The Detroit times., 1916-05-01
Big Profits Not Alto
gether Satisfactory,
Says Banker
STRUGGLE NOW
RULES FINANCE
Dangerous IntOxica-
+ ton In Business AZ
fairs Is Created
HENRY CLEws.

"The- effect of the war upon some
industrials Is phenomenal. particu-
larry upon those engaged In iron
and steel production" says Henry
Clews. the New York banker. In his
weekly market review. For ex.
ample, the United States Steel cor
poration's net earnings during the
last quarter were reported at about
| 60.C00,000. or five times what they
were a year ago Similar results
are being reported by other con.
Germs In TINS industry. although IL
must be remembered that compari-
sons are made with a period of de-
preston. Copper mining companies
are making extraordinary profits.
and their combined output for this
year will considerably exceed g.
Doc, 900, 0oO' pounds. which at current
average prices would approximate
considerably over s500.000,000 in
value OF product. compared with
$3.50 e00,c0o last year. Moreover.
the entire output for 1916 Is said
to have been sold to the allies. who
seem TO have secured all the sur
plus copper In the country. When
the war Is over there will be ire
mendous vacuuci in Germany which
'his country Will be called upon to
I'LL.
Such bulging profits, pleasing as
they may be, arc not altogether sat
4 :sfactory. They are much exagger.
ated by high prices and innationary
conditions. Beyond question they
create a species OF dangerous intox-
scation in business affairs The
whole industrial fabric. while run.
ming At ,op speed, Is put more or
less out OF gear. Costly changes
and Improvements are being made
that may be suddenly wiped out OF
J existence when peace comes. Com.
I missions are mary and heavy. En-
travagance IL inevitable. and care
less business methods take the
place OF economies formerly en-.
forced b. necessity. Opportunities
I s0r graft and greed are innumcr.
|, able and the morale of many es-
Establishments Is seriously impaired
or destroyed. A hazardous situa.
tlon Is being created which. though
recognized is often lightly regarded
Because OF the immense profits In
immediate view. Foresight may eff
fectually prevent the disasters which
|, would ordinarily follow such ex.
\ cesses. but the effect is demorali,.
!, ing alike to capital and labor. The
latter naturally expects share in
these extraordinary results. and Is
securing II without much difficulty
Z Many concerns are disposed TO deal
literally with their help, and nu.
/, merous wage al, ances have already
occurred in industries making these
unparalleled profits. II would prob.
! bly, have been better for all con-
oerned. II instead OF higher wages
! nnses had been given the men,
WIN the assurance that they would
" ANhNih"'N 90 iVhk 90 pitctuN IA
'rao-dinary conditions last.
Dividends and interest payments
, for May are estimated at about
$l37 .0QD.000, or more than $5.000.000
lin exceGs OF last year. The increase
Is smaller than expected in view
Of the large profits made by many
industriIls The reasons why dis
tributions have not been heavier are
several Large sums have been
, charged osf for depreciation. Still
larger sums have been taken out of
earnings and put into plant, reap.
pear!ng m the form OF surplus and
stock dividends. Some companies
are wisely STRENGTHENING themselves
: against future reaction by building
Up good reserves TO maintain divi-
denis: and all concerns are feeling
the widespread rise in the cost OF
> doing business. as well as the nh
. merous concessions to labor, which
/, will soon cut down dividends to
more normal proportions.
WAR continues the ruling factor
!, In financial affairs: our relations
, with Germany still being the first