New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-04-03
Guggenhein Hits
Govt Interference
With Economical
Head of American Smelt-
ing & Refining Co. De-
nounces Price Fixing

Government interference with the
normal working of the economic law
of supply ans demand has seriously
affected the earning ability of the
American Smelling and Refining Com
pany. Daniel Guggenheim, president
of the company, in the annual report
issued yesterday, stresses the fact that
the corporation is suffering from the
"entile lack of economic law" The
company earned 22l2 per cent in 1917
on Its common stock, against 80 per
cent in 1916.
The company is operating under the
direction of governmental commits
slons,' says Mr. Guggenheim, "where-
by the value of the metal products of
the company is fixed. But the cost Of
labor and supplies is not fixed; in fact,
owing to the various government con-
tracts for shipbuldlng and other con-
Stfuctlon or great magnitude, which
nave been made on the basis of cost
plus of commission. the contractors
nave no interest in holding labor costs
at point where profit can be made,
and, IN tact, their own interests are in
tavor OF as high a cost as can be in
any way justified
Earnings Jeopardized
BY these two governmental actions,
first by reducing the value of our
product and second, by constantly in
creasing our cost, this great corpora
ton, producing what is absolutely nee.
essary TO the government in carrying
on the war, is having its ability to pay
lar return to its stockholders Sc
rlously jeopardized. While it may be
said that the previous profits were OK
ccssive, had it not been for such prof
It's the company would not have been
able to enlarge its works and increase
It's output, all of which has been OF
vital necessity to the government
These engagements have been effected
at cost of fully S15OO0,0OO, all Of
which has been taken out of earnings
OF the company, and the enlarged ca
pacity will doubtless be entirely use
less after the war demand ceases"
Earnings of the company and it's
subsidiaries, after dcducting general
expenses, fixed charges and corporate
taxes, aggregated $25 035, 1913, decrease
OF S206,35S compared with 1916. Cor
porate taxes were S2.S64 COS in excess
of 1916. The annual charge for depre-
citation and depletion of ore reserves
was S4.954 ASP, compared with $780,
O47 the year before. After payment of
the preferred dividends there remained
Sl3, 7S2959 applicable to dividends on
the outstanding common stock, again st
$16.15S,991 in 1916.
Sales Over $100,OOO,00O
During 1917 the company receipts
from sales Of metals aggregated S405,-
6l6,l66, of which $24S552 1866 was for
copper sold. Gold sales produced SOL
~ ,4o9, silver $49, ,505, and lead
SAB ,772,391. Payments included s426,-
0l7,G67 for ore and bullion purchased
received $S,9S2, 525 in dividends last
year On December 81 last cash on
hand and in the bank amounted to
S10,9o1,717, compared with S16,941, 391
IN 1916. The decrease is more than
offset by the S6,419,25O Liberty Loan
bonds purchased by the company.
The company produced S4S, SS8 900
pounds of copper last year, against
789 ,43S,000 in 1916. The silver output
was 69,841 ,061 ounces, decrease of
about 100000 ounces. The increasing
war demand for sulphuric acid in the
manufacture of explosives stimulated
lHc Collpdly output OF lnat product
the amount produced last year totalling
66,174,ooo pounds, against 25,842 900 in
1916.
At tie end of last year the corr
pany had in its employ "a sos men, ex-
Guiding its Mexican properties Total
wages and salaries paid excluding
Mexico, in 1917 aggregated S24,497 1886
compared with $l7,047 ,9A4 in 1916
The average wages per eight-hour day
jumped from $40 in 1916 to 1881
in 1917.
Expenditures on property account
last year were S6,6O5 800, of which APP
proximately S4700,O 900 was expended in
extending and charging the copper
smelling works at Garfield, FL Paso
and Hayden, and the copper refining
works: at Baltimore, Perth Amboy and
Tacoma. These expenditures have
brought the smelling and refining
capacity up to 1,15o,O0O,O00 pounds Of
clectrolytic copper year, and the
company is actually producing at the
rate of 1,oooooo,Ooo pounds year.