Canned Profits

It takes 100 tin cans a year to maintain the average U. S. family--about 60 for food and about 40 more for oil, shoe polish, paint, etc., off & on throughout the year. Since cans, once opened, are of little further use, that means the U. S. consumes 12,000,000,000 cans annually. Tin cans, as all the world knows, are not made from tin but from tin plate which is 98 1/2% steel with 1 1/2% coating of tin. Last year the can makers used more steel than any other industry except the automobile, absorbing one-eighth of the country's total steel production. Furthermore, two can companies between them make at least two out of every three cans opened. American Can is more than twice as large as Continental Can but both have waxed rich on the theory of taking an infinitesimal profit on each can and then multiplying it by billions. The estimated profit on the handiest container developed since the egg is 2/10 of 1-c-.

Last week, having rolled up about three billion of these tiny profits into one big $9,000,000 ball in the year through June, Continental Can declared a 50% stock dividend. Continental paid dividends throughout the Depression, has upped its payments twice in the past year. If the stockholders authorize the necessary increase in capitalization--which they will undoubtedly be delighted to do--the directors plan to place the stock on a $2.40 annual basis. As each stockholder will then have three shares instead of two, that will amount to boosting the present rate of $3 to $3.60.

Continental Can was yet to be born when William B. ("Tin Plate") Leeds and his gaudy crew of promoters gathered up 90% of the U. S. can business in 1900 and called it American Can--what really was then but is not now the Tin Can Trust. American Can promptly made the mistake of raising prices all around, which not only irritated Roosevelt I and the best can customers but also attracted scores of competitors into the field. One thus attracted was Edwin Norton, who had sold out to the Trust and urged others to do likewise. Mr. Norton had solemnly agreed not to re-enter the can business for 15 years or within 3,000 miles of Chicago but nothing was said about setting up his son in business. So Mr. Norton was largely responsible for Continental's beginnings. Several American Can executives went over to Continental bringing with them the account of Campbell Soup, now the world's largest user of tin cans. And by 1921 Continental ranked far ahead of all other can makers except American.

In that year Carle Cotter Conway, who had married Mr. Norton's daughter, decided that his piano business was in for heavy weather. So without much difficulty he made himself the active head of his family-in-law's can business, in which he had long been a director and big stock holder.

Ambitious Mr. Conway launched an expansion program which more than doubled the size of the company, pushed it west to the lush packing shores of California. He even gobbled up the third biggest unit in the field, U. S. Can, and with it Oscar Caperton Huffman. Mr. Huffman was not anxious to sell in 1928 but one day he turned up in Mr. Conway's Manhattan office. Mr. Conway began a long speech about all the benefits of a merger but he was cut short.

"Wait a minute," said Mr. Huffman. "You know that you and I can settle this thing right here and now."

"Huffman," said Mr. Conway, "you're a man after my own heart." And without more palaver the $7,000,000 deal was arranged.

The late days of the Coolidge Market brought fame to C. C. Conway, can man, but more fame to C. C. Conway, speculator--a fact which Mr. Conway now deplores. Every stockmarket pool worthy of the name had Mr. Conway down for thousands of shares. When the Crash came Mr. Conway was far out on a limb in several big syndicates--but not so far as some people would like to believe. Mr. Huffman's election to the presidency in 1930 was erroneously spotted as the end of Mr. Conway. Today he is Continental's active board chairman, its biggest individual stockholder, and he will probably witness the best year in Continental's history.

Deficits are unknown in Continental's recent history but profits tend to fluctuate with the size of the canning pack. Both American Can and Continental sweat to build up sales of their "general line" for varnish, candy, adhesive tape, etc., but "packers' cans" still amount to about 55% of American's output, about 70% of Continental's. Packers' cans are the easiest to manufacture for they are standardized but their sale depends on the weather. And no matter what else the Drought may have done, it dropped into the can makers' laps an unsolicited order for hundreds of millions of cans for the meat which the Government is tinning for the unemployed in its huge cattle-slaughtering program-- all at 3/10 of 1-c- profit.

This year's commercial pack, moreover, will be perhaps 16% larger than last year's. The American Institute of Food Distribution estimates that the tomato pack will be 18,000,000 to 22,000,000 cases (24 cans to a case) against 18,000,000 cases last year; the corn pack at 12,000,000 cases against 10,000,000; the pea pack at 15,000,000 cases against 13,000,000; the string bean pack at 6,000,000 against 5,500,000. The Alaska salmon pack was the biggest on record--7,234,227 cases. But owing to a marketing agreement, peaches may be down 1,000,000 cases, and many another miscellaneous fruit and vegetable will just hold its own.

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