The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1924-02-27
SCAB COMPAN
HAS HUGE PROFIT
DEBAUCH IN 1923
Baldwin Makes Over
$40 a Share
Bv LELAND OLDS

Federated Press Industrial Editor)
Baldwin Locomotive Company was
forced to resort to obvious account
ing tricks to tone down the outrag-
eous pronts made at the expense of
the railroads during 1923. Profits of
S25.58 on each share of common stock
were reported by the company.
These are large enough. But an ex-
animation Of the annual income
statement shows that before the Jug
Cling of figures profits actually stood
at $40.59 on each 500 share. Among
other things a reserve Of $2,800,000
was set aside to cover the full 1924
= dividends on both preferred and COM
mon stock.
Milking the Public.
Y Such looting of railroad treasures
will go on as long as the continuance
of private ownership maintains the
fiction that the railroads and their
supply corporations are separate in
terests rather than two parts Of the
same combine out to milk the public.
The actual manufacturing profit on
$102, 762,075 worth of business was
$10,184,755. Profits from the Stand
ard Steel Works together with other
income brought the gross profit Of
the owners to 1885,, 1922. After pay
ing $2,34S,147 interest, $l,400,O00
taxes and setting aside 100000 for
depreciation there remained $685.
IT'S for the holders of preferred and
common stock or enough to pay their
annual dividends three times over.
Reserves Set Aside.
But before showing such profits for
the stockholders the corporation ar
bitrarily set aside two unusual re-
serves, one Of $S,000,000 for re-
movals and one of $2,S00,0OO for divi-
dends in 1924. In other words divi-
dends are assured for the coming
year whether the corporation gets
profitable business or whether 1t Is
altogether idle.
This illustrates the striking fact
about modern industry that all the
reserves piled up in years Of activity
go to protect the absentee owners
during periods when orders fall off.
No reserve is created to feed and
clothe the families of the men who
actually produce the goods. Today
when S2,800,000 stands to keep the
owners in cash during 1924 it is also
published that over $4,000 wage
earners have been totally cut OF
from the pay roll of the company on
account of lack of business.
Buy From Themselves.
The excessive profits of Baldwin
locomotive like those. of the other
great railroad equipment and supply
corporations are a result Of the fact
that financiers of the railroad COM
bine are dealing with members OF
their own group when they determine
the prices which the railroads are to
pay for the product purchased. Thru
]. P. Morgan & Co., the directorate
of Baldwin interlocks with the execu-
tives of the great railroad systems
of the country. It also interlocks
with such corporations as Midvale
Steel, Haskell & Barker, Wasston
Piston Ring and other corporations
forming the manufacturing end. OF
the railroad business. Because OF
Y such connections Baldwin was able
to get such profitable contracts dur
ing the period of business depression
that in spite Of only operating about
S5 per cent of capacity it was able
20 show very respectable profit.
s6O,OOO,OOO Graft.
IA 1923 Balwin could have charged
Che railroads some $6,000,000 less
sor the goods furnished and still
have secured profits sufficient to pro,
vide interest, dividends and norma
depreciation reserves. Baldwin's bust
ness appears to have amounted Il
about one-tenth of the billion dollar
railroad betterment expenditure
which guaranteed prosperity to these
interests. 1t is fair to assume that
the carriers could have saved al
least $6O,000,000 if these allied cor
porations had not overcharged. But
of course this is just one Of the
ways that railroad financiers are ablt
to get around the limitations of rail
road profits to mere $1,000, 900 ,O0t
, by public rate making.
j Altogether Baldwin has on hanc
i, S21,528,SS5 in undivided profits OF
more than the entire par value Of
the common stock. 1t has additional
reserves deducted from profits
amounting to S12,613,6s4. While it,
total working capital amounts Il