The labor journal. [volume] (Everett, Wash.) 1909-1976, 1914-05-01

lule aiming DlS DuSlueSS ueu Is 10 Is
sue as much stock as the profits will
pay dividends upon. That is the way
business men estimate values. Earn
ing power is the test. If a concern
can produce profits of $1,000 a year,
the concern must be worth $4,000, be-
cause $1,000 is per cent of $4,000.
The advantage of this scheme is that
it gives the insiders an opportunity to
get their own profits quickly They
do not wait weary years for dividends.
They simply start the presses to print
ing stock. The stock is sold to the
public at high prices and bought back,
in panic times, at low prices. The in
slider cannot lose. The outsider can
not win. The insider does not intend
the outsider shall win.
The Ford Automobile company, as
have said, produced in 1913 profits of
$25,OOO,000. 1t was known far and
wide as highly prosperous concern.
According to all the rules of high fl
nance, it should have been capitalized
at an enormous sum According to all
the rules of high finance, it's stock
should have been tOuted broadcast as
a great investment and sold to every
body who could be induced to buy. If
Henry Ford had been the ordinary big
business man, he would have done
these things. Upon the basis of his
/ $25,000000 of profits he would have
capitalized his concern at 1925, 900 900
or Whereabouts. Upon a capitalization
of $625,OO0,000 he could have paid an
annual dividend of per cent. AS the
owner of more than half of the stock
he could have put more than $3O0,000,-
600 into his own pockets and became
another Carnegie. He could have re-
duced wages, starved his employees
into strikes, shot them down if neces-
sary, and virtuously resisted all de-
mands for more wages by declaring
that he was already paying so much
wages that he could pay only 4 per
cent dividend upon his stock
But Henry Ford did none of these
things The Ford Automobile COM
pany, instead of being capitalized at
$625,0 100000, is capitalized at $4,000
600 The stock of the company, in
stead of being scattered broadcast
through the country, is owned by
seven men, Mr.. Ford himself owning
more than half. Mr.. Ford, in other
words, has been and is engaged in the /.
making and selling of automobiles |
rather than in the making and selling
of stock
Therein Ford differs from the CON 4
yentional big business man. Because
his company is honestly capitalized, /
his books in 1913 showed a profit of
more than 1900 per cent, 1t is be-
cause his books showed a profit of
more than 1900 per cent that the Ford
company is pointed out as an unusual
ly successful enterprise. If the Ford
company We're capitalized for seven or
eight hundred million dolalrs, the very
men who now regard it as a gold mine
would regard it as a gold brick.
And it would be a gold brick to
everybody except the men who sold
the brick They would have the seven
or eight hundred millions and would
be so respectable that their respecta.
bility would shed censure as a ducks
feathers shed rain. But the cheated
would be dissatisfied
with their wages The wages of floor
sweepers would not be increased from
1924 day to So, nor would $4,000 900
be handed out each year to other en-
ployes. More likely the wages of
everybody would be reduced And the
reduction would be based upon the
excuse that is everywhere given by
big business men: I'VE must reduce
wages in order to pay our stockhold-
ers fair rate of interest"
We hear this cry every day. The
railroad companies want to reduce
wages or increase freight rates-they ,
do not much care which. The mining
cannot afford to pay their
employees living wages. No million
aire Will admit that he is making a
dollar in excess of necessary house
hold expenses. Ford is the only mil
lionaire in the United States who is
crying to his employees for help to
spend his money.
Yet common sense should tell us
that the Ford plant is not the only in
dustry in the United States that is
making much money, Why should
the Ford plant be so considered?
The Ford plant makes nothing but
Automobiles are not