The toiler. [volume] (Cleveland, Ohio) 1919-1922, 1920-06-04
: By BASIL N. MANLY.

manufacturers S2s5 per cent clothing and dry good
stores 1926 per cent, and to cap the climax, steel
mills as higL as s90.999 per cent.
profit of 29O,999 per cent seems incredible
nut here ale the facts. This steel company (pags
S61 of the Treasury report) had a capital stock of
$4,000; N 1917 ii reported to the Treasury Depart
ment net income of S14.5f995o After paying its
exess profits tax, its net income still amounted to
22Si per cent its capital stock This corporation
dd not make any report of its invested capital
owing to the secrecy which shrouds the income and
excess profits tax reports nobody except the officials
OF the Treasury and of the company itself knows
what comparY this No explanation of these
sensational facts can therefore be given. II NAV
have been of getting a fat contract from
this government foreign government and
selling the right to another corporation for some
Sl5OOOOOO, The company may have been formed by
the inside officials and financiers of big corp.
Grafton as means of coneeang profits and plunder-
ing the other stockholders. Nobody knows. but this
corporation did make this unbelievable profit of
29O,999 per cent while this nation was at war; and
so far as have been able to discover neither the
Attorney General nor any committee of Congress has
ever made any attempt to ascertain who this king
ot profiteers This steel company did not stand
entirely alone, for there is another corporation
reported on the same page as earning 201S0 per
cent on its capital stock
What Did the Steel Trust Make?
What profits did the Steel Corporation which
has denied its workers the right to organize report
to the Treasury in 1912 tried to find out On page
a61 | found steel company with capital stock
Of $S6S5S3600 There is only one corporation in the
world with that amount of capital stock - the
United States Steel Corporation. I thought I had
found it. I looked to see what net income II had
reported TO the Treasury Department in 1917 and I
tound the amount recorded $l55,S54365 before
sne sne deduction Of income and profits taxes
thls seemed incredible, the net income before the
deduction OF taxes reported by the corporation in
its published report A7s,2O4,342. It appeared
as though $322,O00.000 of the Steel CORPORATION g
income was being concealed from Uncle Sam II did
in I won tn tha
treasury and asked permission to see the return of
the United States Steel Corporation in order to ver
~ the facts Section of Treasury Decision No 2Ol6
states that the Secretary of the Treasury shall nor
iot the inspection Of the return of anv corporation
listed on tine stock exchange I was told by an of.
Ilcla or the Treasury Department that this decision
was now in force and covered the inspection of
returns Yet to the return of the Steel Corn
oratlon was denied me, and after davis delav T
received long memorandum. three pages of which
were taken up with telling me that although tbis
was the only decision the subject it was not now
IN force, having been modified by one of the later
revenue acts. The last page of the memorandum
Wh,le refusing to state whether the facts which I
had quoted from the report of the Treasury Depart
meAt applied to the United States Steel CORPORATION
or not, set up a hypothetical case to eyplain how
this apparent discrepancy of $500 OOO 0oO m;cbt
rave occurred 1t was stated that in the case Of
holding company reports of the subsidiaries wero
made separately, and the only income reported bv
ne holding company that accrling directly IN II
believe ttat this statement is corrected and that
the steel Corporation reported its income correctly
20 the treasury Department bat neither [ nor any
o!ner American citizen has any means of knowing DO
eitvey what the facts are So far as the income and
excess profits taxes are concerned the Treasury DO
Fartment IS an impenerable veil through which no
citi2en rs permitted to see.
For this reason the net income of the Steel (,or
cannot be stated the basis of the Treasury
pvPnrsnen1 l 1igures but on the basis if its own
Pnnnshed report its net profits in the two wears
1910 and 1917, after the payment of interest nm
ooauS ana atter allowance for all charges growing
out OF the installation of special war facilities
amounted th TO SSSS'5l5l1. This is $2OOOOOOO more
than thc total capital stock of the Steel Cornoraton
IN other words in 1916 and 1917 every dollar of tLo
captal stock of the Steel Corporation was paid for
IN net profits In this connection it should be e.
membefcd that when the Steel Corporation was form
ed Its entire $5OO,OOO.OOO worth of common sto"
represented nothing but water ~
nave tabulated the returns of industries on .
aoseu IN mssn,9tacturlng and selling the principal
eceSSaries or life There is not single one of these
branches of industry and trade in which tboro 80
not at lease one establishment making 100 nor CAN'T
or more on IFS capital stock. Out of SOC flopr m;I
s reported net profits of 100 per cent on their
e"Pitai STOCK. and one company reported 26os nor
'ht. The bread and bakery companies wero ~.
quite so fortunate, but out of PIT of them. "a or
more than ohc'sevenh, made moro than ion nar
I'M on thelr capital stock, and 1853, or more than
capital. W. W iuNeS'eG
The newspapers have carried advertisements cost.
Tag millions of dollars telling how little profit is
made by the meat packers The Treasury Depart.
ments reports show that ont of 122 meat packers,
~, or one out of every four made more than 100
Ter cent profit their capital stock One of these
companies rot one of the "Bg Five" made the
nice little profit of 4,244 per cent on its capital
stock in 1911 In this connection discovered ono
interesting and significant thing while examining
this report of the Treasury Department On page 965
found meat packing corporation with capital
stock of $lOO0O00Oo in 1917. There were only two
meat packing corporations with capital stock OF
Sl0O,OOO,OOO n 1917 Armour & Company ana
Swift & Company The corporation that is mentioned
above reported to the Treasury Department n ne,
income in 1917 Of $l9l3o147; after tho payment of
income and excess profits taxes it still had a net
income Of S4S'slO,9S4 Looking at the published re.
ports OF Armour and Swift find that Armour re-
PORTED to tho public profits of only S3062s l57 in
1917, and Swift reported profits of only $34 $50 900
do not know which of these companies is rc
presented ia the Treasury Departments report but
10 know that whichever one it is concealed from
me public either SO 100000 or s13O00OOO net income
which IT reported to the Treasury Department In
other words the Treasury Departments report 70.
vcas beyond question that one of these companies
las fals;fied its report to the public and TO its
stockholders II the public had the access 10 the tax
reports to which it is entitled by every rule of
justice and by every precedent Of the American
government, there would be no difficulty in ascer.
tanning which of these companies was guilty Of this
offense AS !! IS both Of then, must lie under su.