oo oc of Rates of brokerage 9, 22, 26, -iH Control of canners ^^- ?I Merchandising 56 Investment of. ^" Canned food "7 Distribution of expenses o® Brokers' prices 65, 57 California Packing Corporation 70 Catching salmon, method of -• 1° Cans. {See Cost analysis) 35, 39, 8(> Capitalization ^S Central Alaska 34,60 Channels of trade 24 Chinese labor 13 Coastal streams 33 Columbia River 13. 17, 33 Competition : In the export trade 31 In the salmon industry 13, 20, 49, 57, 74 Consolidation of the first canners 13 Consumption of canned salmon 7, 31 Countries producing canned salmon 31 Contracts for sale of salmon ^^ ^5 Centralization of control 70 Cost: Difficulty on finding 35 Compilation of 35 Analysis 6t 37, 38- Items of 35, 36. Sectional 38 Range of cost - - 40-43- By grades of fish packed 42-44 Of canning by different size cans 44-45 Of large and small companies 46-47 Of large and small plants - 46-47 Cudahy Packing Co 74 Deming& Gould 49,70,71 Depreciation {see Cost analysis) 36, 40 Distribution of canned salmon 21, 22, 54 Eagle Cliff 13 Expense ?^' ^J Export trade 31, 32 Factory swells {see Cost analysis) 36 Fish, difficulty of securing 20, 21 Food value of salmon *»J Founding of the salmon-canning industry 13 Fraser River IJ Future sales "J General expenses 36 Gorman & Co 72 97684—19 6 81 III Cl« Grades of salmon: Coet... Wute in canning. . Opening prices Average price Growth of the industry. Hapgood, Andrew S Hazard INDEX. Hatcheries History of the salmon canning industry Hume, Wm. and G. W. * Investment: Borrowed funds, stocks, and bonds Average per company Avefage per case packed ] Canners profit on Brokers profit on Items of cost 37, 38, Japan M Jobbers (see Wholesale grocers) 21, 22, Kelley-Clarke Co ' Labels {see Cost analysis) Packers, jobbers, and brokers Labor (see Cost analysis) 35^ Lllf|e-scale production ' Legislation to protect the supply of salmon 19, LiDby, McNeil & Libby Licenses Nets New York Nushagak Bay Opening prices: Average for 1 916-1 7. For different grades 56, Statistics of 50, Outiide rivers ' Ovefhead expense {see Coet analysis) Pacrific American fisheries Pack in cases Pick of different grades flirts, for export shipping Packers, meat, relation of to salmon industry Prices (see Opening prices): Importance of opening prices Factors in naming Uniformity of opening prices 49, Dates for naming , Brokers 55, IVofits: Packers On investment Per case packed A e» casC' soau ---••-•»••••-•--•--•••••.•............,,,.,...........,,,. By districts ....[[[. Cost of sales PugetSmnd i3,'32,*33, Raw lish {see Cost analysis) Recommendations Sacramento ,[ Sales: Fnture , Spot. S. A. P Meichandising ...[..... Sties agents 21, 22, Page. 42-44 39 49 54 13-14 13 36 75 13 13 58 60 . 60 61 64-67 39, 40 31 24,28 72 3ft 28,30 39,40 69 75,76 73 19 18 32,49 75 54 52,53 51,52 19 36,40 71,72 32 34 32 74 49 49 52,53 54 56,57 61 61 61 10,64 63 64 49,52 35,38 78-80 13 54,55 55 54,55 55,56 20,28 INDEX. 83 i Salmon (raw fish): ^*®*' Kinds and grades 14.17 Rise in price 20 Competition iu securing 21 Cost {see Cost analysis) . 21 San Francisco 32, 69 Seattle f2 Seines 1° Selling expense {see Cost anal^rsis) 47 Shooks— boxes {see Cost analysis) 35, 40 Siberia 31 Spoils (see Factory swells) 36 Stocks: On hand 49 Carried over "4 Sulzerbill... 11,75,76 Swift & Co 73,74 Traps: Locations 18, 76 Valuation 1^ Licenses J^ Operations of "^q io Advantages of desirable 11, 18, 69 Transportation of men and supplies 35, 40 Wakefield & Co 73 Wakefield, Lee H 73 Washington 1^ Waste in canning 39 Wholesale grocers overbuying 54 Wilson & Co 73 Wilson I^shenes Co 73 Wilson- Wakefield 75 Wood River 75 ADDITIONAL COPIES OF TmS PUBUCATION MAT BE PROCURED FROM THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTINQ OFFICE WASfflNGTON, D. 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