Document aBeprqZEQx7QBGR07Q4rKRE6M

/- cxceurtvc orricw tOI flO<KCT AVC.Nk.Wl ebcvcu*Mo.QMo . L> TiJg $HWfoZfM* "T-i , ! <; >>*\ V. * l !! l k' * it 27, 1942 A ii *{!! f.r. H. F. Taggart,! Director Accounting Division, 1.. % Office of Price Administration, ft* taetnnffton, 0. C. Da*r Sirs "k 19.S1, '. On July 16th you granted ua permission 'to withhold fllfdjjF of ' "Industry Cueatiormaire for Paint and Paint Produotabut at the urgent request of ;Ur. E. T. Trigg, President of'the 'National Paint,' Varnish and Lacquer Association, we are filing'herewith, the schedules > * retuifated for The Sherwin-hilllanw Compddy/ii t Acme White Lead * Color Works, " The Lose brothers Company, John Lucas Company, . The aartin-Senour.Company.AJiT oust labor ad tflgfr {>'> Lao past yety 1. In submitting these schedules, we'fe'diethat-'eearfeeiagiieition to ofivr en analysis of present costs and profits which should be bel^ "ul to you in i-.onniriering the position of the Paint and Varnish Industry in r*;-MM to the groan profit margin.' > ` -i n. .ryi : ij>i, I . .;:.ed *.*; -.^s fcai. u <fvet From doth contained in the attaehed aahedulea.iryou Tilt observe that during the years ending August SI, 1989?*1940~aodl>l941s ourlg?9**v profit was as follow*: ;u- .i./. Jfr to vC i< : of ' The Sherein-Williame Co. . :L2jMajc!x!- BstlS 38.S< Acme Milt* Lead 1c Color forki-"'"v!lj8 ,!* >S6.1>. 3S.S Tr>e Lowe1 Brothers Co. ' ' nq >68Tt4w > 139.31i 4218* , John Lucas 4 Co. J li.-ueSB.O'- >S4.1 i SSdSss Tho hsrtih-Senour Co. I :-u rr.ui84.,4* i'S4.6>n 3S|*' he arw not yet in possession of faots relating to 1942, as our year ends August 31. However, estimates-which velars able to make *'ro i n extanalvo1 record and review of costl oiW raw 'materials, packages, U.roi- *(>(. expenses, indicate a serious deollne in margin of gross profit. \ . t.nei t Saar heteriels > m * From our, records reflecting the rise and fall in coats and ,c*r*t* of raw aJtterlnle used in the production of paint and paint iii-ivu'iots, we observe: : iW'' t i k Vi N 4395 2. '!>* weirht*-n average actual eot of row materials, Kant*,nbcr ISM through larch's!., 1948, hu increased ovr.r the weighted average coat of our fiscal year ended Auyua'.. 32, 2941 - - -- - 15,37$ 8. 'liie >'<m;hied average currant sarlcet of raw asteri'-ls at Larch 31, 1.942, compared to tha average actual cost during tha year ended August 31, 1941, htti inure*sod ------ 9.55$ J. Aa a result or the foregoing facts, our weighted average cost of raw naterinis used in the production of Paint and paint Products during 1942 will be apm-ii'uateljr 0.5'/ higher then in 1941. r..ii>ci.ji,i'!- Labor & t.'xnenne Ui to tncrenaee in hourly rates, the cost of labor and .Muir:*-- r gallon of output has increased 5$. Over tha past year our hourly rates have increased 0 to 21$ and tha increased output V.; not olT-cat tne advancing coat of labor. urri;et. priceu of raw materials advanced sharply during this fine*! y*r. As inulnntad above, tbs wsightad average March aarlcat costs or i'kw materials wars 29.5$ higher than tha averaga eoet of _ 'terit Is nut into production lent year. Beeause of forward buying, oet of raw materials used in production lags 60 to 90 daya bacic of markets and *o ure now dofinitelv In a coat period whan tha currant v-arirst cos! s -re determining bur coat of production. Consequently, o-*n rytn n1' rrtmm profit froo this ties forward is reduced to appro,teeiely 5.5$. he have had but one increase in selling price n ir ye, r, which averaged 6.4$. This increase in selling price does mi' jiT: * i ui* inuro-aed non I. of raw materials, as witnessed by the rollnvir-* cicul-ficnej .1 1. , la represent. 74$ of coot of Paint and Van.inn llllral output - 74$ X 9.5$ 1.75$ :. end bxiwtnue represents 18$-of coat of Paint ii-nim i'lllnd output - 16? x 5$ .90$ 4*0fc oi* Pul.!i >nd Vupninh Production ' * t^ # > ^"THIr 4t- r Sell in./ Pries *e increased 8.4?; therefore, present filin' Price coupared to 1941 is $108.40; it0*.40 - $30.50 . $27.90, or 25.555 Gross Profit .!' Pt in Thus e levs & shsrp decline in gross profit on Point i pro;..ct >is follower I Year ended Au:ust 31, 3541 - 34.3? Current Actual Cost - - 25.5? i.e believe this condition to be representative of the Feint nr.d Varnish Industry as a whole. Sales during the past three annl-he have fallen off sharply and ue are now'in a position vir.rn conniileration must be given to an increase in selling prioes. Yours very truly, THE SHERtllH-HLLIAhS CO., Ui.e Comptroller. l