Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1921-03-04
BILLION PROFIT
BY u. S. STEEL
Gain in Two Years by Great
Corporation Has Been
Enormous.
WILLIAMS ISSUES STATEMENT
Comptroller Of Currency Declares Cor
poration Has Defrauded the Gov
eminent Out of Large Sums of
Income and Profits Taxes.


Washington, Feb 2S.-The United
States Steel corporation has earned in
two years more than a billion dollars
OF profits, 1.-THE eXaction of which has
had a most disturbing and injurious
effect on our country and our allies,
according to a statement of John
Shelton Williams. comptroller of the
currency.
This swollen and unconscionable
profit" Mr.. Williams charges, was
made selling steel at prices averaging
$50 ton in excess of the amount nee
essary to pay dividends on steel
stocks" He also charges that by
manipulation of its accounts the cor
poration defrauded the government
out of large sums in income and ex-
cess profits taxes.
The statement by Mr.. Williams fol-
lowed letter sent to Ebert H. Gary.
president of the corporation, on Feb
ruary Is, and heretofore unpublished,
in which Mr. Williams said:
NO insiduous, sneaking propaganda
of high-brOw or low-brow apostles of
ruin could put in the popular mind so
much poison as refusal by such cor
poration to do its part toward solving
great difficult problem, reviving in
dustry and business activities and pro-
noting industry and the peace and
happiness of humanity"
Tn b;c e,+o +o,,ooY,4 IT.. !.
Unnecessarily high prices exacted
by the United States Steel corporation
during 1918 for supplies of all kinds,
especially steel and iron products, cost
the government many hundreds of mil
lions of dollars.
Official figures of the corporation
show that 1t charged, for every ton of
its steel products, an average of about
$50 more than necessary to pay divi-
dends on steel stocks.
'"The United States Steel corpora
ton produces close to one-half of the
steel made in the United States and
through its subsidiary companies and
powerful financial and industrial al
lfances holds a dominating position in
the steel and iron trade.
''The company officially reports total
value of its. business for 1918 at
81 ,288, 029,225. To create this product
the corporation paid out total of
1852, 1868, 524 on pay rolls. We find that
they received an average of $87.7O per
ton for every ton of the 14,124,9 tons
of rolled steel and other products
shipped to domestic and foreign
trade.
'"The net earnings of the United
States Steel corporation for 1918. as
shown by its annual report, amounted
to $549, 100000 In it's report to it's
stockholders, however,. the company
deducted from net earnings an esti-
mate for war, income and excess
profits taxes amounting to S274,277,-
600, leaving net earnings of $274, 9O3,-
600.
This deduction included an item of
$96,675,000 for maintenance and re-
pairs, though the company was carry
ing on its books to the credit of de
probation and extraordinary. replace
ment' the impressive sum of $191, 2S1,-
600.
"The earnings of the company were
so large during 1918 that it could have
doubled the wages and would have
had a surplus left of S96,517,O00.
IF the United States. Steel corpora
ton had held prices to a moderate
basis during the war, the government,
our allies and the public would have
been saved exactions amounting to
many times the $2S8,OOO,0O0 to be paid
by it in federal income taxes.
"The United States Steel corpora
ton with its plethoric treasury could
richly afford to say to the government
that for the remainder of this year it
will sell its products at net cost, hav-
ing made in the last two years more
than a billion dollars of profits, the
exaction of which had a most dis
turbing effect not only on our allies
but upon our country in the midst of
war.
"The company's report states that
its inventory was arbitrarily reduced
by more than $5O,OOO,000 December 81,
1918, by marking down stock on hand
from actual cost or market value to
normal prices But it does not say
what prices they regard as nor
NAL
My conclusion from the foregoing
figures is that the United States Steel
corporation should make radical and
sharp reduction from the prices recon-
mended by the Redfield committee.