The Penn's Grove record., 1921-03-25
Dupont EARNINGS
Annual Report of Company Reveals
Decrease In Sales From Year 1919

NeL earnings OF 9~IO,ODo,VZZ.Zl anu
sales Of $685., 291.61, are shown in
the annual report for 1920 of E. |. du-
Pont de Nemours & Company, which
has been issued. These figures com
pare with net sales Of sos, 37,923.24
and net earnings of S11,620,953.05 in
1919. Earnings applicable to common
stock were $10,74 ,807.86, of which
$6,267,74 was paid III cash dividends.
In addition to sum applicable to com
mon stock the undivided earnings &C
cruing to the company through its
stockholders in subsidiary and other
companies aggregated approximately
S13, 000, 900. This would make a total
of $23, 749, 807. SO, which represents
the company's direct earnings appli-
cable to common stock, plus its equity
in earnings Of other companies in
which it has large and controlling
stock interests. This total is equiva-
lent to approximately $3.50 per
share of common stock.
The report says the estimated net
value of the principal investment
s~tockholdings exceeds the values at
which such stocks are carried or the
books by slightly over $4,000 900,
equivalent to about $50 a share on
common stock.
The conpany's suspended val con-
tracts with the Government form an
interesting chapter in the report. On
December 81, 1920, there were 81 of
these claims a~ggregating $685.
692.55, but by reason of advances from
the United States, and credits due the
United States for purchases Of ma
Uerials in claims, the net cash due the
company was only S2,013,410.18. OF
these claims agreements have been
reached with auditors and the local
army boards covering q claims, ag-
gregating S23, 075 ,327.31, IN which
there is due the company in cash
1854, 70.
The balance of the claims (16 ag-
gregating $4,000, 365.24, on which
there is cash due the company of
81, 1858, 716.48), are still in process of
settlement.
Depreciation of inventories of raw
materials and finished products, due
to the abrupt decline in prices in the
latter part of the year, amounted to
S1O,342.413.43. That was written off
without disturbing the profits for 1920
because during previous years when
i OFFICES W6IC tdSlIlS IIC
had set aside from the current profits
an amount sufficient to meet such an
expected decline.
The investment of surplus funds IN
other profitable industries was com
pleted in 1919, but during last year
at became apparent that the oppor-.
tunity for expansion in the lines OF
business in which we had become en-
gagged was so attractive that it would
be advisable to have additional funds
l to permanently invest therein" To
secure the necessary funds dividends
: were paid partly in stock which re-
l suited in cash accumulations at the
5 rate of approximately S6,000,OOO per
annum.
This change in the dividend plan
was made because, the report says:
: at was found that many of the stock
holders would be unable to purchase
their proportion of a new stock issue
r because the Government would take
4 so much of their income in taxes as
u to leave an insufficient amount for
reinvestment. 1t is difficult to find
newcomers to take up the stock, fol
the reason that they are in the same
situation with respect to income tax
and have little surplus for r%elnvest-
ment. The same situation prevents
the sale of bonds or debenture stock
except at very high interest rates
y doubtless due to the grave shortage
y in ~reinvestment capital
, Payment of federal taxes was
"major contributing cause of the in
sufficiency of capital remaining from
undivided profits" the report says
The amounts paid to the United
States Government since 1915 are
n For year 1916, $751; 8,286.30; 1917
S21, 596, 1854; 1918, $1,000, 919.76
1919, S1,373, 3S3.27. Total, S51, 662,
l. 564. 81. "These taxes, like the sur
taxes on individual incomes" the re
port adds, "are a serious drain OF
o funds available for reinvestment II
industry"
The recent purchase of the Duran
e holdings in General Motors (in which
d the dupont Company already had
d large interest and now has a CONTROL
5 ing INTEREST," and the financing Of the
deal are explained in detail.
n The Company's consolidated balance
o sheet, in which is included E. /. du'
p Point de Nemours & Company, o
Pennsylvania, E. I. DUPONT de Ne.
mours Export Company and the Roke.
1 by Realty Company, shows total as
e sets of 1858, 359, S71.03 as compared
with S240, 9S2,620.74 in 1919. Sur.
plus shown is S69, $50, 784.27, as com.
pared with 81, 741, 304.41 in> 1919
Q The capitalization in 1920 was: De
benture stock, S70629 $50; common
: stock, $~63,378,335.