The Washington times., 1920-05-20

increased their net income OF VA
ESQ, 900 Tor the period l9i2-lOl+ 10
s337 .OOO. 900 for the period l910-l9Is.
OF almost exactly four ana one-half
times the pre-war average. ThCse
companies, said the report. made a
total OF more than billion dollars, OF
which some $3.50, ,OO0, 900 represented
| excess profits over pre-war conditions.
THE per cent OF return on capital
| stock also more than quad cupled, MS
ing from an average OF approximately
| 9 per cent to approximately 70 per
cent. =,
| Three Corporations CITED.
| That these increased profits were
not entirely due to increased proiuc-
tion can be illustrated in the case OF
three corporations. United states
! Steel increased its net income per ton
from an average OF s4.89 prior to the
war to an average of Sab during the
1916-101S period. Lackawanna Steel
| showed an even larger Increase
somewhat Influenced by a deficit OF
| the pre-war years-while the Colorado
| Fuel and Iron Company was able to
| raise its earnings per ton from $2.O2
to 1884.
| ''The average profits OF the United
States Steel Corporation for the years
l916-191S were S2l1 .O94.557. represent
l -
capital stock" said the report. This
was more than four times it's prc-war
leverage OF $53, 900. 900. AS matter
of fact, its earnings were over a quar-
| ter of a billion dollars in 1915 the
amount being s271, ,637, ,730. or a return
of more than 81 per cent on it's enor-
nous capital stock. an income which
| would mean its replacement in 81 ht-
| ly over three years.
| In lot 70 n
the profits earned by the Bethlehem
S,eel Corporation were even higher
| thar those of United states Steel In
| contrast with pre-war profit: OF ap
proximately $4,250,O0O, the average
| annual profits during The war years
| of 1916-191S, approXimatcd $4,000
| 0OO--the wartime earnings being six
times as great as those OF the ante
| bellum period In 1916. this corpora
| ton took profits equivalent to 146 per
cent of it's capital stock, so that it
was no surprise to find it appearing
| the following year with a much high
er capitalization. Its earning powe"
was being capitalized. For the three
years 19l6-191S, despite it's increased
| capitalization, IL earned approXi-
| mately 40 per cent. The high prices
which the people OF the world have
| been, paying for the essentials of life
| have enabled this company to make
a profit in three years equal 10 three
| times the entire par value or Its
stock in 1916
! Did Some "Henvy Grabbing"
| "The Cambria Steel Company also
| did some heavy grabbing while the
opportunity lasted. Its pre-war
| profits of S3,s0O,OOO per year became
war profits of more than sl.O0O,OOO,
| or an increase from Sh per cent to
43 per cent on its capital stock. Dur
ing 1916 and 1917 Cambria Steel made
more than $25.OOO.0O0 a year-or
more than $4,000, 900 as the profits
OF two years on $45,0O0,0O worth OF
stock.
| "Crucible Steel took advantage Of
| the war to quadruple its profits.
From an average of approximately
S3115, 900, they rose to more than
S13,OO,OO, or from 6.3 per cent to 26.2
lper cent. For three years this cor
poration earned annually more than
a quarter Of the entire value of its
| capital stock.
| "Republic Steel took profits during
| the war years seven times those ac-
cepted prior to the war and Su-
perior Steel with $50 per cent profits
lin 1916 was let into reincorporating
with capital stock increased to
fourteen times the original figure"
| The tremendous increase in the
price of steel during recent years.
said the survey. is not attributable
to advances in wages. Even after
| war time increases in wages had
been met. the labor costs per ton of
| finished steel was only Al per cent
higher in war time rnan during the
pre-war period, as compared with in
crease in net profits per ton Of fin-
Iished product of 220 per cent. The
increase in gross sales and earnings
! was equivalent. to $62.9O per ton Of
output, or approximately four times
the increase in total wages and sal
aries per ton.
For every dollar paid in salaries
and wages" said Lauck, "the net
profits of the corporations available
for dividends increased from % cents
for the pre-war period to IS cents in
lle17. At the close of 1913, the cor
poration accounts showed that for
every additional dollar paid to labor,
approximately ii per cent more was
available for dividends than had been
on an average during the pre-war
period.
Lnbor Costs Not Responsible.
"The facts presented by the steel
corporation reports as well as those
ascertained by the Investigations OF
the United States Commission OF Cor
norations." said the report, show
conclusiyely that the high prices of
steel. which are affecting all prices,
are due not to increased labor costs,
but to enormous profits on inflated
capital
| Assuming that labor costs in 1918
were twice as great as those in 1910.
IL is evident that the total costs
would amount to only a very small
fraction Of the increase In prices
during the war. In the case of steel
billets. the increase In price was
s21. go, more than four times the total
labor costs and more than nine times
the increase in labor costs. In the
case OF rails, the increase in price
was 500. approximately four times
the total labor cost and eight times
the increase in labor cost. In gen
eral, then, a 100 per cent Increase
in labor costs during the war would
have been approximately only 12b