The sun., 1918-09-11
LOCOMOTIVES NET
EARNINGS DECREASE
American Company Reserves
S1,40O,OOO for Increases
in War Profits Taxes.

Net profits on the common stock OF
The American Locomotive Company, ac-
cording to the annual report issued yes
terday for the year ended juno 30. 1918.
werc s4.l61.137 This compared with
s5,tbl.6ss the year before and s9.Oi9.-
42s in the 1916 fiscal year. These were
eaunl to $685. a share. against s21.S0
in tho preceding year.
This balance for the common, how
ever, does not tell the real story, for
the report shows that the company
charged against earnings $3s1,1e2, rep
resenting the writing down of the book
value Of It's drawings and patterns from
ses1,1s3 to 81. Had this deduction,
which statisticlans figure should have
been a charge to surplus, not been made
percentage earnings on the common
would have been s20.1o.
The profits for the 1913 fiscal year,
according to the report are shown after
the deduction of all United States and
Canadian taxes under existing laws.
with an additional reservation Of 81, 4e0,-
900 for anticipated increases in the
United States war profits tax. At the
ciose OF Its fiscal year American Loco
motive had untitled orders on its books
amounting to s74.736,5i3 against ST.
620,+4s the year before.
Gross earnings. the report shows, were
SsO.oSS.07o. against ss2.213,S45 year
ago and s59.316,016 two years ago
Iotal charge to income for taxes was
Sf.olS,961. compared with S2,205,31s in
the 1917 fiscal year and s7a5,o00 In the
1916 fiscal year. The 'compapy's profit
ana loss surplus was $17,S2s.506 at the
close or the year. compared With Sl5,-
sl7.369 at its beginning.
~ VIII be noted from the balance
eneet. says Andrew Fletcher, president
or the company. In the report. that the
amount of current assets exceeded the
current liabilities as Of June 80 last by
S26.3c0,675. The amount of money in
Inventories of materials and supplies on
manu- ana Tor work in progress at the
close OF the fiscal year aggregated s25,-
i11.S35. as compared with about ST.
100000 In the largest year of business
previous to the war"
Mr.. Fletcher forecasts maximum ca
pacity operations for the plants of all
locomotive builders during the war and
Tor some time thereafter to supply the
requirements OF railroads. Industrial
plants engaged in war service and to
meet the demands for foreign service.
Commenting upon an order for 500 loco
motives of standardized designs received
Aioih tHc AurlllnlStra
months ago, Mr.. Fletcher expressed the
belief that the standardizlng of locomo-
tive design for domestic railroads will be
a substantial factor In obtaining maxi
mum tonnage producticn from the plants
of the various builders.
He noter however. many deterrent
factors and comments upon the produce
tion situation in the report az follows:
"a scarcity and q general unrest OF
both skilled and unsk!lled labor existed
during the year .notwithsta nding fire.
Quent increases of wages: these condi-
tions still exist and together with the
enlistment and draft of men required for
national service, the severe weather con-
ditions of last winter, the then conges-
ton Of rail traffic. with consequent delays
IN obtaining materials, and the shortage
Of fuel. affected the production for the
year"